2025-05-28 19:10

BRASILIA, May 28 (Reuters) - The average cost of Brazil's domestic debt issuance rose to the highest level in more than eight years, Treasury data showed on Wednesday, as elevated interest rates and persistent inflation continue to weigh on the country's debt profile. The cost reached 13.05% in April, up from 12.61% the previous month and the highest since January 2017. Sign up here. Local currency debt accounts for 96% of the total public debt in Latin America's largest economy. Brazil's debt burden is under pressure from high interest rates - nearly half of the public debt is linked to the Selic rate - as well as persistent inflation, which has long remained above the 3% target, making inflation-linked bonds more expensive. The central bank has raised interest rates by a total 425 basis points to 14.75% since it began a tightening cycle in September to curb sticky inflation. Annual consumer prices reached 5.40% in mid-May. According to Treasury data, Brazil's total public debt stock, including external debt, rose 1.44% in April from the previous month to 7.617 trillion reais ($1.34 trillion). Gross debt issuance totaled 204.6 billion reais, while redemptions reached 164.6 billion reais, resulting in net issuance of 40 billion reais. The debt stock was also impacted by 68.3 billion reais in interest payments, the Treasury said. Year-to-date, Brazil's public debt has increased by 300.6 billion reais, driven by 259.4 billion reais in interest payments and net issuance of 41.2 billion reais. ($1 = 5.6894 reais) https://www.reuters.com/world/americas/brazils-debt-issuance-cost-rises-highest-level-more-than-eight-years-2025-05-28/

2025-05-28 19:06

BRASILIA, May 28 (Reuters) - Brazil's economy created a net 257,528 formal jobs in April, data from the Labor Ministry showed on Wednesday, above the 175,000 expected by economists in a Reuters poll. The data accounts for 2,282,187 jobs opened and 2,024,659 closed in the period, according to the ministry. Sign up here. It was the highest figure for April since 2020, when the current methodology for the official series was introduced. From January to April, a net 922,362 jobs were created in Brazil, down from 965,818 a year earlier, according to adjusted data. https://www.reuters.com/world/americas/brazil-creates-more-formal-jobs-than-expected-april-2025-05-28/

2025-05-28 18:57

Restructuring includes commitment of $1.6 billion in financing Deal also includes elimination of more than $2 billion of debt Further commitment of up to $950 million in equity financing May 28 (Reuters) - Brazilian airline Azul (AZUL.N) , opens new tab on Wednesday filed for Chapter 11 bankruptcy protection in the United States, it said in a securities filing, after months of trying to restructure mostly pandemic-era debt. The move, which may scupper a potential merger with peer Gol (GOLL4.SA) , opens new tab, makes the carrier the latest Latin American airline to file for bankruptcy in the aftermath of the severe industry fallout from the initial months of COVID-19. Sign up here. Sao Paulo-traded shares of Azul fell as much as 12% after the filing, before paring losses to trade down around 3% in the afternoon. The stock is now down 70% year-to-date. A restructuring deal includes a commitment of $1.6 billion in financing throughout the process, elimination of more than $2 billion of debt, and a commitment of up to $950 million in equity financing upon emergence, the carrier said. "We had too much debt on the balance sheet that principally came from COVID. We now have an opportunity to clean it all up," Chief Executive John Rodgerson told Reuters in an interview. Azul said it had entered into agreements with key financial stakeholders, including existing bondholders, aircraft lessor AerCap (AER.N) , opens new tab, and strategic partners United Airlines (UAL.O) , opens new tab and American Airlines (AAL.O) , opens new tab to support the restructuring. "We believe we could be in and out prior to the end of the year," Rodgerson said. "The exit is sometimes the most difficult part of this process. So we're already entering with the exit in mind, and exiting with the financing lined up." Azul's move follows in the footsteps of Aeromexico, Colombia-based Avianca and its two largest rivals, Gol and LATAM Airlines (LTM.SN) , opens new tab, all of which filed for bankruptcy. "This development comes as no major surprise," analysts at JPMorgan said in a note to clients, saying the bankruptcy process should lead to significant equity dilution and downgrading their recommendation on the stock to "Underweight" from "Neutral." SOARING INTEREST PAYMENTS Azul last year struck a deal with lessors to scrap $550 million in debt in exchange for an equity stake of around 20%, as well as a deal with bondholders to raise an additional $500 million. But factors such as high costs, supply-chain issues delaying aircraft deliveries and maintenance plans, as well as a weaker Brazilian real , have kept the company under pressure. "What I used to pay in interest in 2019 has gone up 10 times with a currency that is 50% weaker," Rodgerson said. United and American agreed to invest up to $300 million to backstop an equity rights offering to repay the airline's debtor-in-possession financing when it emerges from bankruptcy. Azul's net debt soared 50% year-on-year by the end of the first quarter to 31.35 billion reais ($5.6 billion), with its leverage ratio hitting 5.2, up from 3.7 a year earlier. The latest blow came last month, as a capital increase fell short of expectations, pressuring Azul's shares. Fitch and S&P recently downgraded Azul's credit ratings, with the latter citing an elevated default risk. Azul said it would maintain its operations and sales normally while in Chapter 11. The Chapter 11 filing likely spoils Azul's plans for a potential business combination with rival Gol, which would have created a dominant carrier in Latin America's No. 1 economy that Rodgerson once touted as a "national champion". "We believe that consolidation discussions with Gol should be put on hold until Azul emerges from Chapter 11," JPMorgan said. ($1 = 5.6377 reais) https://www.reuters.com/business/aerospace-defense/brazil-airline-azul-files-chapter-11-restructure-high-debt-2025-05-28/

2025-05-28 16:54

NEW YORK, May 28 (Reuters) - U.S. homeowners and prospective buyers are feeling the most uncertain about the real estate market since 2023, a Bank of America survey showed on Wednesday, as rising mortgage rates deter buyers. Of the 2,000 respondents to BofA's poll, 60% said they could not tell whether it was a good time to buy a home, according to a report published by the nation's second-largest lender. That is up from 57% last year and 48% in 2023. Sign up here. Volatile interest rates and elevated home prices have fueled uncertainty, prompting consumers to slow house purchases during the spring season, when activity typically picks up, Matt Vernon, head of consumer lending at Bank of America, told Reuters. "We're certainly off to a slower start, from a spring season perspective, than we've historically seen," he said. The sluggish start to a spring season contrasts with the first quarter, when BofA saw an 80% jump in mortgage applications as buyers were tempted by increasing home inventory and lower long-term bond yields. Mortgage rates (USMG=ECI) , opens new tab have increased alongside the yield on the benchmark 10-year U.S. Treasury note. Volatility in rates has been driven by concerns over the Trump administration's economic policies, including tariffs, and the nation's deteriorating fiscal outlook. "Despite buyers having more options and better affordability compared to last April, sales fell over the year," said Kara Ng, senior economist at Zillow, a home listing services firm. "The likely culprit was macro uncertainty, as many households didn’t know what was next for their jobs, investment portfolios, or budgets," Ng said. Still, the survey showed that 52% of prospective home buyers felt that the market was better now than it was a year ago. Three out of four expected home prices and interest rates to fall and are waiting until then to buy a new home, up from 62% in 2023. "This continued rate period in the 6% to 7% range is now becoming a new normal," said Vernon. "They are looking to be opportunistic for rates and prices to come down." https://www.reuters.com/business/finance/us-home-buyers-are-most-uncertain-since-2023-rates-surge-bofa-survey-shows-2025-05-28/

2025-05-28 16:25

May 28 (Reuters) - Over-the-counter (OTC) shares of Fannie Mae and Freddie Mac rose on Wednesday after U.S. President Donald Trump said he was working on taking the housing giants public. "I am working on TAKING THESE AMAZING COMPANIES PUBLIC, but I want to be clear, the U.S. Government will keep its implicit GUARANTEES, and I will stay strong in my position on overseeing them as President," Trump wrote in a post on Truth Social late on Tuesday. Sign up here. The Trump administration wants to end the long-standing conservatorship of Fannie Mae and Freddie Mac, which have been under the U.S. government's control since 2008 after they suffered heavy losses during the subprime mortgage crisis. Trump had tried to reduce government control during his first term. At a Fannie Mae news conference, Bill Pulte, director of the Federal Housing Finance Agency that regulates Fannie Mae and Freddie Mac, said , opens new tabTrump is talking about "potentially figuring out how these businesses can continue to be worth more and more money over time." "These businesses, in my view are worth - eventually, will be worth - trillions of dollars worth of value to the American taxpayers," he said. Asked about details of the plan on taking the companies public, Pulte said it's up to Trump and he would "eventually make whatever decision that he wants to make, on his own timeline." The regulator is expected to play a central role in any effort to return the pair, which backs the majority of the nation's residential mortgages, to the private sector. Fannie shares (FNMA.PK) , opens new tab rose 3.7% to $10.92, while Freddie gained (FMCC.PK) , opens new tab 7% to $8.13 by midday trading after a double-digit jump earlier in the session. The shares, which don't trade on major exchanges, hit their highest since 2008 after Trump said last week he was mulling a spinoff of the U.S. mortgage finance firms. The United States Treasury owns preferred shares in the firms and warrants to purchase about 80% of their common stock. The combined market value of the two companies was $17 billion as of the last closing price. They have shot up more than five-fold in value over the past year, with most gains made around Trump's 2024 U.S. election win. Trump ally Bill Ackman's Pershing Square Capital Management (PSHP.L) , opens new tab is the biggest holder of Fannie's public OTC shares with about 10%, according to LSEG data. Capital Research Global Investors, a unit of the Capital Group, is among the top investors in Freddie and Fannie. Fannie Mae announced , opens new tab an AI fraud detection technology partnership with Palantir (PLTR.O) , opens new tab on Wednesday and said it was in talks with Elon Musk-owned xAI as well. The mortgage fraud detection software will be trained on Fannie Mae data, and Palantir will comply with the company's controls, Fannie Mae CEO Priscilla Almodovar said. https://www.reuters.com/business/fannie-freddie-otc-shares-climb-trump-prepares-take-firms-public-2025-05-28/

2025-05-28 16:07

MOSCOW, May 28 (Reuters) - The net profit of Russian banks rose by 7% in month-on-month terms in April to 261 billion roubles ($3.27 billion), according to data published by the central bank on Wednesday. Corporate lending rose by 0.9% in April compared to March, while consumer lending declined by 0.7%, the central bank said. Sign up here. ($1 = 79.8705 roubles) https://www.reuters.com/business/finance/russian-banks-net-profit-up-7-mm-april-central-bank-says-2025-05-28/