South America

Prayers for a sudden return to dovish monetary policies have been answered, and now investors are living with the aftermath: a world awash with $8.6 trillion in negative-yielding debt, Bloomberg News reported. That’s one reason money managers are wading once more into the fringes of fixed-income markets across the globe. Consider the action over the past week: Serial defaulter Ecuador managed to sell $1 billion in new bonds even as the government is in talks for International Monetary Fund financing.

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Brazilian fertilizer company Fertilizantes Heringer SA has said it is filing for bankruptcy protection, closing down nine plants in Brazil and laying off their workers, Reuters reported. Heringer, among the largest players in the Brazilian fertilizer market with annual output of around 6 million tonnes, explained in a securities filing late on Monday that its liquidity situation deteriorated recently, leading to the decision. Reuters last week reported that the company was closing down 10 installations including plants and regional offices, and laying off an unspecified number of workers.

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Banco Bradesco SA on Thursday posted forecast-beating quarterly earnings and set more aggressive targets for 2019, including eyeing upcoming government asset sales, sending the Brazilian lender’s shares to a record high. Brazil’s second-largest privately owned bank reported a 19.9 percent rise in fourth-quarter profit over a year earlier and beat analysts’ average estimate on lower loan-loss provisions. Recurring net income at Banco Bradesco came in at 5.830 billion reais ($1.58 billion) in the fourth quarter, above the average Refinitiv estimate of 5.526 billion reais.

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Brazilian fertilizer company Fertilizantes Heringer SA has decided to close several of its plants and distribution centres as part of a restructuring plan to lower its debt burden, two sources told Reuters on Thursday, the International New York Times reported on a Reuters story. Heringer, one of the largest players in the Brazilian fertilizer market, sent a message to workers on Thursday in at least 10 installations, including plants and regional offices, advising them that they faced closure, according to a e-mail message seen by Reuters. Workers in those units would be laid off.

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Brazilian airline Avianca Brasil, which filed for bankruptcy protection in December, expects that advanced loan talks with hedge fund Elliott Management Corp will avoid the grounding of its planes, two sources with knowledge of the matter said on Thursday, Reuters reported. Avianca Brasil has been talking to Elliott about the hedge fund’s providing a 250 million real ($68.59 million) loan, the sources said. No agreement has yet been reached, however, and the aircraft lessors have not been paid, the people added, asking for anonymity to disclose private talks.

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Samarco Mineracao SA, the Brazilian mining venture that caused an environmental catastrophe in 2015, disclosed that it has been is in advanced debt restructuring talks just days after it’s co-owner Vale SA suffered a similar dam rupture that has killed at least 65 people, Bloomberg News reported. The distressed joint venture owned by Vale and BHP Group Ltd. had reached a preliminary deal with creditors to restructure its debt by issuing new notes, according to documents Samarco disclosed on Monday night. Samarco bonds have tanked since Jan.

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Brazil's deadly tailings dam collapse is likely to complicate a settlement for a similar disaster less than four years ago at the Samarco iron ore mine, owned jointly by Vale SA and BHP Group, investors said on Tuesday. Vale and BHP have been aiming to restart the mine as early as 2020 following a dam failure in 2015 that killed 19 people and buried a village, the International New York Times reported on a Reuters story. A second deadly dam burst at a Vale mine on Friday killed 65 people and there are fears the death toll could soar into the hundreds.

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Venezuelan opposition leader Juan Guaido’s team of advisers is rushing to take control of the country’s main foreign asset, U.S. refiner Citgo Petroleum, before a potential bond default that could leave half the company in creditors’ hands, sources close to the talks told Reuters on Monday.

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Many have applauded the return of stability to Argentina’s peso, which was one of the world’s worst-performing currencies in 2018. But being one of the best performing currencies this year brings a whole new set of problems, the Financial Times reported. The central bank is striving to maintain currency stability while fighting record levels of inflation, which reached nearly 48 per cent last year, without also prolonging a recession that could endanger President Mauricio Macri’s chances of re-election in October.

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Venezuelan bond prices jumped to the highest in six months as large anti-government protests throughout the country spurred speculation that President Nicolas Maduro’s regime could be coming closer to an end, Bloomberg News reported. As Venezuelans took to the streets, the country’s $4 billion of defaulted notes due in 2027 surged 2.4 cents to 30.7 cents on the dollar, the highest price since June. Other overseas notes from the government and state-owned oil company joined along in a broad rally.

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