South America

Small and medium-sized Brazilian lenders will have to merge with rivals to strengthen their capital base and revamp their fundraising structure, central bank director Anthero Meirelles said in a newspaper interview published on Monday, Reuters reported. Smaller financial institutions must "adapt their strategies" to face a more competitive landscape in the industry, Meirelles, the central bank's industry watchdog, told Valor Economico.

The world's biggest economies hope to make progress this week on a plan to identify countries that put the global economy at risk, while China warned against any moves that would curb its red-hot growth, Reuters reported. The meeting of the Group of 20 rich and emerging-market nations comes at a time of conflicting economic signals. Just as signs of a strengthening recovery in some rich countries have pushed their central banks to begin to pull back on economic supports, world markets have been rocked by fears that high oil prices will put the brakes on global growth.

A high-level executive at Latin America's largest shipping company in terms of revenue, Chile's Compania Sudamericana de Vapores SA, said the company won't go bankrupt despite recent financial troubles that have led to market speculation it could fail, Dow Jones Daily Bankruptcy Review reported. Vapores, whose finances have been weighed down by hefty ship and container leasing fees, as well as rising international crude oil prices, is looking to stanch its financial hemorrhaging through a $500 million capital increase and the listing of up to 49% of its SAAM ports unit.

Brazil's Central Bank President Alexandre Tombini said on Tuesday that default rates on loans are rising, Reuters reported. Tombini, speaking at a congressional hearing, did not give further details. Consumer credit has risen rapidly in Brazil in recent years, fueling an economic boom, but some analysts have voiced concern that default rates could rise this year as the economy cools and interest rates rise. Read more.

Argentina's flagship airline, Aerolineas Argentinas, has asked the courts to lift a 10-year-old legal measure shielding it from creditors after the company managed to restructure its debts, Dow Jones Daily Bankruptcy Review reported. In a statement, the airline said it has paid 99.3% of the outstanding debts related to the court-ordered protection from creditors. Argentina seized Aerolineas Argentinas from Spanish tourism company Grupo Marsans in 2009 and has since pumped money into the airline to expand and update its fleet.

Treasury Secretary Timothy Geithner, on a visit Monday to Latin America's biggest economy, urged Brazilian officials to help the U.S. pressure China to allow its currency to appreciate, The Wall Street Journal reported. Though officials in public shied away from specifics of any plan to coordinate calls for a stronger yuan, a person familiar with the discussions said Brazil and the U.S. may speak with a common voice on the issue in a coming meeting of the Group of 20 major economies.

Argentina's largest electricity provider, Pampa Energia SA, said Monday it will pay $29 million to acquire Enron Pipeline Company Argentina SA, Dow Jones Daily Bankruptcy Review reported. "The purchase is part of Pampa's broader plan to become an important player in Argentina's natural gas industry," a person familiar with the company's plans said. The pipeline company owns 10% of Compania de Inversiones de Energia SA, or Ciesa, which controls 55.3% of the gas distributor Transportadora de Gas del Sur SA, or TGS.

A bankruptcy judge cleared Lehman Brothers Holdings Inc. to sell its Brazil investment business, Libro Companhia Securitizadora de Creditos Financeiros, for nearly $15.9 million, Dow Jones Daily Bankruptcy Review reported. Judge James Peck of the U.S. Bankruptcy Court in Manhattan, approved of the sale Wednesday to a firm called Jive Investments Holding Ltd. In his order, Peck said that Jive's offer was the "highest and best" available and that the sale was in the best interest of Lehman and its creditors.

Lehman Brothers Holdings Inc. is seeking court approval to sell its Brazil investment business, Libro Companhia Securitizadora de Creditos Financeiros, to a firm called Jive Investments Holding Ltd., Dow Jones Daily Bankruptcy Review reported. Jive, which is based in the British Virgin Islands, will buy Lehman's equity stake and notes in Libro, which maintains portfolios of fixed income, distressed and loan assets. The sale price is nearly $15.9 million, after Jive outbid an unidentified competitor. Lehman is asking Judge James Peck of the U.S.

The Group of 20 is beginning to look more like the G19 plus 1 as emerging and rich countries alike accuse the United States of breaking a vow of unity, Reuters reported. This week's G20 summit will require every bit of President Barack Obama's diplomacy skills after the Federal Reserve embarked on a new $600 billion bond-buying spree, sparking criticism from four continents that the U.S. central bank was ignoring the global repercussions.