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/raid1/www/Hosts/bankrupt/TCRLA_Public/200320.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 Friday, March 20, 2020, Vol. 21, No. 58 Headlines A R G E N T I N A ARGENTINA: Seeks to Swap $3.2BB in Peso Debt STONEWAY CAPITAL: Fitch Cuts $665MM Senior Secured Notes to 'D' B R A Z I L AZUL SA: Moody's Cuts CFR to B1; Under Review for Further Downgrade GOL LINHAS: Moody's Places B1 CFR on Review for Downgrade C H I L E LATAM AIRLINES: Moody's Cuts CFR to B1; On Review for Downgrade D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: Agro Braces for Dwindling Tourism Income DOMINICAN REPUBLIC: Tourism Activity Headed to an 'Intense Fall' J A M A I C A JAMAICA: Efforts to Minimize Covid-19 Impact Unveiled M E X I C O ALPHA GUARDIAN: Gets Approval to Hire Force Ten, Appoint CRO AXTEL SAB: Fitch Affirms 'BB-' LT FC IDR, Alters Outlook to Pos. GRUPO AEROMEXICO: Moody's Cuts CFR to B2, On Review for Downgrade LSC COMMUNICATIONS: Deloitte & Touche Raises Going Concern Doubt SIX FLAGS: Egan-Jones Lowers Sr. Unsec. Debt Ratings to BB T R I N I D A D A N D T O B A G O TRINIDAD & TOBAGO: Bank Reports Dramatic Drop in Energy Prices - - - - - ================= A R G E N T I N A ================= ARGENTINA: Seeks to Swap $3.2BB in Peso Debt -------------------------------------------- Hugh Bronstein at Reuters reports that Argentina's government has struck a deal with domestic bondholders to swap around 200 billion pesos ($3.2 billion) in local currency debt in a major planned auction, the country's Economy Minister Martin Guzman said. The scheduled swap, which is offering new instruments that expire between 2021 and 2024 for others maturing up to this year, is part of Argentina's drive to gain more time to make payments amid a widespread debt crisis, according to Reuters. "The goal is to roll-over a significant portion of the peso-debt at sustainable interest rates," Guzman said in comments to Reuters about the swap. "We expect to exchange about 200 billion of short term peso debt in this first round," the report notes. Guzman, who is facing tough separate negotiations with international creditors to restructure close to $70 billion in foreign-law debt, added that pushing back peso debt payments would "alleviate the stress on the treasury financing needs and, in the current conditions, on the central bank as well," the report relates. "A successful outcome would facilitate a gradual but persistent process of accumulation of foreign reserves, which in the view of the government is a necessary condition for alleviating capital controls," he said, the report says. Argentina has been focused on rolling over its local bonds though a series of debt swap auctions, but it faces a tougher challenge with its international debt, the report notes. The country is racing to strike a deal with foreign creditors by the end of the month. It is also in talks about revamping its borrowings from the International Monetary Fund, which extended a then $57 billion credit facility to the South American grains producer in 2018. It has so far disbursed around $44 billion, the report relates. Guzman told Reuters earlier this month that Argentina will need "substantial relief" from international creditors in its restructuring, signaling a potentially tough tonic ahead for the country's bondholders. Those negotiations may face some delays amid the global coronavirus pandemic, however, as it starts to ripple around Latin America with Argentina imposing strict quarantines and closing the country's borders, the report adds. 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 President-elect 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. STONEWAY CAPITAL: Fitch Cuts $665MM Senior Secured Notes to 'D' --------------------------------------------------------------- Fitch Ratings has downgraded Stoneway Capital Corporation's $665 million senior secured notes due in 2027 to 'D' from 'C'. RATING RATIONALE The downgrade reflects the default on the payment of principal and interest due on March 2, not cured in the five-day period established under the notes. KEY RATING DRIVERS Stoneway's issuance rating was originally underpinned by its operational stage, moderate operating risks established through fixed-priced O&M, and overhaul costs with an experienced counterparty. Nonetheless, the rising payment delinquencies in the past months from CAMMESA, the project's sole offtaker, impaired the project's payment capacity. On Feb. 20, Stoneway sent a solicitation to bondholders to defer the scheduled principal payment on the notes due on March 1 (USD27,808,970) to Sept. 2, 2020. On Feb. 27, the company announced it has terminated the consent solicitation. To Fitch's best knowledge, the default has happened without any consensual agreements on forbearances from bondholders. RATING SENSITIVITIES Not applicable. SECURITY The notes were issued at a 10% fixed rate and fully amortizing with a final maturity in 2027. The notes are senior secured obligations by a first-priority lien on substantially all the assets of the issuer and the guarantors of the notes, the issuer and sponsor's subsidiaries participating in the project. Stoneway is a private company originally constituted with the purpose of constructing, owning, and operating four simple-cycle power-generating plants with a total installed capacity of 686.5 MW, through two indirect subsidiaries, Araucaria Energy S.A. and SPI Energy S.A. Stoneway installed capacity is 806.5 MW, considering the recent 120 MW the expansion of San Pedro plant into a combined-cycle power generation project. ESG CONSIDERATIONS ESG issues are credit neutral or have only a minimal credit impact on the entity(ies), either due to their nature or the way in which they are being managed by the entity(ies). =========== B R A Z I L =========== AZUL SA: Moody's Cuts CFR to B1; Under Review for Further Downgrade ------------------------------------------------------------------- Moody's Investors Service has downgraded Azul S.A.'s corporate family rating to B1 from Ba3. At the same time, Moody's downgraded the USD400 million senior unsecured notes issued by Azul Investments LLP and guaranteed by Azul and Azul Linhas Aereas Brasileiras S.A. to B2 from B1. The ratings have been placed under review for further downgrade. Downgrades: Issuer: Azul S.A. Corporate Family Rating, Downgraded to B1 from Ba3; Placed Under Review for further Downgrade Issuer: Azul Investments LLP USD400 million gtd senior unsecured notes due 2024, Downgraded to B2 from B1; Placed Under Review for further Downgrade Outlook Actions: Issuer: Azul S.A. Outlook, Changed To Rating Under Review From Stable Issuer: Azul Investments LLP Outlook, Changed To Rating Under Review From No Outlook RATINGS RATIONALE The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The passenger airline sector has been one of the sectors most significantly affected by the shock given its exposure to travel restrictions and sensitivity to consumer demand and sentiment. More specifically, the weaknesses in Azul's credit profile have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions and Azul remains vulnerable to the outbreak continuing to spread. The action reflects the impact on Azul of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. It regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. The rating action was prompted by the very sharp decline in passenger traffic since the outbreak of coronavirus started during January 2020, which will result in a significant negative free cash flow in 2020, a weakening liquidity profile and a significantly higher leverage. From a regionally contained outbreak the virus has rapidly spread to many different regions severely denting air travel. The International Air Travel Association's latest scenario analysis forecasts a decline in passenger numbers of between 11% and 19% for the full year 2020. Moody's base case assumptions are that the coronavirus pandemic will lead to a period of severe cuts in passenger traffic over at least the next three months with partial or full flight cancellations and aircraft groundings, with all regions affected globally. The base case assumes there is a gradual recovery in passenger volumes starting in the third quarter. However, there are high risks of more challenging downside scenarios and the severity and duration of the pandemic and travel restrictions is uncertain. Moody's analysis assumes around a 70% reduction in Azul's passenger traffic in the second quarter and an 30% fall for the full year, whilst also modelling significantly deeper downside cases including a full fleet grounding during Q2 and a more extended period of severely depressed volumes. The economic slowdown in Latin American coupled with increased risk aversion is driving the sharp devaluation in local currencies in the region. Accordingly, Azul is particularly exposed to the depreciation of the Brazilian Real, which accounts for about 80% of the company's revenues. This effect is only partially mitigated by the important reduction in fuel prices observed during the last couple of weeks. The company also hedged its US dollar notes through cross-currency swaps to mitigate the effect of the real's devaluation. Moody's anticipates that the airline industry will require continued and further support from regulators, national governments and labor representatives to alleviate pressures on slot allocations, provide indirect or direct financial support and manage airlines' cost bases. Although there is nothing concrete yet, the Brazilian government announced that it is considering measures to support the airlines operating in Brazil including, but not limited to long term credit lines and working capital lines to be provided by state owned banks as well as allowing the companies to defer tax payments. LIQUIDITY Currently, Azul's liquidity is adequate. As of 2019, Azul's cash position of BRL1.7 billion was enough to cover 3.5x the company's short-term debt. Azul's financial policies target a minimum cash availability of 15% of its last-12-month net revenue and the company does not have committed credit facilities. Azul's long-term investments in TAP's bonds, accounts receivables and its investment in its wholly owned subsidiary TudoAzul that add up to around BRL5 billion, could be used as alternative sources of liquidity if needed. In downside scenarios Azul's access to financial markets and alternative sources of liquidity may be required. The profile and financial metrics of Azul in a post-crisis environment are subject to high uncertainty but Moody's expects that the company would ultimately be able to gain share and recover its financial metrics over time, depending on the severity of the current crisis. The review process will be focusing on (i) the current market situation with a review of current passenger traffic conditions and pre-booking trends for the next few weeks, (ii) the liquidity measures taken by the company and their impact on the company's balance sheet, (iii) other measures being taken by the company to alleviate balance sheet and credit metrics stress. WHAT COULD CHANGE THE RATING UP / DOWN The ratings are unlikely to be upgraded in the short term. Positive rating pressure would not arise until the coronavirus outbreak is brought under control, travel restrictions are lifted, and passenger volumes return to more normal levels. At this point Moody's would evaluate the balance sheet and liquidity strength of the company and positive rating pressure would require evidence that the company is capable of substantially recovering its financial metrics and restoring liquidity. Moody's could further downgrade Azul if: - There are expectations of deeper and longer declines in passenger volumes including a material extension into Q3 2020 as a result of the coronavirus outbreak, particularly if not matched by additional sources of liquidity - Wider liquidity concerns increase, for instance due to cost inflexibility - There are clear expectations that the company will not be able to maintain financial metrics compatible with a B1 rating following the coronavirus outbreak if: - Gross adjusted leverage is expected to be sustainably above 6.0x - Retained cash flow / debt is expected to be sustainably below 9.0% PRINCIPAL METHODOLOGY The principal methodology used in these ratings was Passenger Airline Industry published in April 2018. COMPANY PROFILE Headquartered in Barueri near the City of Sao Paulo, Brazil, Azul S.A. is a Brazilian airline founded by David Neeleman in 2008. The company is the largest airline in Brazil by number of cities and departures, serving 116 destinations with an operating fleet of 142 aircraft and operating 916 flights daily. The company also flies its aircraft to select international destinations, including Fort Lauderdale, Orlando and Lisbon. Azul is the sole owner of the loyalty program TudoAzul, a strategic revenue-generating asset, which had around 12 million members in the end of 2019. In 2019 Azul generated BRL11.4 billion in net revenue and carried almost 28 million passengers. GOL LINHAS: Moody's Places B1 CFR on Review for Downgrade --------------------------------------------------------- Moody's Investors Service placed Gol Linhas Aereas Inteligentes S.A.'s corporate family rating of B1 under review for downgrade. The B2 ratings of Gol Finance's perpetual notes guaranteed by Gol and Gol Linhas Aereas S.A. and the $350 million senior exchangeable notes due 2024 issued by Gol Equity Finance and guaranteed by Gol and Gol Linhas Aereas S.A. were also placed under review for downgrade. At the same time Moody's also placed the Baa3 the foreign currency rating assigned to Gol LuxCo S.A.'s term loan guaranteed by Delta Air Lines, Inc. under review for downgrade. Ratings placed under review for downgrade: Issuer: Gol Linhas Aereas Inteligentes S.A. Corporate Family Rating, Placed on Review for Downgrade, currently B1 Issuer: Gol Finance $153.9 Million Guaranteed Senior Unsecured Perpetual Notes, Placed on Review for Downgrade, currently B2 Issuer: GOL Equity Finance $350 Million Guaranteed Exchangeable Senior Notes due 2024, Placed on Review for Downgrade, currently B2 Issuer: Gol LuxCo S.A. $300 Million Guaranteed Senior Unsecured Term Loan due 2020, Placed on Review for Downgrade, currently Baa3 Outlook Actions: Issuer: Gol Linhas Aereas Inteligentes S.A. Outlook, Changed To Rating Under Review From Stable Issuer: Gol Finance Outlook, Changed To Rating Under Review From Stable Issuer: GOL Equity Finance Outlook, Changed To Rating Under Review From Stable Issuer: Gol LuxCo S.A. Outlook, Changed To Rating Under Review From Stable RATINGS RATIONALE The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The passenger airline sector has been one of the sectors most significantly affected by the shock given its exposure to travel restrictions and sensitivity to consumer demand and sentiment. More specifically, the weaknesses in Gol's credit profile have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions and Gol remains vulnerable to the outbreak continuing to spread. The action reflects the impact on Gol of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. The rating action was prompted by the very sharp decline in passenger traffic since the outbreak of coronavirus started during January 2020, which will result in a significant negative free cash flow in 2020, a weakening liquidity profile and a significantly higher leverage. From a regionally contained outbreak the virus has rapidly spread to many different regions severely denting air travel. The International Air Travel Association's (IATA) latest scenario analysis forecasts a decline in passenger numbers of between 11% and 19% for the full year 2020. Moody's base case assumptions are that the coronavirus pandemic will lead to a period of severe cuts in passenger traffic over at least the next three months with partial or full flight cancellations and aircraft groundings, with all regions affected globally. The base case assumes there is a gradual recovery in passenger volumes starting in the third quarter. However, there are high risks of more challenging downside scenarios and the severity and duration of the pandemic and travel restrictions is uncertain. Moody's analysis assumes around a 70% reduction in Gol's passenger traffic in the second quarter and an 30% fall for the full year, whilst also modelling significantly deeper downside cases including a full fleet grounding during Q2 and a more extended period of severely depressed volumes. The economic slowdown in Latin American economies coupled with increased risk aversion is driving the sharp devaluation in local currencies in the region. Accordingly, Gol is particularly exposed to the depreciation of the Brazilian Real, which accounts for about 85% of the company's revenues. This effect is only partially mitigated by the important reduction in fuel prices observed during the last couple of weeks. Moody's anticipates that the airline industry will require continued and further support from regulators, national governments and labor representatives to alleviate pressures on slot allocations, provide indirect or direct financial support and manage airlines' cost bases. Although there is nothing concrete yet, the Brazilian government announced that it is considering measures to support the airlines operating in Brazil including, but not limited to long term credit lines and working capital lines to be provided by state owned banks as well as allowing the companies to defer tax payments. LIQUIDITY Currently Gol's liquidity is adequate. In the end of 2019, the company had around BRL3.0 billion in cash, pro-forma for the sale of 11 Boeing 737 NGs, compared with short-term financial debt maturities of BRL2.3 billion, of which USD300 million (around BRL1.5 billion) relates to the term loan guaranteed by Delta Airlines, which Gol has already provisioned and deposited in a foreign account denominated in US dollars. Upcoming debt obligations maturing over the next few years include BRL483 million in 2021, BRL352 million in 2022 and BRL1.8 billion in 2024; the balance of around BRL3.3 billion is comprised of its BRL500 million perpetual notes and other instruments due 2025 and beyond. In terms of alternative sources of liquidity, Gol has a 52.7% stake in Smiles; the equity on its leased aircraft; and non-securitized receivables that could be used in case of need. Moody's estimates that these items together could provide around BRL2.8 billion in additional liquidity to the company. In a downside scenario Gol's access to financial markets and alternative sources of liquidity may be required. The profile and financial metrics of Gol in a post-crisis environment are subject to high uncertainty but Moody's expects that the company would ultimately be able to gain share and recover its financial metrics over time, depending on the severity of the current crisis. The review process will be focusing on (i) the current market situation with a review of current passenger traffic conditions and pre-booking trends for the next few weeks, (ii) the liquidity measures taken by the company and their impact on the company's balance sheet, (iii) other measures being taken by the company to alleviate balance sheet and credit metrics stress. The review for downgrade of Gol LuxCo's USD300 million senior unsecured term loan at Baa3 reflects Delta guaranty for this term loan. Moody's views this guarantee as an effective guaranty of payment of lenders in the entirety of its original promise when due, and not just a guarantee of collection after an event of default. As such, the rating on the term loan is at the same level as Delta's senior unsecured rating of Baa3 on review for downgrade. WHAT COULD CHANGE THE RATING UP / DOWN The ratings are unlikely to be upgraded in the short term. Positive rating pressure would not arise until the coronavirus outbreak is brought under control, travel restrictions are lifted, and passenger volumes return to more normal levels. At this point Moody's would evaluate the balance sheet and liquidity strength of the company and positive rating pressure would require evidence that the company is capable of substantially recovering its financial metrics and restoring liquidity. Moody's could downgrade Gol if: - There are expectations of deeper and longer declines in passenger volumes including a material extension into Q3 2020 as a result of the coronavirus outbreak, particularly if not matched by additional sources of liquidity - Wider liquidity concerns increase, for instance due to cost inflexibility - There are clear expectations that the company will not be able to maintain financial metrics compatible with a B1 rating following the coronavirus outbreak if: - Gross adjusted leverage is expected to be sustainably above 6.0x - Retained cash flow / debt is expected to be sustainably below 9.0% An upgrade or downgrade in the term-loan rating depends on changes in Delta's creditworthiness. PRINCIPAL METHODOLOGY The methodologies used in these ratings were Passenger Airline Industry published in April 2018, and Rating Transactions Based on the Credit Substitution Approach: Letter of Credit-backed, Insured and Guaranteed Debts published in May 2017. COMPANY PROFILE Based in Sao Paulo and founded in 2001, Gol is the largest low-cost carrier in Latin America, offering over 700 daily passenger flights to connect Brazil's major cities and various destinations in South America, North America and the Caribbean, along with cargo and charter flight services. Additionally, Gol has a 53% stake in Smiles, a loyalty program company with more than 14 million participants that allows members to accumulate miles and redeem tickets in more than 900 destinations around the world and offer non-ticket reward products and services. In the fiscal year ended December 2019, Gol reported consolidated net revenues of BRL13.9 billion and lease adjusted EBITDA of BRL4.1 billion. Gol LuxCo, Gol Finance, and Gol Equity Finance are wholly-owned subsidiaries of Gol. ========= C H I L E ========= LATAM AIRLINES: Moody's Cuts CFR to B1; On Review for Downgrade --------------------------------------------------------------- Moody's Investors Service has downgraded LATAM Airlines Group S.A.'s corporate family rating to B1 from Ba3. At the same time, Moody's downgraded LATAM Pass Through Trust 2015-1A to Baa1 from A3 and LATAM Pass Through Trust 2015-1B to Ba1 from Baa3. The ratings have been placed on review for downgrade. Downgrades: Issuer: LATAM Airlines Group S.A (LATAM) Corporate Family Rating, Downgraded to B1 from Ba3; Placed Under Review for further Downgrade Issuer: LATAM Pass Through Trust 2015-1A Senior Secured Enhanced Equipment Trust, Downgraded to Baa1 from A3; Placed Under Review for further Downgrade Issuer: LATAM Pass Through Trust 2015-1B Senior Secured Enhanced Equipment Trust, Downgraded to Ba1 from Baa3; Placed Under Review for further Downgrade Outlook Actions: Issuer: LATAM Airlines Group S.A (LATAM) Outlook, Changed To Rating Under Review From Stable Issuer: LATAM Pass Through Trust 2015-1A Outlook, Changed To Rating Under Review From Stable Issuer: LATAM Pass Through Trust 2015-1B Outlook, Changed To Rating Under Review From Stable RATINGS RATIONALE The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The passenger airline sector has been one of the sectors most significantly affected by the shock given its exposure to travel restrictions and sensitivity to consumer demand and sentiment. More specifically, the weaknesses in LATAM's credit profile have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions and LATAM remains vulnerable to the outbreak continuing to spread. The action reflects the impact on LATAM of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. The rating action was prompted by the very sharp decline in passenger traffic since the outbreak of coronavirus started during January 2020, which will result in a significant negative free cash flow in 2020, a weakening liquidity profile and a significantly higher leverage. From a regionally contained outbreak the virus has rapidly spread to many different regions severely denting air travel. The International Air Travel Association's latest scenario analysis forecasts a decline in passenger numbers of between 11% and 19% for the full year 2020. Moody's base case assumptions are that the coronavirus pandemic will lead to a period of severe cuts in passenger traffic over at least the next three months with partial or full flight cancellations and aircraft groundings, with all regions affected globally. The base case assumes there is a gradual recovery in passenger volumes starting in the third quarter. However, there are high risks of more challenging downside scenarios and the severity and duration of the pandemic and travel restrictions is uncertain. Moody's analysis assumes around a 70% reduction in LATAM's passenger traffic in the second quarter and an 30% fall for the full year, whilst also modelling significantly deeper downside cases including a full fleet grounding during Q2 and a more extended period of severely depressed volumes. The economic slowdown in Latin American economies coupled with increased risk aversion globally is driving the sharp devaluation in local currencies in the region. Accordingly, LATAM is particularly exposed to the depreciation of both the Brazilian Real and the Chilean Peso, which together comprise about 40% of the company's revenues. This effect is only partially mitigated by the important reduction in fuel prices observed during the last couple of weeks. Additionally, the company uses derivative hedging strategies that involve hedging monthly cash flow with foreign-currency forwards and exchange rate collars. Moody's anticipates that the airline industry will require continued and further support from regulators, national governments and labor representatives to alleviate pressures on slot allocations, provide indirect or direct financial support and manage airlines' cost bases. Although there is nothing concrete, yet the Brazilian government announced that it is considering measures to support the airlines operating in Brazil including, but not limited to long term credit lines and working capital lines to be provided by state owned banks as well as allowing the companies to defer tax payments. LIQUIDITY Currently, LATAM's liquidity is adequate. The company reported unrestricted cash and short-term investments in the amount of $1.5 billion at the end of 2019, enough to cover around $1.0 billion in short-term debt maturities. Including its $600 million committed credit facility, LATAM's cash to net revenues reached 21% in 2019. However, a more severe downside with extended groundings into Q3 would likely start to pressure the company's current resources. In that case LATAM's access to financial markets or other sources of alternative liquidity may be required. The profile and financial metrics of LATAM in a post-crisis environment are subject to high uncertainty but Moody's expects that the company would ultimately be able to gain share and recover its financial metrics over time, depending on the severity of the current crisis. The review process will be focusing on (i) the current market situation with a review of current passenger traffic conditions and pre-booking trends for the next few weeks, (ii) the liquidity measures taken by the company and their impact on the company's balance sheet, (iii) other measures being taken by the company to alleviate balance sheet and credit metrics stress. The downgrade and review of the EETC ratings accompanies the downgrade and placement on review for downgrade of the corporate family rating. Moody's assigns ratings to EETCs by notching above an airline's Corporate Family rating, based on its opinion of the importance of the aircraft collateral to the airline's network, whether there is a liquidity facility, its estimates of the size of the projected equity cushion, and each Classes' position in the waterfall. Moody's estimates the peak LTVs at about 57% and about 68% for the Class A and Class B certificates, respectively. The still sufficient equity cushions, the ongoing importance of the models to the company's network, the cross-default and cross-collateralization of the equipment notes and the cross-subordination provisions of the equipment note indentures at this time support Moody's belief that repossession would be timely under an insolvency scenario support the EETC ratings. WHAT COULD CHANGE THE RATING UP / DOWN The ratings are unlikely to be upgraded in the short term. Positive rating pressure would not arise until the coronavirus outbreak is brought under control, travel restrictions are lifted, and passenger volumes return to more normal levels. At this point Moody's would evaluate the balance sheet and liquidity strength of the company and positive rating pressure would require evidence that the company is capable of substantially recovering its financial metrics and restoring liquidity. Moody's could further downgrade LATAM if: - There are expectations of deeper and longer declines in passenger volumes including a material extension into Q3 2020 as a result of the coronavirus outbreak, particularly if not matched by additional sources of liquidity - Wider liquidity concerns increase, for instance due to cost inflexibility - There are clear expectations that the company will not be able to maintain financial metrics compatible with a B1 rating following the coronavirus outbreak if: - Gross adjusted leverage is expected to be sustainably above 6.0x - Retained cash flow / debt is expected to be sustainably below 9.0% Changes in the EETC ratings can result from any combination of changes in the underlying credit quality or ratings of the company, Moody's opinion of the importance of the aircraft collateral to the operations and/or its estimates of current and projected aircraft market values, which will affect estimates of loan-to-value. PRINCIPAL METHODOLOGY The principal methodology used in rating LATAM Airlines Group S.A was Passenger Airline Industry published in April 2018. The principal methodologies used in rating LATAM Pass Through Trust 2015-1A and LATAM Pass Through Trust 2015-1B were Enhanced Equipment Trust and Equipment Trust Certificates published in July 2018 and Passenger Airline Industry published in April 2018. COMPANY PROFILE LATAM Airlines Group S.A is a Chile-based airline holding company formed by the business combination of LAN Airlines S.A. of Chile and TAM S.A. of Brazil in June 2012. LATAM is the largest airline group in South America, with a local presence for domestic passenger services in six countries (Brazil, Chile, Peru, Ecuador, Argentina and Colombia). The company also provides intraregional and international passenger services and has a cargo operation that is carried out using belly space on passenger flights and dedicated freighter service. In 2019, LATAM generated $10 billion in net revenue and carried more than 74 million passengers and 904,000 tons of cargo. =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: Agro Braces for Dwindling Tourism Income ------------------------------------------------------------ Dominican Today reports that Dominican Republic's income from tourism during 2019 will be difficult to repeat in 2020 due to the expansion of the outbreak of coronavirus, which has led to the suspension of flights from Europe, China, Korea and Iran. Moreover, Dominican authorities have prohibited the arrival of cruise ships to the country's ports, according to Dominican Today. The decline in tourism directly impacts sectors such as agriculture, the report relates. "The tourism sector sells between 15% and 20% of annual production. Right now we are producing approximately 20 million eggs per month, which means that poultry farmers place around 30 million eggs in the tourism sector and 20% to Haiti, that is about 40 million eggs," said National Egg Producers Association (Asohuevos) president Manuel Escano, 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 on April 4, 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). DOMINICAN REPUBLIC: Tourism Activity Headed to an 'Intense Fall' ---------------------------------------------------------------- Dominican Today reports that Dominican Republic's tourism activity will suffer an "intense fall" as a result of the coronavirus pandemic, Puntacana Group president, Frank Rainieri, warned. In a video, Rainieri said that although measures have been taken to lessen the effects of the disease, both the country and companies in the sector "will suffer the consequences of an intense drop in tourist activity which will bring about a difficult situation for all," according to Dominican Today. The tourism mogul said the country will take measures to preserve its wellbeing, while calling for national unity to overcome the "difficult time" derived from the pandemic, the report notes. "We all must be willing to make the necessary sacrifices to face this situation," 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 on April 4, 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: Efforts to Minimize Covid-19 Impact Unveiled ----------------------------------------------------- RJR News reports that Jamaica Financial Analyst David Wan expressed confidence that the measures disclosed by the Finance Minister to minimise the economic impact of the coronavirus will be effective and that they were unveiled at the right time. The measures include cash transfers for persons who lose their jobs as a result of the coronavirus, according to RJR News. The government is also implementing an incentive for companies based on the number of people they keep employed and a soft loan fund for small businesses and individuals hit hard by events related to the virus, the report notes. Central Bank Measures The Central Bank has pledged to make more cash available to the public including foreign exchange, the report says. With the sharp contraction in the tourism industry and the likely disruption to remittance inflows, Bank of Jamaica Governor, Richard Byles, expects the supply of foreign exchange to fall, the report notes. Meanwhile, the Small Business Association of Jamaica is calling for a further cut in interest rates in light of the COVID-19 pandemic, the report says. In a release, the Association highlighted that some countries have cut interest rates to 0% to boost the economy, the report discloses. It said this will help small businesses in Jamaica to keep their doors open, the report adds. About Jamaica As reported in the Troubled Company Reporter-Latin America on Oct. 1, 2019, S&P Global Ratings, on Sept. 27, 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 =========== ALPHA GUARDIAN: Gets Approval to Hire Force Ten, Appoint CRO ------------------------------------------------------------ Alpha Guardian and its affiliates received approval from the U.S. Bankruptcy Court for the District of Nevada to hire Force Ten Partners, LLC and appoint Nicholas Rubin, the firm's partner, as chief restructuring officer. Mr. Rubin and his firm will provide these financial advisory and management services in connection with the Debtors' Chapter 11 cases: a. manage the affairs of the Debtors, supervise the Debtors' employees, management and professionals, and provide periodic reports to the special committee; b. assist the Debtors' legal counsel in the administration of their bankruptcy cases; c. provide support services; d. assist in obtaining debtor-in-possession financing and exit financing; e. assist in the sale of the Debtors' real property; f. seek to refinance the Debtors' existing indebtedness; g. seek to maximize the value of the Debtors' assets through restructuring the operations of their businesses; h. seek to maximize the value of the Debtors' assets and operations through, among other things, the potential sale, recapitalization, restructuring or reorganization of the Debtors' business; i. provide assistance in connection with motions, responses or other court activity as directed by legal counsel; j. provide monthly operating reports required by a bankruptcy court; k. provide periodic reporting to stakeholders; l. evaluate and develop restructuring plans and other strategic alternatives. m. assist in the formulation and preparation of the Debtors' disclosure statement and plan of reorganization; n. assist in negotiations with the Debtors' creditors and respond to any objections to the bankruptcy plan; and o. prepare and offer declarations, reports, depositions and in-court testimony. Force Ten Partners will be paid at these hourly rates: Partners $650 - $750 Directors $350 - $595 Analysts $225 - $350 Staff $100 - $225 Mr. Rubin's hourly rate is $750. Mr. Rubin disclosed in a court filing that his firm is "disinterested" as defined in section 101(14) of the Bankruptcy Code. Force Ten Partners can be reached through: Nicholas Rubin Force Ten Partners, LLC 20341 SW Birch, Suite 220 Newport Beach, CA 92660 Office: (949) 357-2368 / (949) 357-2360 Mobile: (949) 933-7011 Email: bweiss@force10partners.com 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. Alpha Guardian and its debtor-affiliates concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Nev. Case No. 20-11016) on Feb. 24, 2020. The petitions were signed by Nicholas D. Rubin, chief restructuring officer. At the time of filing, the Debtor estimated $10 million to $50 million in assets and $100 million to $500 million in liabilities. The Debtors tapped Garman Turner Gordon, LLP as legal counsel, and Stretto as claims, noticing and solicitation agent; and Force Ten Partners, LLC as financial advisor. Nicholas Rubin, a partner at Force Ten, is the Debtors' chief restructuring officer. The U.S. Trustee for Region 17 appointed a committee of unsecured creditors on March 11, 2020. AXTEL SAB: Fitch Affirms 'BB-' LT FC IDR, Alters Outlook to Pos. ---------------------------------------------------------------- Fitch Ratings has affirmed Axtel, S.A.B de C.V.'s ratings, including the Long-Term Foreign Currency Issuer Default Rating at 'BB-', Local Currency IDR at 'BB-', National Long-Term Rating at 'A-(mex)' and 2024 USD senior unsecured notes at 'BB-'. The Rating Outlook has been revised to Positive from Stable. The ratings reflect the company's stable operational performance in the enterprise and government telecommunications segment in Mexico, as well as the company's steady deleveraging via asset sales. The ratings are tempered by Axtel's relatively small operating scale. While the company's strategic refocusing and consistent deleveraging is a positive for the credit, execution risk remains high amid an evolving Mexican telecom market. KEY RATING DRIVERS Improving Financial Structure: Axtel's leverage has trended down in line with Fitch's expectations, aided by the company's divestitures of non-core businesses. The company's net debt/EBITDA (ex-IFRS16) has declined from greater than 5.0x in 2017 to approximately 3.3x as of YE 2019. In December 2018, Axtel sold approximately 80% of its residential fiber business to Televisa for MXN4.7 billion, followed by the remaining portion to Megacable S.A.B. de C.V. for MXN1.2 billion in May 2019. In 2020, Axtel closed the sale of three data centers to Equinix, Inc. (BB+/Positive) for USD175 million (MXN3.4 billion). Fitch expects net leverage to fall further to 2.5x over the medium term, as cash generation improves. Small Scale in Competitive Market: Axtel operates in a competitive landscape that constrains its ratings to the 'BB' category. In fixed enterprise telecom services, Axtel is the No. 2 participant, with approximately 20% market share, competing with Telefonos de Mexico S.A.B. de C.V. (Telmex), which has a market share above 60%. In IT services, Axtel's market share is smaller, but the competitive position is more balanced, given the fragmented nature of that segment. Axtel's addressable market of enterprise and government services is about MXN80 billion-MXN85 billion; telecom represents MXN50 billion-MXN55 billion and IT represents MXN30 billion-MXN35 billion. While demand for enterprise IT and telecom services is expected to continue to grow at a healthy pace, weakness in the government segment weighed on revenues in 2019. Strategic Refocusing: In 2019, Axtel announced a reorganization of its operations; the functional separation will see the creation of a Services unit and an Infrastructure unit. The Services unit will provide managed telecom and IT solutions to its enterprise customers, while the Infrastructure unit will provide connectivity and internet services to wholesale customers. Fitch expects steady telecom growth in the low single digits, given the recurrent nature of its revenue streams. Prospects for the infrastructure unit are less certain, as the Mexican telecom market remains unbalanced and there are several other wholesale initiatives. Enterprise-Driven Growth: Enterprise telecom clients comprise 73% of the company's revenues. Fitch expects this segment's growth prospects will be in the low single digits over the medium term. The business segment provides the company with stable cash flow, due to the recurrent nature of this business and the relatively high costs to switch to another provider. IT solution services for Axtel's enterprise clients, which account for 11% of revenues, should remain solid, given good demand prospects in Mexico. The government segment's revenues fell 13% in 2018, more than Fitch forecast. Fitch does not expect a significant recovery in government demand over the rating horizon. DERIVATION SUMMARY Axtel's ratings are not influenced by Mexico's Country Ceiling (A-), or operating environment scores. Fitch rates Axtel on a standalone basis, and does not give any uplift due to parent/subsidiary linkages with parent Alfa S.A.B. de C.V. (BBB/Stable). Axtel has lower financial leverage compared with WOM S.A. (BB-/Stable), following the latter's dividend recapitalization. Axtel and WOM are relatively undiversified carriers, both service-wise and geographically. WOM benefits from the relative health of the Chilean operating environment, as well as the more balanced market while Axtel's revenues are exposed to the slowing Mexican economy. Axtel has less service and geographical diversification than Cable & Wireless Communications Limited (CWC, BB-/Stable), which offsets the positive rating impact from Axtel's stronger capital structure. CWC has a much stronger market position, as it operates primarily in a series of duopoly markets, which supports stronger EBITDA margins than Axtel's. CWC also benefits from its large scale, with a B2B services and infrastructure division that alone generates 70% more revenue than Axtel. Relative to CWC's sister company, VTR Finance BV (BB-/Stable), Axtel has a more comparable business position, given the two companies' scale, fixed-line telecom focus, and lack of geographic, product and service diversification. However, VTR has a much stronger competitive position as a leader in the Chilean broadband and pay-TV market. Axtel benefits from lower leverage than VTR. Axtel's business profile could be considered similar to Empresa de Telecomunicaciones de Bogota (ETB, BB+/Stable), in that both are small scale undiversified fixed-line providers. ETB benefits from lower net leverage (below 1.5x). Both companies are going through transitions, as ETB attempts to reorient its product portfolio around fiber-based solutions. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer - Overall revenues to grow in the 1%-3% range, as IT revenues to grow 3%-5% annually, with telecom revenues to grow 2%-4%; - EBITDA margins to remain stable in the medium term in the 31%-33% range; - Capex of approximately USD129 million in 2020, with capital intensity of around 20%-22% thereafter; - A stable macroeconomic environment, including Mexican peso/U.S. dollar exchange rates, interest rates and inflation. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action - Debt/EBITDA falling approaching 2.5x, due to strong demand for telecom services by enterprises and wholesale infrastructure by telecom and technology firms; - Continued positive cash flow generation (excluding the payment of non-recurring liabilities to Alfa). Developments That May, Individually or Collectively, Lead to Negative Rating Action - Debt/Operating EBITDA rising above 4.0x due to weak demand for telecom services by enterprises, a sustained contraction in government revenues, and weak interest in wholesale infrastructure by telecom and technology firms LIQUIDITY Adequate Liquidity: As of Dec. 31, 2019, the company-maintained cash of MXN858 million, against short-term debt (i.e. the current portion of long-term debt and accrued interest) of MXN584 million. The company also maintains a committed credit line for USD50 million expiring June 2021. The company's liquidity is aided by improving cash flow generation, which Fitch expects to turn positive in 2021. The company benefits from its manageable amortization schedule, comprising the MXN1.3 billion syndicated loan facility maturing in 2022, the USD500 million senior unsecured notes (MXN9.8 billion) due 2024 and the MXN3.2 Bancomext facility. The company used most of the proceeds from its mass market divestitures to pay down Mexican peso debt, extending its maturity profile and lowering net leverage, as well as a payable to Alfa. ESG Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of 3 - ESG issues are credit neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. FULL LIST OF RATING ACTIONS Fitch has affirmed the following ratings and revised the Rating Outlook to Positive: Axtel S.A.B. de C.V. - LT FC and LC IDRs at 'BB-'; - National LT Rating at 'A-(mex)'; - 2024 USD Notes 'BB-'. GRUPO AEROMEXICO: Moody's Cuts CFR to B2, On Review for Downgrade ----------------------------------------------------------------- Moody's Investors Service has downgraded Grupo Aeromexico S.A.B. de C.V.'s corporate family rating to B2 from B1. Moody's has also downgraded to B3 from B2 the senior unsecured rating on its global notes due 2025, issued by its fully owned subsidiary Aerovias de Mexico, S.A. de C.V. All ratings remain on review for downgrade. RATINGS RATIONALE The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The passenger airline sector has been one of the sectors most significantly affected by the shock given its exposure to travel restrictions and sensitivity to consumer demand and sentiment. The action reflects the impact on Aeromexico of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. The downgrade was prompted by its expectation of a severe decline in top line and cash generation during the coronavirus outbreak in the US and Mexico, resulting in further weakening in liquidity profile and a significantly higher leverage through 2021. Aeromexico plans to cut capacity in 40% and will see its variable costs reduced following the decline in oil prices. Still, these mitigating factors will not be enough to alleviate the negative effects in the company's credit metrics. Moody's base case assumptions are that the coronavirus pandemic will lead to a period of severe cuts in passenger traffic over at least the next three months with partial or full flight cancellations and aircraft groundings, with all regions affected globally. The base case assumes there is a gradual recovery in passenger volumes starting in the third quarter. However, there are high risks of more challenging downside scenarios and the severity and duration of the pandemic and travel restrictions is uncertain. Moody's estimates Aeromexico's revenues will decline by 20% in 2020, whilst also modelling significantly deeper downside cases including a full fleet grounding during the course of Q2 and a more extended period of severely depressed volumes. Aeromexico is weakly positioned to absorb the negative impacts from the global coronavirus outbreak. In 2019, the company's results were weak as a consequence of extended grounding of Boeing MAXs that not only prevented Aeromexico to achieved planed cost reduction through a more modern and efficient fleet but resulted in higher leases related to short notice renewals of aged fleet. Stiff competition mainly from US airlines and a highly fragmented domestic market also drove low profitability. Accordingly, Aeromexico´s operating margin adjusted by Moody's reached a modest 3.9% by year-end and the recovery originally expected for 2020 will not happen before 2021. Aeromexico's liquidity is also tight. Pro-forma for the issuance of $400 million in five-year global notes in January 2020 and repayment of $130 million in debt, Moody's estimates the company's cash balance at around MXN11.5 billion ($ 500 million). This compares with maturities of MXN15,629 ($680 million) through 2021 and some $260 million estimated in annual lease payments. The B3 rating for the unsecured notes stands one notch lower than Aeromexico's B2 corporate family rating in order to reflect the effective subordination of those unsecured creditors to the company's other existing secured debt. Accordingly, Aeromexico's consolidated debt is composed mainly of capitalized leases under IFRS 16 accounting and financing leases, representing about 85% of its total debt. The review process will be focusing on (i) the current market situation with a review of current passenger traffic conditions and pre-booking trends for the next few weeks, (ii) the liquidity measures taken by the company and their impact on its balance sheet, (iii) other measures being taken by the company to alleviate balance sheet and credit metrics stress. WHAT COULD CHANGE THE RATING UP / DOWN The ratings are unlikely to be upgraded in the short term. Positive rating pressure would not arise until the coronavirus outbreak is brought under control, travel restrictions are lifted, and passenger volumes return to more normal levels. At this point Moody's would evaluate the balance sheet and liquidity strength of the company and positive rating pressure would require evidence that the company is capable of substantially recovering its financial metrics and restoring liquidity headroom within a 1-2 year time horizon. Moody's could downgrade Aeromexico in case it liquidity deteriorates further than expected and if there are expectations of deeper and longer declines in passenger volumes including a material extension into Q3 2020 as a result of the coronavirus outbreak, particularly if not matched by additional sources of liquidity. Quantitatively, downward pressure on the rating would occur if adjusted EBIT margin remains below 5% and adjusted Debt-to-EBITDA remains above 6.0 times following the coronavirus outbreak. Based in Mexico City, Grupo Aeromexico, S.A.B. de C.V. is Mexico's leading airline, with more than 20 million passengers transported in 2019 and currently serving 87 destinations (43 domestic and 44 international) in Mexico, the United States, Europe, Central and South America, Asia and Canada. The company currently has a fleet of 121 aircraft with passengers accounting more than 90% of revenues and the balance being related with cargo services. Aeromexico has been a public company since 2011. In 2017, Delta Air Lines, Inc. (Delta, Baa3, positive) increased its equity stake in Aeromexico to 49%, enhancing the strategic alliance between both companies. For the LTM period ended December 31, 2019, Aeromexico generated revenues of $3.6 billion and EBITDAR of $776 million. Currently public float of the company accounts for 20% of its equity stake. The principal methodology used in these ratings was Passenger Airline Industry published in April 2018. Downgrades: Issuer: Grupo Aeromexico S.A.B. de C.V. Corporate Family Rating, Downgraded to B2 from B1; Placed Under Review for further Downgrade Issuer: Aerovias de Mexico, S.A. de C.V. Senior Unsecured Regular Bond/Debenture, Downgraded to B3 from B2; Placed Under Review for further Downgrade Outlook Actions: Issuer: Grupo Aeromexico S.A.B. de C.V. Outlook, Changed To Rating Under Review From Stable Issuer: Aerovias de Mexico, S.A. de C.V. Outlook, Changed To Rating Under Review From Stable LSC COMMUNICATIONS: Deloitte & Touche Raises Going Concern Doubt ---------------------------------------------------------------- LSC Communications, Inc., filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K, disclosing a net loss of $295 million on $3,326 million of net sales for the year ended Dec. 31, 2019, compared to a net loss of $23 million on $3,826 million of net sales for the year ended in 2018. The audit report of Deloitte & Touche LLP states that the Company was not in compliance with certain covenants contained in its Credit Agreement as of December 31, 2019 but has entered into a "Waiver, Forbearance Agreement and Fourth Amendment to Credit Agreement" with the lenders constituting a majority under the Credit Agreement that is in effect through May 14, 2020, absent further events of default. Unless the Company obtains an extension or another waiver beyond May 14, 2020, the Company could be in default of the Revolving Credit Facility and Term Loan Facility and all amounts then outstanding could be accelerated by the lenders. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The Company's balance sheet at Dec. 31, 2019, showed total assets of $1,649 million, total liabilities of $1,721 million, and a total deficit of $72 million. A copy of the Form 10-K is available at: https://is.gd/wVxoLb LSC Communications, Inc., together with its subsidiaries, provides various traditional and digital print, print-related services, and office products in North America, Europe, and Mexico. It operates through Magazines, Catalogs and Logistics; Book; Office Products; Mexico; and Other segments. The company was founded in 2016 and is based in Chicago, Illinois. SIX FLAGS: Egan-Jones Lowers Sr. Unsec. Debt Ratings to BB ---------------------------------------------------------- Egan-Jones Ratings Company, on March 13, 2020, downgraded the foreign currency and local currency senior unsecured ratings on debt issued by Six Flags Incorporated to BB from BB+. Six Flags Entertainment Corporation, also known as Six Flags Theme Parks or simply Six Flags, is an amusement park corporation based in the United States, with properties in Canada, Mexico, and the contiguous United States. ===================================== T R I N I D A D A N D T O B A G O ===================================== TRINIDAD & TOBAGO: Bank Reports Dramatic Drop in Energy Prices -------------------------------------------------------------- RJR News reports that the Central Bank of Trinidad and Tobago (CBTT) said a significant fallout of the COVID-19 pandemic for the country has been the dramatic drop in energy prices as the demand for fuel declined on account of the slowdown of industrial production and sharp reduction in airline carriage. The CBTT said this, coupled with discord among the Organization of the Petroleum Exporting Countries and non-OPEC countries has resulted in the West Texas Intermediate oil price hovering around the US$30 price point, compared to US$50-US$60 earlier in the year, according to RJR News. In its March Monetary Policy statement, the CBTT said the impact on the twin republic's fiscal and external balances will likely spill over to the growth outlook, 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 * * *