South America

Airline bankruptcies have increased this year at the fastest ever rate, led by the collapse of India’s Jet Airways, British travel group Thomas Cook and Avianca of Brazil, according to industry data published on Friday, Reuters reported. “2019 has seen the fastest growth in airline failure in history,” said airline consulting firm IBA, which has tracked plane fleets returned to lessors or administrators by 17 carriers that have gone bust so far this year.

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Creditors of Brazilian oil platforms and rigs maker Sete Brasil have approved the sale of four oil exploration rigs to British company Magni Partners, two sources familiar with the deal told Reuters on Friday, Reuters reported. The rigs sold are named Urca, Frade, Arpoador and Guarapari. The four rigs have a 10-year leasing contract with Petrobras , which will pay $299,000 per day for each rig when operational, one of the sources said. The sources, who spoke on condition of anonymity, had no information regarding total value of the deal.

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Brazilian state bank Caixa Economica Federal has filed a legal motion requesting the liquidation of engineering conglomerate Odebrecht SA, according to court documents seen by Reuters, in what could be a dramatic end to the graft-plagued company, Reuters reported. Caixa also demanded that creditors appoint new management at the conglomerate and its subsidiaries if the judge does not order the company’s liquidation. The move by Caixa adds pressure on Odebrecht to restructure its debts in one of Latin America’s largest-ever bankruptcy cases.

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Argentine economists forecast a deeper recession and maintained a pessimistic inflation forecast at a shade under 55% in the latest central bank monthly poll of analysts released on Wednesday, Reuters reported. The prediction follows weeks of political uncertainty and a plunge in the value of the peso after Alberto Fernandez, a Peronist candidate, soundly beat market-friendly incumbent President Mauricio Macri in an August primary election.

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Oi SA’s top executives have a message for investors and analysts pushing the company to sell more assets or take on more debt: Back off. The Brazilian phone company -- now in the final stages of a $19 billion debt restructuring -- has various options to raise capital but won’t make any decisions under pressure, Chief Operational Officer Rodrigo Abreu and Chief Executive Officer Eurico Teles said in an interview, Bloomberg News reported.

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Russian President Vladimir Putin and Nicolas Maduro briefly discussed Caracas’ debt obligations to Russia last week during a visit to Moscow by the Venezuelan leader, the Kremlin said on Tuesday, without providing details, Reuters reported. Close ally Moscow has acted as a lender of last resort for Caracas, with the Russian government and oil giant Rosneft (ROSN.MM) providing at least $17 billion in loans and credit lines since 2006. In November 2017, Russia agreed to restructure Venezuela’s sovereign debt of $3.15 billion, with repayments over 10 years.

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Argentina’s creditors holding out hope that they can avoid losses on the country’s bonds are “living in fantasy land”, one big investor said, reflecting tensions over the government’s reorganisation of its massive debt pile, the Financial Times reported. Alberto Fernández, who is expected to win presidential elections later this month, has assured markets that losses on bonds would not be necessary as part of the debt’s “voluntary reprofiling”, as long as creditors give Argentina’s economy time to start growing again.

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Venezuela’s government is ready to resume negotiations with foreign investors on about $60 billion of defaulted debt, according to President Nicolas Maduro, Bloomberg News reported. The embattled leader said Vice President Delcy Rodriguez and Economy Vice President Tareck El Aissami, both sanctioned by the U.S., will lead talks with bondholders. While actions by the Treasury Department prevent Venezuela from paying its debt through traditional means, Maduro said his government has alternatives, including cryptocurrencies.

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Brazilian state-run development bank BNDES is facing losses of up to 14.6 billion reais ($3.5 billion) from loans made to conglomerate Odebrecht SA, which has been in bankruptcy protection since June, the bank said on Monday, Reuters reported. Of this total, 3.7 billion reais is related to federal government losses on export financing credits, and 8.7 billion reais is loans to companies under the Odebrecht Group umbrella, the BNDES said in a statement on its website.

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Argentina’s presidential front-runner Alberto Fernandez said that if elected next month, he would aim to avoid haircuts on bond payments and seek a moderate “Uruguay-style” debt restructuring, music to the ears of the country’s creditors, Reuters reported. Investors are closely watching Fernandez’s comments on debt after the South American nation was forced to announce plans to renegotiate around $100 billion in bonds after a sharp market crash in August pushed the country toward default.

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