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Mexican airline Grupo Aeromexico SAB de CV has filed a reorganization plan that includes a financing proposal largely backed by a group of senior noteholders and unsecured creditors and allow the carrier to shed $1 billion from its debt stack, Reuters reported. In court papers filed late Friday, Aeromexico says it is continuing to “actively negotiate with various stakeholders regarding an exit financing package” based on the noteholders and trade creditors’ joint proposal to bring in as much creditor support for the plan as possible. The airline, represented by Davis Polk & Wardwell, filed for chapter 11 in June 2020 with $2 billion in debt, blaming the downturn in travel demand caused by the COVID-19 pandemic. Aeromexico plans to ask U.S. Bankruptcy Judge Shelley Chapman in Manhattan to grant approval for it to begin soliciting creditor votes on the plan at a hearing on Oct. 25. The joint proposal includes $1.1875 billion in new equity and $537.5 million in new secured debt. The new financing would be used to refinance or pay off all or some of $1 billion in loans used to fund operations during the bankruptcy. It would also be used to cover costs necessary to emerge from chapter 11, to set up a cash-out option for general unsecured creditors and acquire Aimia Holdings UK Ltd’s interest in the airline's travel loyalty program, PLM Premier. The joint proposal puts Aeromexico's total enterprise value at $5.4 billion. Aeromexico says the plan would save nearly 13,000 jobs worldwide.

The Treasury Department yesterday announced plans to start reallocating the billions of dollars in federal rental assistance in a bid to get more money into the hands of tenants facing eviction, the Associated Press reported. The move, which was required by Congress when it allocated the monies, follows the slow distribution of rental assistance in many parts of the country. A little more than 16.5% of the tens of billions of dollars in federal assistance reached tenants in August, compared with 11% a month earlier. Lawmakers have approved $46.5 billion in spending on rental assistance and Treasury is targeting the first tranche of money known as ERA1 which amounts to $25 billion. States and cities are mostly allocating ERA1 money, which must be spent by Sept. 30, 2022. Allocation of the second installment of $21.5 billion, can go through through Sept. 30, 2025. The goal, Treasury officials said, is to reallocate money from those programs either don’t need it or don’t have the desire to set up a program.

Inflation held firm in August as consumer spending rebounded sharply from a July decline, according to data released Friday by the Commerce Department, The Hill reported. The personal consumption expenditures (PCE) index, the Federal Reserve's preferred gauge of consumer price growth, rose 0.4 percent in August and 0.3 percent without food and energy prices, the same rates as in July. Annual inflation ticked higher in August, rising 0.1 percent from July to 4.3 percent, while annual inflation without food or energy prices stayed even at 3.6 percent. The rate of consumer price increases has appeared to slow from a sharp rise this summer, but inflation has remained at decade-plus highs longer than many economists, including White House and Federal Reserve officials, had anticipated. A combination of severe shipping backlogs, supply chain snarls, hiring troubles in key industries and the stifling impact of the delta variant have all kept upward pressure on consumer prices, with little clarity into when they will ease. Consumer spending, however, snapped back strongly from a 0.1 percent decline in July, rising 0.8 percent in August and 0.4 percent when adjusted for inflation.

The Labor Department’s official unemployment rate — the most well-known gauge of the labor market’s health — counts as unemployed only those who aren’t working but are actively seeking a job. That leaves out millions who stopped working and looking for work since the coronavirus hit the economy in early 2020, leaving many businesses struggling to hire, the Wall Street Journal reported. A September drop would be good news if it primarily reflects job growth. Economists estimate that employers added 485,000 jobs to payrolls last month, which would be a pickup from August but not as large as the monthly gains of early summer. But the decline would be worrisome if it is also due to potential workers staying on the sidelines. In Friday’s report, economists will be closely watching the labor-force participation rate, or the share of adults working or seeking work. It has held at or below 61.7% since April, well down from 63.4% in January 2020.