South America

Alberto Fernández, Argentina’s president, has made an impassioned appeal for the world to accept that — with an economy devastated by coronavirus — he cannot budge from his final offer to restructure $65bn of foreign debt, the Financial Times reported. Weighed down by $323bn of borrowing, Argentina was already in a deep recession before the pandemic and in May the South American country defaulted for the ninth time in its history — although no creditors have attempted to sue it yet.

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Ecuador is coming under pressure to sweeten its $17.4bn debt restructuring after some bondholders balked at the terms of the deal it presented earlier this month, the Financial Times reported. The country — one of the poorest in Latin America — said in March that it would be unable to repay all its debts as it deals with the fallout of Covid-19 and a collapse in oil prices. Earlier this month, the government announced a provisional agreement to cut and stretch out repayments, with the backing of the holders of around half of its bonds, including heavyweights Ashmore and BlackRock.

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Two groups of Ecuador bondholders have proposed revised restructuring terms to the government as it seeks to strike a deal to renegotiate $17.4 billion in debt, Reuters reported. The government’s proposal already has the backing of one group of creditors, holding around half of the bonds and including AllianceBernstein, Ashmore and BlackRock.

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The International Chamber of Commerce, a global trade union and civil society groups urged the Group of 20 major economies to extend and expand a freeze in debt service payments to help not just the poorest, but also middle-income countries, weather the coronavirus pandemic and its economic fallout, the International New York Times reported on a Reuters story. The ICC, International Trade Union Confederation, and Global Citizen, a group pushing to end extreme poverty by 2030, also called on G20 finance ministers, who will meet online on July 18, to take additional steps to boost th

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LATAM Airlines, the largest airline group in Latin America, said today that it had secured an additional $1.3 billion for its financing proposal before a New York bankruptcy court, while adding its unit in Brazil to the debt restructuring process, Reuters reported. LATAM filed for U.S. bankruptcy protection in May, aiming to reorder $18 billion in debt. It was the world’s largest airline to date to seek an emergency reorganization due to the coronavirus pandemic. Today it said it had secured an additional $1.3 billion in funding from Oaktree Capital Management L.P.

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Argentina’s bondholders shouldn’t expect any more improvements or changes to the country’s debt restructuring proposal, Economy Minister Martin Guzman said, according to a Bloomberg News report. The government sees no room for further modifications on an amended offer released Sunday night, part of Argentina’s bid to restructure $65 billion of debt. The proposal gives bondholders about $13 billion more than its initial plan announced in April. “Clearly not,” Guzman said Wednesday, responding to a question about modifying the deal in any way.

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Ecuador reached a preliminary agreement with some of its largest bondholders to restructure $17.4 billion in outstanding debt, Bloomberg News reported. The nation intends to exchange 10 existing bonds maturing between 2022 and 2030 for three new notes due in 2030, 2035, and 2040, reducing the average coupon rate to 5.3 percent, according to a government statement. The plan still needs to be approved by a share of the remaining bondholders.

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Banks are asking a New York judge to subpoena more documents from bankrupt soy-export giant Vicentin SAIC, saying they may have been the victims of “major international financial impropriety,” Bloomberg News reported. Lenders including Rabobank, Credit Agricole, ING and the International Finance Corp., the private-lending arm of the World Bank, want copies of wire transfers by Argentina’s Vicentin and several related companies that include a meatpacker and a vineyard.

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The World Bank projects the recession in Latin America and the Caribbean will be the worst downturn since reliable data began in 1901, setting back progress on fighting inequality and poverty, Bloomberg News reported. The development institution expects a gross domestic product contraction of more than 7% for 2020, making it worse than any crisis of the past century, including the Great Depression, the 1980s debt crisis and the global financial of 2008-2009, President David Malpass said.

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Ratings agency S&P Global on Wednesday slashed seven Argentine foreign-currency bonds to default, triggered by non-payment of interest, as the government remains entangled in debt negotiations with its foreign creditors, Reuters reported. S&P said it downgraded to “D” from “CC” three foreign-law foreign-currency bonds that had about $582 million in interest due at the end of June. It also downgraded four Argentine-law, U.S. dollar-denominated bonds with $837 million interest due at the end of June.

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