South America

Government debt around the world shot up last year to approach levels last seen in the aftermath of World War II, as nations stepped up spending to fight the Covid-19 pandemic and its economic fallout, the International Monetary Fund said yesterday, the Wall Street Journal reported. Public debt as a share of global gross domestic product surged to 98% by the end of December from 84% at the end of 2019, before the pandemic struck, the IMF said in an update to its semiannual Fiscal Monitor report.

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Credit Suisse Group AG, ING Groep NV and BNP Paribas SA will stop providing trade financing for oil exports from the Ecuadorian Amazon, after pressure from climate activists, Bloomberg News reported. The three banks were collectively responsible for $5.5 billion of such financing in the past 11 years, according to research by Amazon Watch and Stand.earth. The two activist groups called out the companies for double standards, saying they promoted corporate sustainability while also financing the Amazon oil trade that contributes to climate change.
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Brazilian appliance retailer Casa & Video filed for an initial public offering on Friday, according to a preliminary prospectus on the securities industry watchdog CVM website, Reuters reported. The Rio de Janeiro-based company has hired the investment banking units of Itau Unibanco Holding SA, Banco Santander Brasil SA, Citigroup, BTG Pactual SA and XP Investments to manage the offering, confirming a previous Reuters report. The company did not disclose in the filing a pricing range for its shares nor the pricing date.

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Millions of barrels of Venezuelan heavy crude, embargoed by the U.S., have been surreptitiously going to China, Bloomberg News reported. The cat-and-mouse games that avoid detection and sanctions include ship-to-ship transfers, shell companies and silenced satellite signals. But there’s another aspect to the dodge. It involves “doping” the oil with chemical additives and changing its name in the paperwork so it can be sold as a wholly different crude without a trace of its Venezuelan roots.

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Brazilian right-wing President Jair Bolsonaro on Wednesday wrote to newly inaugurated U.S. President Joe Biden that he hoped the two countries would pursue a broad free trade agreement during Biden’s tenure, Reuters reported. The letter is Bolsonaro’s most amicable overture yet to Biden, a Democrat. The Brazilian president was a close ally of former Republican President Donald Trump and refused for weeks to accept the result of the Nov. 3 U.S. election, repeating baseless allegations of fraud. It took him 42 days to recognize Biden’s victory.

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A federal judge ordered that Venezuela’s stake in oil refiner Citgo Petroleum Corp. be put up for sale to satisfy creditors, calling the country’s nonpayment an affront while acknowledging that no auction can occur under current U.S. sanctions, the Wall Street Journal reported. Judge Leonard Stark of the U.S. District Court in Wilmington, Del., said that Venezuela’s shares in Citgo’s parent company should be positioned for sale “to the extent possible.” No such sale can occur under rules promulgated by the Trump administration that restrict transfers of Venezuelan state property.

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In the 99 years since it was founded to pump the oil fields of Patagonia, Argentine energy driller YPF SA has been whipsawed by countless booms and busts. If global oil markets weren’t collapsing, it seemed, then Argentina was mired in a debt crisis that was wreaking havoc on the whole nation’s finances. Never, though, had the company been pushed into a large-scale default of any kind, Bloomberg News reported. Until, it would appear, now. Word of this came in an odd way: Officials at state-run YPF sent a press release laying out a plan to saddle creditors with losses in a debt exchange.

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The Canada Pension Plan Investment Board is joining a fund managed by Banco BTG Pactual SA to make a binding offer for the fiber unit of Brazilian telecom carrier Oi SA, Bloomberg News reported. The bid is expected Jan. 22, along with two other binding offers. Highline do Brasil, part of Digital Colony, and Ufinet, which is backed by Italy’s Enel SpA, both plan to make bids for the business. Oi is planning to sell as much as 51% of its subsidiary, known as InfraCo, with a value for the whole company of at least 20 billion reais ($3.6 billion).
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Costa Rica built Latin America’s model society, enacting universal health care and spending its way to one of the Western Hemisphere’s highest literacy rates. Now, it’s reeling from the financially crushing side effects of the coronavirus, as cratering revenue and crisis spending force a reckoning over a massive pile of government debt, the Washington Post reported. The pandemic is hurtling heavily leveraged nations into an economic danger zone, threatening to bankrupt the worst-affected.

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Severe coronavirus restrictions around the world to contain surging infection rates weighed on fuel sales, weakening the prospect of energy demand recovery in the first half of 2021, Reuters reported. Most of Europe is now under the strictest restrictions, according to the Oxford stringency index, which assesses indicators such as travel bans and the closure of schools and workplaces. The United Kingdom’s new national lockdown is expected to last until mid-February at least.

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