South America

Peru’s struggling state-owned oil company is asking the government to convert some of its loans into equity and push back deadlines to avoid running out of cash this year, Bloomberg News reported. Petroleos del Peru SA has been navigating a worsening liquidity crisis for years, tied to the construction of a brand new refinery that came in over budget and was repeatedly delayed. “We have to push back the deadlines of previous debts with the government, that’s what will help us afford operating until the end of the year,” Oliver Stark, Petroperu’s new chairman, told Bloomberg in an interview.

Brazilian power company Equatorial Energia SA emerged as the sole bidder to buy a key stake in Sabesp, the water utility that’s being privatized by Sao Paulo state in a multibillion-dollar share offering, Bloomberg News reported. Equatorial submitted a proposal by Wednesday’s deadline to buy a 15% stake in Cia. de Saneamento Basico do Estado de Sao Paulo, as the Brazil company is formally known, according to people with knowledge of the matter. A rival bid from a private utility backed by Singapore sovereign wealth fund GIC and Itausa SA, failed to materialize.

Argentine President Javier Milei’s administration embarked on what it called the second phase of its economic plan Friday by announcing that it will swap out notes held at the central bank for new Treasury debt that it’s still negotiating the terms of with private banks, Bloomberg News reported. Monetary authorities will phase out its one-day repo notes that currently pay an interest rate of 40% and served as the institution’s policy instrument.

Miguel Gutierrez, the former chief executive officer of Americanas SA, was detained early Friday in Madrid as part of an investigation into a massive accounting fraud at the Brazilian retailer, Bloomberg News reported. Brazil’s federal police confirmed the detention of the “main target” of its operation in Spain early Friday, identifying him only as the former CEO of Americanas, adding that Interpol carried out the arrest. The detention comes a day after police carried out arrest and search warrants in Rio de Janeiro as part of its biggest operation yet into the case.

Brazil’s mid-month inflation slowed more than expected in early June, just as central bankers signaled they’re in no rush to resume interest rate cuts after pausing their monetary easing cycle last week, Bloomberg News reported. Official data released Wednesday showed prices increased 4.06% from a year earlier, below the 4.11% median estimate from analysts in a Bloomberg survey. Inflation stood at 0.39% on the month. Policymakers led by Roberto Campos Neto interrupted an almost yearlong cycle of rate cuts, holding the benchmark Selic steady at 10.5%.

A group of Venezuela bondholders hired Orrick, Herrington & Sutcliffe LLP as its new legal adviser as they gear up to eventually negotiate a massive debt restructuring with the government, Bloomberg News reported. The Venezuela Creditor Committee, which holds more than $10 billion of defaulted government and state oil company bonds, said in a statement it had retained the San Francisco-based firm. It previously worked with Cleary Gottlieb Steen & Hamilton LLP as its legal adviser.

Brazil’s central bank held its key interest rate in a unanimous vote, fueling a rally in the real as it signaled borrowing costs will be steady for a prolongued period to battle rising inflation estimates, Bloomberg News reported. Policymakers kept the benchmark Selic unchanged at 10.5% late on Wednesday, as expected by nearly all economists in a Bloomberg survey. They paused an easing cycle that had lowered rates by 3.25 percentage points. The Brazilian real gained as much as 0.9% against the dollar on Thursday morning, leading global gains.

Brazilian companies that loaded up on cheap debt are bracing for a new reality: double-digit interest rates for longer than anyone expected, Bloomberg News reported. The Central Bank of Brazil’s easing cycle appears headed for a premature end, with traders expecting it to hold the policy rate at 10.5% when it meets later Wednesday. Borrowing costs will remain above 10% for the foreseeable future, according to pricing in Brazil’s swap curve. That poses a fresh challenge to companies carrying floating-rate debt they took on when rates were around historic lows of 2% during the pandemic.

At least five groups of investors submitted binding bids this month in a U.S. court-ordered auction of shares in Citgo Petroleum's parent, and three have secured financing commitments for Venezuela's foreign crown jewel, Reuters reported. In the last mile of an unprecedented auction to pay up to $21.3 billion from past expropriations and debt defaults in Venezuela, a federal court officer supervising the auction is working to evaluate bids from big investors and creditors.

Brazil's tax authority will soon call foreign crypto exchanges not based in the country to explain their operations and how they cooperate with local service providers, government officials told Reuters on Monday. The tax revenue service is expected to publish this week an ordinance summoning these companies for further information. Unlike exchanges formally established in Brazil, they are not obligated to report transactions conducted on their platforms. "It's an area of concern for us to understand first how they operate here, whether there's any illegality or not.