Colombia will bring home the $5.3 billion from its International Monetary Fund loan at a gradual pace to avoid causing turbulence in currency markets, deputy Finance Minister Juan Pablo Zarate said, Bloomberg News reported. This cautious approach also improves the chances of the nation getting a more favorable exchange rate, Zarate said in a video interview on Thursday. Colombia will be the first country to tap an IMF flexible credit line, a pre-approved source of funding that comes with no conditions on how it’s spent.
Countries do not usually gain friends when telling creditors they can’t pay them back. Yet Ecuador earned serious plaudits as it went about restructuring $17.4bn of bonds this year, GlobalCapital reported. The Ad Hoc Bondholder Group that owned more than half of the sovereign’s bonds even said that the process “set a precedent” for Covid-19 era restructurings. Jan Dehn, head of research at Ashmore, part of the Ad Hoc group, explains that on one hand the group was referring to modifications in collective actions clauses that some creditors hope will become standard practice.
Nextel Brazil has been rebranded as Claro-nxt after being acquired by America Movil in December last year, Developing Telecoms reported. America Movil, which operates Claro Brasil, spent US$905 million to obtain the unit from NII Holdings. Nextel subscribers have now been migrated and can access Claro’s LTE-A network, as well as benefits such as free calling and WhatsApp messages. Nextel’s former parent NII Holdings has now filed a “verified petition for dissolution” in the Court of Chancery of the State of Delaware, reports TeleGeography.
An International Monetary Fund mission concluded a visit to Argentina on Sunday, after several days of preliminary talks aimed at repaying about $44 billion owed by the cash-strapped government to the fund, a government source said, Reuters reported. The delegation of IMF economists arrived early last week, led by Julie Kozack, Western Hemisphere deputy director for the IMF. “This first visit has concluded,” the government source told Reuters on condition of anonymity. Argentina recently restructured about $100 million in non-performing bonds.
Three small investment funds have started buying defaulted Venezuelan bonds as hopes of a change of government are fading and the South American nation is proposing a restructuring, according to sources and documents, Reuters reported. Canaima Capital Management, headquartered on the English Channel island of Guernsey, Uruguay-based Copernico and Cayman Islands-based Altana have bought heavily discounted bonds with face value of hundreds of millions of dollars, according to eight finance industry sources in Caracas, New York, Miami, Madrid and London.
Rafael Correa, the leftist leader who governed Ecuador for a decade and defaulted on its debt, and his protégé in next year’s presidential election said they would reject the spending cuts requested by the International Monetary Fund as part of a loan deal, Bloomberg News reported. “These austerity policies kill economies,” Correa said in an interview from exile in Belgium. “We’ll check all of this.
Nearly half of Argentina’s population was living in poverty in the second quarter, a sharp increase from last year, as the country’s longstanding economic crisis deepened due to the coronavirus pandemic, researchers estimated on Wednesday, Reuters reported. The Catholic University of Argentina (UCA) estimated the poverty rate spiked to between 46% and 47% by the end of June following months of strict lockdowns to battle the spread of the virus.
Argentina will make interest payment due on dollar and euro-denominated “Par” bonds on Wednesday this week, the country’s Economy Ministry said in a statement on Monday, closing off an unresolved issue from its recent major debt revamp, Reuters reoprted. The government had failed to restructure a small number of bonds, including the Pars, as part of an otherwise successful $65 billion foreign debt restructuring, which saw 99% of eligible debt exchanged at the end of last month.
Argentina’s newly restructured dollar bonds have slumped in value less than a month after a deal was finalised to postpone debt payments, as fears grow about the country’s economic health, the Financial Times reported. On August 31, Argentina clinched near-unanimous approval from its bondholders to restructure $65bn of foreign debt after months of sparring. The country’s sovereign bonds began trading this month, and have already fallen towards distressed levels.
Argentine companies are facing an increasingly difficult task to keep up with payments on dollar debt, hiking the risk of a wave of corporate defaults after the country tightened access to foreign currency to stem a sharp decline in reserves, Reuters reported. The central bank move, which pressured firms to restructure their debts and tightened individuals’ access to greenbacks, jolted local markets, pummeled bond prices and equities and heightened demand for black market dollars.