Restructuring Insights - Latin America
10 December 2020
With the roll-out of Debtwire’s Restructuring Data to Latin America, this inaugural Restructuring Insights Report serves as a previewofthepower,breadth and depth of the data that will be available to subscribers.
In this report, we apply the same lenses to the Latin American restructuring landscape from January 2019 through 15 November2020,analyzing newly initiated restructuring and bankruptcy situations across the region.
• Over this time period, more than 60 new restructuring situations have commenced across the region, with just under half coming from Brazil; nonetheless, there have been over twice as many Brazilian corporate restructurings as the rest of the region combined.
• On the sector front, government restructurings, including sovereigns and quasi-sovereigns, accounted for approximately 25% of the restructuring activity, followed by the transportation sector (i.e., airlines) and then agriculture.
• 2Q20 saw a huge surge in restructurings, with 15 new situations (close to 20% of the total case volume), due largely to the COVID-19 pandemic; however, when focusing on the amount of debt the discrepancy is even greater, with more debt under restructuring in 2Q20 than the rest of the time period combined.
• Another main trendline is the use of US Chapter 11 processes in lieu of domestic proceedings, covering several large Latin American airlines—Aeromexico (Mexico), Avianca Holdings (Colombia), LATAM Airlines (Chile)—and three other Mexico-related Chapter 11s.