South America

Brazil's government submitted a bill to Congress on Wednesday that would modernize bankruptcy regulations, aiming to speed up proceedings by giving creditors more control over the process, Reuters reported. According to finance ministry official Marcos Pinto, Brazil's current regulations date to the 1980s, and the average bankruptcy process in the country lasts more than 11 years. With the changes, the government expects to cut that length in half while increasing recovery levels and reducing the cost of credit, Pinto added in a press release.

The parent company of Brazil’s Gol Linhas Aereas Inteligentes SA and Colombia’s Avianca is meeting creditors to kickstart negotiations in a bid to fix its balance sheet, Bloomberg News reported. Abra Group Ltd will host talks with representatives of its $1.5 billion bondholders in New York on Wednesday, the first step toward striking a comprehensive restructuring deal for the troubled low-cost airline group. Abra’s bondholders are working with financial adviser Houlihan Lokey Inc. and law firm Dechert LLP, while Abra hired Rothschild & Co., they said.

Argentina's international dollar bonds rose on Thursday after the International Monetary Fund (IMF) staff and the government reached an agreement that should unlock some $4.7 billion from the country's embattled loan program with the fund, Reuters reported. The agreement removes in the short-term the risk of Argentina falling behind on IMF repayments. "Getting the program back on track is positive," Goldman Sachs analyst Sergio Armella wrote in a note, adding the program had been "derailed" last year when the previous government missed economic targets set out in the program.

Brazil’s development bank is considering granting loans to the country’s airlines as part of a government plan aimed at alleviating financial pressures at Gol Linhas Aereas Inteligentes SA, Azul SA and other carriers that have caused sharp increases in fares, Bloomberg News reported. BNDES, as the bank is known, is looking for options to help the airlines come up with sufficient collateral, according to three people with knowledge of the matter.

Argentina's monthly inflation rate likely soared to 28% in December, which would be the highest since early 1990, driven by a sharp devaluation of the peso currency last month by the new government of libertarian President Javier Milei, Reuters reported. The median forecast from 20 local and foreign analysts polled by Reuters underscores the challenge facing the South American grains giant, with annual inflation set to top 200% for the year, one of the highest rates in the world.

Argentina is set to make a near $1 billion payment to foreign bondholders this week while the government of President Javier Milei continues talks with the International Monetary Fund as he seeks to restore investor confidence in the serial-defaulting nation, Bloomberg News reported. Interest on several hard-currency bonds comes due Tuesday, marking a major test for Milei just a month after he took office promising to overhaul South America’s second-largest economy.

Chilean consumer prices unexpectedly posted their biggest monthly drop in more than a decade in December, sending swap rates tumbling and paving the way for more sharp interest rate cuts, Bloomberg News reported. Prices fell 0.5% last month, more than all estimates in a Bloomberg survey that had a -0.1% median forecast. Annual inflation eased to 3.9%, the national statistics agency reported on Monday. A closely-watched price gauge that excludes volatile items increased 5.4% in the year through December. Chile’s central bank has signaled it will deliver another big rate cut at its Jan.

Argentine President Javier Milei is proposing a local debt swap that could top $71 billion, aiming to stabilize the country’s finances by pushing off maturities and reducing the deficit to zero, Bloomberg News reported. Economy Minister Luis Caputo and Finance Secretary Pablo Quirno told representatives of local and foreign banks operating in Argentina that they plan to issue new peso bonds in February to swap for the 2024 maturities, according to four people with direct knowledge of the meeting that took place Thursday afternoon.

Argentina's inflation likely hovered around 30% in December, presidential spokesman Manuel Adorni said on Wednesday, when asked by a reporter about studies showing monthly inflation reaching nearly that level, Reuters reported. "We still don't have the official data, but we understand that the figure was around the one you are referring to," Adorni told the reporter during a press conference. If confirmed, that would take annual inflation in the South American country to over 200% in 2023, the highest in more than three decades. The official figure will only be released on Jan.

Brazil posted a wider-than-expected current account deficit in November but the figure as a proportion of gross domestic product (GDP) continued to decrease, data from the central bank showed on Wednesday, Reuters reported. The current account deficit in Latin America's largest economy totaled $1.6 billion in November. Economists polled by Reuters expected a $400 million deficit. Brazil's $6.7 billion trade surplus in the month, larger than the $4.7 billion one reported a year ago, was not enough to offset an increase in the factor payment and service deficits, the central bank said.