South America

Brazilian airline Azul is in talks with multiple parties to raise about $400 million in fresh capital via debt financing and an agreement may come as soon as this week, three sources close to the discussions told Reuters. Azul dominates Brazil's airline industry along with LATAM and Gol. It managed to avoid chapter 11 even as a number of Latin American carriers filed for bankruptcy after the COVID-19 pandemic, including its two main rivals.

Azul SA’s efforts to raise $400 million in fresh debt have hit a snag, with the troubled Brazilian airline rushing to raise the cash it needs to meet a key condition of its deal with aircraft lessors, Bloomberg News reported. Jefferies Financial Group had been reaching out to potential investors to help Azul raise cash through the sale of new debt that can be converted to equity, the people said, asking not to be named discussing private details. But the bank has so far come up short of the full amount.

Key terms of a proposed court agreement with a U.S. hedge fund seeking to gain control of oil refiner Citgo Petroleum from Venezuela would lock in the fund's low-ball bid, the company's creditors said in new court filings against the deal, Reuters reported. The backlash to Elliott Investment Management's wholly-owned Amber Energy's offer ends any chance this year of a change to Citgo's ownership to satisfy debt defaults and expropriations by Venezuela.

Brazil's central bank chief Roberto Campos Neto on Monday highlighted a "huge" de-anchoring of inflation expectations in the country, adding that it is "very important" to bring inflation back to the 3% target, and policymakers are committed to doing so, Reuters reported. Speaking at an event hosted by the 20-20 Investment Association, Campos Neto said tight labor market data indicates the need to closely monitor services inflation. He also reiterated that policymakers chose not to provide monetary guidance to allow time to assess the evolving scenario.

Light has filed for bankruptcy protection in the U.S., a step by the Brazilian electric utility company to complete a restructuring deal that creditors approved in May in its home country, WSJ Pro Bankruptcy reported. Light on Tuesday filed for chapter 15 in the U.S. Bankruptcy Court in Houston. Light, which provides energy for most of Rio de Janeiro, began a reorganization in Brazil in 2023, as well as in England in July. The company has assets of $582.1 million and carries more than $2.1 billion in debt, including two issuances of U.S. notes totaling $600 million.

Argentina lost a bid at the U.K. Supreme Court to hear its appeal on a ruling that would force the South American nation to pay $1.5 billion in damages to holders of the country’s growth-linked bonds, Bloomberg News reported. In an order signed Monday, the U.K.’s top court refused to hear an appeal over payments to hedge funds including Palladian Partners LP. The holders of those notes argued the losses were a result of a change by a previous Argentine government in how it calculated gross domestic product.

Azul SA is rushing to raise cash as part of a deal it reached last week with its aircraft lessors, a key step in the Brazilian carrier’s attempt to again rework its debt, Bloomberg News reported. The company was able to strike an agreement with lessors and parts suppliers that reduces its debt by 3 billion reais ($540 million) in exchange for 100 million new preferred shares. The announcement sent shares rallying as much as 22%. But the boost proved short-lived.

Brazil's central bank chief Roberto Campos Neto said on Tuesday that stablecoins and asset tokenization should be regulated in the country next year, as he delivered remarks in a video recorded for market intelligence firm Uqbar, Reuters reported. Stablecoins are pegged to real-world assets, such as the U.S. dollar, and therefore fluctuate much less than other crypto assets like bitcoin.

Holders of billions of dollars in Venezuelan bonds and notes have emerged as last-minute protagonists in a U.S. court case set to decide the ownership of oil refiner Citgo Petroleum, threatening to derail an auction to compensate more than a dozen companies for unpaid debts and expropriations by the country, Reuters reported. At least two groups of holders have resorted to other U.S. courts to enforce their claims, pursuing the same Citgo assets that industrial conglomerates, mining and oil firms have been pursuing for years.

Argentina's triple-digit inflation, the world's highest, is starting to slow but this offers little relief for residents whose salaries have stayed the same while costs of basic goods sky-rocketed and the government slashed state subsidies, Reuters reported. "We're losing track of what's expensive and what's cheap," said university professor Daniel Vazquez while shopping in Buenos Aires. "Prices keep going up and the only thing that isn't going up is salaries." "The gap is very, very big," he said.