South America

Global regulators gave banks four more years and greater flexibility on Sunday to build up cash buffers so they can use some of their reserves to help struggling economies grow. The pull-back from a draconian earlier draft of new global bank liquidity rule to help prevent another financial crisis went further than banks had expected by allowing them a broader range of eligible assets.

Investors who hold Argentina's restructured debt are seeking to have New York's highest court consider whether a bond provision requires the country to equally treat holders of defaulted and new bonds, Bloomberg News reported today. The bondholder group, which includes Brevan Howard Asset Management LLP and AllianceBernstein LP, said in a court filing that interpretation by the state Court of Appeals in Albany is needed to determine whether Argentina must make payments on defaulted bonds when it pays holders of restructured debt, as a federal court judge ordered it to do.

Brazil’s consumer-loan default rate fell in November for the first time in five months as the government pushes banks to reduce interest rates, Bloomberg reported. The consumer default rate fell to 7.8 percent from 7.9 percent in October, the central bank said in a report distributed today in Brasilia. Interest rates to consumers fell to a record 34.8 percent.

A US appeals court has rejected a request from defaulted creditors led by Elliott Associates, a US fund, to require Argentina to post security of at least $250m by Monday to demonstrate its willingness to pay any judgment in their favour, the Financial Times reported. The ruling from the Second Circuit Court of Appeals means there will be no change to a schedule it laid down last week for the thorny case, which has pit the government against funds it decries as “vultures” and sparked fears of a new Argentine default.

Investors suing over Argentina's 2002 debt default have asked a U.S. court to order the country to post a security deposit of at least $250 million by December 10, while an appeal of a lower court's order is pending, The Chicago Tribune reported on a Reuters story. In an emergency motion filed late on Friday, the "holdout" creditors urged the 2nd U.S. Circuit Court of Appeals to modify its ruling from Wednesday that halted an order for Argentina to deposit $1.33 billion into an escrow account by December 15 on the investors' behalf.

Holders of Argentina’s restructured bonds asked for an emergency stay to block orders by U.S. District Judge Thomas Griesa that prevent the country from paying interest on the debt next month without paying $1.3 billion to owners of defaulted notes, Bloomberg reported.

The majority of creditors of Independencia, an insolvent Brazilian meatpacker, approved a restructuring plan of the company's debt today, removing one of the last remaining obstacles for the firm to be taken over by its larger rival JBS, Reuters reported today. JBS started out as a family butcher in Brazil and became the world's largest beef producer by assuming control of smaller firms, a strategy it has recently resumed. Read more.

Centrais Eletricas do Para SA, a Brazilian utility know as Celpa that was acquired this month by Equatorial Energia SA, filed for Chapter 15 bankruptcy protection in New York, Bloomberg reported. The company, based in Belem, Brazil, listed both debt and assets of more than $1 billion in documents filed today in U.S. Bankruptcy Court in Manhattan. Chapter 15 protects foreign companies from U.S. lawsuits and creditor claims while a company reorganizes abroad. Celpa is asking the U.S.

Yesterday, Argentina filed for a re-hearing of its arguments against hedge fund manager Paul Singer and other investors in its sovereign debt that neglected to restructure their debt in 2005 and 2010 (exchange bondholders), Business Insider reported. Argentina is making two arguments for why their case should be heard (before a panel of judges) again.

Brazilian state-led power company Eletrobras said on Tuesday that it plans to take over Cia de Eletricidade do Amapa (CEA) to help restructure the bankrupt northern Brazilian utility and recover debts, Reuters reported. The companies and the government of Amapa, which controls CEA, agreed to sign shareholder and management agreements aimed at restoring CEA to financial health, Rio de Janeiro-based Eletrobras said in a statement on Tuesday. Amapa authorities will receive financing from Brazil's federal government to pay off CEA's debts to Eletrobras and other suppliers.