/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/200317.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 17, 2020, Vol. 21, No. 55 Headlines A R G E N T I N A ARGENTINA: Needs 'Substantial' Relief in $70 Billion Debt Talks B O L I V I A BANCO NACIONAL: Moody's Downgrades LT LC Deposit Rating to B1 B R A Z I L ENGIE BRASIL: Fitch Corrects March 12 Ratings Release D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: Cruise Losses From Coronavirus Top US$139MM E C U A D O R ECUADOR: Yields Surge Above 20% as Oil Rout Boosts Default Risk E L S A L V A D O R AES EL SALVADOR: Moody's Affirms B2 CFR, Alters Outlook to Pos. G U Y A N A [*]GUYANA: Injunction Blocking Election Results Declaration Remains M E X I C O ALPHA GUARDIAN: U.S. Trustee Appoints Creditors' Committee P U E R T O R I C O ARMANDO TROCHE: Maldonaldo Represents Jimenez, 3 Others T R I N I D A D A N D T O B A G O PETROLEUM CO: Firm's US$720 Million LoanTransparent, says FM X X X X X X X X [*] CARIBBEAN: Region Still Open for Business, CTO Says - - - - - ================= A R G E N T I N A ================= ARGENTINA: Needs 'Substantial' Relief in $70 Billion Debt Talks --------------------------------------------------------------- Hugh Bronstein and Eliana Raszewski at Reuters report that Argentina will need "substantial relief" as it restructures nearly $70 billion in debt with international bondholders, the country's economy minister Martin Guzman told Reuters, signaling a tough tonic ahead for the country's creditors. In his first interview with international media since taking up his role in December, the 37-year-old U.S. trained economist, said a March 31 deadline to strike a deal with bondholders may also be affected by a global coronavirus outbreak that was hitting plans for road shows for the government's debt proposal, according to Reuters. In an hour-long conversation in his office in central Buenos Aires, Guzman said Argentina does not have the capacity to service its foreign currency bonds for a "few years" and that any agreement with creditors needed to put public debts on a sustainable path, the report relays. "There is need for substantial relief," he said, adding that all options were on the table and ongoing talks sought to find a path that "maximizes creditor acceptance," the report notes. "But if anyone thinks we are going to kick the can down the road in a way that forces another restructuring later on, they should think again, because we are not going to do that," the report relays. Argentina is locked in debt restructuring talks with global creditors including Pimco and BlackRock Inc to avert a damaging sovereign default that would block the giant grain producer's access to global markets, Reuters discloses. Guzman and his debt team have laid out a plan to strike that deal with creditors by the end of March, though he indicated that there may have to be flexibility given the current global situation, including the coronavirus outbreak, Reuters notes. He added road shows planned for this month for government officials to take their case to creditors had been affected and may have to be done by video conference, the report relates. "We have been on track, but now we are in a situation of global emergency that requires that every side is flexible," Guzman said, adding if the March 31 deadline was missed it should only be by "a matter of days," the report notes. The report says that Guzman said the proposal to bondholders would be made before the end of the month, but declined to give any details about what the government's offer would look like. "We will not accept anything that is not sustainable. We will be absolutely firm on that," Guzman said, adding that any deal would have to avoid putting more fiscal austerity on Argentina's recession-hit economy. "Clearly Argentina has no capacity to service interest over the next few years," he added. Government officials met with bondholders earlier this month, while negotiations are ongoing with the International Monetary Fund (IMF), which has lent around $44 billion to the South American country, the report notes. The debt negotiations could determine Argentina's economic future and global standing in markets for years following the current period of economic turmoil that has seen high inflation, recession and rising poverty, the report discloses. Argentina - a serial defaulter - settled long-standing court cases with creditors in 2016 under ex-president Mauricio Macri after a 2002 default left the country a pariah with investors, the report relates. By 2018 the country was back in debt trouble again, after Macri borrowed heavily in the bond market based on what turned out to be overly optimistic economic growth projections, the report notes. Peronist President Alberto Fernandez has said that the country cannot pay its debts until given space to revive growth and ruled out imposing fiscal austerity measures to help pay debts while poverty levels remained high, the report notes. "There's not going to be a reduction in the primary fiscal deficit in 2020. In the most optimistic case we can achieve fiscal primary balance in 2022 or 2023," Guzman said, the report adds. Guzman said the country was looking to "roll over" its debts with the IMF, though the deal with bondholders was more urgent, considering that bond payments were fast coming due and that the country could not keep paying debts with international reserves, the report relays. "We are running out of the reserves that the Treasury can use for servicing debt. So we need to resolve this problem quickly," Guzman said, the report says. About Argentina Argentina is a country located mostly in the southern half of South America. It's capital is Buenos Aires. Alberto Angel Fernandez is the current president of Argentina after winning the October 2019 general election. He succeeded Mauricio Macri in the position. Argentina has the third largest economy in Latin America. The country's economy is an upper middle-income economy for fiscal year 2019 according to the World Bank. Historically, however, its economic performance has been very uneven, with high economic growth alternating with severe recessions, income maldistribution and in the recent decades, increasing poverty. Moody's credit rating for Argentina was last set at Caa2 from B2 with under review outlook. Moody's rating was issued on Aug. 30, 2019. S&P Global Ratings, in December 2019, raised its foreign currency sovereign credit ratings on Argentina to 'CC/C' from 'SD/D'. S&P's outlook on the long-term sovereign credit ratings is negative. Fitch Ratings, in December 2019, upgraded Argentina's Long-Term Foreign-Currency Issuer Default Rating to 'CC' from 'RD', and its Short-Term Foreign-Currency IDR to 'C' from 'RD'. DBRS, Inc. meanwhile downgraded Argentina's Long-Term and Short-Term Foreign Currency - Issuer Ratings to Selective Default (SD), from CC and R-5, respectively, also in December 2019. ============= B O L I V I A ============= BANCO NACIONAL: Moody's Downgrades LT LC Deposit Rating to B1 -------------------------------------------------------------- Moody's Investors Service has downgraded all long-term ratings and assessments assigned to Banco Nacional de Bolivia S.A., concluding its review on the ratings initiated on December 6, 2019. BNB's local currency deposit rating was downgraded to B1 from Ba3, its foreign currency deposit rating to B2 from B1, its baseline credit assessmentand adjusted BCA to b1 from ba3, its counterparty risk ratings to Ba3 from Ba2 and its counterparty risk assessment to Ba3(cr) from Ba2(cr). The outlook on BNB's ratings is negative. The rating action follows Moody's announcement published on 10 March 2020 that it had downgraded Bolivia's government bond rating to B1 from Ba3, with negative outlook. The following ratings and assessments were downgraded: Issuer: Banco Nacional de Bolivia S.A. Global scale, long-term local currency deposit rating to B1 from Ba3, Negative from Rating Under Review Global scale, long-term foreign currency deposit rating to B2 from B1, Negative from Rating Under Review Global scale, long-term local and foreign currency counterparty risk rating to Ba3 from Ba2 Baseline credit assessment and adjusted baseline credit assessment to b1 from ba3 Global scale, long-term counterparty risk assessment to Ba3(cr) from Ba2(cr) Outlook, Changed To Negative from Rating Under Review The following ratings and assessments were affirmed: Issuer: Banco Nacional de Bolivia S.A. Global scale, short-term local and foreign currency deposit ratings of Not Prime Global scale, short-term local and foreign currency counterparty risk ratings of Not Prime Global scale, short-term counterparty risk assessment of Not Prime(cr) RATINGS RATIONALE The rating action on BNB was prompted by a similar action on Bolivia's government bond rating, which was downgraded to B1 from Ba3, considering that BNB's ratings are currently at the same level of the sovereign ratings. Moreover, the negative outlook on BNB's ratings is driven by the negative outlook of the sovereign ratings, as a downgrade of the latter would unequivocally drive a downgrade of the bank's ratings. This reflects its view that underlying inter-linkages between banks' standalone creditworthiness and that of the sovereign are high. The rating action on Bolivia's sovereign was prompted by Moody's expectation that the country's sovereign credit profile will weaken materially over the medium term, driven by continued erosion of fiscal and foreign exchange reserve buffers that will be pressured by structurally lower growth. Ongoing challenges in the country's hydrocarbon sector and increased policy uncertainty have reduced prospects for economic growth, government revenue generation and foreign exchange earnings. This has exacerbated the trend decline in fiscal and foreign exchange reserve buffers. The negative outlook on the sovereign rating signals that, following the presidential election on May 3, the new government will likely face material sociopolitical challenges in implementing fiscal policy adjustments and structural reforms that would significantly reduce the country's fiscal and external imbalances and sustainably increase potential growth. The downgrade of BNB's ratings and the negative outlook consider the implications of the recent political crisis and the prospect of weaker economic growth on the local banking system and on BNB's credit profile. If sustained, policy uncertainty and economic deceleration would cause a deterioration in banks' asset risk metrics, albeit from strong levels. BNB holds a relatively diversified loan book, with important presence on mortgage, corporate and small and medium size enterprises segments. The bank's asset quality on those segments has been close to the banking system's average, as evidenced by non-performing loans relative to gross loans at 1.9% as of December 2019, slightly improving from the 2.0% of 2018 year-end. However, the level of loan restructurings spiked to 2.5% as of December 2019 from 1.9% a year earlier, indicating still seasoning asset risks. BNB's funding and liquidity profiles could also weaken, if the incipient increase in deposit dollarization that followed the elections intensifies going forward, reversing years of steady reduction. If sustained, this trend would further affect the banking system's local currency liquidity, and also pressure funding costs. BNB funds most of its loan portfolio with deposits, which results in very low use of more volatile and expensive market funds. However, the bank's liquidity profile, similarly to most of its local peers, has deteriorated in the last years because of rapid loan growth and a largely stagnant deposit base. BNB's liquid assets to total banking assets ratio fell to a moderate 27% as of December 2019 from a strong 38% in 2017. Moody's does not have any particular concerns with BNB's governance. The bank has shown a long track record of contained asset quality metrics, which signal prudent underwriting practices and adequate governance. WHAT COULD CAUSE THE RATINGS TO MOVE UP OR DOWN An upgrade is unlikely for BNB given the current negative outlook. However, the outlook could be changed to stable following a similar stabilization of Bolivia's sovereign ratings outlook, provided that the bank's financial performance remains stable. A downgrade could be driven by a downgrade of the Bolivian sovereign rating, further deterioration in the country's operating environment, or a higher-than-expected deterioration of BNB's asset quality or pressures on their funding and liquidity profiles. The principal methodology used in these ratings was Banks Methodology published in November 2019. =========== B R A Z I L =========== ENGIE BRASIL: Fitch Corrects March 12 Ratings Release ------------------------------------------------------ Fitch Ratings replaced a ratings release published on March 12, 2020 to correct the name of the obligor for the bonds. Fitch Ratings has affirmed Engie Brasil Energia S.A.'s Foreign Currency and Local Currency Issuer Default Ratings at 'BB' and 'BBB-', respectively, and its National Scale Rating at 'AAA(bra)'. The Rating Outlook is Stable. Engie Brasil's ratings reflect its prominent market position as the largest private electric energy generation company in Brazil with a sizable and diversified portfolio, operational efficiency and robust operating cash flow generation derived from the existence of long-term power purchase agreements with its clients. The company's credit profile also benefits from a conservative financial profile with historical low leverage and strong financial flexibility to deal with financing needs resulting from investments in new projects and acquisitions. The regulatory risk of the Brazilian power sector is considered as low to moderate, while the hydrology risk is currently above average. Engie Brasil's FC IDR is constrained by Brazil's country ceiling of 'BB', as the company generates all of its revenues in local currency, with no cash and committed credit facilities abroad. The analysis does not incorporate any potential support from the parent company, Engie S.A. (IDR A/Stable). Fitch also considers the three-notch difference between the company's LC IDR and the sovereign rating as appropriate due to its regulated nature. The Stable Outlook for the FC and LC IDRs follows the same Outlook of Brazil's 'BB-' sovereign rating. Fitch also expects Engie Brasil will be able to sustain its solid consolidated credit profile over the next few years despite a period of higher investment levels, which also supports the Stable Outlook for the National Scale rating. Engie Brasil Energia S.A. - LT IDR BB; Affirmed - LC LT IDR; BBB- Affirmed - Natl LT AAA(bra); Affirmed - Senior unsecured; Natl LT AAA(bra) Affirmed KEY RATING DRIVERS Strong Business Profile: Engie Brasil's ratings benefit from its strong business position in the electric power generation segment. The company is the largest private energy generation company in Brazil, with a total installed capacity of 8,711MW, to be further increased by 361MW to 9,072MW after the conclusion of its last project under development. The company presents a successful track record in its commercial strategy and monthly allocation of its energy capacity, also benefited by the dilution of operational risks obtained through its diversified asset base. The entrance into the transmission segment in 2017 provides further diversification and improves predictability to the operational cash flow. Engie Brasil has 2,800 km in transmission line under development with Permitted Annual Revenues of BRL545 million to be completed until 2023. Manageable Negative FCF: Fitch considers that Engie Brasil has financial flexibility to deal with the expected negative FCF for the next couple of years. The base case scenario presents average EBITDAs and cash flow from operations of BRL5.5 billion and BRL4.0 billion in 2020 and 2021, respectively, with negative FCF of around BRL1.3 billion in 2020 and BRL580 million in 2021. EBITDA margin should grow gradually, with 57% in 2020, due to lower energy trading activity and the start-up of transmission lines from 2022 on. High capex of BRL5.2 billion during 2020-2021 period and strong distribution of dividends corresponding to a dividend payout of 100% pressure the FCF, although Fitch considers that there is certain flexibility in the dividends pay-out to maintain strong credit metrics. Fitch assumed energy sales of 5.8 average GW and 5.3 average GW in 2020 and 2021, with average tariffs of BRL210/MWh and BRL218/MWh, excluding sales at the spot market and quota regime for the latest. Moderate Exposure to Hydrological Risk: Fitch estimates that the company's uncontracted energy level at 13% in 2020 and 12% in 2021 is sufficient to support the Generating Scaling Factor in these years, considered at 0.83 on average for this period. This scenario mitigates the company's exposure to energy prices in the spot market of BRL171/MWh incorporated in the base case scenario. Engie Brasil must be efficient in getting power purchase contracts at prices compatible with those established in the sales contracts or in maintaining uncontracted energy to cover the reduction of its own generation. Engie Brasil has some protection against hydrological risk in sales contracts within the regulated market, which represents about 40% of the energy sold, limiting the exposure to 9%. Conservative Leverage to Remain: Fitch's base case estimates Engie Brasil's net debt to adjusted EBITDA and net debt to FFO around 2.1x and 2.5x, respectively, in 2020 and 2021. These ratios are still conservative for the IDRs, although show some increase compared with 1.7x and 1.9x on average, respectively, in the last three years, due to new debt raised to finance acquisitions (BRL3.5 billion in two hydroelectric power plants in 2017 and another BRL3.5 billion in Transportadora Associada de Gas S.A. -TAG in 2019) and investments in greenfield projects. Fitch's base case scenario already incorporates another acquisition of BRL410 million concluded in March 2020 with an associated investment of around BRL2.0 billion during the construction phase in 2020 and 2021. DERIVATION SUMMARY Engie Brasil's FC IDR of 'BB'/Stable is three notches below peers in Latin America, such as Emgesa (BBB/Stable), the second largest generation company in Colombia, and Engie Chile (BBB/Positive), the fourth largest generator in Chile, primarily as a result of the Brazilian country ceiling at 'BB'. Emgesa and Engie Chile benefit from a better economic environment in investment grade countries. Engie Brasil's 'BBB-'/Stable LC IDR is more comparable with these 'BBB' rated peers. Fitch considers the three-notch difference between the company's LC IDR and the sovereign rating appropriate due to the regulated nature of the business. All three companies benefit from strong business profile, with Engie Brasil's installed capacity being the largest among them, although the energy mix of Engie Chile differs from the related company in Brazil and Emgesa. Engie Brasil and Emgesa are more exposed to hydrological conditions, while Engie Chile needs to deal with the coal and natural gas prices volatility. All the companies have predictable and robust cash flow generation since they have managed business risks properly, but Engie Brasil has a stronger financial profile. KEY ASSUMPTIONS Fitch's Key Assumptions Within the Rating Case for the Issuer Include: - GSF of 0.83 in 2020 and 2021; - Capex of BRL5.0 billion from 2020 to 2021; - Operating expenses adjusted by inflation; - Distribution payout of 100%; - Absence of asset sale and new acquisitions besides Novo Estado and the greenfield projects under construction; - Acquisition of UHE Jirau not considered until 2023. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action - An upgrade is unlikely in the near term because the Foreign Currency IDR is constrained by the country ceiling (BB) and the Local Currency IDR is limited to three notches above the sovereign rating (BB-). Developments That May, Individually or Collectively, Lead to Negative Rating Action - Sizable investments or acquisitions currently out of Fitch's base case that could lead to net leverage consistently above 3.5x; - FFO-adjusted net leverage above 4.0x on a sustainable basis; - Difficulties in financing the capex plan through project finance debts; - A downgrade of the sovereign rating would trigger another downgrade of Engie Brasil's IDRs. LIQUIDITY AND DEBT STRUCTURE High Financial Flexibility: Engie Brasil's consolidated liquidity is robust with no concentration on the short-term debt maturities. As of December 2019, cash and marketable securities of BRL4.2 billion was significantly above the short-term debt of BRL2.7 billion. The high cash balance will be partially used to finance the negative FCF for the next two years, when the group will still need to raise new debt. Engie Brasil's ample access to debt and capital markets benefits the group to raise alternatives funding with structure adequate to project finance and maintaining a well-balanced debt maturity profile. As of December 2019, Engie Brasil's total debt of BRL14.4 billion was mainly composed of debentures (BRL6.0 billion) and BNDES (BRL4.3 billion). =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: Cruise Losses From Coronavirus Top US$139MM --------------------------------------------------------------- Dominican Today reports that the suspension of flights from Europe, China, South Korea and Iran, as well as the cruise passengers turned away to prevent the spread of the coronavirus, could lead to losses as high as US$139 million for the country. Said estimates are based on the calculation of the average spending that cruise passengers and non-resident tourists normally make in hotels and tourist goods and services establishments when they touch Dominican soil, according to Dominican Today. When analyzing the cruise industry during March last year, it is observed that 98,684 passengers entered, who spent an estimated US$8,371,923, the report notes. Also, with the arrival of 117,288 tourists from Europe, in the referred period, for income of US$128,056,454, the report relates. Meanwhile, due to the arrival of 2,598 tourists from China, South Korea and Iran, the tourism sector received 2,967,793 dollars, the report says. The data is based on an average cost of US$89.1 for each passenger on cruises and US$136 for non-resident tourists, who stay an average of eight nights in the country, according to the report "Tourist Statistics 2018" of the Central Bank, 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). ============= E C U A D O R ============= ECUADOR: Yields Surge Above 20% as Oil Rout Boosts Default Risk --------------------------------------------------------------- Matthew Bristow and Stephan Kueffner at Bloomberg News report that Ecuador's dollar bonds slumped the most in emerging markets as investors price in a higher probability of default following the crash in crude prices. The nation's dollar bonds due 2028 fell 10.6 cents to 47.6 cents on the dollar on March 9, sending the yield surging 4.3 percentage points to 22.3%, according to Bloomberg News. The extra yield investors demand to hold Ecuadorian debt over U.S, the report notes. Treasuries blew out 753 basis points to 27.33 percentage points, the report relays. That compares to 28.16 percentage points for Argentina which is preparing to restructure its debt, the report says. Current prices discount "a high probability of default," for the oil producer, said Siobhan Morden, the head of Latin America fixed income strategy at Amherst Pierpont Securities in New York, the report discloses. "The oil shock should dominate near term and requires an aggressive counter-response from authorities to manage cashflow stress," the report notes. Oil crashed more than 30% on March 9 after the breakup of the OPEC+ alliance triggered an all-out price war, with both Russia and Saudi Arabia poised to flood the market with cheap oil, the report relays. The government was already struggling to meet its funding needs even before the oil price slump, and Moody's Investors Service cut its credit rating deeper into junk last month, to Caa1. Public hostility is making it harder for the government of President Lenin Moreno to boost tax revenue or curb spending, the report discloses. The country suffered nearly two weeks of violent unrest in October when the government tried to end subsidies on diesel and gasoline, and was forced to back down due to demonstrations, the report says. The government said that it's negotiating to receive disbursements from the International Monetary Fund as part of a $4.2 billion credit agreement, the report notes. The fund is expected to support the government's financing needs this year and in 2021, the report adds. As reported in the Troubled Company Reporter - Latin America on Feb. 10, 2020, Moody's Investors Service downgraded the long-term foreign-currency issuer and senior unsecured rating of the Government of Ecuador to Caa1 from B3 and changed the outlook to stable from negative. ===================== E L S A L V A D O R ===================== AES EL SALVADOR: Moody's Affirms B2 CFR, Alters Outlook to Pos. --------------------------------------------------------------- Moody's Investors Service changed the rating outlook for AES El Salvador Trust II bis to positive from stable. At the same time, Moody's affirmed Trustco II's ratings, including its B2 senior unsecured and corporate family ratings. Trustco II issued the 10-year $310 million senior global notes due in 2023 for the benefit of four affiliated electric distribution companies in El Salvador: Compania de Alumbrado Electrico de San Salvador, SA de CV (CAESS), Empresa Electrica de Oriente, S.A. de C.V. (EEO), AES CLESA S. en C. de C.V. (CLESA) and Distribuidora Electrica de Usulutan (DEUSEM). These four distribution utilities which are majority owned by The AES Corporation (AES; Ba1 stable) unconditionally and severally guarantee the debt of Trust II bis, collectively the guarantors. RATINGS RATIONALE The affirmation of Trustco II's B2 ratings and change of the outlook to positive is prompted by the affirmation of the Government of El Salvador bond rating B3 rating with positive outlook. Trust II's B2 CFR and senior unsecured ratings reflect the guarantors' consolidated credit profile given the joint and multiple guaranties provided by each of these regulated utilities that represent a senior unsecured obligation of each guarantor. The B2 ratings further reflect Trust II's dependence on the guarantors' payments under a promissory note to service the $310 million Notes. The guarantor's B2 ratings reflect the low business risk of the utilities' electricity distribution operations as well as their limited exposure to carbon transition risk and foreign exchange risk. The utilities' credit quality also factors in their robust combined credit metrics including a ratio of cash flow pre-working capital changes (CFO pre-W/C) to debt that exceeded 20% for 2018 and for the last twelve month (LTM) period ended September 2019. The metrics are underpinned by the constructive outcome of the 2018-2022 tariff review, a more timely collection of the electric subsidies following the changes implemented in 2017, and the power demand growth recorded in the utilities' service territory. However, the utilities' modest size compared to their global peers, cash flow exposure to the volatility in power prices despite their contracted load (at least 70% of the total) as well as quarterly tariff adjustments temper the rating. In addition, the utilities' financial performance depends on the impact of weather and economic conditions on the residential power demand and the credit quality of their industrial customers. The guarantor's timely collection of their share of the electric subsidies (around 80% of the total) depends on the government's fiscal policies. That said, the total electric subsidies in El Salvador aggregate $64 million or around 1% of the 2020 government's budget. The rating action also captures a number of strengths including the guarantors' cash balance of around $45 million end of February 2020 and a 3-year $16.5 million committed credit facility that remains almost fully available. In addition, under the terms of the Notes, the structure has a six month interest only debt service reserve account. The rating action also considers the financial covenant embedded in the $310 million Notes that limits the guarantors' ability to incur incremental indebtedness to a maximum total capitalization to debt of 65%. It also considers AES' historical track-record of reducing the dividend pressure on its El Salvadorian subsidiaries amid the country's financial and liquidity challenges. Moody's anticipates that the guarantors will be able to record robust consolidated performance leading to strong metrics for the rating category. Specifically, CFO pre-W/C to debt will continue to exceed 15% on a sustainable basis. The guarantors' financial and liquidity profile as well as their limited dependence on the local capital markets further support the Trustco II ratings. FACTORS THAT COULD LEAD TO AN UPGRADE An upgrade of Trustco II's B2 ratings is likely to follow an upgrade of the sovereign ratings assuming that the utilities continue to record robust credit metrics and maintain a strong liquidity profile, including access to the $16.5 million committed credit facility. FACTORS THAT COULD LEAD TO AN DOWNGRADE Trustco II's outlook could be stabilized should the outlook of El Salvador be changed to stable. In addition, downward pressure on the ratings is likely if Moody's perceives a deterioration in the regulatory framework that reduces the predictability and consistency in which the regulation is applied. Negative momentum is also likely if the consolidated key credit metrics deteriorate significantly; specifically, if the consolidated interest coverage ratio and the CFO pre-W/C to debt fell below 2x and 5%, respectively, for an extended period. An aggressive distribution policy that contributes to a material deterioration of the credit metrics would also likely result in a downgrade. Moody's assessment that the guarantors' financial and/or liquidity profiles are no longer appropriate to maintain the one-notch difference between Trustco II's ratings and the sovereign rating could also result in a downgrade. The principal methodology used in these ratings was Regulated Electric and Gas Utilities published in June 2017. Other Factors used in these ratings are described in Assessing the Impact of Sovereign Credit Quality on Other Ratings, published in June 2019. The guarantors' ultimate parent company is AES which holds indirect ownership stakes that range in between 80.08% (CLESA), 75.11% (CAESS) and 89.11% (EEO), averaging 80% overall. =========== G U Y A N A =========== [*]GUYANA: Injunction Blocking Election Results Declaration Remains ------------------------------------------------------------------- Caribbean360.com reports that a week after Guyanese went to the polls to choose a new government, Chief Justice Roxane George upheld an injunction blocking a winner from being declared, amid concerns about electoral laws being breached. The injunction, filed by Reeaz Hollander, a supporter of the main opposition People's Progressive Party/Civic (PPP/C), was granted by High Court judge, Justice Navindra Singh to prevent the outcome of the March 2 vote being declared until the legal process of verification of results in Region Four, Guyana's largest electoral district, is complied with, according to Caribbean360.com. The court action came after the Returning Officer for Region Four, Clairmont Mingo, only allowed the verification process for Statements of Poll for 421 of the 897 polling stations, the report relays. The unverified results put the incumbent A Partnership for National Unity-Alliance for Change (APNU-AFC) coalition in the lead over the PPP/C by just over 59,000 votes, the report notes. The opposition has alleged fraud in the counting and verification process, the report says. In maintaining Justice Singh's injunction and ruling that the court can invoke is supervisory responsibility to ensure that the correct procedure is followed, the Chief Justice said she would begin hearing the case tomorrow to decide whether to direct Mingo to complete the verification process in the presence of party agents and local and international observers, the report says. While attorneys for the applicant had argued that the court had jurisdiction to hear the matter, lawyers representing the Guyana Elections Commission (GECOM) contended that the applicant had been premature in going to the court since the issue could only be addressed via an election petition after the results of the vote were declared, the report discloses. However, Justice George said in her ruling that a court cannot shirk its duty and "shelter behind the contention that an elections petition should be filed when the case clearly does not so warrant," the report relays. "As such, having found that there is prima facie evidence to support the court having jurisdiction to hear this application, the respondents must be given a chance to be heard in response through any evidence they may wish to file," she said, the report notes. Although disappointed with the ruling, attorney Roysdale Forde who is on GECOM's legal team said they would comply with the order and review all options available at this stage, the report discloses. "We remain resolute in our position that the declaration of the Returning Officer is a valid declaration made and we will return to court," he said, the report says. The law makes provision for the official declaration of results to be made within 15 days after the holding of elections, and GECOM's lead lawyer Senior Counsel Neil Boston said he is confident that the Chief Justice will rule before that time expires, the report relates. Boston, Forde and Robin Hunte are representing the country's elections body in the matter while the PPP/C is represented by Trinidad and Tobago Senior Counsel Douglas Mendes along with local attorneys Anil Nandlall and Sanjeev Datadin, the report says. Meantime, GECOM said in a statement issued that it is "unfortunate how things have escalated" and insisted that it intended to abide by all legal and procedural requirements to conclude its work, the report notes. It also sought to explain the decision by Chief Elections Officer Keith Lowenfield to prepare his final report on the results of the elections and write to GECOM Chairperson Retired Justice Claudette Singh seeking a meeting approve that report, although the injunction preventing the declaration of results was in place, the report relays. "The recent action of the Chief Election Officer indicating to the [GECOM] Chairperson and Commissioners that his report in the relation to the final declaration was completed was not intended to disregard the court proceedings, but rather apprising the Chairperson of the completion of the document and that she may convene a meeting at her convenience. In relation to this matter, no meeting was scheduled," it said, the report notes. "GECOM remains resolute in the fulfillment of its constitutional and statutory obligation," the report adds. =========== M E X I C O =========== ALPHA GUARDIAN: U.S. Trustee Appoints Creditors' Committee ---------------------------------------------------------- The U.S. Trustee for Region 17 on March 11, 2020, appointed seven creditors to serve on the official committee of unsecured creditors in the Chapter 11 case of Alpha Guardian, a Nevada Corporation. The committee members are: 1. PICC Property and Casualty Company Ltd. Ningbo Branch Attn: Chen Zhang Li No. 50 Dalai Street, Haishu District Ningbo, Zhejiang Province, 315000 People's Republic of China 2. Shinsho American Corporation Attn: Shin Kiyoshiro 26200 Town Center Drive, Suite 220 Novi, Michigan 48375 3. R+L Carriers, Inc. Attn: Rita Miller 600 Gillam Road Wilmington, Ohio 45177 4. AFC Worldwide Express dba R+L Global Attn: Bob Doty 16520 S. Tamiami Trail, Suite 180 Ft. Myers, Florida 33908-5349 5. Cardinal Paint & Powder, Inc. Attn: Pat Mathiesen 1900 Aerojet Way North Las Vegas, Nevada 89030 6. Lexam Security Products Attn: Shu Qian Zhan 230 Hong Xian Road, Feng Xian District Shanghai 201411 People's Republic of China 7. Gateway Fabrication Solutions Mexico, S.A.P.I. de C.V. Attn: Alejandro Guerra Ing. Tomas Limon Gutierrez 123 Zona Industrial Sur Guadalajara, Jalisco CP 44940 United Mexican States Official creditors' committees serve as fiduciaries to the general population of creditors they represent. They may investigate the debtor's business and financial affairs. Committees have the right to employ legal counsel, accountants and financial advisors at a debtor's expense. About Alpha Guardian Established in July 2017, Alpha Guardian -- https://www.alphaguardian.com/ -- provides consumers with secure storage solutions. Its products are sold to major retailers across the United States under the Cannon Safe, Stack-On and GunVault brands, all of which are designed to fill unique consumer needs. The company operates manufacturing and distribution facilities in the U.S. and Mexico and has employees in multiple countries. Cannon Safe -- https://www.cannonsafe.com/ -- is a manufacturer of large-scale gun safes and secure home storage solutions. Since 1965, its focus has been on manufacturing safes to protect prized possessions. GunVault -- https://www.gunvault.com/ -- offers a wide range of gun safes including biometric safes, pistol safes, and portable safes. Stack-On -- https://www.stack-on.com/ -- manufactures and distributes gun security products. Alpha Guardian, a Nevada corporation, based in Henderson, Nev., filed a Chapter 11 petition (Bankr. D. Nev. Lead Case No. 20-11016) on Feb. 24, 2020. In the petition signed by CRO Nicholas D. Rubin, the Debtor was estimated to have $10 million to $50 million in assets and $100 million to $500 million in liabilities. The Hon. Bruce T. Beesley presides over the case. The Debtor tapped Garman Turner Gordon LLP as bankruptcy counsel; Stretto as claims noticing and solicitation agent; and Nicholas D. Rubin of Force Ten Partners, LLC as chief restructuring officer. ===================== 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). ===================================== T R I N I D A D A N D T O B A G O ===================================== PETROLEUM CO: Firm's US$720 Million LoanTransparent, says FM ------------------------------------------------------------ Ria Taitt at Trinidad Express reports that Finance Minister Colm Imbert told the Senate that Petrotrin and Trinidad Petroleum Holdings Ltd used established and transparent procedures to select individuals and firms to provide advisory and support services to source and secure TPHL's US$720 million loan in 2018. The report recounts that the loan was used to partially refinance the US$850 million Petrotrin bond that matured in August 2019. Responding to a question on the US$720 million loan, Imbert said in September 2018, on the cusp of the November 2018 deadline for the US$850 million bullet payment, requests for proposals were issued to 20 potential financial services firms and consortiums for the provision of banking, financial and technical services, notes the report. According to Trinidad Express, four proposals were shortlisted: Credit Suisse/First Citizens/Bladex; Morgan Stanley/Ansa Merchant Bank; Goldman Sachs; and Citibank. The firms and consortium made presentations to a selection committee of the board and management, after which the Credit Suisse and Morgan Stanley consortiums were selected for consideration of the tenders committee and were thereafter chosen to provide banking, financial and technical services. TPHL contacted several major law firms with energy sector experience for the provision of legal services and Thomas, Hobsons and Paul Hastings was contracted to provide legal services for securing of the US $720 million loan facility, the report says. The Credit Suisse and Morgan Stanley consortiums were paid directly from the proceeds of the financing. The procedures used to secure all services were regulated by the State Enterprise Performance Monitoring Manual as well as the company's internal policies and procedures, the report relates. Responding to a question for oral answer from Independent Senator Paul Richards in the Senate, Finance Minister Colm Imbert said he was advised by the Central Bank that as of January 31, 2020, the value of $7.525 billion in paper-based $100 old notes was exchanged, notes Trinidad Express. That would be approximately 94 per cent of the estimated $8 billion in paper-based notes that were in circulation prior to demonetisation of the notes, says the report. Asked by Richards whether there was any mechanism to identify and collect the remaining six per cent (of old notes), Imbert said: "I wish I could find that out too. I would love to know who has that missing $500 million. I assume through a process of auditing, in terms of bank notes that would have been sent to the commercial banks, it may be possible to discover who has that extra $500 million. It would be very labourious. Perhaps the police, FIB, FIU may be investigating this matter as we speak," he said. Questioned further, Imbert said he believed that this money was in the country. He said since T&T's currency has no value outside of the country, he would have to assume that the money is somewhere in T&T. "And I would not take the bait from my friends around me [Attorney General Faris Al-Rawi who was seated next to him] and say that it is buried under somebody’s house . . . But I think most of it would be here," he said, Trinidad Express relates. The report notes that Imbert had earlier stated that 96 million new $100 notes had been ordered from De La Rue International Ltd, the supplier. The Central Bank received to date 80 million. He said the Central Bank would take delivery of the other 16 million notes as and when required to change out the old notes. He said the polymer notes lasted seven years while the old notes lasted two to three years, adds the report. About Petrotrin State-owned Petroleum Co. of Trinidad & Tobago (Petrotrin) closed it oil refinery in November 2018. Prior to closure, Petrotrin underwent a corporate reorganization that started in the last quarter of 2018. The T&T government insisted that the reorganization was necessary to improve the company's efficiency. As a result of the reorganization, Petrorin's refining business was shut down and new entities were created: three operating subsidiaries (Heritage Petroleum Company Limited, Paria Fuel Trading Company and Guaracara Refining Company Limited), and the new holding company, TPH, to which the international bonds were transferred from Petrotrin. =============== X X X X X X X X =============== [*] CARIBBEAN: Region Still Open for Business, CTO Says ------------------------------------------------------- Caribbean360.com reports that the Caribbean Tourism Organization (CTO) says the region remains open for business, despite the spread of the novel Coronavirus (COVID-19) that has touched more than 100 countries, including some in the Caribbean. In a statement, the CTO said it continues to closely monitor the COVID-19 situation and to engage member countries, as well as the Caribbean Public Health Agency (CARPHA) and tourism partners, to inform travel-related health measures that are proportionate to the public health threat and based on local risk assessment according to Caribbean360.com. And it noted that while there continues to be a limited number of imported cases and no cases of local transmission in the region, the health authorities across its membership are taking the necessary steps to limit the number of new cases and to curb the possible spread among our populations from the confirmed imported cases, the report notes. However, the statement added, "the CTO would like to emphasize that the World Health Organization (WHO) has not called for any travel and trade restrictions as a result of the coronavirus," the report relays. "As a matter of fact, the WHO continues to advise against such restrictions. Local populations and visitors alike are assured that the Caribbean remains open for business," the Barbados-based CTO said the report relates. The organization has advised travelers to follow the health and travel advisories issued by the authorities and to take appropriate precautions, such: -- Avoiding contact with sick people; -- Avoid travelling if sick; -- Wash hands often with soap and water for at least 20 seconds; -- Use an alcohol-based hand sanitizer if soap and water are not available; -- cover your nose and mouth with a flexed elbow or paper tissue -- when coughing or sneezing and disposing immediately of the tissue and performing hand hygiene; -- refrain from touching mouth and nose; and -- follow proper food hygiene practices COVID-19 cases, which have surpassed 118,000 globally, have been confirmed in Jamaica, St Vincent, Guyana, Cuba, the Dominican Republic, Martinique, Saint Martin and Saint Barthelemy, the report adds. ********* 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 * * *