South America

Even if Argentina defaults for the ninth time in its history, creditors say the issue could be cured quickly as the two sides work to restructure $65 billion in overseas bonds, Bloomberg News reported. Although an event of default will be hard to avoid for Argentina, there is willingness to resolve the negotiations, said Greylock Capital Management LLC’s Chief Executive Officer Hans Humes at an online event.

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Bunge’s Brazil unit has signed a contract to acquire two soy crushing plants from Imcopa, according to a statement sent to Reuters on Wednesday, marking another step to consolidate its position as Brazil’s largest soybean crusher, Reuters reported. Imcopa, which is operating under bankruptcy court protection, confirmed the signing of the contract and said the aim of the sale is to keep the plants running and protect jobs, according to a separate statement. Bunge said regulatory approvals for the transaction are still pending.

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Investors holding debt protection for Ecuador are in line to share compensation of about $60 million after the South American nation struck a deal with creditors to suspend coupon payments on its foreign debt, Bloomberg News reported. Firms holding the country’s credit-default swaps will receive about 65% of the amount covered by the instruments, according to the final results of an auction to settle the contracts on Tuesday. They get triggered when a borrower fails to pay its debt. Investors use the instruments to make negative bets on borrowers or as hedges for bond investments.

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Argentina and creditors seeking to hash out a $65 billion bond restructuring are still far apart, just days away from a deadline that could plunge the country into default, Bloomberg News reported. Talks have continued since bondholders sent two counterproposals Friday, but there’s a gap of about 20 cents on the dollar between the government’s offer and the most aggressive creditors, according to people with direct knowledge of the matter.

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Venezuela’s bond market has been rocked over the past few years by defaults, sanctions and a collapse in crude oil prices, Bloomberg News reported. Yet the disastrous cocktail is attracting hedge funds including London’s Altana Wealth Ltd. that say the situation can’t get any worse. Altana is pitching the South American nation’s government notes, which can be bought at pennies on the dollar, as the “trade of the new decade,” according to two letters to investors seen by Bloomberg.

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A growing number of Argentine provinces are hiring advisers and weighing options for their foreign debt loads as the national government advances its own talks to restructure $65 billion, Bloomberg News reported. Half a dozen regional governments are taking their own steps as Argentina negotiates with holders of its overseas debt ahead of a May 22 deadline. For provinces, which hold $15 billion in debt and rely on disbursements from the central government, the fate of the national talks are key.

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Argentina’s largest and most populous province was cut to selective default by S&P Global Ratings after it missed a deadline to make a $150 million payment. The province is considered to be in selective default because negotiations with creditors are ongoing, making the proposal a “distressed exchange,” according to an S&P statement, Bloomberg News reported. Buenos Aires extended this week to May 26 an offer to restructure $7 billion of overseas debt.

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Months of concern over rising Covid-19 infection levels may be secondary for investors in coming days as market-moving events and policy decisions take center stage, Bloomberg News reported. China’s annual National People’s Congress starting Friday will likely keep volatility suppressed for developing-nation currencies, despite the prospect of another flareup in tensions between Beijing and Washington.

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While most of the world contemplates with dread the economic destruction wreaked by the coronavirus, for many Argentine entrepreneurs it is just one more challenge to overcome, the Financial Times reported. Accustomed to dealing with crises on an all-too-regular basis, many start-ups have succeeded in turning misfortune to their advantage. Argentina’s last major economic collapse in 2001-02 served as a catalyst for the rise of some of its most successful companies.

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Shares of Avianca Holdings Inc fell sharply on the Bogota stock exchange on Tuesday after a New York court approved initial motions in the Colombia-based airline’s bankruptcy case, Reuters reported. Many airlines have been forced to suspend flights since March in the wake of quarantine measures to slow the spread of the novel coronavirus. Avianca filed for Chapter 11 bankruptcy protection in New York on Sunday after failing to meet a bond payment deadline and as its pleas for assistance from Colombia’s government over the coronavirus crisis were met with a tepid response.

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