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/raid1/www/Hosts/bankrupt/TCRLA_Public/200310.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Tuesday, March 10, 2020, Vol. 21, No. 50 Headlines B R A Z I L BRAZIL: Instability Affects Risk After Impacting Stock Exchange ODEBRECHT SA: R$143MM in Financial Assets of Former Head Frozen D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: Bank Guarantees Stable Prices, Exchange Rate J A M A I C A JAMAICA: Manufacturers Urged Not to Up Prices Amid Coronavirus JAMAICA: Monitors Fallout From Coronavirus in Key Markets M E X I C O GRUPO POSADAS: Moody's Reviews B2 CFR for Downgrade on Weak Credit P A R A G U A Y PARAGUAY: IDB OKs $90MM Loan to Modernize its Regulatory Framework P E R U HUNT OIL: Moody's Changes Ratings Outlook to Negative P U E R T O R I C O ARMANDO TROCHE: Maldonaldo Represents Jimenez, 3 Others PONCE REAL ESTATE: Hearing on Disclosures Moved to June 11 T R I N I D A D A N D T O B A G O TRINIDAD & TOBAGO: Forex Shortage Deepening Retail Pressure TRINIDAD & TOBAGO: Seeking Amicable Customs Solution - - - - - =========== B R A Z I L =========== BRAZIL: Instability Affects Risk After Impacting Stock Exchange --------------------------------------------------------------- Rio Times Online reports that since the end of Carnival, instability in the exchange and interest markets and in the Brazilian Stock Exchange was attributed to the impact of the coronavirus on economic activity worldwide. Financial indicators signaled a loss of investor confidence in the Brazilian economy, according to Rio Times Online. There was also a strong increase in Brazil's country risk as measured by the CDS (Credit Default Swap), the report adds. As reported in the Troubled Company Reporter-Latin America, Fitch Ratings in November 2019 affirmed Brazil's Long-Term Foreign Currency Issuer Default Rating at 'BB-'. The Rating Outlook is Stable. ODEBRECHT SA: R$143MM in Financial Assets of Former Head Frozen --------------------------------------------------------------- Rio Times Online reports that the 2nd Sao Paulo Business Court granted the Odebrecht Group's request, part of the lawsuit it filed against its former President. The Sao Paulo courts have frozen R$143 (US$32) million from Marcelo Odebrecht's accounts, according to Rio Times Online. The preliminary decision, handed down by Judge Eduardo Pellegrinelli, of the 2nd Sao Paulo Business Court, meets Odebrecht Group's own request, which brought the lawsuit against its former president, his wife and daughters, the report adds. Odebrecht S.A. -- www.odebrecht.com -- is a Brazilian conglomerate consisting of diversified businesses in the fields of engineering, construction, chemicals and petrochemicals. Odebrecht S.A. is a holding company for Construtora Norberto Odebrecht S.A., the biggest engineering and contracting company in Latin America, and Braskem S.A., the largest petrochemicals producer in Latin America and one of Brazil's five largest private-sector manufacturing companies. Odebrecht controls Braskem, which by revenue is the fourth largest petrochemical company in the Americas. On June 17, 2019, Odebrecht filed for bankruptcy protection, aiming to restructure BRL51 billion (US$13 billion) of debt. The bankruptcy filing comes after years of struggles for Odebrecht, the biggest of the Brazilian engineering groups caught in a sweeping political corruption investigation that has rippled across Latin America, Reuters relayed, as reported by The Troubled Company Reporter - Latin America. On August 28, 2019, the Troubled Company Reporter - Latin America, citing The Wall Street Journal, reported that Odebrecht and its affiliates filed for chapter 15 bankruptcy, seeking U.S. recognition of the largest-ever bankruptcy in Latin America. Odebrecht SA and several of its affiliates has filed for bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York on Aug. 26. The case is assigned to Hon. Stuart M. Bernstein. =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: Bank Guarantees Stable Prices, Exchange Rate ---------------------------------------------------------------- Dominican Today reports that the Central Bank said it's firmly committed to stable prices and exchange stability in the country. It appealed to the economic agents, the political and business class to contribute to the climate of stability, "avoiding generating greater uncertainties for the economy," according to Dominican Today. "We continue vigilant to take any monetary, exchange or financial policy measures that may be necessary," it said in a statement obtained by the news agency. It adds that it has adopted a series of details, "to avert generating greater uncertainty due to the events that have affected international and domestic markets in the months of January and February 2020," the report adds. About Dominican Republic The Dominican Republic is a Caribbean nation that shares the island of Hispaniola with Haiti to the west. Capital city Santo Domingo has Spanish landmarks like the Gothic Catedral Primada de America dating back 5 centuries in its Zona Colonial district. The Troubled Company Reporter-Latin America reported in April 2019 that the Dominican Today related that Juan Del Rosario of the UASD Economic Faculty cited a current economic slowdown for the Dominican Republic and cautioned that if the trend continues, growth would reach only 4% by 2023. Mr. Del Rosario said that if that happens, "we'll face difficulties in meeting international commitments." An ongoing concern in the Dominican Republic is the inability of participants in the electricity sector to establish financial viability for the system. Standard & Poor's credit rating for Dominican Republic stands at BB- with stable outlook (2015). Moody's credit rating for Dominican Republic was last set at Ba3 with stable outlook (2017). Fitch's credit rating for Dominican Republic was last reported at BB- with stable outlook (2016). ============= J A M A I C A ============= JAMAICA: Manufacturers Urged Not to Up Prices Amid Coronavirus -------------------------------------------------------------- RJR News reports that Floyd Green, Minister of State in the Ministry of Industry, Commerce, Agriculture and Fisheries, is urging manufacturers to resist price increases in the wake of the threat of the new coronavirus. The National Compliance Regulatory Authority and the Consumer Affairs Commission have been directed to increase their visits to supermarkets, as well as the frequency of reports to consumers, according to RJR News. Mr. Green met with industry stakeholders to ascertain concerns and to discuss strategies to safeguard businesses against the virus, the report notes. Among the issues discussed were the availability of supplies for manufacturers, the need to guard against hoarding and price increases, as well as the need to ramp up production, the report adds. About Jamaica As reported in the Troubled Company Reporter-Latin America, S&P Global Ratings in September 2019 raised its long-term foreign and local currency sovereign credit ratings on Jamaica to 'B+' from 'B'. The outlook is stable. At the same time, S&P Global Ratings affirmed its 'B' short-term foreign and local currency sovereign credit ratings on the country. S&P Global Ratings also raised its transfer and convertibility assessment to 'BB-' from 'B+'. RJR News reported in June 2019 that Steven Gooden, Chief Executive Officer of NCB Capital Markets, warned that the increasing liquidity in the Jamaican economy might result in heightened risk to the financial market if left unchecked. This, he said, is against the background of the local administration seeking to reduce the debt to GDP to 60% by the end of the 2025/26 fiscal year, which will see Government repaying more than J$600 billion which will get back into the system, according to RJR News. JAMAICA: Monitors Fallout From Coronavirus in Key Markets --------------------------------------------------------- RJR News reports that Jamaica Tourism Minister Edmund Bartlett has said the Government is monitoring industry developments in relation to the coronavirus outbreak in key visitor source markets. Mr. Bartlett said bookings from the United Kingdon, United States, Canada and South America are showing a holding pattern, but this is not likely to prevail within the next two to three months, according to RJR News. He revealed that due to the travel ban on Italy, bookings have ceased from that market, the report relays. There have also been fewer bookings from the continental sections of Europe, such as Germany and France, the report adds. About Jamaica As reported in the Troubled Company Reporter-Latin America, S&P Global Ratings in September 2019 raised its long-term foreign and local currency sovereign credit ratings on Jamaica to 'B+' from 'B'. The outlook is stable. At the same time, S&P Global Ratings affirmed its 'B' short-term foreign and local currency sovereign credit ratings on the country. S&P Global Ratings also raised its transfer and convertibility assessment to 'BB-' from 'B+'. RJR News reported in June 2019 that Steven Gooden, Chief Executive Officer of NCB Capital Markets, warned that the increasing liquidity in the Jamaican economy might result in heightened risk to the financial market if left unchecked. This, he said, is against the background of the local administration seeking to reduce the debt to GDP to 60% by the end of the 2025/26 fiscal year, which will see Government repaying more than J$600 billion which will get back into the system, according to RJR News. =========== M E X I C O =========== GRUPO POSADAS: Moody's Reviews B2 CFR for Downgrade on Weak Credit ------------------------------------------------------------------ Moody's Investors Service placed Grupo Posadas, S.A.B. de C.V.'s B2 corporate family rating and the senior unsecured rating on its 2022 notes on review for downgrade. Prior to this rating action, Posadas rating outlook was positive. The action follows weaker than anticipated operating performance and challenging business prospects through at least 2021. RATINGS RATIONALE "The review for downgrade was prompted by Posadas' weak credit metrics in the context of the Coronavirus outbreak that will hit global growth this year and could rapidly derail the Mexican touristic sector." says Sandra Beltran, a lead analyst at Moody's. During the review, Moody's will focus on Posadas' ability to refinance its 2022 notes, considering tightening capital markets conditions. Moody's will also use the period to analyze the evolution of the coronavirus outbreak in Mexico and the US and its effects on Posadas' occupancy and tariffs. In 2019 Posadas underperformed its expectations, closing the year with an adjusted gross debt to EBITDA of 9.7 times and EBITA / Interest Expense of 0.5 times. Urban hotels were affected by weak industrial activity and overall economic growth, whereas demand from international travelers continued affected by safety concerns. Overall, Posadas' occupancy remained relatively stable at 65%, but at the expense of tariffs, as reflected by the 5.8% drop in coastal average daily rate (ADR) that ultimately led to a 2.6% decline in total portfolio's revenue per available room (RevPar). Moreover, during 2019 Posadas faced cost pressures that further affected profitability. Labor and energy costs increased due to minimum wage raises throughout the country and a hike in electric power rates in the Yucatan peninsula. Likewise, the cancellation of federal budget to promote Mexico's tourist destinations abroad resulted in higher promotion expenditures. As a result, Moody's adjusted EBITDA margin declined to 13% in 2019 from 21% the prior year. Posadas' liquidity is tempered by the need to refinance its 2022 notes amid a challenging environment and history of underperformance. The bulk of Posadas' debt are $393 million outstanding under senior notes maturing in June 2022. In the end of 2019, the company's cash position amounted to MXN1.2 billion, enough to cover short term needs including lease commitments of MXN750 million, interest expense amounting $30 million (MXN615 million) and capital investments expected to be MXN650 million in 2020. However, the MXN1.5 billion cash burn reported in 2019 highlights the risk of a rapid deterioration. Although reflective of management prudency, the recent revision of 2020 capex and EBITDA - both downsized by $1 billion -- further flags this risk. Also limiting its assessment of Posadas' liquidity is its high exposure to the depreciation of the peso as only 30% of its revenues are US dollar denominated. Ratings could be downgraded if there is no indication of an ongoing plan to refinance the 2022 global notes by mid-2020. A downgrade will also arise if cash burn continues, threatening Posadas' ability to cover corporate expenses such as interests, taxes and working capital with internal sources or if committed investments are at risk. Posadas is the leading hotel operator in Mexico that owns, leases, franchises and manages 184 hotels and 29,851 rooms in the most important and visited urban and coastal destinations in Mexico. Urban hotels represent 81% of total rooms and coastal hotels represent 19%. Posadas trades in the Mexican Stock Exchange since 1992. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. =============== P A R A G U A Y =============== PARAGUAY: IDB OKs $90MM Loan to Modernize its Regulatory Framework ------------------------------------------------------------------ Paraguay plans to modernize its regulatory framework and strengthen its government policies designed to move toward the new age economy with a loan of $90 million approved by the Inter-American Development Bank (IDB). This program aims to consolidate public policies reformed designed to encourage access to digital technology by citizens and the private sector, as well as promoting digital transformation of public sector services. In this sense, the development of the National Information Technology and Communications Plan will be supported. This plan will feature a variety of initiatives involving the digital economy and promotion of information technologies, from supply-oriented policies aimed at expanding broadband coverage to demand-related policies linked to information technology competitiveness and accessibility, as well as electronic government initiatives. This project will also support analysis of gender in the appropriation of digital technologies and a pilot plan will be designed and carried out to collect disaggregated data by gender on access to and use of information technology. The reforms planned will be transversal and are aimed at overcoming regulatory and institutional limitations to achieve a substantial improvement in the economy's productivity by digitizing it. The program will benefit 61 percent (the percentage of Internet users) of the country's more than seven million people and 20 percent (the percentage with Internet access) of the country's more than two million households, which will enjoy higher quality of public and private digital services with the National Information Technology and Communications Plan. It is also expected that companies located in the same geographic area as 88 percent of the population covered by 4G networks benefit from improvements in government digital services. Likewise, companies located in the same geographic area as 88 percent of the population covered by 4G networks are expected to benefit from improvements in the provision of digital government services. The IDB loan of $90 million has a repayment term of 20 years, a grace period of five and a half years, and an interest rate based on LIBOR. As reported in the Troubled Company Reporter-Latin America on Dec. 11, 2019, Fitch Ratings affirmed Paraguay's Long-Term Foreign Currency Issuer Default Rating at 'BB+' with a Stable Outlook. ======= P E R U ======= HUNT OIL: Moody's Changes Ratings Outlook to Negative ----------------------------------------------------- Moody's Investors Service confirmed Hunt Oil Co. of Peru L.L.C., Suc. Del Peru's corporate family rating at Ba2. The outlook is negative. The rating actions were prompted by the downgrade on March 5, 2020 of Hunt Peru's parent, Hunt Oil Company's B3 issuer rating. These rating actions conclude the ratings review initiated on January 8, 2020. The actions on the ratings of Hunt were based on its weak credit metrics and high level of structural subordination of its creditors to debts outstanding at its subsidiaries; Hunt's ratings are buttressed by the financial support provided by its parent company, Hunt Consolidated, and its financial capacity to provide further support, if needed. Outlook Actions: Issuer: Hunt Oil Co. of Peru L.L.C., Suc. Del Peru Outlook, Changed To Negative From Rating Under Review Confirmations: Issuer: Hunt Oil Co. of Peru L.L.C., Suc. Del Peru Corporate Family Rating, Confirmed at Ba2 Senior Unsecured Regular Bond/Debenture, Confirmed at Ba2 RATINGS RATIONALE The Ba2 corporate family rating on Hunt Peru and its senior unsecured notes are restrained by Hunt's capital control of the Peruvian company and Hunt's dependence on cash flow from its subsidiary to service its own large debt obligations. In addition, the ratings also consider Hunt Peru's small production size; asset concentration in only two gas blocks; operating dependence on only two pipelines, owned by Transportadora de Gas del Peru (Baa1 stable); no operating control over the gas blocks; vulnerability to commodities prices; Moody's view of weak natural gas and natural gas liquids prices; and high dividend payout rate. On the other hand, Hunt Peru's ratings are also based on the company's large proved gas reserves, equivalent to 17 years of life; solid asset base in the world-class, prolific Camisea gas fields; low volume risk given solid demand both in the local and international markets; the strategic importance of the Camisea fields to the Government of Peru (A3 stable); and the company's experienced management team. Moody's considers the debt agreement's provisions in Hunt Peru's unsecured notes, that help ring-fence Hunt Peru from its parent, to be beneficial to its credit profile since the notes represent 100% of the company's debt. Hunt Peru has good liquidity. Cash in the amount of about $35 million in December 2019 plus around $200 million in cash from operations in the next 18 months, as expected by Moody's, will fund $41 million in capital spending plus $155 million in shareholders distributions in the period. The company also counts on a $30 million three-year committed revolving credit facility that matures in 2021. Hunt Peru will start to amortize its senior unsecured notes in late 2021. Hunt Peru's ratings negative outlook mirrors Hunt's rating negative outlook, which reflects the latter's lack of its own committed revolving credit facility to meet is liquidity requirements. The negative outlook on Hunt Peru's ratings also reflects the challenges of weak commodity prices and their effect on the company's cash flow-based credit metrics. Hunt Peru's Ba2 ratings could be downgraded if it faces extended operational disruptions or if its production declines. An interest coverage ratio, as measured by EBITDA/interest expense, below 5 times could also trigger a negative rating action. A negative action on Hunt's rating could also lead to a negative action on Hunt Peru's rating. Hunt Peru's Ba2 ratings could be upgraded if Hunt's rating is upgraded, provided that Hunt Peru at least maintains its current credit profile. The principal methodology used in these ratings was Independent Exploration and Production Industry published in May 2017. Hunt Peru is a wholly-owned, indirect subsidiary of Hunt, one of the largest privately-owned hydrocarbon companies in the United States. Hunt Peru is one of the leading exploration and production companies in Peru, with a focus on the exploitation of hydrocarbons and related activities, such as the purchase, sale, processing and fractionation of hydrocarbons, mostly natural gas. ===================== P U E R T O R I C O ===================== ARMANDO TROCHE: Maldonaldo Represents Jimenez, 3 Others ------------------------------------------------------- Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure, attorney Harold A. Frye Maldonado submitted a verified statement to disclose that it is representing Giovanna Ferrer Jimenez, Delia Aleman Acevedo, Raquel Negron Aleman, and Amarilys Oliveras Vega, in the Chapter 11 cases of Armando Troche Oliveri and Katherine Davila Morales. On or about Feb. 20, 2020, the undersigning attorney was retained to represent creditor Giovanna Ferrer Jimenez in the above-captioned Chapter 11 Case. On or about Feb. 28, 2020 Delia Aleman Acevedo, Raquel Negron Aleman, and Amarilys Oliveras Vega, retained the services of the undersigning attorney to represent them in the same case. Attorney Harold A. Frye Maldonado represents the above mentioned Creditors in the above captioned Chapter 11 Case and in Chapter 7, case number 20-00300 (Centro Citopatologico Del Caribe Inc.) The Creditors are the only creditors or other parties in interest in the above captioned Chapter 11 Case for which attorney Harold A. Frye Maldonado is required to file a Verified Statement pursuant to Rule 2019. As of March 4, 2020, the lists of Creditor's and their disclosable economic interests are: Giovanna Ferrer Jimenez PO Box 35000 PMB 20141 Canovanas, PR 00729 * Nature of Claim or Interest: Labor Law Claim * Amount of Claim or Interest: $22,120.20 Delia Aleman Acevedo Calle 16 Z-11 Jardines de Country Club Carolina, PR 00983 * Nature of Claim or Interest: Labor Law Claim * Amount of Claim or Interest: $14,024.00 Raquel Negron Aleman Ave. Gilberto Monroig 1961 San Juan, PR 00912 * Nature of Claim or Interest: Labor Law Claim * Amount of Claim or Interest: $18,341.51 Amarilys Oliveras Vega 114 Urb. Valles de Santa Olaya Bayamon, PR 00956 * Nature of Claim or Interest: Labor Law Claim * Amount of Claim or Interest: $22,978.15 The Firm can be reached at: Harold A. Frye Maldonado, Esq. PO Box 366973 San Juan, Puerto Rico 00936 Tel: (787)668-3022 Fax: (800)204-0744 Email: frye.maldonado@gmail.com A copy of the Rule 2019 filing, downloaded from PacerMonitor.com, is available at https://is.gd/eqNQAA About Armando Troche Oliveri and Katherine Davila Morales The Chapter 11 case is In re Armando Troche Oliveri and Katherine Davila Morales (Banks. D.P.R. Case No. 19-07179). PONCE REAL ESTATE: Hearing on Disclosures Moved to June 11 ---------------------------------------------------------- Judge Edward A. Godoy has ordered that the motion filed by PONCE REAL ESTATE CORP, the debtor in the case, requesting continuance of the hearing on the approval of the Disclosure Statement set for February 27, 2020 is granted. The same is rescheduled for June 11, 2020 at 9:30 AM at the United States Bankruptcy Court, Southwestern Divisional Office, MCS Building, Second Floor, 880 Tito Castro Avenue, Ponce, Puerto Rico. About Ponce Real Estate Corp. Ponce Real Estate Corp. as registered in the Department of State of Puerto Rico on February 11, 1955, under registry number 4514, as a domestic for-profit-corporation, operating the business of owning to lease real estate properties for commercial and/or residential purposes. Its principal place of business is located at 49 Mendez Vigo Street, Ponce, Puerto Rico 00730, which is property of PRE. Mr. Francisco I. Vilarino Rodriguez a/k/a Frank Vilarino is the sole owner and president. Ponce Real Estate Corp. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D.P.R. Case No. 18-06805) on Nov. 24, 2018. At the time of the filing, the Debtor was estimated to have assets of $1 million to $10 million and liabilities of the same range. The Debtor tapped EMG Despacho Legal, CRL as its legal counsel, and Tamarez CPA, LLC as its accountant. ===================================== T R I N I D A D A N D T O B A G O ===================================== TRINIDAD & TOBAGO: Forex Shortage Deepening Retail Pressure ----------------------------------------------------------- Andrea Perez-Sobers at Trinidad Express reports that continued unavailability of foreign exchange is putting additional strain on the small business community in T&T to pay for foreign goods. TRINIDAD & TOBAGO: Seeking Amicable Customs Solution ---------------------------------------------------- Ria Taitt at Trinidad Express reports acting Prime Minister Colm Imbert said there was no instruction by the Government to impose new Custom and Excise Division rules. Imbert was responding to a question from Mayaro MP Rushton Paray in the House of Representatives, according to Trinidad Express. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Latin America is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA, Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A. Chapman, Editors. Copyright 2020. All rights reserved. ISSN 1529-2746. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Latin America subscription rate is US$775 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Peter A. Chapman at 215-945-7000. . * * * End of Transmission * * *