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.

Argentina could issue $30bn in debt this year, as other issuers seek to mimic the government's success in returning to international capital markets with a blockbuster bond sale last month. First out of the gates will be Argentina’s provincial governments, expected to issue at least $4bn this year, the Financial Times reported. They hope to take advantage of rekindled investor interest in a country isolated from bond markets by a protracted creditor dispute, which was triggered by a 2001 default on almost $100bn of debt. “Argentine debt represents an extraordinary opportunity.

After summoning 100 representatives of Argentina’s business elite to the presidential residence this week, Mauricio Macri praised the few that had recently announced investments. The rest, he implied, were not doing their bit for the country, the Financial Times reported. The centre-right leader has implemented a barrage of economic reforms since taking office in December, including fixing a decade-long creditor dispute that enabled Argentina’s blockbuster return to international capital markets with a $16.5bn debt issue.

Brazilian construction company Grupo OAS said its creditors would take over its 24.5 percent stake in infrastructure company Invepar as part of a restructuring plan, Reuters reported. OAS's shares of Invepar will be transferred to SPE Credores by the end of the day on May 31, the company said in a statement on Thursday. Grupo OAS filed for bankruptcy protection in a São Paulo court last year to restructure 8 billion reais ($2.3 billion) in debt owed by nine units.

Brazil's rig leaser Sete Brasil Participações SA has decided to file for bankruptcy protection, the company said on Wednesday, Reuters reported. According to a source with direct knowledge of the matter, state-controlled pension fund Petros reversed its earlier position against the bankruptcy filing at a shareholder's meeting on Wednesday. The decision allows Sete Brasil to garner the 85 percent threshold for approval to file for creditor protection, said the source, who requested anonymity because the matter is private.