South America

Brazil's privately held deposit guarantee fund ruled out improving terms of a bond repurchase for Banco Cruzeiro do Sul, which runs the risk of bankruptcy, O Estado de S. Paulo newspaper reported on Monday. The central bank seized the bank June. Bondholders of consumer lender Cruzeiro do Sul, who stand to lose half of their investment under a repurchase program, have questioned the plan, in an indication that they will press for a sweeter offer. The plan requires the approval of 90 percent of bondholders.
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Bondholders of Brazilian consumer lender Banco Cruzeiro do Sul, who stand to lose half of their investment under a repurchase program, questioned the plan at a creditors meeting on Tuesday, in an indication that they will press for a sweeter offer, Reuters reported. Investors who attended the meeting in Miami said the buyback, announced last week as part of efforts to save Cruzeiro from liquidation, treats them unequally.
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Bondholders of Brazilian lender Banco Cruzeiro do Sul who stand to receive about half of their investment in a bond repurchase program are being treated in an unfair way, investors told Valor Economico newspaper on Monday. Cruzeiro do Sul was seized by Brazil's central bank on June 4 and put under the administration of privately held deposit guarantee fund FGC the same day. Under the global bond buyback plan, FGC will receive tenders until Sept. 12.
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Bondholders of Brazilian troubled bank Banco Cruzeiro do Sul will receive about half of their investments as part of a bond repurchase program, an executive said on Tuesday, Reuters reported. Cruzeiro do Sul was seized by Brazil's central bank on June 4 and put under the administration of privately held deposit guarantee fund FGC the same day. FGC and Cruzeiro launched the global bond buyback plan that will receive tenders until Sept. 12, said Celso Antunes, the FGC executive currently in charge of the bank.
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Brazilian electricity utility Equatorial Energia is considering ways to beef up its capital, including selling stock, to make way for the purchase of debt-laden rival Celpa, two sources with knowledge of the situation said on Thursday, Reuters reported. A share sale would comply with rules for companies that list common shares in the São Paulo Stock Exchange. Alternatives include borrowing from banks in the form of bridge loans, said one of the sources, who declined to be named because the process is in the works.
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Brazilian electricity utility Equatorial Energia's potential capital injection in debt-laden rival Celpa may come up short, a source told Reuters on Wednesday. Equatorial only has 500 million reais ($248 million) available to invest in Celpa, a power distribution company that serves the northern state of Pará, said the source, who declined to be quoted because of the sensitivity of the issue. Celpa, a unit of cash-strapped power holding company Rede Energia, filed for bankruptcy protection in February. Equatorial declined to comment.
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Brazil’s consumer-loan default rate fell in June for the first time in three months, as the government’s drive to lower borrowing costs provides relief to indebted families, Bloomberg Businessweek reported. The consumer default rate declined to 7.8 percent from a revised 7.9 percent in May, the central bank said in a report distributed today in Brasilia. The company loan default rate slid to 4 percent from 4.1 percent over the same period.
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The Brazilian central bank, concerned by a deepening scarcity of funding for small- and mid-sized lenders, is considering creating a fund to invest in sales of loan-backed receivables, O Estado de S. Paulo newspaper reported on Monday. So-called mid-cap banks are responsible for about 220 billion reais ($108 billion) in loans, or about 10 percent of Brazil's total outstanding lending, the report said. Banks in that segment are facing a dearth of funding in the wake of the central bank's seizure of Banco Cruzeiro do Sul for alleged accounting irregularities.
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Brazilian debt-laden power distributor Celpa and creditors halted dent restructuring talks in order to allow the company to negotiate a sale to rival Equatorial Energia, an official told Reuters on Monday. Mauro Santos, the official in charge of overseeing Celpa's bankruptcy protection filing, said in an interview that talks will remain suspended until August 9. Equatorial said recently that it entered exclusive talks with Celpa over a potential sale. Read more.
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Brazil’s consumer loan default rate rose to the highest in 30 months, reinforcing concerns that households struggling with debt could further dent Brazil’s credit-driven growth model. The consumer default rate in May rose to 8 percent, from a revised 7.8 percent in April, the central bank said in a report distributed today in Brasilia. The default rate on company loans remained unchanged at 4.1 percent, Bloomberg reported.
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