/raid1/www/Hosts/bankrupt/TCRLA_Public/200413.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
Monday, April 13, 2020, Vol. 21, No. 74
Headlines
A R G E N T I N A
ARCOR SAIC: Moody's Cuts GS CFR to Caa2, Outlook Revised to Neg.
ARGENTINA: Fitch Cuts LT FC IDR to RD on Postponed Payments
ARGENTINA: S&P Cuts FC Sovereign Credit Ratings to 'SD/SD'
BANCO DE GALICIA: S&P Affirms 'B-' ICR, Off Watch Negative
BANCO DE LA CIUDAD: Moody's Cuts Sr. Unsec. FC Debt Ratings to Ca
EDENOR: Price Waterhouse & Co. S.R.L. Raises Going Concern Doubt
[*] Moody's Cuts Ratings on 22 Argentine Financial Companies
[*] Moody's Cuts Ratings on Argentine Regional & Local Gov'ts.
B R A Z I L
UNIGEL PARTICIPACOES: S&P Alters Outlook to Neg., Affirms 'B+' ICR
C A Y M A N I S L A N D S
CAYMAN ISLANDS: Rejects One of Two Proposals For Money Transfer
NAGACORP LTD.: Moody's Affirms B1 CFR, Alters Outlook to Negative
C H I L E
CORP GROUP: S&P Downgrades ICR to 'CC', Outlook Negative
GEOPARK LTD: S&P Affirms 'B+' Global Scale ICR, Outlook Negative
INVERSIONES LATIN: S&P Cuts $412MM Sr. Sec. Notes Rating to 'BB+'
D O M I N I C A N R E P U B L I C
DOMINICAN REPUBLIC: Nearly Half a Million Workers Were Suspended
DOMINICAN REPUBLIC: Purchase & Sale of US$ is at RD$54
M E X I C O
GRUPO GICSA: S&P Lowers GS Issuer Credit Rating to 'BB-'
P A R A G U A Y
BANCO REGIONAL: Moody's Cuts LT LC Deposit Rating to 'Ba2'
P U E R T O R I C O
FERRELLGAS PARTNERS: Prices $575M of 10.000% Senior Secured Notes
MGIC INVESTMENT: Egan-Jones Cuts Sr. Unsec. Debt Ratings to BB+
PILGRIM'S PRIDE: Egan-Jones Cuts Unsecured Debt Rating to B+
RED CAT: Losses Since Inception Cast Going Concern Doubt
T R I N I D A D A N D T O B A G O
CONSOLIDATED ENERGY: S&P Downgrades ICR to 'BB-', Outlook Stable
X X X X X X X X
[*] BOND PRICING: For the Week April 6 to April 10, 2020
- - - - -
=================
A R G E N T I N A
=================
ARCOR SAIC: Moody's Cuts GS CFR to Caa2, Outlook Revised to Neg.
----------------------------------------------------------------
Moody's Latin America Agente de Calificacion de Riesgo S.A., has
downgraded the global scale and national scale ratings for several
non-financial companies operating in Argentina. The outlook was
revised to negative from ratings under review. In the case of
Quickfood S.A., the outlook was changed to negative from stable.
This concludes the review for downgrade initiated on September 3,
2019. The rating actions follow the downgrade of the Government of
Argentina's bond rating to Ca from Caa2, with the outlook changed
to negative from ratings under review, on April 3, 2020.
ISSUERS AND RATINGS DOWNGRADED, NEGATIVE OUTLOOK
Arcor S.A.I.C.'s global scale and national scale senior unsecured
notes' rating was downgraded to Caa2/B1.ar from B3/A3.ar. At the
same time, Moody's Investors Service has downgraded to Caa2 from B3
the company's global scale corporate family rating and senior
unsecured global notes' rating. The outlook was revised to negative
from ratings under review. This concludes the review for downgrade
initiated on September 3, 2019.
Holcim (Argentina) S.A.'s CFR was downgraded to Caa2/B1.ar from
B3/Baa1.ar. The outlook was revised to negative from ratings under
review. This concludes the review for downgrade initiated on
September 3, 2019.
Mirgor S.A.C.I.F.I.A.'s CFR was downgraded to Caa3/Caa2.ar from
Caa1/Ba1.ar. The outlook was revised to negative from ratings under
review. This concludes the review for downgrade initiated on
September 3, 2019.
Quickfood S.A.'s CFR was downgraded to Caa1/Baa3.ar from B3/
Baa2.ar. The outlook was changed to negative from stable. Moody's
will subsequently withdraw all ratings.
Raghsa S.A.'s national scale CFR and senior unsecured note ratings
were downgraded to B2.ar from Ba2.ar. At the same time, Moody's
Investors Service has downgraded to Caa2 from Caa1 Raghsa S.A.'s
global scale CFR and senior unsecured notes' rating. The outlook
was revised to negative from ratings under review. This concludes
the review for downgrade initiated on September 3, 2019.
Sullair Argentina S.A.'s CFR was downgraded to Caa3/Caa2.ar from
Caa1/Ba1.ar. The outlook was revised to negative from ratings under
review. This concludes the review for downgrade initiated on
September 3, 2019.
Telecom Argentina S.A.'s CFR was downgraded to Caa3/Caa1.ar from
Caa1/Baa3.ar and the senior unsecured notes' national scale rating
was downgraded to Caa1.ar from Baa3.ar. At the same time, Moody's
Investors Service has downgraded to Caa3 from Caa1 Telecom
Argentina S.A.'s global scale senior unsecured notes' rating. The
outlook was revised to negative from ratings under review. This
concludes the review for downgrade initiated on September 3, 2019.
YPF Sociedad Anonima's issuer rating and senior unsecured bank
credit facility ratings were downgraded to Caa3/Caa1.ar from
Caa2/B1.ar. At the same time, Moody's Investors Service has
downgraded to Caa3 from Caa2 the company's global scale senior
unsecured notes' rating and to (P)Caa3 from (P)Caa2 the rating of
the medium-term notes program. YPF's Baseline Credit Assessment
(BCA) was lowered to caa3 from caa2. The outlook was revised to
negative from ratings under review. This concludes the review for
downgrade initiated on September 3, 2019.
RATINGS RATIONALE
The downgrades and changes in outlook to negative for these
companies follow the downgrade of the Government of Argentina's
ratings to Ca from Caa2, with the outlook changed to negative from
ratings under review, on April 3, 2020. The rating actions reflect
Moody's view that the creditworthiness of these companies cannot be
completely de-linked from the credit quality of the Argentine
government, and thus their ratings need to closely reflect the risk
that they share with the sovereign. Moody's believes that a weaker
sovereign has the potential to create a rating drag on companies
operating within its borders, and therefore it is appropriate to
limit the extent to which these issuers can be rated higher than
the sovereign, in line with Moody's cross-sector rating methodology
"Assessing the Impact of Sovereign Credit Quality on Other Ratings
" published in June 2019.
Moody's decision to downgrade the Government of Argentina's ratings
to Ca reflected Moody's expectation that private creditors will
likely incur substantial losses in the current government debt
restructuring process as the economic and financial shock stemming
from the pandemic compounds the funding stress that forces the
government to reduce its upcoming debt payments obligations in the
coming years. The negative outlook reflects the risk that investor
losses under the government debt restructuring may be beyond levels
consistent with a Ca rating, which typically captures losses of up
to 65%.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The principal Rating Procedure Manual used in assigning these
ratings was the Procedures Manual to Rate Companies and/or
Securities Issued published in January 2017. These ratings are
consistent with those assigned or maintained elsewhere under the
methodology Automotive Supplier Methodology published in January
2020.
ARGENTINA: Fitch Cuts LT FC IDR to RD on Postponed Payments
-----------------------------------------------------------
Fitch Ratings has downgraded Argentina's Long-Term Foreign-Currency
Issuer Default Rating to 'RD' from 'CC' and its Short-Term
Foreign-Currency IDR to 'RD' from 'C'.
Argentina
- LT IDR; RD; Downgrade; previously at CC
- ST IDR; RD; Downgrade; previously at C
- LC LT IDR; RD; Affirmed; previously at RD
- LC ST IDR; RD; Affirmed; previously at RD
- Country Ceiling; CCC; Affirmed; previously at CCC
- Senior unsecured; LT CC; Affirmed; previously at CC
KEY RATING DRIVERS
The downgrade of Argentina's foreign-currency ratings to 'RD'
follows a decree from Argentina's government that postpones
upcoming payments on locally issued foreign currency debt
obligations. In accordance with Fitch Ratings' criteria, this
development constitutes a "distressed debt exchange" (DDE) and
default on Argentina's sovereign obligations.
The decree issued on April 5 by Argentina's government postpones
payments on locally issued foreign-currency debt instruments due
for the remainder of the year until Dec. 31, 2020 or an earlier
date that could be determined at the executive's discretion based
upon how successfully broader efforts to ensure debt sustainability
proceed. The affected instruments include both long-term
USD-denominated BONAR instruments as well as short-term
USD-denominated LETES that had been previously rescheduled for Aug.
31.
Fitch has deemed the maturity extension to be a DDE in line with
its published Sovereign Rating Criteria, albeit unilaterally via
presidential decree rather than a negotiation with creditors, given
that it entails a material reduction in terms and was taken to
avoid a traditional payment default. Fitch deems that the decree
also effectively concludes the DDE and will upgrade Argentina's
Foreign Currency IDRs to a level appropriate for its debt service
payment prospects on a forward-looking basis.
The unilateral re-profiling of locally-issued USD debt takes place
amid ongoing discussion with foreign creditors to restructure
Argentina's foreign law bonds. The authorities have released new
projections indicating Argentina's sovereign debt is unsustainable,
requiring substantial relief from commercial creditors. A formal
exchange offer has not yet been submitted, and how much of a loss
creditor would be willing to accept remains highly uncertain, and
if the supermajorities needed to reach collective action clauses
can be achieved. This poses risks of protracted negotiations and
outright payment default given that the authorities have expressed
a narrowing appetite to keep servicing bond interest with
international reserves.
Argentina's local currency IDRs remain rated as 'RD' given that the
authorities have continued with a strategy of swapping
peso-denominated debt instruments on terms that Fitch has deemed
distressed.
ESG - Governance: Argentina has an ESG Relevance Score (RS) of 5
for both Political Stability and Rights and for the Rule of Law,
Institutional and Regulatory Quality and Control of Corruption, as
is the case for all sovereigns. Theses scores reflect the high
weight that the World Bank Governance Indicators (WBGI) have in its
proprietary Sovereign Rating Model. Argentina has a medium WBGI
ranking at 52nd percentile, reflecting a recent track record of
political transitions that have been peaceful but accompanied by
high policy uncertainty and macroeconomic instability; moderate
control of corruption, government effectiveness and regulatory
quality and rule of law; and above-average voice and
accountability.
ESG - Creditor Rights: Argentina has an ESG Relevance Score (RS) of
5 for Creditor Rights as willingness to service and repay debt is
highly relevant to the rating and is a key rating driver with a
high weight. The current rating action taken on Argentina reflects
a 'distressed debt exchange' that constitute a default event, and
Argentina has defaulted on its debt repeatedly in the past, for
extended periods in some cases.
SOVEREIGN RATING MODEL (SRM) AND QUALITATIVE OVERLAY (QO)
In accordance with its rating criteria, Fitch's sovereign rating
committee has not utilized the SRM and QO to explain the ratings,
which are instead guided by the ratings definitions.
Fitch's SRM is the agency's proprietary multiple regression rating
model that employs 18 variables based on three-year centered
averages, including one year of forecasts, to produce a score
equivalent to a LT FC IDR. Fitch's QO is a forward-looking
qualitative framework designed to allow for adjustment to the SRM
output to assign the final rating, reflecting factors within its
criteria that are not fully quantifiable and/or not fully reflected
in the SRM.
RATING SENSITIVITIES
The main factors that may, individually or collectively, lead to an
upgrade or other positive rating action are:
-- Fitch deems that the unilateral extension of foreign-currency
debt instruments constitutes a DDE that has effectively concluded
and will shortly upgrade Argentina's Foreign-Currency IDRs to a
level appropriate for its debt service payment prospects on a
forward-looking basis.
BEST/WORST CASE RATING SCENARIO
Best/Worst Case Rating Scenarios - Public Finance:
Ratings of Public Finance issuers have a best-case rating upgrade
scenario (defined as the 99th percentile of rating transitions,
measured in a positive direction) of three notches over a
three-year rating horizon; and a worst-case rating downgrade
scenario (defined as the 99th percentile of rating transitions,
measured in a negative direction) of three notches over three
years. The complete span of best- and worst-case scenario credit
ratings for all rating categories ranges from 'AAA' to 'D'. Best-
and worst-case scenario credit ratings are based on historical
performance.
KEY ASSUMPTIONS
Fitch expects growth of the global economy, and that of key trading
partner Brazil, in line with the projections outlined in the latest
Global Economic Outlook (GEO).
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF
RATING
The principal sources of information used in the analysis are
described in the Applicable Criteria.
ESG CONSIDERATIONS
Argentina has an ESG Relevance Score of 5 for Political Stability
and Rights as World Bank Governance Indicators have the highest
weight in Fitch's SRM and are highly relevant to the rating and a
key rating driver with a high weight.
Argentina has an ESG Relevance Score of 5 for Rule of Law,
Institutional & Regulatory Quality and Control of Corruption as
World Bank Governance Indicators have the highest weight in Fitch's
SRM and are therefore highly relevant to the rating and are a key
rating driver with a high weight.
Argentina has an ESG Relevance Score of 4 for Human Rights and
Political Freedoms as strong social stability and voice and
accountability are reflected in the World Bank Governance
Indicators that have the highest weight in the SRM. They are
relevant to the rating and a rating driver.
Argentina has an ESG Relevance Score of 4 for Creditor Rights as
willingness to service and repay debt is relevant to the rating and
is a rating driver, as for all sovereigns. Argentina has recently
defaulted on its debt and has done so many times in the past, for
extended periods in some cases.
ARGENTINA: S&P Cuts FC Sovereign Credit Ratings to 'SD/SD'
----------------------------------------------------------
On April 7, 2020, S&P Global Ratings lowered its long- and
short-term foreign currency sovereign credit ratings on Argentina
to 'SD/SD' from 'CCC-/C'. S&P also affirmed the local currency
sovereign credit ratings at 'SD/SD'. There is no outlook on 'SD'
ratings. S&P also took the following rating actions:
-- S&P lowered the issue rating on our rated Argentine-law US$
bond due Oct. 8, 2020, to 'D' from 'CCC-';
-- S&P lowered other long-term foreign currency issue ratings to
'CC' from 'CCC-' given the likelihood of a comprehensive debt
restructuring offer or risk of nonpayment;
-- S&P affirmed the local currency long-term issue ratings at
'CC';
-- S&P affirmed its 'B-' transfer and convertibility assessment on
Argentina; and
-- S&P affirmed its national scale rating on Argentina of 'SD'.
Outlook
There is no outlook on S&P's sovereign credit ratings of 'SD', or
its long-term issue ratings of 'CC'.
S&P said, "We could lower the foreign currency issue (bond) ratings
to 'D' from 'CC' when the government finalizes terms with
bondholders for a potential commercial debt restructuring, which we
would characterize as a distressed debt exchange based on our
methodology. Such a restructuring could entail an extension of
maturities, which will not be compensated for by the issuer, or a
reduction in the face value of debt. Additionally, we could lower
the issue ratings if economic and financial stresses further
threaten timely debt service or the sovereign misses a debt
payment. We expect the government could make an exchange offer for
cross-border debt soon."
The government continues to manage peso-denominated debt by rolling
over, paying, and placing new securities in order to build a local
yield curve. Large peso maturities have been included in exchanges
that we consider to be distressed. S&P will lower its ratings on
Argentine-peso denominated issues to 'D' from 'CC', should they be
included in an exchange, or if the government misses a timely
payment.
S&P said, "We could raise the sovereign credit ratings following
the conclusion of the comprehensive commercial debt restructuring,
and upon issuance of new bonds. The post-default rating will
reflect the resulting debt burden and the policy stance of the
Fernandez Administration to support growth, including the prospects
for improved private-sector confidence and investment, its fiscal
consolidation plans, potential access to market and official
financing, as well as its external and monetary profile. Our
post-restructuring ratings tend to be in the 'CCC' or low 'B'
categories."
Rationale
S&P said, "We lowered our foreign currency sovereign credit rating
on Argentina following a government decree (Decreto 346/2020)
effective April 6 that postpones payment of U.S.-dollar-denominated
principal and interest on local-law debt to at least 2021, or when
deemed feasible by the government.
"We view this unilateral extension as tantamount to default under
our criteria. The decree formally differentiates Argentine-law
dollar-debt from foreign-law foreign-currency-denominated debt. The
foreign-law commercial debt is currently under an active
restructuring process led by Lazard Ltd. (the financial adviser),
as well as HSBC Holdings plc and Bank of America Corp. (the
placement agents).
'We believe the likelihood of another foreign-currency default is
virtually certain, given the timing and advanced nature of the
comprehensive foreign-law restructuring process. Hence, we will not
raise the foreign currency sovereign credit ratings from 'SD/SD'
until that process has concluded."
The government has rolled over and placed peso debt as it has come
due. But, for sizable peso-denominated obligations, it has
conducted what under our criteria are distressed exchanges. This
occurred in January 2020 for short-term peso debt, and then on
several occasions in March--including a mix of 13 securities (both
short-term and longer-term due 2020), which were exchanged for four
inflation-indexed bonds due between 2021 and 2024.
Given stressed financing conditions in the shallow local market,
with the central bank a main source of peso financing, we assume
further exchanges to be forthcoming given the upcoming
peso-maturity profile. The 'SD' sovereign credit rating reflects
that another default is virtually certain. S&P does not plan to
raise the local currency sovereign credit ratings from 'SD/SD',
pending a comprehensive restructuring strategy of this commercially
held debt.
The 'B-' transfer and convertibility assessment remains higher than
the sovereign rating because the government continues to signal
that tightened capital controls will not apply to principal and
interest payments for nonsovereign entities. A wide variety of
foreign-exchange restrictions remain in place to protect
international reserves that have been broadly stable since December
2019. In recent weeks and months various local governments,
financial institutions, and corporates have accessed foreign
exchange and made timely debt-service payments.
S&P said, "However, we may lower our transfer and convertibility
assessment if, in our view, capital controls are likely to become
more severe. This could accompany any decision by the sovereign to
no longer service its own foreign-law foreign currency debt.
"Our credit ratings on Argentina reflect its unfavorable debt
dynamics and fiscal profile, a volatile exchange rate (which
remains under depreciating pressure, as do most emerging market
currencies), high inflation, and a deep economic recession. Our
ratings incorporate the deterioration of the sovereign's financial
environment and strained investor confidence." These factors have
all limited the sovereign's capacity to pay, exacerbated by the
longstanding absence of the Argentine peso as a store of value
among the population and in shallow local financial markets.
Argentina's track record of pronounced swings in policy stances
once administrations change, as well as repeated defaults--most
recently on local-law instruments, in pesos, and U.S. dollars, both
short- and long-term--weigh on its credit profile. The Macri
Administration defaulted in August on locally issued short-term
debt, and the Fernadez Administration engineered two re-profilings
of short-term debt--one in December in U.S. dollars and one in
January for pesos. Since then, there were several distressed
exchanges in March for pesos (short- and long-term) and this week's
dollar local-law unilateral extension.
Minister of Finance Martín Guzmán is leading negotiations with
bondholders to comprehensively restructure the sovereign's debt,
underscoring that Argentina's debt stock is unsustainable,
unaffordable, and unfinanceable. This should underpin the
configuration of the forthcoming proposal on commercially
foreign-law debt, as it has informed actions on local-law peso- and
dollar-denominated debt.
The government has engaged with the International Monetary Fund
(IMF), including on a future Article IV and potential future
program modalities. The government aims to reconfigure forthcoming
repayments with the IMF in 2021-2023, and is in conversations with
other multilateral and official bilateral creditors. The IMF
technical note on debt sustainability published in March
underscores the importance of relief for Argentina's gross
financing needs and debt service in foreign exchange to contribute
to a sustainable debt profile, notwithstanding uncertainties on the
macroeconomic outlook, and pending more detail on the Fernandez
Administration's macroeconomic and fiscal policy measures and
strategies.
S&P said, "We have lowered the near-term outlook for the Argentine
economy, with the hit from COVID-19 and strong lockdown measures
underpinning a deeper contraction in real GDP this year. This
suggests additional fiscal strain--both weaker revenue and higher
expenditure. Projections of net general government debt do not
consider the impact of any debt restructuring relief; the increase
in net general government debt in 2020 incorporates a weaker peso,
and the subsequent decline largely reflects real appreciation of
the peso over the forecast period. Economic weakness underpins
another year of modest current account imbalances, but external
debt indicators and external financing needs are a key ratings
vulnerability. We expect inflation to remain very high, as it has
been in recent years, because of pressure on the peso and recourse
to monetary financing of the government deficit."
Environmental, social, and governance (ESG) factors relevant to the
rating action:
-- Health and safety
In accordance with S&P's relevant policies and procedures, the
Rating Committee was composed of analysts that are qualified to
vote in the committee, with sufficient experience to convey the
appropriate level of knowledge and understanding of the methodology
applicable. At the onset of the committee, the chair confirmed that
the information provided to the Rating Committee by the primary
analyst had been distributed in a timely manner and was sufficient
for Committee members to make an informed decision.
After the primary analyst gave opening remarks and explained the
recommendation, the Committee discussed key rating factors and
critical issues in accordance with the relevant criteria.
Qualitative and quantitative risk factors were considered and
discussed, looking at track-record and forecasts.
The committee's assessment of the key rating factors is reflected
in the Ratings Score Snapshot above.
The chair ensured every voting member was given the opportunity to
articulate his/her opinion. The chair or designee reviewed the
draft report to ensure consistency with the Committee decision. The
views and the decision of the rating committee are summarized in
the above rationale and outlook. The weighting of all rating
factors is described in the methodology used in this rating
action.
Ratings List
Downgraded
To From
Argentina
Sovereign Credit Rating
Foreign Currency SD/SD CCC-/Negative/C
Senior Unsecured CC CCC-
Senior Unsecured D CCC-
Ratings Affirmed
Argentina
Sovereign Credit Rating
Local Currency SD/--/SD
Argentina National Scale SD/--/--
Transfer & Convertibility Assessment B-
Senior Unsecured CC
BANCO DE GALICIA: S&P Affirms 'B-' ICR, Off Watch Negative
----------------------------------------------------------
S&P Global Ratings affirmed its 'B-' long-term issuer credit
ratings on Banco De Galicia Y Buenos Aires S.A.U. (Banco Galicia),
Banco Patagonia S.A., and Banco de la Provincia de Buenos Aires
(BAPRO), which are at the same level of its T&C assessment of
Argentina. In addition, S&P affirmed its 'B' short-term issuer
credit rating on Banco Patagonia, and its 'CCC' subordinated debt
rating on Banco Galicia. S&P also affirmed its 'CCC' long-term
ratings on Banco Hipotecario S.A. Finally, S&P removed all ratings
on these four banks from CreditWatch negative. The outlook is
negative.
The removal of CreditWatch listing reflects the lessening of
imminent factors that could have affected banks related to the
re-profiling of the sovereign debt, trends deposits behavior, and
potential policy changes under the new administration. However,
uncertainties remain given very weak economic and financial
conditions in the country, exacerbated by COVID-19.
Following the presidential primary election in August 2019, foreign
currency deposits sharply declined. However, recently, they
stabilized at $18 billion - $19 billion, compared withm previous
levels of $31 billion - $32 billion. Deposits in Argentine pesos
continued growing but at a pace slower than inflation rate. On the
other hand, in recent weeks and months several of Argentina's local
governments, financial institutions, and corporations have accessed
funding in foreign currencies and made timely debt service
payments, supporting the T&C assessment of the sovereign. However,
S&P could revise this assessment to a weaker category if capital
controls are to tighten, along with the sovereign's decision to no
longer service its own foreign currency debt.
S&P said, "We expect banks' asset quality to continue deteriorating
amid payment-chain disruption and slow loan portfolio growth. We
also expect banks' profitability to weaken in 2020 given
regulations that aim to reduce banks' issuances of short-term Leliq
notes amid high inflation, recession, and of the rising cost of
credit stemming from COVID-19. S&P believes additional pressure on
banks' financial flexibility could rise amid the sovereign's likely
further debt exchanges given the upcoming peso-maturity profile and
strains in domestic financing conditions."
BANCO DE LA CIUDAD: Moody's Cuts Sr. Unsec. FC Debt Ratings to Ca
-----------------------------------------------------------------
Moody's Investors Service has downgraded the senior unsecured
foreign currency debt ratings of Banco de la Ciudad de Buenos
Aires, Banco Hipotecario S.A., Banco Macro S.A., Banco Supervielle
S.A., and Tarjeta Naranja S.A. to Ca, from Caa2. Moody's also
downgraded Banco de Galicia y Buenos Aires S.A.U. and Banco Macro
S.A.'s foreign currency senior unsecured MTN program to (P)Ca, from
(P)Caa2, and the banks' foreign currency subordinated debt ratings
to Ca, from Caa3. In addition, the outlook on the ratings is now
negative. This action concludes the review on the ratings initiated
by Moody's on September 4, 2019.
The rating actions follow the announcement by Moody's Latin America
A.C.R. S.A. (MLA) that it has taken a similar action on the banks'
foreign currency deposit ratings. In turn, both rating actions
follow the announcement by Moody's Investors Service, published on
April 3, 2020, that it had concluded its review on the ratings and
downgraded Argentina's government bond rating to Ca, from Caa2,
changing the outlook to negative. Moody's also lowered Argentina's
country ceilings for debt and deposits.
The following debt ratings of Banco de Galicia y Buenos Aires
S.A.U. were downgraded:
Global Foreign Currency Subordinated Debt Rating to Ca from Caa3
Global Foreign Currency Senior Unsecured MTN Program Rating to
(P)Ca from (P)Caa2
Outlook, Changed To Negative from Rating Under Review
The following debt ratings of Banco de Galicia y Buenos Aires
S.A.U. were confirmed:
Global Local Currency Senior Unsecured MTN Program Rating at
(P)Caa2
The following debt ratings of Banco de la Ciudad de Buenos Aires
were downgraded:
Global Foreign Currency Senior Unsecured Debt Rating to Ca from
Caa2, Negative from Ratings Under Review
Outlook, Changed To Negative from Rating Under Review
The following debt ratings of Banco Hipotecario S.A. were
downgraded:
Global Foreign Currency Senior Unsecured Debt Rating to Ca from
Caa2, Negative from Ratings Under Review
Outlook, Changed To Negative from Rating Under Under Review
The following debt ratings of Banco Macro S.A. were downgraded:
Global Foreign Currency Senior Unsecured Debt Rating to Ca from
Caa2, Negative from Ratings Under Review
Global Foreign Currency Subordinated Debt Rating to Ca from Caa3
Global Foreign Currency Senior Unsecured MTN Program Rating to
(P)Ca from (P)Caa2
Outlook, Changed To Negative from Rating Under Review
The following debt ratings of Banco Macro S.A. were confirmed:
Global Local Currency Senior Unsecured MTN Program Rating at
(P)Caa2
The following debt ratings of Banco Supervielle S.A. were
downgraded:
Global Foreign Currency Senior Unsecured Debt Rating to Ca from
Caa2, Negative from Ratings Under Review
Outlook, Changed To Negative from Rating Under Review
The following ratings of Tarjeta Naranja S.A. were downgraded:
Global Foreign Currency Senior Unsecured Debt Rating to Ca from
Caa2;
Outlook, Changed To Negative from Rating Under Review
The following ratings of Tarjeta Naranja S.A. were confirmed:
Long-Term Corporate Family Rating at Caa2;
RATINGS RATIONALE
DOWNGRADE OF FOREIGN CURRENCY RATINGS
The downgrade of the foreign currency debt ratings to Ca is driven
by the lowering of Argentina's country ceiling for foreign currency
deposits to Ca, from Caa2, which in turn derives from the sovereign
debt downgrade to Ca. In downgrading the foreign currency debt
ratings to Ca, despite a foreign currency bond ceiling at Caa3,
Moody's acknowledges the expectation that, in the event the banks
face restrictions or are unable to respond to withdrawals of
foreign currency deposits, they will likely face problems to also
honor their foreign currency debt obligations. The foreign currency
country ceilings reflect potential transfer and convertibility
risks, which could include restrictions on moving foreign exchange
offshore, as well as restrictions on freely converting local
currency to foreign currency in order to pay debt, or even deposit
freezes.
As Argentina's government initiates the process of restructuring
its market debt held by private investors, it is Moody's
expectation that a combination of extension of maturities, lower
interest rates and reductions on principal will drive substantial
losses to investors, which will likely be consistent with a Ca
rating and typically captures losses between 35% and 65%.
CONFIRMATION OF LOCAL CURRENCY RATINGS
The confirmation of the local currency ratings at their current
levels despite the downgrade of their respective BCAs, reflects its
view that the credit risk of their local currency obligations,
though still significant, is lower than that of their foreign
currency obligations. The potential negative events captured by the
Ca foreign currency deposit ceiling would particularly affect
foreign currency obligations, and Moody's therefore believes local
currency ratings remain adequately positioned at the Caa rating
level. The main drivers of the differentiation between banks' local
currency ratings and the sovereign rating is derived from the fact
that banks' direct exposure to sovereign debt, while not negligible
at less than 40% of their tangible common equity on average, would
not by itself mean that the sovereign default will drive bank
defaults.
However, banks' indirect exposures to Argentine sovereign risk
remain significant and are the main drivers for the Caa-range
ratings. The high underlying inter-linkages between the banks'
standalone credit risk profiles and that of the sovereign are
driven by their sizable exposures to central bank debt and central
bank deposits, and the severe impact of the sovereign debt crisis
on banks' operating environment. The latter imposes rising risks on
banks' asset quality and profitability as business volumes remain
low, companies and households' repayment capacity weakens in the
context of continued economic recession, high inflation and rising
unemployment. In January 2020, the average problem loans of
Argentine banks were 6.0% of gross loans, up from 3.1% as of 2018
year-end and 1.8% in 2017. Reserve coverage of problem loans has
also deteriorated to 88% from 112% and 139% in the same period.
Partly offsetting the risks, Argentine banks currently hold
sizeable liquidity buffers, which represent about half of their
assets, and moderate capital positions. Additionally, Argentine
banks have a limited exposure to foreign currency funding risk and
their overall market funding exposure is low, as their funding is
mainly sourced from local currency deposits.
NEGATIVE OUTLOOK
The negative outlook on Argentina's financial institutions reflects
the negative outlook on the sovereign, as their ratings remain
constrained by the sovereign ratings and country ceilings. It also
incorporates the risk of more negative economic scenarios,
including the tail risk of a disorderly government debt
restructuring that would weaken financial conditions impacting
banks' fundamentals. More importantly, the coronavirus pandemic,
which it considers a social factor under Moody's ESG framework,
will only compound the already deep economic and budgetary
challenges facing the government, and the weak economic conditions,
which Moody's expects will significantly affect financial
institutions' asset quality and profitability. Its action reflects
the impact on Argentine financial institutions of the breadth and
severity of the shock, and the deterioration in credit quality it
has triggered.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
An upgrade is unlikely for banks in Argentina due to the negative
outlook and the fact that their ratings are constrained by the
sovereign rating and country ceilings of Argentina, which now carry
a negative outlook. A downgrade could be driven by further
downgrade of Argentine sovereign ratings, by further deterioration
in the country's operating environment, and/or a
higher-than-expected deterioration of the financial institutions'
asset quality, which could lead to material decline in
profitability levels, and thus, capital ratios, reducing their
loss-absorption capacity amidst a highly negative credit cycle.
METHODOLOGIES
The principal methodology used in rating Banco Macro S.A., Banco
Hipotecario S.A., Banco de Galicia y Buenos Aires S.A.U., Banco
Supervielle S.A., and Banco de la Ciudad de Buenos Aires was Banks
Methodology published in November 2019. The principal methodology
used in rating Tarjeta Naranja S.A. was Finance Companies
Methodology published in November 2019.
EDENOR: Price Waterhouse & Co. S.R.L. Raises Going Concern Doubt
----------------------------------------------------------------
Empresa Distribuidora y Comercializadora Norte S.A. (edenor) filed
its Form 6-K, disclosing a comprehensive profit of
ARS12,129,009,000 on ARS89,943,794,000 of revenue for the year
ended Dec. 31, 2019, compared to a comprehensive profit of
ARS6,602,144,000 on ARS86,039,928,000 of revenue for the same
period in 2018.
The audit report of Price Waterhouse & Co. S.R.L. states that the
Company's current economic and financial situation raises
substantial doubt about its ability to continue as a going
concern.
At Dec. 31, 2019, the Company had total assets of
ARS119,472,609,000, total liabilities of ARS60,321,760,000, and
ARS59,150,849,000 in total equity.
A copy of the Form 6-K is available at:
https://is.gd/E7v1P1
Empresa Distribuidora y Comercializadora Norte S.A. (edenor), a
public service company, engages in the distribution and sale of
electricity in Argentina. It serves approximately 9 million people
in the northwestern part of the greater Buenos Aires metropolitan
area and the northern part of the City of Buenos Aires through the
concession of 4,637 square kilometers. The company was formerly
known as Empresa Distribuidora Norte Sociedad Anonima and changed
its name to Empresa Distribuidora y Comercializadora Norte S.A. in
June 1996. The company was founded in 1992 and is based in Buenos
Aires, Argentina. Empresa Distribuidora y Comercializadora Norte
S.A. is a subsidiary of Pampa Energia S.A.
[*] Moody's Cuts Ratings on 22 Argentine Financial Companies
------------------------------------------------------------
Moody's Latin America ACR S.A. has downgraded the global scale
long-term foreign currency deposit and debt ratings of 22 banks and
finance companies. Moody's confirmed the global scale long-term
local currency deposit and debt ratings of 21 financial
institutions and downgraded the local currency deposit and debt
ratings of two banks. Moody's also lowered the baseline credit
assessment and adjusted baseline credit assessment of 20 banks. The
ratings outlook on all financial institutions is now negative. This
action concludes the review for downgrade initiated by Moody's on
September 4, 2019.
The rating actions follow the announcement by Moody's Investors
Service, published on April 3, 2020, that it had concluded its
review on the ratings and downgraded Government of Argentina's
government bond rating to Ca, from Caa2, changing the outlook to
negative. Moody's also lowered Argentina's country ceilings for
debt and deposits.
RATINGS RATIONALE
DOWNGRADE OF FOREIGN CURRENCY RATINGS AND BCAs
The downgrade of the foreign currency deposit ratings to Ca is
driven by the lowering of Argentina's country ceiling for foreign
currency deposits to Ca, from Caa2, which in turn derives from the
sovereign debt downgrade to Ca. In downgrading the foreign currency
debt ratings to Ca, despite a foreign currency bond ceiling at
Caa3, Moody's acknowledges the expectation that, in the event the
banks face restrictions or are unable to respond to withdrawals of
foreign currency deposits, they will likely face problems to also
honor their foreign currency debt obligations. The foreign currency
country ceilings reflect potential transfer and convertibility
risks, which could include restrictions on moving foreign exchange
offshore, as well as restrictions on freely converting local
currency to foreign currency in order to pay debt, or even deposit
freezes.
As Argentina's government initiates the process of restructuring
its market debt held by private investors, it is Moody's
expectation that a combination of extension of maturities, lower
interest rates and reductions on principal will drive substantial
losses to investors, which will likely be consistent with a Ca
rating, and typically captures losses between 35% and 65%.
Consequently, in order to reflect the risks, Moody's has lowered
the BCAs of all rated banks to ca, in line with Argentina's
government debt rating, to reflect the high correlation between the
sovereign and banks' creditworthiness. The adjusted BCAs of local
subsidiaries of foreign banks - which capture elements of affiliate
support - were lowered to caa3, and continue to incorporate one
notch of uplift from the banks' respective BCAs, indicating Moody's
assessment of the likelihood that the foreign subsidiaries would
receive support from its parent banks in the event of stress.
CONFIRMATION OF LOCAL CURRENCY RATINGS
The confirmation of the local currency deposit and debt ratings of
21 financial institutions at their current levels despite the
downgrade of their respective BCAs, reflects its view that the
credit risk of their local currency obligations, though still
significant, is lower than that of their foreign currency
obligations. The potential negative events captured by the Ca
foreign currency deposit ceiling would particularly affect foreign
currency obligations, and Moody's therefore believes local currency
ratings remain adequately positioned at the Caa rating level. The
main drivers of the differentiation between banks' local currency
ratings and the sovereign rating is derived from the fact that
banks' direct exposure to sovereign debt, while not negligible at
less than 40% of their tangible common equity on average, would not
by itself mean that the sovereign default will drive bank
defaults.
However, banks' indirect exposures to Argentine sovereign risk
remain significant and are the main drivers for the Caa-range
ratings. The high underlying inter-linkages between the banks'
standalone credit risk profiles and that of the sovereign are
driven by their sizable exposures to central bank debt and central
bank deposits, and the severe impact of the sovereign debt crisis
on banks' operating environment. The latter imposes rising risks on
banks' asset quality and profitability as business volumes remain
low, companies and households' repayment capacity weakens in the
context of continued economic recession, high inflation and rising
unemployment. In January 2020, the average problem loans of
Argentine banks were 6.0% of gross loans, up from 3.1% as of 2018
year-end and 1.8% in 2017. Reserve coverage of problem loans has
also deteriorated to 88% from 112% and 139% in the same period.
Partly offsetting the risks, Argentine banks currently hold
sizeable liquidity buffers, which represent about half of their
assets, and moderate capital positions. Additionally, Argentine
banks have a limited exposure to foreign currency funding risk and
their overall market funding exposure is low, as their funding is
mainly sourced from local currency deposits.
The downgrade of Banco Hipotecario S.A.'s local currency deposit
rating to Caa3, from Caa2, was driven by the sovereign debt rating
downgrade, as the previous rating of Banco Hipotecario S.A.
benefitted from one-notch uplift from its BCA due to its assumption
of high probability of government support. BNP Paribas
(Argentina)'s, as a full branch of BNP Paribas (Aa3 stable, baa1),
does not have a BCA and its ratings are currently constrained by
the country ceilings. Therefore, its local currency deposit rating
was downgraded to Caa1, from B2, in line with the lowering of the
local currency deposit country ceiling to Caa1.
In addition, after confirming Banco de Servicios Financieros S.A.'s
(BSF) local currency ratings and downgrading its foreign currency
ratings, Moody's will subsequently withdraw all of BSF's ratings.
Moody's has withdrawn the ratings in accordance with local
regulatory requirements following the termination of the rating
agreement at the request of the issuer.
NATIONAL SCALE RATINGS
Moody's noted that because of the confirmation of 21 entities'
global scale local currency ratings, their corresponding local
currency national scale ratings (NSR) were also confirmed at their
current levels. The only two exceptions were Banco Hipotecario S.A.
and BNP Paribas (Argentina), whose global scale local currency
ratings were downgraded and, therefore, their local currency NSRs
were also downgraded. In addition, all 22 entities that had their
global scale foreign currency ratings downgraded to Ca, also had
their corresponding foreign currency NSRs downgraded to Ca.ar.
NEGATIVE OUTLOOK
The negative outlook on Argentina's financial institutions reflects
the negative outlook on the sovereign, as their ratings remain
constrained by the sovereign ratings and country ceilings. It also
incorporates the risk of more negative economic scenarios,
including the tail risk of a disorderly government debt
restructuring that would weaken financial conditions impacting
banks' fundamentals. More importantly, the coronavirus pandemic,
which Moody's considers a social factor under Moody's ESG
framework, will only compound the already deep economic and
budgetary challenges facing the government, and the weak economic
conditions, which Moody's expects will significantly affect
financial institutions' asset quality and profitability. Its action
reflects the impact on Argentine financial institutions of the
breadth and severity of the shock, and the deterioration in credit
quality it has triggered.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
An upgrade is unlikely for banks in Argentina due to the negative
outlook and the fact that their ratings are constrained by the
sovereign rating and country ceilings of Argentina, which now carry
a negative outlook. A downgrade could be driven by further
downgrade of Argentine sovereign ratings, by further deterioration
in the country's operating environment, and/or a
higher-than-expected deterioration of the financial institutions'
asset quality, which could lead to material decline in
profitability levels, and thus, capital ratios, reducing their
loss-absorption capacity amidst a highly negative credit cycle.
METHODOLOGIES
The principal Rating Procedure Manual used in assigning these
ratings was the Procedures Manual for Rating of Deposits, Debt
Instruments, Counterparty Obligations and Shares of Financial
Institutions published in September 2018. These ratings are
consistent with those assigned or maintained elsewhere under the
methodology Banks Methodology published in November 2019, Finance
Companies Methodology published in November 2019, Captive Finance
Subsidiaries of Nonfinancial Corporations published in August 2019,
and Securities Industry Service Providers Methodology published in
November 20196.
Issuer: Banco Comafi S.A.
Downgrades:
Adjusted Baseline Credit Assessment, Downgraded to ca from caa2
Baseline Credit Assessment, Downgraded to ca from caa2
Counterparty Risk Assessment, Downgraded to Caa2(cr) from Caa1(cr)
Senior Unsecured Medium-Term Note Program (Foreign Currency),
Downgraded to (P)Ca from (P)Caa2
NSR Senior Unsecured Medium-Term Note Program (Foreign Currency),
Downgraded to Ca.ar from B2.ar
LT Bank Deposits (Foreign Currency), Downgraded to Ca from Caa2,
Negative from Ratings Under Review
NSR LT Bank Deposits (Foreign Currency), Downgraded to Ca.ar from
B2.ar, Negative from Ratings Under Review
Confirmations:
Senior Unsecured Medium-Term Note Program (Local Currency),
Confirmed at (P)Caa2
NSR Senior Unsecured Medium-Term Note Program (Local Currency),
Confirmed at B2.ar
LT Bank Deposits (Local Currency), Confirmed at Caa2, Negative from
Ratings Under Review
NSR LT Bank Deposits (Local Currency), Confirmed at B2.ar, Negative
from Ratings Under Review
Affirmations
ST Bank Deposits (Local Currency), Affirmed at NP
ST Bank Deposits (Foreign Currency), Affirmed at NP
ST Counterparty Risk Assessment, Affirmed at NP(cr)
Outlook Actions:
Issuer: Banco Comafi S.A.
Outlook, Changed To Negative From Rating Under Review
Issuer: Banco de Galicia y Buenos Aires S.A.U.
Downgrades:
Adjusted Baseline Credit Assessment, Downgraded to ca from caa2
Baseline Credit Assessment, Downgraded to ca from caa2
LT Counterparty Risk Assessment, Downgraded to Caa2(cr) from
Caa1(cr)
LT Bank Deposits (Foreign Currency), Downgraded to Ca from Caa2,
Negative from Ratings Under Review
NSR LT Bank Deposits (Foreign Currency), Downgraded to Ca.ar from
B1.ar, Negative from Ratings Under Review
Confirmations:
LT Bank Deposits (Local Currency), Confirmed at Caa2, Negative from
Ratings Under Review
NSR LT Bank Deposits Deposits (Local Currency), Confirmed at B1.ar,
Negative from Ratings Under Review
Affirmations:
ST Counterparty Risk Assessment, Affirmed NP(cr)
ST Bank Deposits (Foreign Currency), Affirmed NP
ST Bank Deposits (Local Currency), Affirmed NP
Outlook Actions:
Issuer: Banco de Galicia y Buenos Aires S.A.U.
Outlook, Changed To Negative From Rating Under Review
Issuer: Banco de la Ciudad de Buenos Aires
Downgrades:
Adjusted Baseline Credit Assessment, Downgraded to caa3 from caa2
Baseline Credit Assessment, Downgraded to ca from caa2
Counterparty Risk Assessment, Downgraded to Caa2(cr) from Caa1(cr)
NSR Senior Unsecured Medium-Term Note Program (Foreign Currency),
Downgraded to Ca.ar from B1.ar
Senior Unsecured Medium-Term Note Program (Foreign Currency),
Downgraded to (P)Ca from (P)Caa2
LT Bank Deposits (Foreign Currency), Downgraded to Ca from Caa2,
Negative from Ratings Under Review
NSR LT Bank Deposits (Foreign Currency), Downgraded to Ca.ar from
B1.ar, Negative from Ratings Under Review
Confirmations:
Senior Unsecured Medium-Term Note Program (Local Currency),
Confirmed at (P)Caa2
NSR Senior Unsecured Medium-Term Note Program (Local Currency),
Confirmed at B1.ar
Senior Unsecured Regular Bond/Debenture (Local Currency), Confirmed
at Caa2, Negative from Ratings Under Review
NSR Senior Unsecured Regular Bond/Debenture (Local Currency),
Confirmed at B1.ar, Negative from Ratings Under Review
LT Bank Deposits (Local Currency), Confirmed at Caa2, Negative from
Ratings Under Review
NSR LT Bank Deposits (Local Currency), Confirmed at B1.ar, Negative
from Ratings Under Review
Affirmations:
ST Counterparty Risk Assessment, Affirmed NP(cr)
ST Bank Deposits (Local Currency), Affirmed NP
ST Bank Deposits (Foreign Currency), Affirmed NP
Outlook Actions:
Issuer: Banco de la Ciudad de Buenos Aires
Outlook, Changed To Negative From Rating Under Review
Issuer: Banco de la Provincia de Cordoba S.A.
Downgrades:
Adjusted Baseline Credit Assessment, Downgraded to ca from caa2
Baseline Credit Assessment, Downgraded to ca from caa2
LT Counterparty Risk Assessment, Downgraded to Caa2(cr) from
Caa1(cr)
LT Bank Deposits (Foreign Currency), Downgraded to Ca from Caa2,
Negative from Ratings Under Review
NSR LT Bank Deposits (Foreign Currency), Downgraded to Ca.ar from
B1.ar, Negative from Ratings Under Review
Confirmations:
LT Bank Deposits (Local Currency), Confirmed at Caa2, Negative from
Ratings Under Review
NSR LT Bank Deposits (Local Currency), Confirmed at B1.ar, Negative
from Ratings Under Review
Affirmations:
ST Counterparty Risk Assessment, Affirmed NP(cr)
ST Bank Deposits (Local Currency), Affirmed NP
ST Bank Deposits (Foreign Currency), Affirmed NP
Outlook Actions:
Issuer: Banco de la Provincia de Cordoba S.A.
Outlook, Changed To Negative From Rating Under Review
Issuer: Banco de Servicios Financieros S.A.
Downgrades:
Adjusted Baseline Credit Assessment, Downgraded to caa3 from caa2
Baseline Credit Assessment, Downgraded to ca from caa3
LT Counterparty Risk Assessment, Downgraded to Caa2(cr) from
Caa1(cr)
LT Bank Deposits (Foreign Currency), Downgraded to Ca from Caa2,
Negative from Ratings Under Review
NSR LT Bank Deposits (Foreign Currency), Downgraded to Ca.ar from
B2.ar, Negative from Ratings Under Review
Confirmations:
LT Bank Deposits (Local Currency), Confirmed at Caa2, Negative from
Ratings Under Review
NSR LT Bank Deposits (Local Currency), Confirmed at B2.ar, Negative
from Ratings Under Review
Affirmations:
ST Counterparty Risk Assessment, Affirmed NP(cr)
ST Bank Deposits (Local Currency), Affirmed NP
ST Bank Deposits (Foreign Currency), Affirmed NP
Outlook Actions:
Issuer: Banco de Servicios Financieros S.A.
Outlook, Changed To Negative From Rating Under Review
Issuer: Banco de Valores S.A.
Downgrades:
Adjusted Baseline Credit Assessment, Downgraded to ca from caa2
Baseline Credit Assessment, Downgraded to ca from caa2
LT Counterparty Risk Assessment, Downgraded to Caa2(cr) from
Caa1(cr)
LT Bank Deposits (Foreign Currency), Downgraded to Ca from Caa2,
Negative from Ratings Under Review
NSR LT Bank Deposits (Foreign Currency), Downgraded to Ca.ar from
B1.ar, Negative from Ratings Under Review
Confirmations:
LT Bank Deposits (Local Currency), Confirmed at Caa2, Negative from
Ratings Under Review
NSR LT Bank Deposits (Local Currency), Confirmed at B1.ar, Negative
from Ratings Under Review
Affirmations:
ST Counterparty Risk Assessment, Affirmed NP(cr)
ST Bank Deposits (Local Currency), Affirmed NP
ST Bank Deposits (Foreign Currency), Affirmed NP
Outlook Actions:
Issuer: Banco de Valores S.A.
Outlook, Changed To Negative From Rating Under Review
Issuer: Banco Hipotecario S.A.
Downgrades:
Adjusted Baseline Credit Assessment, Downgraded to ca from caa3
Baseline Credit Assessment, Downgraded to ca from caa3
LT Counterparty Risk Assessment, Downgraded to Caa3(cr) from
Caa2(cr)
NSR Senior Unsecured Regular Bond/Debenture (Foreign Currency),
Downgraded to Ca.ar from B3.ar, Negative from Ratings Under Review
LT Bank Deposits (Foreign Currency), Downgraded to Ca from Caa2,
Negative from Ratings Under Review
LT Bank Deposits (Local Currency), Downgraded to Caa3 from Caa2,
Negative from Ratings Under Review
NSR LT Bank Deposits (Foreign Currency), Downgraded to Ca.ar from
B3.ar, Negative from Ratings Under Review
NSR LT Bank Deposits (Local Currency), Downgraded to Caa1.ar from
B3.ar, Negative from Ratings Under Review
Affirmations:
ST Counterparty Risk Assessment, Affirmed NP(cr)
ST Bank Deposits (Foreign Currency), Affirmed NP
ST Bank Deposits (Local Currency), Affirmed NP
Outlook Actions:
Issuer: Banco Hipotecario S.A.
Outlook, Changed To Negative From Rating Under Review
Issuer: Banco Itau Argentina S.A.
Downgrades:
Adjusted Baseline Credit Assessment, Downgraded to caa3 from caa1
Baseline Credit Assessment, Downgraded to ca from caa2
LT Counterparty Risk Assessment, Downgraded to Caa1(cr) from
B3(cr)
Senior Unsecured Medium-Term Note Program (Foreign Currency),
Downgraded to (P)Ca from (P)Caa1
NSR Senior Unsecured Medium-Term Note Program (Foreign Currency),
Downgraded to Ca.ar from Baa3.ar
LT Bank Deposits (Foreign Currency), Downgraded to Ca from Caa2,
Negative from Ratings Under Review
NSR LT Bank Deposits (Foreign Currency), Downgraded to Ca.ar from
B1.ar, Negative from Ratings Under Review
Confirmations:
NSR Senior Unsecured Medium-Term Note Program (Local Currency),
Confirmed at Baa3.ar
Senior Unsecured Medium-Term Note Program (Local Currency),
Confirmed at (P)Caa1
LT Bank Deposits (Local Currency), Confirmed at Caa1, Negative from
Ratings Under Review
NSR LT Bank Deposits (Local Currency), Confirmed at Baa3.ar,
Negative from Ratings Under Review
Affirmations:
ST Counterparty Risk Assessment, Affirmed NP(cr)
ST Bank Deposits (Foreign Currency), Affirmed NP
ST Bank Deposits (Local Currency), Affirmed NP
Outlook Actions:
Issuer: Banco Itau Argentina S.A.
Outlook, Changed To Negative From Rating Under Review
Issuer: Banco Macro S.A.
Downgrades:
Adjusted Baseline Credit Assessment, Downgraded to ca from caa2
Baseline Credit Assessment, Downgraded to ca from caa2
LT Counterparty Risk Assessment, Downgraded to Caa2(cr) from
Caa1(cr)
NSR Senior Unsecured Medium-Term Note Program (Foreign Currency),
Downgraded to Ca.ar from B1.ar
NSR Senior Unsecured Regular Bond/Debenture (Foreign Currency),
Downgraded to Ca.ar from B1.ar, Negative from Ratings Under Review
LT Bank Deposits (Foreign Currency), Downgraded to Ca from Caa2,
Negative from Ratings Under Review
NSR LT Bank Deposits (Foreign Currency), Downgraded to Ca.ar from
B1.ar, Negative from Ratings Under Review
Confirmations:
NSR Senior Unsecured Medium-Term Note Program (Local Currency),
Confirmed at B1.ar
Senior Unsecured Regular Bond/Debenture (Local Currency), Confirmed
at Caa2, Negative from Ratings Under Review
NSR Senior Unsecured Regular Bond/Debenture (Local Currency),
Confirmed at B1.ar, Negative from Ratings Under Review
LT Bank Deposits (Local Currency), Confirmed at Caa2, Negative from
Ratings Under Review
NSR LT Bank Deposits (Local Currency), Confirmed at B1.ar, Negative
from Ratings Under Review
Affirmations:
ST Counterparty Risk Assessment, Affirmed NP(cr)
ST Bank Deposits (Foreign Currency), Affirmed NP
ST Bank Deposits (Local Currency), Affirmed NP
Outlook Actions:
Issuer: Banco Macro S.A.
Outlook, Changed To Negative From Rating Under Review
Issuer: Banco Patagonia S.A.
Downgrades:
Adjusted Baseline Credit Assessment, Downgraded to caa3 from caa1
Baseline Credit Assessment, Downgraded to ca from caa2
LT Counterparty Risk Assessment, Downgraded to Caa1(cr) from
B3(cr)
Senior Unsecured Medium-Term Note Program (Foreign Currency),
Downgraded to (P)Ca from (P)Caa1
NSR Senior Unsecured Medium-Term Note Program (Foreign Currency),
Downgraded to Ca.ar from Baa3.ar
LT Bank Deposits (Foreign Currency), Downgraded to Ca from Caa2,
Negative from Ratings Under Review
NSR LT Bank Deposits (Foreign Currency), Downgraded to Ca.ar from
B1.ar, Negative from Ratings Under Review
Confirmations:
NSR Senior Unsecured Medium-Term Note Program (Local Currency),
Confirmed at Baa3.ar
Senior Unsecured Medium-Term Note Program (Local Currency),
Confirmed at (P)Caa1
Senior Unsecured Regular Bond/Debenture (Local Currency), Confirmed
at Caa1, Negative from Ratings Under Review
NSR Senior Unsecured Regular Bond/Debenture (Local Currency),
Confirmed at Baa3.ar, Negative from Ratings Under Review
LT Bank Deposits (Local Currency), Confirmed at Caa1, Negative from
Ratings Under Review
NSR LT Bank Deposits (Local Currency), Confirmed at Baa3.ar,
Negative from Ratings Under Review
Affirmations:
ST Counterparty Risk Assessment, Affirmed NP(cr)
ST Bank Deposits Deposit Rating (Local Currency), Affirmed NP
ST Bank Deposits (Foreign Currency), Affirmed NP
Outlook Actions:
Issuer: Banco Patagonia S.A.
Outlook, Changed To Negative From Rating Under Review
Issuer: Banco Piano S.A.
Downgrades:
Adjusted Baseline Credit Assessment, Downgraded to ca from caa2
Baseline Credit Assessment, Downgraded to ca from caa2
LT Counterparty Risk Assessment, Downgraded to Caa2(cr) from
Caa1(cr)
LT Bank Deposits (Foreign Currency), Downgraded to Ca from Caa2,
Negative from Ratings Under Review
NSR LT Bank Deposits (Foreign Currency), Downgraded to Ca.ar from
B3.ar, Negative from Ratings Under Review
Confirmations:
LT Bank Deposits (Local Currency), Confirmed at Caa2, Negative from
Ratings Under Review
NSR LT Bank Deposits (Local Currency), Confirmed at B3.ar, Negative
from Ratings Under Review
Affirmations:
ST Counterparty Risk Assessment, Affirmed NP(cr)
ST Bank Deposits (Local Currency), Affirmed NP
ST Bank Deposits (Foreign Currency), Affirmed NP
Outlook Actions:
Issuer: Banco Piano S.A.
Outlook, Changed To Negative From Rating Under Review
Issuer: Banco Rioja Sociedad Anonima Unipersonal
Downgrades:
Adjusted Baseline Credit Assessment, Downgraded to ca from caa2
Baseline Credit Assessment, Downgraded to ca from caa2
LT Counterparty Risk Assessment, Downgraded to Caa2(cr) from
Caa1(cr)
LT Bank Deposits (Foreign Currency), Downgraded to Ca from Caa2,
Negative from Ratings Under Review
NSR LT Bank Deposits (Foreign Currency), Downgraded to Ca.ar from
B1.ar, Negative from Ratings Under Review
Confirmations:
LT Bank Deposits (Local Currency), Confirmed at Caa2, Negative from
Ratings Under Review
NSR LT Bank Deposits (Local Currency), Confirmed at B1.ar, Negative
from Ratings Under Review
Affirmations:
ST Counterparty Risk Assessment, Affirmed NP(cr)
ST Bank Deposits (Foreign Currency), Affirmed NP
ST Bank Deposits (Local Currency), Affirmed NP
Outlook Actions:
Issuer: Banco Rioja Sociedad Anonima Unipersonal
Outlook, Changed To Negative From Rating Under Review
Issuer: Banco Santander Rio S.A.
Downgrades:
Adjusted Baseline Credit Assessment, Downgraded to caa3 from caa1
Baseline Credit Assessment, Downgraded to ca from caa2
LT Counterparty Risk Assessment, Downgraded to Caa1(cr) from
B3(cr)
Senior Unsecured Medium-Term Note Program (Foreign Currency),
Downgraded to (P)Ca from (P)Caa1
NSR Senior Unsecured Medium-Term Note Program (Foreign Currency),
Downgraded to Ca.ar from Baa3.ar
LT Bank Deposits (Foreign Currency), Downgraded to Ca from Caa2,
Negative from Ratings Under Review
NSR LT Bank Deposits (Foreign Currency), Downgraded to Ca.ar from
B1.ar, Negative from Ratings Under Review
Confirmations:
NSR Senior Unsecured Medium-Term Note Program (Local Currency),
Confirmed at Baa3.ar
Senior Unsecured Medium-Term Note Program (Local Currency),
Confirmed at (P)Caa1
Senior Unsecured Regular Bond/Debenture (Local Currency), Confirmed
at Caa1, Negative from Ratings Under Review
NSR Senior Unsecured Regular Bond/Debenture (Local Currency),
Confirmed at Baa3.ar, Negative from Ratings Under Review
LT Bank Deposits (Local Currency), Confirmed at Caa1, Negative from
Ratings Under Review
NSR LT Bank Deposits (Local Currency), Confirmed at Baa3.ar,
Negative from Ratings Under Review
Affirmations:
ST Counterparty Risk Assessment, Affirmed NP(cr)
ST Deposit Rating (Foreign Currency), Affirmed NP
ST Deposit Rating (Local Currency), Affirmed NP
Outlook Actions:
Issuer: Banco Santander Rio S.A.
Outlook, Changed To Negative From Rating Under Review
Issuer: Banco Supervielle S.A.
Downgrades:
Adjusted Baseline Credit Assessment, Downgraded to ca from caa2
Baseline Credit Assessment, Downgraded to ca from caa2
LT Counterparty Risk Assessment, Downgraded to Caa2(cr) from
Caa1(cr)
LT Bank Deposits (Foreign Currency), Downgraded to Ca from Caa2,
Negative from Ratings Under Review
NSR LT Bank Deposits (Foreign Currency), Downgraded to Ca.ar from
B2.ar, Negative from Ratings Under Review
Confirmations:
LT Bank Deposits (Local Currency), Confirmed at Caa2, Negative from
Ratings Under Review
NSR LT Bank Deposits (Local Currency), Confirmed at B2.ar, Negative
from Ratings Under Review
Affirmations:
ST Counterparty Risk Assessment, Affirmed NP(cr)
ST Bank Deposits (Local Currency), Affirmed NP
ST Bank Deposits (Foreign Currency), Affirmed NP
Outlook Actions:
Issuer: Banco Supervielle S.A.
Outlook, Changed To Negative From Rating Under Review
Issuer: BNP Paribas (Argentina)
Downgrades
LT Counterparty Risk Assessment, Downgraded to Caa1(cr) from
B2(cr)
LT Bank Deposits (Local Currency), Downgraded to Caa1 from B2,
Negative from Ratings Under Review
LT Bank Deposits (Foreign Currency), Downgraded to Ca from Caa2,
Negative from Ratings Under Review
NSR LT Bank Deposits (Foreign Currency), Downgraded to Ca.ar from
B1.ar, Negative from Ratings Under Review
NSR LT Bank Deposits (Local Currency), Downgraded to Baa3.ar from
A2.ar, Negative from Ratings Under Review
Affirmations:
ST Counterparty Risk Assessment, Affirmed NP(cr)
ST Bank Deposits (Foreign Currency), Affirmed NP
ST Bank Deposits (Local Currency), Affirmed NP
Outlook Actions:
Issuer: BNP Paribas (Argentina)
Outlook, Changed To Negative From Rating Under Review
Issuer: GPAT Compania Financiera S.A.U.
Downgrades:
Adjusted Baseline Credit Assessment, Downgraded to caa3 from caa2
Baseline Credit Assessment, Downgraded to ca from caa3
LT Counterparty Risk Assessment, Downgraded to Caa2(cr) from
Caa1(cr)
NSR Senior Unsecured Medium-Term Note Program (Foreign Currency),
Downgraded to Ca.ar from B2.ar
Senior Unsecured Medium-Term Note Program (Foreign Currency),
Downgraded to (P)Ca from (P)Caa2
LT Bank Deposits (Foreign Currency), Downgraded to Ca from Caa2,
Negative from Ratings Under Review
NSR LT Bank Deposits (Foreign Currency), Downgraded to Ca.ar from
B2.ar, Negative from Ratings Under Review
Confirmations:
NSR Senior Unsecured Medium-Term Note Program (Local Currency),
Confirmed at B2.ar
Senior Unsecured Medium-Term Note Program (Local Currency),
Confirmed at (P)Caa2
Senior Unsecured Regular Bond/Debenture (Local Currency), Confirmed
at Caa2, Negative from Ratings Under Review
NSR Senior Unsecured Regular Bond/Debenture (Local Currency),
Confirmed at B2.ar, Negative from Ratings Under Review
LT Bank Deposits (Local Currency), Confirmed at Caa2, Negative from
Ratings Under Review
NSR LT Bank Deposits (Local Currency), Confirmed at B2.ar, Negative
from Ratings Under Review
Affirmations:
ST Counterparty Risk Assessment, Affirmed NP(cr)
ST Bank Deposits (Local Currency), Affirmed NP
ST Bank Deposits (Foreign Currency), Affirmed NP
Outlook Actions:
Issuer: GPAT Compania Financiera S.A.U.
Outlook, Changed To Negative From Rating Under Review
Issuer: HSBC Bank Argentina S.A.
Downgrades:
Adjusted Baseline Credit Assessment, Downgraded to caa3 from caa1
Baseline Credit Assessment, Downgraded to ca from caa2
LT Counterparty Risk Assessment, Downgraded to Caa1(cr) from
B3(cr)
Senior Unsecured Medium-Term Note Program (Foreign Currency),
Downgraded to (P)Ca from (P)Caa1
NSR Senior Unsecured Medium-Term Note Program (Foreign Currency),
Downgraded to Ca.ar from Baa3.ar
LT Bank Deposits (Foreign Currency), Downgraded to Ca from Caa2,
Negative from Ratings Under Review
NSR LT Bank Deposits (Foreign Currency), Downgraded to Ca.ar from
B1.ar, Negative from Ratings Under Review
Confirmations:
NSR Senior Unsecured Medium-Term Note Program (Local Currency),
Confirmed at Baa3.ar
Senior Unsecured Medium-Term Note Program (Local Currency),
Confirmed at (P)Caa1
Senior Unsecured Regular Bond/Debenture (Local Currency), Confirmed
at Caa1, Negative from Ratings Under Review
NSR Senior Unsecured Regular Bond/Debenture (Local Currency),
Confirmed at Baa3.ar, Negative from Ratings Under Review
LT Bank Deposits (Local Currency), Confirmed at Caa1, Negative from
Ratings Under Review
NSR LT Bank Deposits (Local Currency), Confirmed at Baa3.ar,
Negative from Ratings Under Review
Affirmations:
ST Counterparty Risk Assessment, Affirmed NP(cr)
ST Bank Deposits (Local Currency), Affirmed NP
ST Bank Deposits (Foreign Currency), Affirmed NP
Outlook Actions:
Issuer: HSBC Bank Argentina S.A.
Outlook, Changed To Negative From Rating Under Review
Issuer: ICBC (Argentina) S.A.
Downgrades:
Adjusted Baseline Credit Assessment, Downgraded to caa3 from caa1
Baseline Credit Assessment, Downgraded to ca from caa2
LT Counterparty Risk Assessment, Downgraded to Caa1(cr) from
B3(cr)
Senior Unsecured Medium-Term Note Program (Foreign Currency),
Downgraded to (P)Ca from (P)Caa1
NSR Senior Unsecured Medium-Term Note Program (Foreign Currency),
Downgraded to Ca.ar from Baa3.ar
LT Bank Deposits (Foreign Currency), Downgraded to Ca from Caa2,
Negative from Ratings Under Review
NSR LT Bank Deposits (Foreign Currency), Downgraded to Ca.ar from
B1.ar, Negative from Ratings Under Review
Confirmations:
NSR Senior Unsecured Medium-Term Note Program (Local Currency),
Confirmed at Baa3.ar
Senior Unsecured Medium-Term Note Program (Local Currency),
Confirmed at (P)Caa1
Senior Unsecured Regular Bond/Debenture (Local Currency), Confirmed
at Caa1, Negative from Ratings Under Review
NSR Senior Unsecured Regular Bond/Debenture (Local Currency),
Confirmed at Baa3.ar, Negative from Ratings Under Review
LT Bank Deposits (Local Currency), Confirmed at Caa1, Negative from
Ratings Under Review
NSR LT Bank Deposits (Local Currency), Confirmed at Baa3.ar,
Negative from Ratings Under Review
Affirmations:
ST Counterparty Risk Assessment, Affirmed NP(cr)
ST Bank Deposits (Local Currency), Affirmed NP
ST Bank Deposits (Foreign Currency), Affirmed NP
Outlook Actions:
Issuer: ICBC (Argentina) S.A.
Outlook, Changed To Negative From Rating Under Review
Issuer: John Deere Credit Compania Financiera S.A.
Downgrades:
Senior Unsecured Medium-Term Note Program (Foreign Currency),
Downgraded to (P)Ca from (P)Caa1
NSR Senior Unsecured Medium-Term Note Program (Foreign Currency),
Downgraded to Ca.ar from Baa3.ar
Senior Unsecured Regular Bond/Debenture (Foreign Currency),
Downgraded to Ca from Caa1
NSR Senior Unsecured Regular Bond/Debenture (Foreign Currency),
Downgraded to Ca.ar from Baa3.ar
Confirmations:
Corporate Family Rating, Confirmed at Caa1
NSR Corporate Family Rating, Confirmed at Baa3.ar
NSR Senior Unsecured Medium-Term Note Program (Local Currency),
Confirmed at Baa3.ar
Senior Unsecured Medium-Term Note Program (Local Currency),
Confirmed at (P)Caa1
Outlook Actions:
Issuer: John Deere Credit Compania Financiera S.A.
Outlook, Changed To Negative From Rating Under Review
Issuer: Matba Rofex S.A.
Confirmations:
LT Issuer Rating (Local Currency), Confirmed at Caa2
NSR LT Issuer Rating (Local Currency), Confirmed at B1.ar
Outlook Actions:
Issuer: Matba Rofex S.A.
Outlook, Changed To Negative From Rating Under Review
Issuer: PSA Finance Argentina Comp.Fin.S.A.
Downgrades:
Adjusted Baseline Credit Assessment, Downgraded to caa3 from caa1
Baseline Credit Assessment, Downgraded to ca from caa2
LT Counterparty Risk Assessment, Downgraded to Caa1(cr) from
B3(cr)
NSR Senior Unsecured Medium-Term Note Program (Foreign Currency),
Downgraded to Ca.ar from Ba1.ar
Senior Unsecured Medium-Term Note Program (Foreign Currency),
Downgraded to (P)Ca from (P)Caa1
LT Bank Deposits (Foreign Currency), Downgraded to Ca from Caa2,
Negative from Ratings Under Review
NSR LT Bank Deposits (Foreign Currency), Downgraded to Ca.ar from
B1.ar, Negative from Ratings Under Review
Confirmations:
Senior Unsecured Regular Bond/Debenture (Local Currency), Confirmed
at Caa1, Negative from Ratings Under Review
NSR Senior Unsecured Regular Bond/Debenture (Local Currency),
Confirmed at Ba1.ar, Negative from Ratings Under Review
LT Bank Deposits (Local Currency), Confirmed at Caa1, Negative from
Ratings Under Review
NSR LT Bank Deposits (Local Currency), Confirmed at Ba1.ar,
Negative from Ratings Under Review
Affirmations:
ST Counterparty Risk Assessment, Affirmed NP(cr)
ST Bank Deposits (Foreign Currency), Affirmed NP
ST Bank Deposits (Local Currency), Affirmed NP
Outlook Actions:
Issuer: PSA Finance Argentina Comp.Fin.S.A.
Outlook, Changed To Negative From Rating Under Review
Issuer: Rombo Compania Financiera S.A.
Downgrades:
Adjusted Baseline Credit Assessment, Downgraded to caa3 from caa1
Baseline Credit Assessment, Downgraded to ca from caa3
LT Counterparty Risk Assessment, Downgraded to Caa1(cr) from
B3(cr)
NSR Senior Unsecured Medium-Term Note Program (Foreign Currency),
Downgraded to Ca.ar from Ba2.ar
Senior Unsecured Medium-Term Note Program (Foreign Currency),
Downgraded to (P)Ca from (P)Caa1
LT Bank Deposits (Foreign Currency), Downgraded to Ca from Caa2,
Negative from Ratings Under Review
NSR LT Bank Deposits (Foreign Currency), Downgraded to Ca.ar from
B1.ar, Negative from Ratings Under Review
Confirmations:
NSR Senior Unsecured Medium-Term Note Program (Local Currency),
Confirmed at Ba2.ar
Senior Unsecured Medium-Term Note Program (Local Currency),
Confirmed at (P)Caa1
Senior Unsecured Regular Bond/Debenture (Local Currency), Confirmed
at Caa1, Negative from Ratings Under Review
NSR Senior Unsecured Regular Bond/Debenture (Local Currency),
Confirmed at Ba2.ar, Negative from Ratings Under Review
LT Bank Deposits (Local Currency), Confirmed at Caa1, Negative from
Ratings Under Review
NSR LT Bank Deposits (Local Currency), Confirmed at Ba2.ar,
Negative from Ratings Under Review
Affirmations:
ST Counterparty Risk Assessment, Affirmed NP(cr)
ST Bank Deposits (Local Currency), Affirmed NP
ST Bank Deposits (Foreign Currency), Affirmed NP
Outlook Actions:
Issuer: Rombo Compania Financiera S.A.
Outlook, Changed To Negative From Rating Under Review
Issuer: Toyota Compania Financiera de Argentina S.A.
Downgrades:
Adjusted Baseline Credit Assessment, Downgraded to caa3 from caa1
Baseline Credit Assessment, Downgraded to ca from caa3
LT Counterparty Risk Assessment, Downgraded to Caa1(cr) from
B3(cr)
NSR Subordinate Medium-Term Note Program (Foreign Currency),
Downgraded to Ca.ar from B1.ar
Subordinate Medium-Term Note Program (Foreign Currency), Downgraded
to (P)Ca from (P)Caa2
Senior Unsecured Medium-Term Note Program (Foreign Currency),
Downgraded to (P)Ca from (P)Caa1
NSR Senior Unsecured Medium-Term Note Program (Foreign Currency),
Downgraded to Ca.ar from Ba2.ar
LT Bank Deposits (Foreign Currency), Downgraded to Ca from Caa2,
Negative from Ratings Under Review
NSR LT Bank Deposits (Foreign Currency), Downgraded to Ca.ar from
B1.ar, Negative from Ratings Under Review
Confirmations:
NSR Subordinate Medium-Term Note Program (Local Currency),
Confirmed at B1.ar
Subordinate Medium-Term Note Program (Local Currency), Confirmed at
(P)Caa2
Subordinate Regular Bond/Debenture (Local Currency), Confirmed at
Caa2
NSR Subordinate Regular Bond/Debenture (Local Currency), Confirmed
at B1.ar
NSR Senior Unsecured Medium-Term Note Program (Local Currency),
Confirmed at Ba2.ar
Senior Unsecured Medium-Term Note Program (Local Currency),
Confirmed at (P)Caa1
Senior Unsecured Regular Bond/Debenture (Local Currency), Confirmed
at Caa1, Negative from Ratings Under Review
NSR Senior Unsecured Regular Bond/Debenture (Local Currency),
Confirmed at Ba2.ar, Negative from Ratings Under Review
LT Bank Deposits (Local Currency), Confirmed at Caa1, Negative from
Ratings Under Review
NSR LT Bank Deposits (Local Currency), Confirmed at Ba2.ar,
Negative from Ratings Under Review
Affirmations:
ST Counterparty Risk Assessment, Affirmed NP(cr)
ST Bank Deposits (Local Currency), Affirmed NP
ST Bank Deposits (Foreign Currency), Affirmed NP
Outlook Actions:
Issuer: Toyota Compania Financiera de Argentina S.A.
Outlook, Changed To Negative From Rating Under Review
[*] Moody's Cuts Ratings on Argentine Regional & Local Gov'ts.
--------------------------------------------------------------
Moody's Latin America Agente de Calificacion de Riesgo S.A.,
downgraded the issuer and debt ratings on both Global/National
scales and in Foreign and Local currencies of Argentine provinces
and municipalities. The outlook on the ratings has been changed to
negative from ratings under review. Moody's also downgraded the
baseline credit assessments on all affected issuers. This concludes
the review for downgrade that was initiated on September 3, 2019.
This rating action on the Argentine regional and local governments
follows Moody's downgrade of the Government of Argentina's
local-currency and foreign-currency sovereign bond ratings to Ca
from Caa2 on April 3, 2020.
RATINGS RATIONALE
Its action reflects Moody's assessment of the rise in systemic
risk, as indicated by the downgrade of the sovereign rating, and
the very close economic and financial linkages between the central
government and the sub-sovereigns, which results in an increase to
the expectation of losses to creditors of Argentinian
sub-sovereigns.
The downgrade to Ca/Ca.ar for all sub-sovereign issuers, with the
exception of the City of Buenos Aires, reflects Moody's expectation
that regional and local governments will incur substantial loss of
market access due to the sovereign decision to restructure its
upcoming debt payments. Moody's expects that in 2020 Argentine
sub-sovereigns will face deteriorating economic and financial
conditions that will undermine their financial results and make it
challenging for them to refinance debt in the face of social
pressures and policy changes.
The downgrade to Ca for the senior secured rating of the Province
of Chubut reflects the anticipated deterioration of hydrocarbon
royalties, which secure the notes, stemming from the low oil prices
and expected lower activities in the sector. In Moody's opinion,
the security provided from hydrocarbon royalties decreased and
expected losses to holders of these notes are in line with the
35-65% range that is consistent with the Ca rating, in line with
Argentine bonds' expected losses, and in line with the expected
losses of non-secured notes of the province.
Nevertheless, Moody's views that the City's creditworthiness is
still deeply linked to the country's systemic risks and sovereign
intervention, which limits the differentiation in the City's rating
from that of the sovereign. Among other considerations, Moody's
observes that the City does not collect revenues in foreign
currency nor holds any foreign assets, it does not have complete
autonomy on tax collection and its federal transfers could be
subject to federal interference. Moreover, as occurred previously,
the sovereign could pressure the City to assume additional
budgetary responsibilities to assist in fiscal consolidation
efforts. Furthermore, like all Argentinian sub-sovereigns, the City
is subject to federal government intervention in the form of
foreign exchange controls and denial of authorizations to take on
debt. Finally, the City's financing costs and market access are
vulnerable to the sovereign's monetary policy.
The negative outlook for all Argentine sub sovereigns reflects
Moody's assumption that investor's recovery could possibly remain
below the 35-65% range that is consistent with the Ca rating. For
the City of Buenos Aires, the negative outlook reflects Moody's
assumption that investor's recovery could remain below the 65-80%
range consistent with the Caa3 rating.
ISSUERS AND RATINGS AFFECTED
The ratings of the following issuers were downgraded and their
outlooks changed to negative from under review for possible
downgrade:
- Province of Buenos Aires: Issuer and debt ratings downgraded to
Ca/Ca.ar from Caa2/B3.ar (on Global/Argentina's national scales,
respectively). Outlook changed to Negative from under review for
possible downgrade.
- Province of Cordoba: Issuer and debt ratings downgraded to
Ca/Ca.ar from Caa2/B1.ar (on Global/Argentina's national scales,
respectively). Outlook changed to Negative from under review for
possible downgrade.
- Province of Chaco: Issuer and debt ratings downgraded to Ca/Ca.ar
from Caa2/B3.ar (on Global/Argentina's national scales,
respectively). Outlook changed to Negative from under review for
possible downgrade.
- Province of Chubut: Issuer and debt ratings downgraded to
Ca/Ca.ar from Caa3/Caa1.ar (on Global/Argentina's national scales,
respectively). Senior secured debt ratings downgraded to Ca/Ca.ar
from Caa2/B2.ar (on Global/Argentina's national scales,
respectively). Outlook changed to Negative from under review for
possible downgrade.
- Province of Rio Negro: Issuer and debt ratings downgraded to
Ca/Ca.ar from Caa2/B3.ar (on Global/Argentina's national scales,
respectively). Outlook changed to Negative from under review for
possible downgrade.
- Municipality of Cordoba: Issuer and debt ratings downgraded to
Ca/Ca.ar from Caa2/B2.ar (on Global/Argentina's national scales,
respectively). Outlook changed to Negative from under review for
possible downgrade.
- City of Buenos Aires: debt ratings downgraded to Caa3/Caa1.ar
from Caa2/B1.ar (on Global/Argentina's national scales,
respectively). Outlook changed to Negative from under review for
possible downgrade.
- Province of Formosa: Issuer and debt ratings downgraded to
Ca/Ca.ar from Caa2/B3.ar (on Global/Argentina's national scales,
respectively). Outlook changed to Negative from under review for
possible downgrade.
- Province of Misiones: Issuer and debt ratings downgraded to
Ca/Ca.ar from Caa2/B3.ar (on Global/Argentina's national scales,
respectively). Outlook changed to Negative from under review for
possible downgrade.
- Province of Tucuman: Issuer ratings downgraded to Ca/Ca.ar from
Caa2/B3.ar (on Global/Argentina's national scales, respectively).
Outlook changed to Negative from under review for possible
downgrade.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Given the strong macroeconomic and financial linkages between the
Government of Argentina's and Sub-sovereigns, a downgrade in
Argentina's bond ratings and/or further systemic deterioration
could exert downward pressure on the ratings. Alternatively,
increased idiosyncratic risks could translate into a downgrade.
Moody's would also downgrade the ratings in the event a debt
restructuring results in losses inconsistent with the current
ratings.
Moody's does not expect upward pressures in the rated Argentinean
sub-sovereigns in the near to medium term. Nevertheless, Moody's
would consider stabilizing the outlooks if financing conditions
stabilize and the anticipated losses to private creditors from debt
restructuring are less than currently forecast.
The principal Rating Procedure Manual used in assigning these
ratings was the Procedures Manual for Risk Rating of Sub-Sovereign
Governments published in January 2017. These ratings are consistent
with those assigned or maintained elsewhere under the methodology
Regional and Local Governments published in January 2018.
===========
B R A Z I L
===========
UNIGEL PARTICIPACOES: S&P Alters Outlook to Neg., Affirms 'B+' ICR
------------------------------------------------------------------
On April 8, 2020, S&P Global Ratings revised its outlook on Unigel
Participacoes S.A. (Unigel) to negative from positive, and affirmed
the 'B+' global scale issuer credit and issue-level and 'brAA'
national scale issuer credit ratings on Brazil-based acrylics and
styrenics producer.
S&P said, "We now expect lower sales volumes as a result of stalled
global economy denting the main end-markets in which Unigel
operates, including the automotive, construction and home
appliances sectors. Even though the company has some flexibility to
increase output of products that enjoy a more resilient
demand--such as sodium cyanide, which is used in gold mining and
polystyrene, used in plastic packaging--the lower demand for
products such as acrylonitrile, used in auto parts, among others,
will likely reduce the company's cash flows this year. Also, we
don't expect the falling value of the Brazilian real will be
sufficient to mitigate the lower sales volume for the export-driven
acrylics products, given that their prices have plunged this year
amid the demand disruption. Moreover, depending on the duration of
the demand contraction, we could see weaker credit metrics for
Unigel for a longer period, extending through 2021."
Unigel holds a sound liquidity position after its liability
management in late 2019, which in our view, enables it to withstand
the challenging and volatile market conditions. Moreover, the
company's countercyclical measures to alleviate cash flow
pressures, such as capital expenditures at minimal levels of about
R$60 million for 2020 should also preserve liquidity. Unigel
doesn't face significant debt maturities until its bond maturity in
2026 and our estimate of its cash position being of around R$400
million at the end of March 2020 should be more than enough to
cover short-term liquidity needs, including potential working
capital peaks. Therefore, S&P sees limited rating pressure stemming
from the company's current liquidity position.
Under its 2026 senior unsecured notes, Unigel has an incurrence
covenant of net debt to EBITDA below 3.5x that limits the company's
ability to raise additional debt. S&P said, "Given the company's
favorable debt maturity profile and countercyclical measures to
preserve cash flows, we don't foresee the need for additional debt.
However, we note that such a breach would limit Unigel's financial
flexibility during volatile credit and economic conditions in the
next few months."
===========================
C A Y M A N I S L A N D S
===========================
CAYMAN ISLANDS: Rejects One of Two Proposals For Money Transfer
---------------------------------------------------------------
RJR News reports that Jamaicans in Cayman will face challenges
sending remittances as the Caymanian government has rejected one of
two proposals for money transfer services to resume operations
during soft curfew hours.
Premier Alden McLaughlin said Ministry of International Trade Chief
Officer, Eric Bush, who is in charge of the curfew exemptions,
refused the proposal as there was no system outlined as to how
money transfer services will manage their customers, according to
RJR News.
He said the second proposal is still being considered, the report
notes.
The premier, responding to queries from the media on the issue,
said the government is increasingly concerned about crowds seen
outside local banks and did not want that to happen with money
transfer services, the report adds.
NAGACORP LTD.: Moody's Affirms B1 CFR, Alters Outlook to Negative
-----------------------------------------------------------------
Moody's Investors Service has affirmed the B1 corporate family
rating of NagaCorp Ltd.
At the same time, Moody's has affirmed the B1 senior unsecured
rating of the company's US dollar bonds. The bonds are
unconditionally and irrevocably guaranteed by the major operating
subsidiaries of NagaCorp.
The outlook on all ratings is changed to negative 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 gaming sector
has been one of the sectors most significantly affected by the
shock given its sensitivity to consumer demand and sentiment.
More specifically, the expected weakening in NagaCorp's credit
profile, including its exposure to Cambodia, have left it
vulnerable to shifts in market sentiment in these unprecedented
operating conditions and the company remains vulnerable to the
outbreak continuing to spread.
Its action reflects the impact on NagaCorp of the breadth and
severity of the shock, and the broad deterioration in credit
quality it has triggered.
Moody's expects the temporary suspension of casinos at NagaWorld
from April 1, 2020, as announced by the company [1], will have a
material impact on NagaCorp's earnings. Gaming revenue accounted
for over 95% of revenue and EBITDA in 2019.
"The change in outlook to negative reflects its expectation that
NagaCorp's earnings and credit metrics will weaken in 2020 with the
extent and pace of any subsequent recovery remaining uncertain for
now," says Jacintha Poh, a Moody's Vice President and Senior Credit
Officer.
"Nonetheless, the rating affirmation reflects NagaCorp's large
leverage buffer to withstand the earnings decline and its
expectation that the company will scale back dividend payments and
expansionary capital spending to preserve liquidity," adds Poh.
As of March 31, 2020, NagaCorp had cash and deposits of around $473
million. Based on Moody's assumption that the company will generate
around $600 million of operating cash flows over the next 18
months, it will have sufficient liquidity to cover estimated
dividend payouts of around $500 million, maintenance capital
spending of around $100 million and repay its $300 million senior
unsecured notes maturing in May 2021.
In terms of environmental, social and governance (ESG) factors,
Moody's has also considered the following.
Moody's regards the coronavirus outbreak as a social risk under its
ESG framework, given the substantial implications for public health
and safety.
NagaCorp's gaming business is also exposed to elevated social
risks, particularly around evolving demographic and societal trends
that may drive a change in demand away from traditional
casino-style gaming. These risks are somewhat mitigated by the
company's ability to adjust capacity to suit market demand because
there are no restrictions under its casino license on operating
hours or the number of gaming tables and machines.
Moody's has also considered governance risk around the controlling
shareholder's concentrated ownership of NagaCorp. However, this
risk is partially balanced by the oversight exercised through the
board, which for the majority consists of independent directors,
and the demonstration of support by the controlling shareholder,
who has funded the company's expansion projects by injecting
equity.
The principal methodology used in these ratings was Gaming Industry
published in December 2017.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Given the negative ratings outlook, an upgrade is unlikely over the
next 12-18 months. Nonetheless, the outlook could return to stable
if the casinos at NagaWorld reopen, supporting a recovery of
NagaCorp's earnings and credit metrics.
Moody's could downgrade NagaCorp's ratings if (1) Cambodia's
sovereign rating is downgraded; (2) the operating environment
deteriorates, resulting in protracted weakness in operating cash
flow generation; (3) the company fails to maintain its 100%
ownership of Ariston Sdn. Bhd, which holds its Cambodian casino
license, and 100% ownership of NagaWorld; (4) the company increases
its debt leverage, capital spending or shareholder returns, such
that adjusted debt/EBITDA exceeds 2.5x and adjusted retained cash
flow/debt falls below 20% over the next 12-18 months; and (5) the
company has insufficient cash to cover its short-term debt
obligations.
NagaCorp Ltd. was incorporated in the Cayman Islands in 2003 and
listed on the Hong Kong Stock Exchange in 2006. The company owns
and manages NagaWorld, the largest integrated casino and hotel
complex in Phnom Penh, Cambodia. NagaCorp was founded by Tan Sri
Dr. Chen Lip Keong, the company's chief executive officer and
largest shareholder with an approximate 70% stake as of March 31,
2020.
=========
C H I L E
=========
CORP GROUP: S&P Downgrades ICR to 'CC', Outlook Negative
--------------------------------------------------------
S&P Global Ratings lowered its issuer credit and issue-level
ratings on Corp Group Banking S.A. (CG Banking) to 'CC' from
'CCC-'. The outlook on the issuer credit rating remains negative.
S&P said, "We base the downgrade on the increasing financial
pressure on CG Banking to meet the interest payment on its bond
within the grace period, according to the indenture. The company
continues to rely on the group's support to honor its debt service
payments. Despite the group's willingness to support CG Banking's
cash shortfalls, credit market conditions are deteriorating
rapidly, with heightened uncertainty amid Chile's social and
political challenges and the local economic difficulties.
Therefore, we expect unfavorable valuation prospects and tighter
financing conditions to further pressure CG Banking's capacity to
meet interest payments on a timely basis. Moreover, the recent
deepening in the Chilean peso's slide weighs on the entity's
finances, given the currency mismatch of cash flows.
On March 18, 2020, board of directors of Itau CorpBanca--the main
asset of CG Banking--approved a dividend distribution equivalent to
100% of the bank's 2019 net income, which translated into a cash
inflow of about $40 million to Corp Group, the ultimate parent of
CG Banking. On March 26, 2020, CG Banking posted a notice to
bondholders stating that it would proceed with the payment of the
March interest payment no later than April 6, 2020. However, the
entity's liquidity position shrunk because the company paid debt
service at its holding level (Inversiones CorpGroup Interhold Ltda.
[Interhold]), mainly related to interest payments on Itau
Unibanco's credit facility, while the Chilean peso continued to
depreciate, increasing CG Banking's interest burden. As of this
report's date, the company didn't complete the interest payment.
The company now relies on the group's non-strategic asset sales to
support cash shortfalls to cover debt service that's due next week.
In S&P's view, payment risk has increased substantially due to the
lack of financial alternatives to meet timely payments amid
economic, political, and social uncertainties in Chile.
GEOPARK LTD: S&P Affirms 'B+' Global Scale ICR, Outlook Negative
----------------------------------------------------------------
On April 8, 2020, S&P Global Ratings removed its global scale 'B+'
issuer credit and issue-level ratings on Latin American oil and gas
company, GeoPark Ltd. (GPRK) from CreditWatch negative, affirmed
them, and assigned a negative outlook.
S&P said, "We expect Brent crude oil prices of $30 per barrel (bbl)
for the remainder of 2020 and $50/bbl for 2021. Those price levels
will cause GPRK's EBITDA to fall below $200 million in 2020,
leading to debt to EBITDA close or above to 5.0x, funds from
operations (FFO) to debt of 5%-10%, and free operating cash flow
(FOCF) to debt below 5%. These metrics deviate substantially from
our previous expectations.
"We expect the company to keep operating its most efficient fields
(Colombia's Llanos 34 and CPO-5) and reduce output at less
productive wells, which would shrink production by 10% (44,000
barrels of oil equivalent per day [boed]) from our previous
guidance. Still, this level is 4% above 2019, mainly due to recent
acquisition of Amerisur Resources Plc. We now expect the company to
delay expansion into Perú and Ecuador while focusing its
investments in Colombia, achieving 50,000 boe per day in 2021 once
prospects for oil price improve."
GPRK had hedged 30% of its oil revenues at $45-$55 per bbl in 2020.
Moreover, the company recently announced it will cut approximately
60% of its capex, temporarily suspend dividends and share buybacks,
renegotiate all service contracts, and reduce administrative costs.
At the same time, GPRK's selling, general, and administrative
(SG&A) costs should benefit from currencies' depreciation in Latin
America. In addition, S&P expects oil royalties to fall based on
similar circumstances in the past. All these measures should
maintain the company's liquidity at adequate levels, with cash on
hand at 168 million as of March 16 (unaudited) and given that the
company has almost no debt maturities until September 2024.
INVERSIONES LATIN: S&P Cuts $412MM Sr. Sec. Notes Rating to 'BB+'
-----------------------------------------------------------------
On April 7, 2020, S&P Global Ratings lowered its rating on
Chile-based wind power project Inversiones Latin America Power
Limitada's (ILAP) $412 million senior secured notes due 2033 to
'BB+' from 'BBB-'. S&P also removed the rating from CreditWatch
negative, where S&P place it on Dec. 2, 2019.
S&P said, "We now believe that regulated energy demand in Chile
will fall 20% for 2022-2027, in line with Comisíon Nacional de
Energia's (the regulator's) December 2019 estimates for the demand
in the Chilean electricity system. The distribution companies'
demand for ILAP's output started to contract in early 2019 due to
the Chile's slowing GDP growth and the migration of clients from
the regulated market to the unregulated one.
"This trend was exacerbated by our latest forecast of Chile's GDP
contraction of 0.2% in 2020, along with a plunge in oil prices.
These factors led to marginal cost prices (spot prices) drop to
below $40 per MWh in the past few weeks. Therefore, we further
revised downward our demand haircut assumption to about 37% in
2020, 25% in 2021, and 20% in 2022-2027, which finally converges to
a long-term excess of 10%. Similarly, spot prices are likely to top
$40 per MWh in real terms in our projections, given that new
renewable capacity will be added to the system in the next two
years.
"Therefore, we now expect a minimum DSCR of 1.15x in 2033 and
average DSCR of 1.22x during the notes' term.
"We continue to assign a positive comparable rating adjustment to
ILAP, which we believe is entitled to receive a cash compensation
after the government decided to freeze the electricity rates to
regulated end consumers from June 2019 until June 2023. Still, at
this point, there's a lack of clarity on how and the timing that
such cash compensation mechanism would be applicable."
===================================
D O M I N I C A N R E P U B L I C
===================================
DOMINICAN REPUBLIC: Nearly Half a Million Workers Were Suspended
----------------------------------------------------------------
Dominican Today reports that on April 2, when the first 15 days of
home isolation and paralysis of various economic activities in the
country were completed, the number of workers suspended by
companies during this period totaled almost half a million.
By the indicated date, 36,015 cancellation requests had been
registered, affecting 434,620 workers, according to data provided
by the Ministry of Labor, notes Dominican Today.
As of noon April 2 alone, more than 6,000 requests involving more
than 60,000 employees were registered, the ministry reported, the
report relates.
By dividing the number of workers affected by the 15 days elapsed,
the result is 28,974 suspended workers per day, the report notes.
Quarantine Continues
Although the 15-day exception period was fulfilled [on April 2],
this same day the Government announced that as of April 3, the
measures announced on March 17 remain in force for 15 more days,
the report relates.
All the distancing measures adopted are maintained, the curfew from
5:00 in the afternoon to 6:00 in the morning and the Executive
Power also requested the Senate of the Republic to extend the state
of emergency for 25 days, the report discloses.
During this period, commercial activities continue to be suspended,
with the exception of businesses that are dedicated to basic
activities for the population, such as supermarkets, grocery
stores, fuel stations, pharmacies, and commercial establishments
dedicated to selling raw or cooked foods, among others, the report
relates.
Support Program
The report discloses that to assist affected workers during this
situation, the Government created the Employee Solidarity
Assistance Fund (FASE), which was made official by Decree 143-20.
Through the PHASE the Government will deliver to the suspended
worker 70% of his ordinary salary and the employer must contribute
the remaining 30%. The amount carried by the State will never be
less than RD$5,000 nor greater than RD$8,500, according to the
decree, the report notes.
This program will be valid for 60 days, starting on April 2. It
will be implemented by the Ministries of Finance and Labor together
with the Dominican Institute for the Prevention and Protection of
Occupational Risks (IDOPPRIL), the report adds.
About Dominican Republic
The Dominican Republic is a Caribbean nation that shares the island
of Hispaniola with Haiti to the west. Capital city Santo Domingo
has Spanish landmarks like the Gothic Catedral Primada de America
dating back 5 centuries in its Zona Colonial district.
The Troubled Company Reporter-Latin America reported in April 2019
that the Dominican Today related that Juan Del Rosario of the UASD
Economic Faculty cited a current economic slowdown for the
Dominican Republic and cautioned that if the trend continues,
growth would reach only 4% by 2023. Mr. Del Rosario said that if
that happens, "we'll face difficulties in meeting international
commitments."
An ongoing concern in the Dominican Republic is the inability of
participants in the electricity sector to establish financial
viability for the system.
Standard & Poor's credit rating for Dominican Republic stands at
BB- with stable outlook (2015). Moody's credit rating for Dominican
Republic was last set at Ba3 with stable outlook (2017). Fitch's
credit rating for Dominican Republic was last reported at BB- with
stable outlook (2016).
DOMINICAN REPUBLIC: Purchase & Sale of US$ is at RD$54
------------------------------------------------------
Dominican Today reports that from March 9 to April 9, the change in
the dollar in the Dominican Republic registered an increase of
RD$0.44 for purchases and RD$0.43 for sales.
When consulting the Central Bank statistics on the average exchange
rates for buying and selling currencies in the Spot Market, as of
April 3, 2020, the dollar presented the amount of RD$54.01 for the
purchase and RD$54.08 for the sale, according to Dominican Today.
So far this year, the dollar has had an upward trend in its
exchange rate in relation to the Dominican peso, the report notes.
On January 2, the purchase of this currency was RD$52.90, while the
sale was RD$52.96, the report relates. From that day to the
present, this type of currency has had an increase of RD$1.11
purchase and RD$1.12, the report discloses.
In January, the average change was RD$53.04 the purchase and
RD$53.10 the sale, the report says. In February it was RD$53.29
and RD$53.37, respectively, while in March it was RD$53.65 and
RD$53.73, the report notes.
Use of The Dollar
The average Dominican uses the dollar to pay for technological
services such as Netflix, Spotify, Android system applications and
Apple, purchases on the internet, among others, 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).
The purchase and sale of the US dollar is at RD $ 54.00 (pesos) in
the Dominican Republic
===========
M E X I C O
===========
GRUPO GICSA: S&P Lowers GS Issuer Credit Rating to 'BB-'
--------------------------------------------------------
On April 7, 2020, S&P Global Ratings lowered its global scale
issuer credit ratings on Grupo GICSA, S.A.B de C.V. (GICSA) to
'BB-' from 'BB' and the national scale ratings to 'mxA-' from
'mxA'. Additionally, S&P also lowered the issue-level ratings on
GICSA's local notes GICSA 15, GICSA 16U, GICSA 17, and GICSA 19 to
'mxA-', while their recovery ratings remain at '3'.
S&P said, "The unprecedented coronavirus shock significantly
pressures GICSA's EBITDA and cash generation, raising uncertainties
about its deleveraging pace. On Nov. 11, 2019, we revised the
company's outlook to negative, because we expected that softer
economic conditions would take a toll on the company's rental
income generation and sales of its residential project (Cero5Cien),
and could further hurt the company's credit metrics. In our view,
recent developments and consequences from the coronavirus pandemic
add significant pressure to GICSA's top-line results, EBITDA, and
cash flow generation. Thus, we no longer foresee a deleveraging
path to gross debt to EBITDA below 7.5x this year. We consider that
traffic and consumption at its shopping and entertainment malls
will drop significantly, reducing variable rent and with potential
deferrals on fixed rent from some temporary mall closures requested
by local authorities." This would materially deviate the company's
financial and operating performance for the year from previous
expectations. At the same time, progress in the sale of its
high-end residential project continues to underperform our
expectations, and the current economic conditions could discourage
potential buyers in the near term.
The company's successful financing in December 2019 provides
liquidity headroom in the short-term, but its long-term debt burden
grew. In December 2019, the company issued commercial
mortgage-backed securities and unsecured debt for an amount
equivalent to about MXN14.3 billion, of which about 13% is
denominated in U.S. dollars. It used nearly MXN8.4 billion of these
proceeds to refinance existing debt, reducing its debt maturities
for the next couple years, and boosting the company's cash balance
to MXN5.7 billion, of which MXN3.0 billion is free cash. In our
view, this transaction, coupled with strict cost controls announced
by the management and low debt maturities in 2020, gives the
company some leeway to weather short-term impacts and fulfill its
financial obligations.
The company is complying with government requirements on closures,
which vary depending on the location of the property. To protect
its liquidity position, management is working on cutting
non-essential expenses, preserving working capital, stalling
components of its budgeted capital expenditures (capex) and not
proposing distributions to shareholders. Moreover, GICSA is seeking
liquidity options, which will include talks with several
stakeholders involved in its operations, from tenants and suppliers
to creditors, working on reaching agreements to contain cash
outflows. Nonetheless, S&P believes that the magnitude of the
COVID-19 impact on GICSA's operations, cash flows, credit metrics,
and liquidity, remains unclear and will depend on the depth and
duration of the coronavirus pandemic.
===============
P A R A G U A Y
===============
BANCO REGIONAL: Moody's Cuts LT LC Deposit Rating to 'Ba2'
----------------------------------------------------------
Moody's Investors Service has downgraded certain long-term ratings
and assessments of Banco Regional S.A.E.C.A. and affirmed all
ratings of Banco Continental S.A.E.C.A. Moody's downgraded Banco
Regional's long-term local currency deposit rating to Ba2, from
Ba1, and the senior unsecured debt rating to Ba2, from Ba1,
following the downgrade of its baseline credit assessment and
adjusted baseline credit assessment to ba3, from ba2, respectively.
The bank's short-term ratings and other long-term ratings were not
affected by this rating action, and were affirmed. The outlook on
the ratings is now negative.
Moody's also affirmed Banco Continental's Ba1/Not Prime long- and
short-term local currency deposit ratings, the Ba2/Not Prime long-
and short-term foreign currency deposit ratings, as well as the
Ba1/Not Prime long- and short-term counterparty risk ratings. The
outlook on the ratings is now negative, apart from the long-term
foreign currency deposit rating which has a stable outlook. The
bank's ba2 baseline credit assessment and ba2 adjusted baseline
credit assessment were also affirmed, along with its Ba1(cr)/Not
Prime(cr) long- and short-term counterparty risk assessments.
The following ratings were downgraded:
Banco Regional S.A.E.C.A.:
- Long term local currency deposit rating to Ba2 from Ba1,
negative outlook from stable
- Senior unsecured foreign currency debt rating to Ba2 from Ba1,
negative outlook from stable
- Adjusted baseline credit assessment to ba3 from ba2
- Baseline credit assessment to ba3 from ba2
The following ratings were affirmed:
Banco Regional S.A.E.C.A.:
- Long- and short-term foreign currency deposit rating of Ba2,
negative outlook from stable, and Not-Prime
- Short term local currency deposit rating of Not-Prime
- Long term local and foreign currency counterparty risk ratings
of Ba1
- Short term local and foreign currency counterparty risk ratings
of Not Prime
- Long- and short-term counterparty risk assessments of Ba1 (cr)
and Not Prime (cr)
Banco Continental S.A.E.C.A.:
- Long- and short-term local currency deposit ratings of Ba1,
negative outlook from stable, and Not Prime,
- Long- and short-term foreign currency deposit rating of Ba2,
stable outlook and Not Prime
- Long- and short-term local currency counterparty risk ratings
of Ba1 and Not Prime
- Long- and short-term foreign currency counterparty risk ratings
of Ba1 and Not Prime
- Adjusted baseline credit assessment of ba2
- Baseline credit assessment of ba2
- Long- and short-term counterparty risk assessments of Ba1 (cr)
and Not Prime (cr)
Outlook Actions:
Issuer: Banco Continental S.A.E.C.A.
Outlook, Changed to Negative from Stable
Issuer: Banco Regional S.A.E.C.A.
Outlook, Changed to Negative from Stable
RATINGS RATIONALE
BANCO REGIONAL
The downgrade of Banco Regional's long-term ratings and assessments
reflects the significant challenges to the bank's profitability
following its decision to defer provisions for loans under the
Paraguayan central bank special measures. A sign of increased asset
risk, the rating agency expects that provisioning related to these
loans in 2020 will reduce earning significantly. Had Regional
provisioned for these loans in 2019, the rating agency estimates
that the bank's capitalization ratio, as calculated by Moody's
ratio of tangible common equity (TCE) to adjusted risk weighted
assets (RWA), would have fallen to 8.9% from 12.0% at year-end
2019. Regional's profitability continued to lag that of its peers.
In 2019, Regional reported net income to tangible assets of 0.9%
(0.8% in 2018), its second lowest level in four years, compared to
a system level ratio of 2.1%.
Regional is the largest bank in Paraguay as of February 2020 in
terms of loans, and its operations are focused on lending to large
agricultural corporations, which tend to expose its asset quality
to volatility. That was the case between 2015-17 when the twin
shocks of a currency devaluation and commodity price crash led to
rising 60-day problem loan and restructured loan ratios. Some
improvement was noted in 2018, and in 2019, when problem loans and
refinanced and restructured loans held steady at 1.5% and 5.5%
respectively. However, in December 2019, 5.0% of the bank's loans
were placed under special central bank measures to smooth out
provisioning expenses over three years. The bank's levels of
foreclosed assets also rose by 50 basis points to 1.6% in 2019. In
2020, the bank could take advantage of the new measures announced
by the Paraguayan central bank in response to spread of the
coronavirus especially given its large corporate focus, which could
further mask its true asset quality beyond the measures it has
already adhered to. Moody's notes that Regional's asset quality is
supported by reserves that cover problem loans by 159%, as adjusted
by Moody's, and also has guarantees of approximately 45% of total
loans. The bank's BCA is supported by Regional's predominant
deposit funding, equivalent to 68% of total funding, by its access
to dollar-based funding sources, and credit facilities that
buttress its liquidity, as well as its capitalization levels of
12%, as calculated by Moody's.
The negative outlook reflects Moody's view that the bank's asset
risk and profitability will continue to be challenged in 2020 given
the direct negative impact of the coronavirus outbreak and related
restrain measures that could materially slow economic activity in
Paraguay, in conjunction to the slowdown in global economic
activity and the lower commodity prices and low demand that will
affect the bank's borrowers in the agricultural sector, which
account for 50% of its loan exposures. The rating agency expects
the bank's asset risk to be pressured, leading to higher problem
loans, refinanced and restructured loans as well as the
accumulation of foreclosed assets. In addition, lower business
volumes, combined with lower interest rates and increased credit
costs will continue to negatively affect already low
profitability.
BANCO CONTINENTAL
The negative outlook on Banco Continental's ratings reflects the
heightened asset risk and challenges to profitability the bank now
faces in 2020 in the wake of lower economic growth in Paraguay and
the negative impact of lower commodity process and demand on the
bank's agricultural borrowers.
The bank's asset risk was already showing signs of weakness from
its high exposure to the agricultural sector. The 60-day problem
loan ratio rose by 36 basis points to 1.7% in 2019, refinanced and
restructured loans rose to 3.4% of total loans and, importantly,
foreclosed assets continued to rise to 3.1% of total loans and
represented 33% of total foreclosed assets in the Paraguayan
banking system. Lower business volumes, low interest rates and
additional provisioning costs as adjusted by Moody's will weigh on
Continental's financial performance.
The affirmation of the bank's rating, however, reflects its
above-peer capitalization levels, measured by Moody's as tangible
common equity (TCE) to risk weighted assets (RWA), of 16.5% and
which was significantly higher than its peers' and bolstered by
Continental's historically strong profitability as shown by net
income to tangible assets of 2.3% in 2019. Moody's also noted that
the bank is the largest deposit taker in Paraguay and deposits
represented over 70% of total funding as of December 2019. Although
the bank has a greater reliance on market funds than peers, it also
held liquid assets equivalent to 25.4% of its tangible banking
assets in December 2019 that gave ample coverage to market funding
risk.
Moody's regards the coronavirus outbreak as a social risk under its
ESG framework, given the substantial implications for public health
and safety. 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.
Banco Regional and Banco Continental have been affected by the
shock given their direct lending exposures to predominantly
corporate borrowers active in the agricultural industry and the
likelihood of asset quality and profitability deterioration in
2020.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE TO THE RATINGS -
BANCO REGIONAL
Banco Regional's ratings and assessments would be downgraded if its
asset quality continues to deteriorate, or if its profitability
suffers, a greater than expected decline along with continued use
of loan loss provision deferrals that would further affect asset
risk in the bank's balance sheet. In addition, a downgrade of the
country's foreign currency deposit ceilings would affect its
foreign currency deposit ratings. The outlook could be stabilized
if the bank's asset risk and profitability do not show signs of
weakening, and stabilize at adequate levels commensurate with a ba3
BCA.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE TO THE RATINGS -
BANCO CONTINETAL
The bank ratings and assessments would be downgraded if Continental
suffered a substantial deterioration in its asset quality,
particularly a further buildup of foreclosed assets. Extensive
usage of central bank measures to smooth out provisioning which
affects its core earnings profile, would lead to a downgrade in its
BCA. In addition, a downgrade of the country's deposit ceilings
would affect its deposit ratings. Continental's outlook could be
stabilized if its asset risk does not show material signs of
weakness and its profitability remains strong, in line with
historical levels.
The principal methodology used in these ratings was Banks
Methodology published in November 2019.
=====================
P U E R T O R I C O
=====================
FERRELLGAS PARTNERS: Prices $575M of 10.000% Senior Secured Notes
-----------------------------------------------------------------
Ferrellgas, L.P. and its wholly-owned subsidiary Ferrellgas Finance
Corp. (together, the "Issuers") announced the pricing of their
offering of $575 million aggregate principal amount of 10.000%
Senior Secured First Lien Notes due 2025 at an offering price equal
to 100% of the principal thereof. The Notes will be senior secured
first lien obligations of the Issuers and will be guaranteed on a
senior secured first lien basis by Ferrellgas Partners, L.P.,
Ferrellgas, Inc. and each existing and future subsidiary of the
Company, subject to certain exceptions. The Issuers intend to use
a portion of the net proceeds received from the offering of the
Notes to repay all of the outstanding indebtedness under the
Company's existing senior secured credit facility, which will be
terminated upon completion of the offering, and to cash
collateralize all of the letters of credit outstanding under the
existing senior secured credit facility, and the remainder for
general corporate purposes. The offering is expected to close on
April 16, 2020, subject to customary closing conditions.
The Notes have not been and will not be registered under the
Securities Act of 1933, as amended, or any state securities laws
and may not be offered or sold in the United States absent
registration or an applicable exemption from the registration
requirements of the Securities Act and applicable state laws. The
Notes are being offered and sold only to persons reasonably
believed to be qualified institutional buyers pursuant to Rule 144A
under the Securities Act and to certain non-U.S. persons outside
the United States in compliance with Regulation S under the
Securities Act.
About Ferrellgas
Ferrellgas Partners, L.P., through its operating partnership,
Ferrellgas, L.P., and subsidiaries, serves propane customers in all
50 states, the District of Columbia, and Puerto Rico.
Ferrellgas reported net loss of $64.54 million for the year ended
July 31, 2019, a net loss of $256.82 million for the year ended
July 31, 2018, and a net loss of $54.50 million for the year ended
July 31, 2017. As of Jan. 31, 2020, the Company had $1.47 billion
in total assets, $754.88 million in total current liabilities,
$1.73 billion in long-term debt, $84.55 million in operating lease
liabilities, $45.26 million in other liabilities, and a total
partners' deficit of $1.14 billion.
* * *
As reported by the TCR on Oct. 22, 2019, S&P Global Ratings lowered
its issuer credit rating on Ferrellgas Partners L.P. (Ferrellgas)
to 'CCC-' from 'CCC'. The downgrade was based on S&P's assessment
that Ferrellgas' capital structure is unsustainable given the
upcoming maturity of its $357 million notes due June 2020.
As reported by the TCR on March 18, 2020, Moody's Investors Service
downgraded Ferrellgas Partners L.P.'s Corporate Family Rating to
Caa3 from Caa2. "Ferrellgas's downgrade is driven by the company's
continued high financial leverage and the very high likelihood that
the partnership will complete a full debt recapitalization in the
near-term," said Arvinder Saluja, Moody's vice president.
MGIC INVESTMENT: Egan-Jones Cuts Sr. Unsec. Debt Ratings to BB+
---------------------------------------------------------------
Egan-Jones Ratings Company, on March 26, 2020, downgraded the
foreign currency and local currency senior unsecured ratings on
debt issued by MGIC Investment Corporation to BB+ from BBB.
MGIC Investment Corporation provides private mortgage insurance
services. The Company offers mortgage insurance to thrifts,
mortgage bankers and brokers, commercial banks, credit unions, and
other lending institutions. MGIC Investment serves customers in the
United States and Puerto Rico.
PILGRIM'S PRIDE: Egan-Jones Cuts Unsecured Debt Rating to B+
------------------------------------------------------------
Egan-Jones Ratings Company, on March 26, 2020, downgraded the local
currency senior unsecured rating on debt issued by Pilgrim's Pride
Corporation to B+ from BBB-.
Pilgrim's Pride Corporation, is a Brazilian-owned, multi-national
food company, currently one of the largest chicken producers in the
United States and Puerto Rico and the second-largest chicken
producer in Mexico. It exited bankruptcy in December 2009 and
relocated its U.S. headquarters to Greeley, Colorado, in 2011.
RED CAT: Losses Since Inception Cast Going Concern Doubt
--------------------------------------------------------
Red Cat Holdings, Inc. filed its quarterly report on Form 10-Q,
disclosing a net loss of $438,619 on $34,538 of revenues for the
three months ended Jan. 31, 2020, compared to a net loss of
$327,051 on $0 of revenues for the same period in 2019.
At Jan. 31, 2020, the Company had total assets of $3,109,752, total
liabilities of $1,266,932, and $1,842,820 in total stockholders'
equity.
The Company states, "We have experienced losses from operations
since inception. To date, we have not been able to generate
product sales or to become cash flow positive. The success of our
business plan during the next 12 months and beyond will be
contingent upon generating sufficient revenue to cover our costs of
operations and/or upon obtaining additional financing. The report
from our independent registered public accounting firm for the
fiscal year ended April 30, 2019 includes an explanatory paragraph
stating the Company has recurring net losses from operations,
negative operating cash flows, does not yet generate revenue from
operations and will need additional working capital for ongoing
operations. These factors, among others, raise substantial doubt
about the Company's ability to continue as a going concern. If we
are unable to obtain sufficient funding, our business, prospects,
financial condition and results of operations will be materially
and adversely affected and we may be unable to continue as a going
concern.
"We are presently seeking to address these going concern doubts
through a number of actions including efforts to (a) raise capital
through the public markets, (b) release our first commercial
product and (c) pursue acquisitions of complementary, revenue
generating companies which are accretive to our operating results.
We can provide no assurance that any of these efforts will be
successful or, that even if successful, that they will alleviate
doubts about our ability to continue as a going concern."
A copy of the Form 10-Q is available at:
https://is.gd/BrhlN7
Red Cat Holdings, Inc. provides distributed data storage,
analytics, and services for the drone industry. The company offers
block chain-based distributed storage, analytics, and SaaS
solutions for regulators to track and review flight data, insurance
companies to insure drones, and pilots to become compliant with
regulations. The company was founded in 2016 and is based in San
Juan, Puerto Rico.
=====================================
T R I N I D A D A N D T O B A G O
=====================================
CONSOLIDATED ENERGY: S&P Downgrades ICR to 'BB-', Outlook Stable
----------------------------------------------------------------
On April 8, 2020, S&P Global Ratings lowered its issuer credit and
issue-level ratings on Trinidad and U.S. Gulf Coast-based
petrochemicals producer Consolidated Energy Ltd. (CEL) to 'BB-'
from 'BB', with a stable outlook.
S&P said, "We anticipate that the global economic downturn underway
and oil price decline in 2020 will hurt CEL revenues and EBITDA,
resulting in a deterioration of its credit metrics.
"The downgrade reflects our expectation that CEL's leverage will
remain high for the rating, with debt to EBITDA above 4.0x,
following lower EBITDA generation than our previous expectations
because of a decline in methanol prices this year. Nonetheless, we
expect increased production from the Natgasoline ramp-up to
continue as expected, somewhat offsetting the credit metrics
decline."
===============
X X X X X X X X
===============
[*] BOND PRICING: For the Week April 6 to April 10, 2020
--------------------------------------------------------
Issuer Name Cpn Price Maturity Country Curr
----------- --- ----- -------- ------- ---
Cia Energetica de Pern 6.2 1.1 1/15/2022 BR BRL
Provincia de Buenos Ai 7.9 75.3 6/15/2027 AR USD
Argentine Republic Gov 8.3 72.9 12/31/2033 AR USD
MIE Holdings Corp 7.5 56.2 4/25/2019 HK USD
China Huiyuan Juice Gr 6.5 46.6 8/16/2020 CN USD
Argentine Republic Gov 8.3 74.5 12/31/2033 AR USD
Provincia de Rio Negro 7.8 70.4 12/7/2025 AR USD
KrisEnergy Ltd 4.0 40.4 6/9/2022 SG SGD
Noble Holding Internat 5.3 60.5 3/15/2042 KY USD
AES Tiete Energia SA 6.8 1.2 4/15/2024 BR BRL
Embotelladora Andina S 3.5 37.9 8/16/2020 CL CLP
USJ Acucar e Alcool SA 9.9 74.0 11/9/2019 BR USD
Argentine Republic Gov 0.5 27.6 12/31/2038 AR JPY
Plaza SA 3.5 38.3 8/15/2020 CL CLP
Banco Security SA 3.0 5.6 7/1/2019 CL CLP
Argentina Bonar Bonds 5.8 75.2 4/18/2025 AR USD
Corp Universidad de Co 5.9 64.2 11/10/2021 CL CLP
City of Cordoba Argent 7.9 73.1 9/29/2024 AR USD
Argentine Republic Gov 8.3 72.9 12/31/2033 AR USD
MIE Holdings Corp 7.5 56.2 4/25/2019 HK USD
Enel Americas SA 5.8 32.7 6/15/2022 CL CLP
Empresa Provincial de 12.5 0.0 1/29/2020 AR USD
Odebrecht Finance Ltd 7.0 17.0 4/21/2020 KY USD
Yida China Holdings Lt 7.0 74.3 4/19/2020 CN USD
Noble Holding Internat 6.1 62.0 3/1/2041 KY USD
USJ Acucar e Alcool SA 9.9 74.0 11/9/2019 BR USD
YPF SA 16.5 67.3 5/9/2022 AR ARS
Provincia del Chubut A 4.5 2208 3/30/2021 AR USD
Avadel Finance Cayman 4.5 55.0 2/1/2023 US USD
Argentine Republic Gov 6.9 75.2 1/11/2048 AR USD
Polarcus Ltd 5.6 71.8 7/1/2022 AE USD
MIE Holdings Corp 7.5 56.4 4/25/2019 HK USD
Banco Macro SA 17.5 65.2 5/8/2022 AR ARS
Provincia de Rio Negro 7.8 70.3 12/7/2025 AR USD
Empresa de Transporte 4.3 30.9 7/15/2020 CL CLP
Argentina Bonar Bonds 7.6 74.4 4/18/2037 AR USD
Automotores Gildemeist 6.8 54.9 1/15/2023 CL USD
SACI Falabella 2.3 50.6 7/15/2020 CL CLP
Sylph Ltd 2.4 65.1 9/25/2036 KY USD
Banco Security SA 3.0 27.4 6/1/2021 CL CLP
Argentine Republic Gov 4.3 70.0 12/31/2033 AR JPY
Automotores Gildemeist 6.8 54.9 1/15/2023 CL USD
Cia Latinoamericana de 9.5 74.3 7/20/2023 AR USD
Provincia de Rio Negro 7.8 70.3 12/7/2025 AR USD
Odebrecht Finance Ltd 6.0 16.4 4/5/2023 KY USD
Province of Santa Fe 6.9 74.7 11/1/2027 AR USD
Embotelladora Andina S 3.5 37.9 8/16/2020 CL CLP
USJ Acucar e Alcool SA 9.9 74.0 11/9/2019 BR USD
Odebrecht Finance Ltd 6.0 16.4 4/5/2023 KY USD
Province of Santa Fe 6.9 75.2 11/1/2027 AR USD
Odebrecht Finance Ltd 7.0 16.5 4/21/2020 KY USD
Noble Holding Internat 6.2 62.2 8/1/2040 KY USD
YPF SA 16.5 67.3 5/9/2022 AR ARS
Banco Macro SA 17.5 65.2 5/8/2022 AR ARS
Odebrecht Finance Ltd 6.0 16.4 4/5/2023 KY USD
Cia Latinoamericana de 9.5 73.9 7/20/2023 AR USD
Automotores Gildemeist 8.3 54.2 5/24/2021 CL USD
Province of Santa Fe 6.9 75.2 11/1/2027 AR USD
Odebrecht Finance Ltd 7.0 16.5 4/21/2020 KY USD
Province of Santa Fe 6.9 74.7 11/1/2027 AR USD
Automotores Gildemeist 8.3 54.2 5/24/2021 CL USD
Provincia de Cordoba 7.1 72.7 8/1/2027 AR USD
Argentine Republic Gov 6.3 74.1 11/9/2047 AR EUR
Provincia del Chaco Ar 4.0 0.0 12/4/2026 AR USD
Fospar S/A 6.5 1.2 5/15/2026 BR BRL
Empresa Electrica de l 2.5 63.8 5/15/2021 CL CLP
Sociedad Austral de El 3.0 17.0 9/20/2019 CL CLP
Provincia del Chaco Ar 9.4 74.8 8/18/2024 AR USD
Argentine Republic Gov 7.1 75.7 6/28/2117 AR USD
Provincia de Cordoba 7.1 74.7 8/1/2027 AR USD
Metrogas SA/Chile 6.0 41.6 8/1/2024 CL CLP
Esval SA 3.5 49.9 2/15/2026 CL CLP
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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
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USA, Marites O. Claro, Joy A. Agravante, Rousel Elaine T.
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Chapman, Editors.
Copyright 2020. All rights reserved. ISSN 1529-2746.
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