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/raid1/www/Hosts/bankrupt/TCRLA_Public/200327.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 27, 2020, Vol. 21, No. 63 Headlines A R G E N T I N A CORDOBA: Moody's Rates 2020 Treasury Note Program 'Caa2' B A R B A D O S BARBADOS: Gets Supports From IDB With $80MM Loan B E R M U D A BERMUDA: Gov't. to Provide Benefits to Unemployed Amid COVID-19 C H I L E LATAM AIRLINES: Posts US$227.1MM Net Income in 4Q2019 LATAM AIRLINES: To Cut Capacity by 70% Following Border Closures G U Y A N A GUYANA: Court to Rule on Vote Recount in Country H A I T I HAITI: Stops Flights & Imposes Curfew Amid COVID-19 Scare P U E R T O R I C O J & C CORPORATION: Plan & Disclosure Hearing Reset to May 6 X X X X X X X X LATAM: Among Worst-Hit Airlines, Investors Bet Who Will Fall First - - - - - ================= A R G E N T I N A ================= CORDOBA: Moody's Rates 2020 Treasury Note Program 'Caa2' -------------------------------------------------------- Moody's Latin America Agente de Calificacion de Riesgo has assigned a Caa2 -Global Scale local currency debt rating- and an B2.ar --National Scale in local currency- to the 2020 Treasury Note Program of the Municipality of Cordoba. The assigned ratings are on review for possible downgrade and are in line with the municipality's long-term foreign currency issuer ratings, which continue under review for possible downgrade. RATINGS RATIONALE The 2020 program, authorized by Mayor's Decree Nº265/19, considers a maximum outstanding issuance amount of ARS2,000 million or its equivalent in foreign currency in different series with maturities up to 360 days. Each series of notes could have different issuance terms and conditions. The treasury notes to be issued under this program will be secured by the Municipality, affecting municipal resources under ordinance 12.994 and its modifications. The assigned debt ratings reflect Moody's view that the willingness and capacity of the Municipality of Cordoba to honor these short-term treasury notes is in line with the municipality's long-term credit quality as captured in the Caa2/B2.ar issuer ratings. The assigned Caa2/B2.ar ratings to the Treasury Note Program are based on preliminary documentation received by Moody's as of the rating assignment date. Moody's does not expect changes to the documentation reviewed over this period, nor does it anticipate changes in the main conditions that the Notes will carry. Should issuance conditions and/or final documentation of the program deviate from the original ones submitted and reviewed by the rating agency, Moody's will assess the impact that these differences may have on the ratings and act accordingly. WHAT COULD CHANGE THE RATING UP/DOWN Given the strong macroeconomic and financial links between the Government of Argentina and sub-sovereigns, a downgrade of Argentina's bond ratings or any further systemic deterioration, or both, could exert downward pressure on the ratings. Alternatively, increased idiosyncratic risks could translate into a downgrade. As the ratings are currently placed under review for downgrade, Moody's does not expect upward pressure on the rated Argentinean sub-sovereigns in the near to medium term. The principal methodology used in these ratings was Procedures Manual for Risk Rating of Sub-Sovereign Governments published in January 2017. =============== B A R B A D O S =============== BARBADOS: Gets Supports From IDB With $80MM Loan ------------------------------------------------ Barbados will modernize its regulatory framework and strengthen its public policies oriented towards sustainable development and climate resilience with the support of an US$80 million loan from the Inter-American Development Bank (IDB). The program, the first in a series of policy-based loans, provides budget support tied to the strengthening and consolidation of public policies focused on improving territorial planning efficiency and sustainability. Its comprehensive approach includes modernizing policies for managing water resources, natural assets, and disaster risk and resilience. The country's legislation governing physical planning and development is being modernized. In particular, It will focus on the modernization of integrated coastal zone management policies, and include the recent update of Barbados' returnable containers legislation to promote recycling of a broader set of packaging materials and to reduce pollution of land and coastal resources. Lastly, the project will support reforms needed to strengthen disaster risk resilience and management. Among other activities, the operation will help adopt a cross-cutting and multiyear approach at each phase of the disaster risk management cycle and will mainstream the use of the newly developed National Coastal Risk Information and Planning Platform (NCRIPP). All these steps are in line with the government's new Roofs to Reefs Program. The IDB's US$80 million loan is for a 20-year term, with a 5-1/2-year grace period and a LIBOR-based interest rate. ============= B E R M U D A ============= BERMUDA: Gov't. to Provide Benefits to Unemployed Amid COVID-19 --------------------------------------------------------------- Caribbean360.com reports that Minister of Labour, Community Affairs and Sports Lovitta Foggo said government is working to provide an unemployment benefit for individuals who are out of work due to the economic impact of the Coronavirus (COVID-19). She said a task force has been created to implement the unemployment benefit scheme, according to Caribbean360.com. "We appreciate that these are unprecedented and uncertain times, particularly for employees who may be facing unemployment due to business closures. So, this Government is trying to be sensitive to the needs and hardship that our residents may face," Foggo said, the report notes. "To be clear, this unemployment benefit is not intended to be a substitute for financial assistance. The proposed period for this unemployment benefit is three months, after which workers may apply for financial assistance. The policy will be administered through the Department of Workforce Development." The Labor Minister said further details are being finalized regarding the unemployment benefit. But the aim is to have the program operational, the report relates. Bermuda has two confirmed COVID-19 cases. Following the announcement of that development, Premier David Burt said the LF Wade International Airport will be closed from tonight for two weeks, the seaport is closed to vessels other than cargo ships, public transportation services have been suspended until April 6 and schools have been closed until that date as well, the report notes. Burt has encouraged private businesses to ask their employees to work from home, if possible, or stagger work schedules to minimize the number of people in the workplace, the report adds. ========= C H I L E ========= LATAM AIRLINES: Posts US$227.1MM Net Income in 4Q2019 ----------------------------------------------------- LATAM Airlines Group reported an operating income of US$350.4 million in the fourth quarter of 2019, representing a 2.1% increase compared to the same period in 2018. LATAM's operating margin reached 12.2%, while net income totaled US$227.1 million in the fourth quarter 2019. For the full year 2019, the Company achieved an operating margin of 7.1%, in line with its guidance and includes a system-wide impact that reached approximately US$40 million generated by the social unrest in Chile during the fourth quarter. Net income totaled US$190.4 million for full year 2019. Total revenues in fourth quarter reached US$2,870.6 million, an improvement of 3.0% year-over-year. This increase was driven by a 6.5% increase in passenger revenues due to a 3.2% capacity growth (ASK) together with a 3.1% increase in passenger revenues per available seat kilometer (RASK). For full year 2019, revenues reached US$10,430.9 million, an increase of 0.6% compared with 2018. A copy of the company's financial report is available free at: https://is.gd/KJhlEu About LATAM Airlines LATAM Airlines, formerly LAN Airlines S.A. and Lan Chile, is an airline based in Santiago, Chile, and is one of the founders of LATAM Airlines Group, Latin America's largest airline holding company. As reported in the Troubled Company Reporter-Latin America on Mar. 18, 2020, RJR News said that LATAM Airlines Group, the largest carrier in Latin America, cancelled 90% of its international flights as demand collapsed and countries shut down borders, leaving the region increasingly isolated. On March 17, 2020, S&P Global Ratings placed all its ratings on Chile-based airline Latam Airlines Group S.A. (Latam) on CreditWatch with negative implications, including the 'BB-' issuer credit rating, the 'B+' unsecured debt rating, the 'BBB+' rating on EETC-2015 1 Class A notes, the 'BB+' rating on Class B notes, and the 'BB' rating on Class C notes. LATAM AIRLINES: To Cut Capacity by 70% Following Border Closures ---------------------------------------------------------------- Following new border closures of various countries and the subsequent drop in demand, LATAM Airlines Group S.A. and its subsidiaries will reduce their capacity by 70%, equivalent to a 90% decrease in international operations and 40% in national flights. "We made this difficult decision following border closures that have made operating to a large part of our network impossible. If these unprecedented travel restrictions are extended over the next few days, we cannot rule out further reductions to our operation," said Roberto Alvo, Chief Commercial Officer and CEO-elect of LATAM Airlines Group. All passengers with affected national or international flights from March 16, 2020, will be able to reschedule their flights until December 31, 2020, at no additional cost. LATAM's customer service channels are currently receiving high numbers of enquiries, impeding the ability to attend customers. To be able to focus on passengers with the most pressing requirements, LATAM requests that customers do not call more than 72 hours prior to their flight. "We are working to ensure the group's long-term sustainability and protect the jobs of LATAM's 43,000 employees. However, the scale and unpredictability of this crisis makes it difficult to anticipate results. This is why we are going to require the support of governments to overcome the greatest crisis in history for the tourism and civil aviation sectors," added Alvo, says the report. About LATAM Airlines LATAM Airlines, formerly LAN Airlines S.A. and Lan Chile, is an airline based in Santiago, Chile, and is one of the founders of LATAM Airlines Group, Latin America's largest airline holding company. As reported in the Troubled Company Reporter-Latin America on Mar 18, 2020, RJR News said that LATAM Airlines Group, the largest carrier in Latin America, cancelled 90% of its international flights as demand collapsed and countries shut down borders, leaving the region increasingly isolated. On March 17, 2020, S&P Global Ratings placed all its ratings on Chile-based airline Latam Airlines Group S.A. (Latam) on CreditWatch with negative implications, including the 'BB-' issuer credit rating, the 'B+' unsecured debt rating, the 'BBB+' rating on EETC-2015 1 Class A notes, the 'BB+' rating on Class B notes, and the 'BB' rating on Class C notes. =========== G U Y A N A =========== GUYANA: Court to Rule on Vote Recount in Country ------------------------------------------------ Caribbean360.com reports that the Supreme Court will hear arguments related to an injunction filed by a citizen blocking a total national recount of votes from the March 2 general and regional elections. An interim injunction was granted as an independent high-level Caribbean Community (CARICOM) team was on the ground to oversee the recount, according to Caribbean360.com. It prevented the Guyana Elections Commission (GECOM) from executing the agreed upon aide-memoire between President David Granger, Opposition Leader Bharrat Jagdeo and CARICOM that requested the regional body supervise the recount, the report notes. The CARICOM team -- chaired by the former Attorney General and Minister of Foreign Affairs of Dominica Francine Baron and including Minister of Finance of Grenada Anthony Boatswain, Senior Lecturer in the Department of Government of UWI Cynthia Barrow-Giles, Barbados' Chief Electoral Officer Angela Taylor; and Chief Elections Officer of Trinidad and Tobago Fern Narcis-Scope -- subsequently left the country, the report relays. President Granger says the court action "has curtailed further our thrust towards reaching a transparent conclusion to the 2020 General and Regional Elections," the report discloses. But he said he would abide by the decisions of the court and GECOM, the report notes. "I iterate my commitment to the due completion of all electoral requirements and the conclusion of the process under the auspices of the Commission and in the interest of all Guyanese," Granger said, the report relates. The Guyanese leader had sought the intervention of CARICOM's Chairman Mia Mottley to bring an end to the questions by both local and international observers about the legitimacy of the election results, the report says. The tabulation process, in particular in Region 4 -- the country's largest electoral district -- had been widely viewed as not being transparent or credible, the report notes. Mottley said CARICOM was forced to withdraw the team that arrived last Saturday, since the injunction granted by the court set aside "any agreement between the President of Guyana and the Leader of the Opposition and/or any agreement between the Guyana Elections Commission and the Caribbean Community," the report discloses. "It is clear that there are forces that do not want to see the votes recounted for whatever reason. Any Government which is sworn in without a credible and fully transparent vote count process would lack legitimacy," she said, the report relays. "The preservation of law and order is paramount and all parties must work hard to ensure that there is peace on the roads and in the communities across Guyana." ========= H A I T I ========= HAITI: Stops Flights & Imposes Curfew Amid COVID-19 Scare --------------------------------------------------------- Caribbean360.com reports that as Haiti recorded its first two cases of the coronavirus (COVID-19) the government declared a state of emergency, closing the country's airports to commercial flights and imposing a nine-hour curfew. Announcing the state of emergency, President Jovenel Moise said ports, airports and borders would be closed to people but would remain open to accept goods, according to Caribbean360.com. In an effort to prevent COVID-19 from reaching Haiti, the government had previously suspended flights from Europe, Latin America and Canada and imposed restrictions on the border with neighbouring Dominican Republic where there have been 21 cases recorded so far, the report notes. With the virus now confirmed here, several measures have been implemented in addition to the month-long suspension of commercial flights, the report relates. Moise said schools, universities, places of worship and industrial parks would also be closed, and an 8 p.m. to 5 a.m. curfew will take effect from tonight, the report discloses. No details of the gender, age, nationality or travel history of the two people who tested positive for COVID-19 have been provided, the report says. Education Minister Pierre Josue Agenor Cadet would only say on local radio that the two had been abroad and were placed under quarantine after being suspected of having the virus, the report relates. COVID-19 has been detected throughout the Caribbean. There are cases in Aruba, Antigua and Barbuda, the Bahamas, Barbados, Bermuda, Cayman Islands, Cuba, Curaçao, the Dominican Republic, French Guiana, Guadeloupe, Guyana, Jamaica, Martinique, Montserrat, Saint Barthelemy, St Lucia, Saint Martin, St Vincent and the Grenadines, Puerto Rico, Suriname, Trinidad and Tobago and Venezuela, the report notes. Five deaths have been attributed to the virus -- one each in Jamaica, Guyana, Cuba, the Dominican Republic and the Cayman Islands, the report relays. As of yesterday, the World Health Organization said there were 209,839 COVID-19 cases confirmed in 169 countries, areas or territories, and 8,778 deaths, the report adds. ===================== P U E R T O R I C O ===================== J & C CORPORATION: Plan & Disclosure Hearing Reset to May 6 ----------------------------------------------------------- Judge Mildred Caban Flores of the U.S. Bankruptcy Court for the District of Puerto Rico granted the motion requesting continuance for debtor J & C Corporation Inc. filed by ACM CCSC OB VII Cayman Asset Company. The hearing on final approval of the disclosure statement and confirmation of the plan scheduled for March 11, 2020, at 9:00 AM, is rescheduled, for cause, for May 6, 2020, at 9:00 AM, at the United States Bankruptcy Court, Jose V. Toledo Federal Building and US Courthouse, 300 Recinto Sur Street, Courtroom 3, Third Floor, San Juan, Puerto Rico. A full-text copy of the order dated March 10, 2020, is available at https://tinyurl.com/vxwoyt9 from PacerMonitor at no charge. About J & C Corporation J & C Corporation Inc. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D.P.R. Case No. 19-04176) on July 24, 2019. At the time of the filing, the Debtor had estimated assets of between $500,001 and $1 million and liabilities of between $100,001 and $500,000. The case is assigned to Judge Mildred Caban Flores. The Debtor tapped Modesto Bigas Mendez, Esq., as its legal counsel. =============== X X X X X X X X =============== LATAM: Among Worst-Hit Airlines, Investors Bet Who Will Fall First ------------------------------------------------------------------ Ezra Fieser and Vinicius Andrade at Bloomberg News reports that even in an industry devastated by the coronavirus crisis, Latin American airlines stand out. Five of the biggest carriers in the region -- Latam Airlines Group SA, Gol Linhas Aereas Inteligentes SA, Azul SA, Avianca and Volaris -- have seen about $12 billion in their market value wiped out since the end of January through March 18's close, according to Bloomberg News. On average, their stock tumbled 78% in local currency terms, more than all 23 members in the Bloomberg World Airlines Index. The global gauge is down 46% in the period. Latin American companies, operating far from China and with almost no direct flights to Asia, weren't expected to see the same massive hits as other parts of the world when the coronavirus chaos began earlier this year, Bloomberg News says. The region's major carriers are now buckling along with their U.S. and European counterparts, underscoring just how quickly the crisis has upended the industry, Bloomberg News notes. "Investors had some expectation that the region was going to be spared," said Reno Bianchi, an independent airline analyst in New York. "Unfortunately, that's not going to happen. No one wants to fly any place," he added. Bloomberg News discloses that while the industry reels, not all airlines are created equal, and investors are laying down their bets on which companies stand a better chance at survival and which may be first to fall. Panama's Copa Holdings SA and Sao Paulo-based Azul look relatively in better positions, Bloomberg News relates. Investors appear most nervous about Colombia's Avianca, whose bond yields have topped 60%, and Mexico's Interjet, which stoked anxiety among its lessors after it grounded some of its Airbus SE planes, Bloomberg News notes. Gol's 2025 dollar bond traded at 37 cents on the dollar on March 19, down from 95 cents at the start of the month. "We are doing everything we can to preserve cash, because difficult days are still ahead," Azul Chief Executive Officer John Rodgerson said in an interview, Bloomberg News notes. "The government is going to have to step in to help with credit lines so the industry can get through the next 90 days. We have a lot of fixed costs that we have to keep up in order to restart services in 90 days," he added. Moody's Investors Service downgraded the credit rating on Santiago-based Latam and Azul by one step to B1 from Ba3, designating both as high credit risks. Grupo Aeromexico SAB was also lowered further into junk territory, while Gol's rating was placed under review for a possible cut, Bloomberg News relays. 'Most Risky' "We do not rule out the possibility of financial distress if the COVID-19 situation continues to escalate," JPMorgan analysts Fernando Abdalla and Guilherme Mendes wrote in a report, Bloomberg News discloses. "Avianca would be the most risky company in that sense, considering its elevated leverage," Bloomberg News added. The Bogota-based carrier, which just months ago restructured borrowings and launched a business turnaround strategy, said it will cut capacity by as much as 40% amid collapsing demand, Bloomberg News says. That hasn't reassured investors, who cite the company's high debt ratios and dependence on international travel, which accounts for about 75% of passenger revenue, Bloomberg News notes. Colombian President Ivan Duque banned passenger flights from abroad for at least 30 days starting March 23, Bloomberg News notes. Avianca's junk-rated bonds due in 2023 have fallen to 30 cents on the dollar, pushing yields deep into distressed territory, according to data compiled by Bloomberg. Aeromexico's bonds due in 2025 have also suffered, tumbling to around 36 cents and driving the yield to around 35%, Bloomberg News says. The company, which counts Delta Air Lines Inc. as its largest shareholder, faces about $370 million in upcoming payments and listed $480 million in cash on hand at the end of last year, Bloomberg News relates. It raised $400 million in international debt markets in January and management has reduced international flights by 40% and frozen some investments, Bloomberg News discloses. The carrier is "weakly positioned for a sharp decline in passenger demand" as it's less profitable than some peers and faces competition from U.S. carriers, Moody's wrote in a note obtained by Bloomberg News. Panama's flagship airline, Copa, may be in the best position to ride out the storm -- relatively speaking. The company carries less debt than other major players and has the collateral to put up if it needs to borrow, Bloomberg News says. Copa said it "maintains a strong financial position, with low leverage and high liquidity." Still, it decided to reduce capacity by 80% in April and hasn't ruled out a temporary shutdown of all operations, Bloomberg News notes. Its stock has fallen nearly 70% this year, Bloomberg News adds. "We estimate Copa is the only airline capable of reaching end-2020 with remaining cash in a skies-closed scenario, without having to raise additional debt," UBS analysts led by Rogerio Araujo wrote in a report, Bloomberg News relates. Brazil's major airlines are less exposed to international travel than peers, with Gol receiving around 13% of passenger revenue from international trips and Azul getting about a quarter, according to Gimme Credit analyst Cedric Rimaud, Bloomberg News notes. Still, the reliance on domestic travel exposes the airlines, whose major costs are in dollars, to currency fluctuations, Bloomberg News says. The Brazilian real and Mexican peso have tumbled more than 21% this year, the most in emerging markets after the Russian ruble, according to data compiled by Bloomberg. Both Azul and Gol have "adequate" liquidity to cover short-term debt, according to Moody's. Still, bonds tied to the companies hit record lows this week and their share prices have collapsed. Azul's 2024 dollar bond tumbled to 40 cents on the dollar March 18 from above 99 cents just two weeks ago, Bloomberg News notes. The region's largest carrier, Latam, cut 90% of international flights and reduced domestic capacity by 40%, Bloomberg News discloses. The carrier entered the downturn with plenty of cash, about $1.5 billion, to cover roughly $1 billion in short-term maturities, according to Moody's, Bloomberg News says. How Long? For carriers across the region, it's a question of how long the situation will last, Bloomberg News notes. Globally, the pandemic is expected to bankrupt most airlines by the end of May unless governments and the industry take coordinated steps to avoid such a situation, aviation consultant CAPA Centre for Aviation warned last week, Bloomberg News discloses. So far, Latin American officials, already dealing with the effects of a tanking global economy, have shown little appetite to bail out airlines, Bloomberg News says. "It's hard to predict for how long the lock-down will last and when coronavirus cases will peak in Brazil and Latin America, Bloomberg News notes. Expenses with personnel and leasing continue, but airlines have been cutting capacity," said Marcelo Cavalheiro, a founding partner at Safari Capital, based in Sao Paulo. "They're doing everything they can, but the situation is very complicated," Bloomberg News 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 * * *