Brazil’s worst recession in recent history continued into 2016, data showed Wednesday, as rising unemployment and deepening political turmoil dragged the once-dynamic economy into its fifth consecutive quarter of decline, The Wall Street Journal reported. Gross domestic product shrank 0.3% in the first quarter of 2016 from the previous three months in seasonally adjusted terms, the Brazilian Institute of Geography and Statistics, or IBGE, said.

An appeals court ruling on whether a Liberian mortgage is valid for a Brazilian-owned oil production ship, due on Wednesday, could cast doubt on the future of secured lending for such vessels in the world's largest deepwater market. The court in São Paulo is due to decide on the appeal by Nordic Trustee ASA to overturn a February ruling that the $500 million mortgage registered in Liberia is invalid for the OSX3 floating production, storage and offloading vessel, or FPSO, owned by a subsidiary of OSX Brasil SA.

Argenova, the Argentinian subsidiary of troubled multinational Pescanova, is working with a legal team to prepare for filing for insolvency as soon as possible, reported Faro de Vigo. However, with all executive functions taken away from president and chairman Manuel Fernandez de Sousa, and the board of directors, it is unclear who will make the decision to enter proceedings. Deloitte, proposed by Spanish regulator CNMV as administrator to oversee the group's bankruptcy, will not take over until Thursday this week.

Brazilian authorities are expanding their sweeping investigation into corruption at Petróleo Brasileiro SA to include more of the state oil company’s suppliers, according to a person involved, a move likely to extend the probe into next year, The Wall Street Journal reported. Investigators in the so-called Car Wash probe have until recently been focused mainly on a bribery-and-bid-rigging scheme centered on construction companies that work with Petrobras, as the state oil company is known.

The state of Rio de Janeiro missed an $8.4 million payment to an international creditor as a debt crisis in Brazil’s state governments deepened amid what the federal Finance Ministry has called “out-of-control personnel expenditures,” The Wall Street Journal reported. The payment, which was due Monday to the French Development Agency, had to be postponed following months in which revenues have fallen short of spending obligations, a person familiar with the matter said.

Argentina’s opposition-dominated Congress on Thursday approved legislation that would double the cost of laying off private and public employees over the next six months, handing President Mauricio Macri his first legislative setback since taking office, The Wall Street Journal reported. Mr. Macri, who said the law would spook investors and destroy jobs, is expected to veto it on Friday. The setback for Mr. Macri comes as pollsters say Argentines are increasingly worried about the prospect of losing their jobs.

Demand for loans among Brazilian companies slumped in April, credit research company Serasa Experian said on Wednesday, a sign that the highest borrowing costs in nine years and the harshest recession in eight decades hampered their ability to take on fresh credit, Reuters reported. The number of requests for new loans dropped 11.6 percent in April from the prior month, and fell 4.2 percent from the same month a year earlier, Serasa said in a statement. In the first four months, demand for consumer credit dropped 8.1 percent.

Smaller corporate lenders are better positioned to weather Brazil's worst recession in decades, but need to be monitored closely as clients grapple with soaring defaults and bankruptcy filings, the head of the nation's deposit guarantee fund said. Banks in the so-called middle-market segment have tightened loan disbursement standards and scaled down the use of borrowed money to boost lending, although they are struggling to predict defaults, which recently hit a six-year high.

Businesses' requests for bankruptcy protection in Brazil doubled in the first four months of 2016 as the harshest recession in decades and borrowing costs at nine-year highs crimped the ability of factories and retailers to stay afloat, the local unit of credit research company Experian Plc said on Wednesday. Companies filed an all-time high of 571 requests for court protection from creditors, compared with 289 filings a year earlier. Last year, a record 1,287 companies sought bankruptcy protection, according to Serasa Experian, which has collected data on the indicator since 2006.

More Brazilian companies will face increasing liquidity risk through next year as rising borrowing costs and the harshest recession in decades hamper their ability to service debt, Moody's Investors Service said on Monday, Reuters reported. A Moody's team of analysts led by Erick Rodrigues said in a report that the number of companies facing high funding risks rose to 33 percent last year, from 28 percent in 2014. More debt is maturing than companies can generate cash to make payments, while banks are refinancing fewer loans, the analysts said.