South America

Bankrupt Brazilian airline Gol Linhas Aereas Inteligentes SA accused its rival Latam Airlines Group SA of taking advantage of its recent financial trouble by trying to poach its pilots and Boeing aircraft, Bloomberg News reported. The Sao Paulo-based airline said in court papers filed Thursday that Latam recently sent a letter to Gol’s business partners inquiring about leasing Boeing aircraft and solicited Brazilian pilots experienced in flying such aircraft in an Internet job posting.

Unigel Participacoes SA is preparing to file for bankruptcy protection in Brazil after talks with creditors stalled, Bloomberg News reported. The chemical producer was granted a 60-day protection from creditors by a court on Dec. 14, but a mediation process didn’t result in an agreement. Local bondholders declared the early maturity of some notes last year, triggering an acceleration of the troubled fertilizer maker’s debt and prompting the company to seek protection in court.

Outstanding loans in Brazil grew by 7.9% in 2023, a sharp deceleration from the previous year when the expansion had been 14.5%, central bank data showed on Tuesday, Reuters reported. The credit stock saw a 1.4% increase in December from the previous month, with the volume of financing concluding the year at 5.8 trillion reais ($1.16 trillion). The slowdown in outstanding loans last year was driven by high borrowing costs.

Chile’s central bank slashed its key interest rate by a full percentage point, speeding up the pace of monetary easing for the second meeting in a row after inflation slowed more than expected last month, Bloomberg News reported. Four of the five policymakers voted to cut borrowing costs to 7.25% late on Wednesday, with the other backing a reduction of 125 basis points. The decision was forecast by 17 of 21 analysts in a Bloomberg survey, with three others predicting 75 basis points and one seeing 125 basis points.

Colombia maintained the pace of monetary policy easing with a second straight quarter-point cut to interest rates as consumer price increases remain above target and inflationary threats abound, Bloomberg News reported. The central bank cut its key rate to 12.75%, Governor Leonardo Villar told reporters in Bogota on Wednesday. Ten of 26 economists surveyed by Bloomberg correctly forecast the move, while 15 expected a half-point cut and one a cut to 12.25%. The board voted 5-2 for the 25 basis-point cut, with the minority favoring a larger half-point reduction.

The International Monetary Fund’s executive board approved a $4.7 billion disbursement to the government of Argentine President Javier Milei, Bloomberg News reported. The payments are part of a refinanced $44 billion program, the lender’s largest, that was beset by uncertainty for months during the election campaign that saw Milei oust the Peronist government of Alberto Fernandez. The board’s decision Wednesday follows a staff-level agreement reached in Buenos Aires earlier this month.

Brazil’s government is working on an emergency plan to help alleviate financial pressures on airlines and address the high cost of consumer litigation and a lack of competition, Bloomberg News reported. The government is proposing using public funds as collateral for loans to the carriers from the country’s development bank, known as BNDES, the person said. It is expected to be issued it as a provisional measure in the coming weeks, allowing the changes to then take effect immediately.

The International Monetary Fund revised down its growth estimate for Argentina, forecasting South America’s second-largest economy will shrink for two consecutive years as President Javier Milei pushes for a “significant policy adjustment,” Bloomberg News reported. Argentina’s gross domestic product will contract 2.8% this year as inflation soars, following a 1.1% decline in 2023, according to the IMF’s latest estimates for the global economy published Tuesday. Back in October, the Fund forecast 2.8% growth in 2024.

Brazil expects its public debt to surge by as much as 13.5% in 2024 and aims to progress in its lengthening while projecting a greater presence in the international debt market this year, said the Treasury on Tuesday, Reuters reported. Public debt is expected to range between 7 trillion reais and 7.4 trillion reais in 2024, compared with 6.520 trillion reais ($1.31 trillion) in 2023, according to the Treasury's Annual Financing Plan.

A U.S. bankruptcy judge on Monday allowed Brazilian airline Gol to borrow the first $350 million of its proposed bankruptcy financing, which a company attorney said was "desperately" needed to maintain normal operations, Reuters reported. Bankruptcy Judge Martin Glenn approved the initial funding at a court hearing in Manhattan, despite voicing some concerns about the high cost of the overall $950 million loan. Glenn will consider approving the rest of the loan at a future hearing, and said he needs more insight into the financing costs. "I'm not writing a blank check," Judge Glenn said.