/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/200720.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, July 20, 2020, Vol. 21, No. 144 Headlines B R A Z I L BRASKEM SA: Pomerantz Probes Claims on Behalf of Investors JBS SA: Accused of Buying Cattle Raised in Protected Areas RWDY INC: U.S. Trustee Appoints Creditors' Committee ULTRAPAR INT'L: Moody's Puts Ba1 Rating to $350MM Sr. Unsec. Notes D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: Bars Reject Short Hours, Demand to Operate DOMINICAN REPUBLIC: Central Banker to Stay in his Post DOMINICAN REPUBLIC: Restaurant Owners Warn of Bankruptcy E C U A D O R ECUADOR DPR 2020-1: Fitch to Rate $150MM Loan B+(EXP) ECUADOR: Restructuring Faces Setback After Some Creditors Balk P U E R T O R I C O PUERTO RICO: Paul Hastings, Casillas File 6th Modified Statement S U R I N A M E SURINAME: Fitch Hikes IDR to CC on Completed Consent Solicitation SURINAME: S&P Raises Sovereign Credit Rating to CCC, Outlook Stable X X X X X X X X [* ] BOND PRICING: For the Week July 13 to July 17, 2020 - - - - - =========== B R A Z I L =========== BRASKEM SA: Pomerantz Probes Claims on Behalf of Investors ---------------------------------------------------------- Pomerantz LLP is investigating claims on behalf of investors of Braskem S.A. Such investors are advised to contact Robert S. Willoughby at newaction@pomlaw.com or 888-476-6529, ext. 7980. The investigation concerns whether Braskem and certain of its officers and/or directors have engaged in securities fraud or other unlawful business practices. On July 9, 2020, Braskem disclosed that authorities in northeastern Brazil had advised Braskem that residents of 1,918 homes needed to be evacuated due to a geological event that Braskem had caused via its mining operations. Braskem estimated that the cost of moving the residents would be 850 million reais, with another 750 million reais for additional measures relating to the permanent closure of Braskem's salt extraction activities in the region. On this news, Braskem's American Depositary Receipt price fell $0.59 per share, or 6.2%, to close at $8.93 per share on July 9, 2020, damaging investors. The Pomerantz Firm, with offices in New York, Chicago, Los Angeles, and Paris is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. About Braskem S.A. Sao Paulo, Brazil-based Braskem S.A. produces petrochemical products and has a strategic focus on polyethylene, polypropylene and polyvinyl chloride. The Company has integrated first and second generation petrochemical production facilities, with 18 plants in Brazil. As reported in the Troubled Company Reporter-Latin America on July 17, 2020, Moody's Investors Service affirmed Braskem's Ba1 corporate family rating and the Ba1 ratings on the foreign and local currency debt issuances of Braskem Finance Ltd and Braskem America Finance Company, respectively, fully guaranteed by Braskem S.A. On July 10, 2020, S&P Global Ratings lowered its ratings on Braskem to 'BB+' from 'BBB-'. S&P also assigned a '3' recovery rating to Braskem's senior unsecured notes. On July 6, 2020, Fitch Ratings has downgraded Braskem S.A.'s Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDR) to 'BB+', from 'BBB-'. At same time, Fitch has affirmed Braskem's National Long-Term Rating at 'AAA(bra)'. The Outlook is Stable. JBS SA: Accused of Buying Cattle Raised in Protected Areas ---------------------------------------------------------- Oliver Mason at Rio Times Online reports that a report released by Amnesty International states that JBS, the world's largest beef processing company, has used illegally raised cattle in protected areas of the amazon. The NGO's report points out that the Brazilian company does not monitor its indirect suppliers, who "launder cattle" raised illegally on reservations and indigenous lands, according to Rio Times Online. The company denies this, the report notes. As reported in the Troubled Company Reporter-Latin America June 19, 2020, Fitch Ratings has upgraded JBS S.A.'s Long-Term Foreign and Local Currency Issuer Default Ratings to 'BB+' from 'BB'. Fitch also upgraded the senior unsecured notes guaranteed by JBS to 'BB+' from 'BB' in addition to upgrading the company's National Scale rating to 'AAA(bra)' from 'AA+(bra)'. The Rating Outlook is Stable. On Dec. 19, 2019, Moody's Investors Service upgraded JBS S.A.'s corporate family rating to Ba2 from Ba3 and the senior unsecured ratings of its wholly-owned subsidiaries JBS USA Lux S.A. and JBS Investments II GmbH to Ba2 from Ba3. The rating of the secured term loan under JBS USA Lux S.A. was upgraded to Ba1 from Ba2. The outlook for all ratings is stable. RWDY INC: U.S. Trustee Appoints Creditors' Committee ---------------------------------------------------- David Asbach, acting U.S. trustee for Region 5, on July 15 appointed a committee to represent unsecured creditors in the Chapter 11 case of RWDY Inc. The committee members are: 1. Vernon Capital Group LLC Andrew Lichtenstein 383 Kingston Ave., Suite 343 Brooklyn, NY 11213 Yossi@htcapllc.com 718-614-9657 2. Queen Funding, LLC Max Gross 101 Chase Ave. Lakewood, NJ 08701 3. EIN CAP Inc. Russell Naftali 160 Pearl Street, 5th floor New York, NY 1005 Official creditors' committees serve as fiduciaries to the general population of creditors they represent. They may investigate the debtor's business and financial affairs. Committees have the right to employ legal counsel, accountants and financial advisors at a debtor's expense. About RWDY Inc. RWDY, Inc. is an internationally recognized provider of oil field consultants. Its personnel have supported offshore drilling operations in Australia, Brazil, Cameroon, New Zealand, Nigeria, Qatar, New Zealand, United Arab Emirates and Venezuela. RWDY 's consultants include project managers; drilling and completion engineers; foreman; mud engineers; HSE advisors, SEMS advisors and HSE consultants; rig clerks and logistics coordinators; shore base dispatchers and materials coordinators; rig commissioning managers; and cement specialists. Visit http://www.rwdyinc.comfor more information. RWDY sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. La. Case No. 20-10616) on June 23, 2020. At the time of the filing, Debtor had estimated assets of less than $50,000 and liabilities of between $10 million and $50 million. Judge John S. Hodge oversees the case. Robert W. Raley, Esq., is Debtor's bankruptcy attorney. ULTRAPAR INT'L: Moody's Puts Ba1 Rating to $350MM Sr. Unsec. Notes ------------------------------------------------------------------ Moody's Investors Service assigned a Ba1 rating to the $350 million proposed senior unsecured notes to be issued by Ultrapar International S.A. under the same terms and conditions as the $500 million notes due 2029, fully and unconditionally guaranteed by Ultrapar Participacoes S.A. (Ba1/Aaa.br) and Ipiranga Produtos de Petroleo S.A. (Ba1/Aaa.br). The outlook is negative. Proceeds from the proposed notes are part of Ultrapar's liability management strategy and general corporate purposes. The rating of the proposed notes assumes that the final transaction documents will not be materially different from draft legal documentation reviewed by Moody's to date and assume that these agreements are legally valid, binding and enforceable. Ratings assigned: Issuer: Ultrapar International S.A. - Gtd Senior Unsecured Notes due 2029, Assigned Ba1 The outlook is negative. RATINGS RATIONALE Ultrapar Participacoes S.A.'s (Ultrapar) Ba1 ratings reflect the company's solid business model, stable cash flow and leading positions in different product segments in Brazil, including fuel and liquefied petroleum gas (LPG) distribution, specialty chemicals and liquid bulk storage. Its ratings are primarily constrained by the current high leverage, lower operating margin, dependence on a few key suppliers for raw materials and the cyclical nature of its chemical business. The rapid and widening spread of the new coronavirus ("COVID-19") outbreak, a 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 fuel distribution sector in Brazil has been significantly affected by COVID-19 lockdown measures and changes in daily habits leading to a sharp reduction in fuel demand. In April 2020, the most negatively impacted month, sale volumes of light-vehicle fuels, gasoline and ethanol, dropped 30% compared to April 2019, and diesel sales dropped almost 14% in the same period. Since then, volumes have recovered gradually, consequently, Moody's estimates that light fuel vehicle sales will drop by 8.4% and diesel sales will drop 3.3% year-over-year in 2020. Because of the COVID-19 outbreak Moody's expects Ultrapar's EBITDA will reduce by 10% to BRL3.06 billion in 2020 from BRL3.41 billion in 2019, with a drop in Ipiranga's EBITDA, Ultrapar's fuel distribution segment, mitigated by EBITDA from other segments which will be more resilient. Oxiteno's EBITDA will benefit from the devaluation of the local currency with its foreign currency denominated sales. Ultragaz will benefit from stable demand for bottled LPG as customers cook more at home, boosting residential consumption and mitigating part of the expected drop in industrial volumes. Ultracargo benefits from long-term contracts and a sustained demand for storage of fuel and liquid bulk. Ultrapar has an adequate liquidity which was reinforced to face the COVID-19 uncertainty period. As of March 2020, Ultrapar had BRL5.9 billion in cash and BRL1.8 billion in short-term debt, with a 3.3x cash-coverage ratio an average debt-maturity profile of five years. In April 2020, Ultrapar raised an additional BRL1.3 billion to reinforce its cash balance and it reduced expected capital spending by 30% to BRL1.2 billion for 2020. The negative rating outlook incorporates its expectation that leverage will remain high, with lower EBITDA generation and lower operating profit straining metrics in the next 12-18 months. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING The rating is unlikely to be upgraded in the short term. Positive rating pressure will not arise until the COVID-19 outbreak is contained and fuel demand normalizes. Ultrapar would need to record an improvement in operating margins, reduction in gross leverage and maintain a strong liquidity profile. Negative actions on the Government of Brazil's rating could trigger a downgrade of Ultrapar's ratings. Quantitatively, a downgrade could happen in case of a deterioration in the group's liquidity position, accompanied by leverage (debt/EBITDA) remaining above 4.0x without prospects of deleveraging in the near term, interest coverage (EBIT/interest expense) remaining below 2.5x for a prolonged period, and operating margin staying below 3.0%. The principal methodology used in this rating was Retail Industry published in May 2018. Ultrapar Participacoes S.A., headquartered in Sao Paulo, Brazil, is engaged in fuel (Ipiranga) and liquefied petroleum gas (Ultragaz) distribution, specialty chemicals production (Oxiteno), storage for liquid bulk (Ultracargo) and retail drugstore (Extrafarma). In the last twelve months ended March 31, 2020, Ultrapar reported consolidated net revenues of BRL 89.9 billion (about $22.0 billion). Ipiranga is the group's largest business segment, representing 84% of consolidated net revenues and 69% of EBITDA in the same period. =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: Bars Reject Short Hours, Demand to Operate -------------------------------------------------------------- Dominican Today reports that the Colonial City Bars Association and the Naco-Piantini Bars Association reacted with outrage at the Health Ministry's decision to limit the business hours for their establishments to 8:00 p.m. In a statement to Diario Libre, the associations reject the decision because some restaurants and bars have violated the protocols established to maintain distances because of the pandemic, according to Dominican Today. They reiterated their outrage with the new resolution and demanded the free right to work, "curtailed contrary to what was previously agreed, with established protocols," the report notes. "All this because a few businesses that irresponsibly opened without control and without supervision set a bad precedent. We clarify that none of these establishments belongs to these associations," they added. 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 negative outlook (April 2020). Moody's credit rating for Dominican Republic was last set at Ba3 with stable outlook (July 2017). Fitch's credit rating for Dominican Republic was last reported at BB- with negative outlook (May 8, 2020). DOMINICAN REPUBLIC: Central Banker to Stay in his Post ------------------------------------------------------ Dominican Today reports that the confirmation of Hector Valdez Albizu as governor of the Central Bank in the administration that will be headed by president-elect, Luis Abinader, has spurred wide reactions, some of rejection "for the time that the official has in office," and others of support, citing the experience necessary due to the economic crisis from the pandemic. Abinader, who will assume the presidency on August 16 after winning the elections on July 5, disclosed the names of the officials who will be part of his economic and financial team, according to Dominican Today. Among them is Valdez Albizu, the report notes. Regarding his choice, the new president explained that he asked him to remain in office "in the face of the current crisis" and that he had accepted, the report relays. His tenure in office in different administrations is seen by many as a sign of his great ability and experience, the report diclosese. Others think, among them the next president, that the current economic crisis merits his work at the institution, 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 negative outlook (April 2020). Moody's credit rating for Dominican Republic was last set at Ba3 with stable outlook (July 2017). Fitch's credit rating for Dominican Republic was last reported at BB- with negative outlook (May 8, 2020). DOMINICAN REPUBLIC: Restaurant Owners Warn of Bankruptcy -------------------------------------------------------- Dominican Today reports that restaurant owners warn that 50% of their businesses could go bankrupt and lose thousands of jobs if a night curfew is implemented as a result of the re-declaration of a state of emergency for 45 days as requested by the Executive Branch due to the recent epidemiological evolution of COVID-19. The president of the Dominican Restaurant Association (Aderes), Rafael Cabrera, warned of the critical situation in the sector since they opened on July 1 and only 15% of restaurants managed to reopen their business, according to Dominican Today. He stressed that the sector has more than 3,650 businesses across the country, with more than 75,000 direct employees, which impacts 225,000 people, the report relays. "Today, under the conditions we are in, 50% of the sector will go bankrupt. And in the last weeks, only 15% of the restaurants opened, since opening means very high costs and there are not the usual customers," he said, the report notes. He advocated that an exception be made with the sector so that it can be opened during the day taking all the hygiene measures established in the protocols of the Ministry of Public Health, the report discloses. They also ask that at night they are allowed to work with delivery or home delivery, the report relates. Cabrera stressed that the sector does not put its interests above that of Dominicans' health since it favors measures to be taken to prevent the spread and spread of COVID-19, the report relates. However, he indicated that not everyone can be penalized equally, and if it is known that the premises have violated hygiene measures, he understands that they should be fined and closed, the report notes. "We cannot, for two or three who break the rules, bankrupt the entire sector," he added. The president of Aderes highlighted that the implications of remaining closed affect business owners, who must continue to pay rent for premises, bank loans, electricity to keep electronic equipment and appliances running, the report notes. He recalled that before the pandemic they maintained hygiene protocols in their premises as measures that are always maintained in establishments, the report discloses. A similar opinion was issued by the president of the Association of Bars of the Colonial Zone (Abzocol), Grace Heyaime, who said that everyone cannot be made to pay for the negligence of some, the report discloses. She also advocated that sanctions be applied to those who violate the measures, the relays. 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 negative outlook (April 2020). Moody's credit rating for Dominican Republic was last set at Ba3 with stable outlook (July 2017). Fitch's credit rating for Dominican Republic was last reported at BB- with negative outlook (May 8, 2020). ============= E C U A D O R ============= ECUADOR DPR 2020-1: Fitch to Rate $150MM Loan B+(EXP) ----------------------------------------------------- Fitch Ratings expects to rate the $150 million series 2020-1 loans originated by Ecuador DPR Funding 'B+(EXP)'. The Rating Outlook is Stable. Ecuador DPR Funding - 2020-1; LT B+(EXP) Expected Rating TRANSACTION SUMMARY The future flow program will be backed by U.S.-dollar-denominated, existing and future diversified payment rights originated in the U.S. (AAA/Stable) by Banco Pichincha C.A. y Subsidiarias of Ecuador. A majority of DPRs (86.6% in 2019) are processed by designated depository banks that will execute account agreements. Fitch's rating addresses timely payment of interest and principal on a quarterly basis. KEY RATING DRIVERS Originator's Credit Quality: Banco Pichincha C.A. has a Long-Term Issuer Default Rating of 'CC'. The bank's ratings are highly influenced by its operating environment and were reviewed by Fitch on May 18, 2020. Fitch downgraded the sovereign's IDR to 'RD' from 'C' on April 20, 2020. Fitch believes that even if the sovereign defaults in a relevant currency, Ecuadorian banks will retain their capacity to service their obligations in that currency in the near future, given the banks' financial profiles in the context for their domestic market, their moderate direct sovereign exposure, and effective funding and liquidity policies resulting from dealing with sovereign stress in the past. Going Concern Assessment: Fitch uses a GCA score to gauge the likelihood that the originator of a future flow transaction will stay in operation through the transaction's life. Fitch assigns a GCA score of 'GC1' to BP based on the bank's systemic importance and largest bank in the Ecuadorian banking system in terms of assets and deposits. The score allows for a maximum of six notches above the local-currency IDR of the originator; however, additional factors limit the maximum uplift. Notching Uplift from LC IDR: The 'GC1' score allows for a maximum six-notch rating uplift from the bank's IDR, pursuant to Fitch's future flow methodology. However, uplift is tempered to four notches from BP's IDR due to factors mentioned below, including Ecuador's lack of last resort lender, moderate beneficiary concentration and the potential volatility of cash flows due to the coronavirus outbreak. Moderate Future Flow Debt: Total future flow debt including the series 2020-1 loan is expected to represent approximately 1.6% of BP's total funding and 22.5% of non-deposit funding utilizing unconsolidated financials as of March 2020. Fitch considers the ratio of future flow debt to overall non-deposit funding to be low enough to allow the financial future flow ratings up to the maximum uplift indicated by the GCA score. Coronavirus Impact and Containment Measures Pressure Transaction Flows: BP processed approximately $2.1 billion in U.S. DPR flows during the first five months of 2020. While January 2020 flows show a slight increase, compared with January 2019 flows, April 2020 flows show a sharp decrease of approximately 47.4% compared to March 2020 volume, from $484.1 million to $254.7 million, but slightly recovered in May 2020 by approximately 42.6% to $363.3 million when compared to April 2020 volume. Global events such as weakening oil prices and the expected sharp economic global contractions, given the coronavirus pandemic and different containment measures, have translated into a decrease in transaction cash flows. Therefore, the potential volatility of the DPR flows limits the notching differential of the transaction. Coverage Levels Commensurate with Rating: Global events including the coronavirus crisis and current drop in oil prices are expected to negatively impact DPR flows. The proposed loan is expected to have an interest-only period of 12 months with the first principal payment not expected to be due until July 2021. When considering cash flows between January 2008 and May 2020 from DDBs who will sign Account Agreements and begin sweeping cash into the concentration account at transaction closing (excludes Miami Agency flows), the projected quarterly minimum debt service coverage ratio is expected to be approximately 107.8x, and the transaction would be able to withstand a drop in flows of approximately 99% and still cover a max principal and interest payment. Nevertheless, Fitch will monitor the performance of the flows as potential pressures could negatively impact the assigned ratings. No Lender of Last Resort: Ecuador is a dollarized economy without a true lender of last resort. While certain mechanisms are in place to help fend off a banking system crisis, this limits the notching differential of the transaction. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: Fitch does not anticipate developments with a high likelihood of triggering an upgrade. However, the main constraint to the program rating is the originator's rating and BP's operating environment. If upgraded, Fitch will consider whether the same uplift could be maintained or if it should be further tempered in accordance with criteria. Factors that could, individually or collectively, lead to negative rating action/downgrade: The transaction ratings are sensitive to changes in the credit quality of BP. A further deterioration of the credit quality of BP is likely to pose a constraint to the current rating of the transaction. The transaction ratings are sensitive to the ability of the DPR business line to continue operating, as reflected by the GCA score and a change in Fitch's view on the bank's GCA score can lead to a change in the transaction's rating. Additionally, the transaction rating is sensitive to the performance of the securitized business line. The expected quarterly DSCR is approximately 107.8x and should therefore be able to withstand a significant decline in cash flows in the absence of other issues. However, significant further declines in flows could lead to a negative rating action. Any changes in these variables will be analyzed in a rating committee to assess the possible impact on the transaction ratings. No company is immune to the economic and political conditions of its home country. Political risks and the potential for sovereign interference may increase as a sovereign's rating is downgraded. However, the underlying structure and transaction enhancements mitigate these risks to a level consistent with the assigned rating. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Structured Finance transactions have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of seven 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 seven notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAAsf' to 'Dsf'. Best- and worst-case scenario credit ratings are based on historical performance. USE OF THIRD-PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10 Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action. 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. PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS The future flow ratings are driven by the credit risk of Banco Pichincha C.A. as measured by its Long-Term IDR. ESG CONSIDERATIONS The highest level of ESG credit relevance, if present, is a score of 3. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity(ies), either due to their nature or to the way in which they are being managed by the entity(ies). ECUADOR: Restructuring Faces Setback After Some Creditors Balk -------------------------------------------------------------- Global Insolvency, citing the Financial Times, reports that Ecuador is coming under pressure to sweeten its $17.4 billion debt restructuring after some bondholders balked at the terms of the deal it presented earlier this month. The country--one of the poorest in Latin America--said in March that it would be unable to repay all its debts as it deals with the fallout of Covid-19 and a collapse in oil prices, according to Global Insolvency. Earlier this month, the government announced a provisional agreement to cut and stretch out repayments, with the backing of the holders of around half of its bonds, including heavyweights Ashmore and BlackRock, the report notes. But not all bondholders are on board, echoing a tussle between holders of defaulted Argentine debt, the report adds. About Ecuador The Republic of Ecuador is a country in northwestern South America. The sovereign state of Ecuador is a middle-income representative democratic republic and a developing country that is highly dependent on commodities, namely petroleum and agricultural products. Lenin Boltaire Moreno Garces is the county's current President, who has been in office since May 2017. As of May 12, 2020, Ecuador has defaulted on sovereign debt in 2020. On April 3, 2020, Moody's Investors Service downgraded the long-term foreign-currency issuer and senior unsecured rating of the Government of Ecuador to Caa3 from Caa1 and changed the outlook to negative from stable. Moody's decision to downgrade Ecuador's rating reflects the increased and now very high probability of a restructuring, distressed exchange or default on Ecuador's market debt as a result of the economic and financial shock the country is experiencing due to the coronavirus outbreak that has led to extremely tight financing conditions for Ecuador. On April 13, 2020, S&P Global Ratings lowered its long- and short-term sovereign credit ratings on Ecuador to 'SD/SD' from 'CCC-/C'. S&P removed the ratings from CreditWatch. S&P said Ecuador's already large budgetary financing needs have been exacerbated by the plunge in global oil prices and the negative global economic impact of the COVID-19 pandemic. The country is one of the worst affected by the virus outbreak in the region. Also, in mid April 2020, Fitch lowered Ecuador's longterm foreign currency issuer default rating to C from CC. The 'C' rating reflects Fitch's view that a sovereign default of some kind is imminent following the "consent solicitation" made by the Ecuadorian government to defer external bond payments while it pursues a comprehensive restructuring. A deferment in payments, if agreed to by bondholders, would constitute a distressed debt exchange in Fitch's view. As reported in the Troubled Company Reporter-Latin America, Egan-Jones Ratings Company, on May 18, 2020, downgraded the foreign currency and local currency senior unsecured ratings on debt issued by the Republic of Ecuador to CCC- from CCC+. EJR also downgraded the rating on commercial paper issued by the Company to D from C. ===================== P U E R T O R I C O ===================== PUERTO RICO: Paul Hastings, Casillas File 6th Modified Statement ---------------------------------------------------------------- Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure, the law firms of Paul Hastings LLP and Casillas, Santiago & Torres LLC submitted a sixth supplemental verified statement to disclose an updated list of the Official Committee of Unsecured Creditors that they are representing in the Chapter 11 cases of The Financial Oversight And Management Board For Puerto Rico, as representative of The Commonwealth Of Puerto Rico et al. On June 15, 2017, the Office of the United States Trustee for the District of Puerto Rico filed its Notice Appointing Creditors Committee for Unsecured Creditors [Docket No. 338]. On June 8, 2020 the court entered an order [Docket No. 13383] amending section IV of the Case Management Procedures to require certain current and retroactive disclosures. In accordance with Bankruptcy Rule 2019 and, more specifically, subsection IV.B of the Case Management Procedures, attached hereto as Exhibit A is a list of the names and addresses of each Committee member, and the nature and amount of all disclosable economic interests held by each current Committee member in relation to the Debtors as of the following dates: * January 14, 2019 (for all Title III Debtors other than PBA); * January 31, 20205 (for PBA); and * July 1, 2020 (for all Title III Debtors, including PBA). As of July 3, 2020, each Committee members and their disclosable economic interests are: American Federation of Teachers 555 New Jersey Avenue, N.W. 11th Floor Washington, DC 20001 January 14, 2019: * AFT is the authorized agent for its local affiliates, the Asociacion de Maestros de Puerto Rico-Local Sindical and the Asociacion de Maestros de Puerto Rico and its sole disclosable economic interest is its claim as set forth in the proof of claim [Claim No. 108,230] which it filed against the Commonwealth and which the Committee incorporates herein by reference. * As set forth more fully in the Proof of Claim, AFT asserts its Claim on behalf of its local affiliates and their members in the following categories of claims against the Commonwealth: (1) claims for wage increases for years of service and career enhancement as allowed by statute and/or collective bargaining agreement with the Department of Education of Puerto Rico, and for other terms of employment which may have been denied (in an amount in excess of $10,000,000); (2) claims based upon grievance settlements and arbitration awards related to breach of the collective bargaining agreement and/or applicable labor or employment laws (in an amount between $500,000 and $1,000,000), and those based upon grievance or arbitrations procedures which have not yet been processed and therefore not yet been liquidated; and (3) claims for all reduced, unfunded or underfunded pension benefits owed with respect to the Teachers Retirement System which amounts to at least $18 billion in total actuarial liability. July 1, 2020: * No change Baxter Sales and Distribution Puerto Rico Corp. Rexco Industrial Park # 200 Calle B Guaynabo, P.R. 00968 January 14, 2019: * Baxter holds prepetition unsecured claims against the Commonwealth in the aggregate amount of $2,512,111.89 for health-related products sold or services rendered to the Commonwealth's Department of Health and certain public hospitals and health facilities. July 1, 2020: * Baxter holds prepetition unsecured claims against the Commonwealth in the aggregate amount of $1,804,857.10 for health-related products sold or services rendered to the Commonwealth's Department of Health and certain public hospitals and health facilities. Drivetrain, LLC, as the Creditors' Trustee for Doral Financial Corporation 630 Third Avenue 21st Floor New York, NY 10017 * DFC holds prepetition unsecured claims under a certain closing agreement, dated December 30, 2013, by and among the Secretary, in her capacity as Secretary of the Treasury, and DFC and certain of its affiliates under which DFC became entitled to a credit for tax overpayments in the amount of $34,097,526. The 2013 Closing Agreement provided that the DFC overpayment could be used to reduce estimated taxes or it could be claimed as a tax refund. As of the date hereof, DFC has not used any of the DFC overpayment. As such, DFC has a tax refund claim in the amount of $34,097,526. * In addition, based on certain closing agreements, DFC is entitled to accrue a $59,314,891 amortization deduction annually from 2017 through 2021, which could be used to reduce income that would otherwise be subject to Puerto Rico tax. Under these closing agreements, DFC is contractually entitled to an aggregate deduction of $296,574,455. DFC asserts a claim for any loss of the Tax Asset, as well as any impairment of its rights under the closing agreements. * DFC also asserts an unliquidated damages claim against the Commonwealth on a number of bases July 1, 2020: * No change Genesis Security Services, Inc. 5900 Isla Verde Avenue L-2 PMB 438 Carolina, PR 00979 * Genesis holds prepetition unsecured claims against the Commonwealth and/or its instrumentalities under agreements for the provision of security services, in the following amounts: As of January 14, 2019: Commonwealth: Department of Labor $1,987,765.34 Department of Transportation and Public Works $186,912.54 Capitol Superintendence $272,983.51 Department of Education $1,398,171.69 Puerto Rico Department of the Family $2,041,707.69 Department of Health Corps of Medical $1,038,770.34 Emergencies Bureau $22,699.25 Highways & Transportation Authority $1,049,522.49 Puerto Rico Electric Power Authority $178,684.02 Total $8,177,216.87 As of January 31, 2020: Puerto Rico Public Buildings Authority $483,761.01 * Genesis holds prepetition unsecured claims against the Commonwealth and/or its instrumentalities4 under agreements for the provision of security services, in the following amounts: Commonwealth: Department of Labor $1,987,765.34 Department of Transportation and Public Works $186,912.54 Capitol Superintendence $272,983.51 Department of Education $1,398,171.69 Puerto Rico Department of the Family $2,041,707.69 Department of Health Corps of Medical $1,038,770.34 Emergencies Bureau $22,699.25 Highways & Transportation Authority $1,049,522.49 Puerto Rico Electric Power Authority $39,795.97 Puerto Rico Public Buildings Authority $483,761.01 Total $8,522,089.83 Service Employees International Union 1800 Massachusetts Avenue, N.W. Washington, DC 20036 January 14, 2019: * SEIU asserts the following categories of disclosable economic interests on behalf of individual employees for whom it serves as collective bargaining representative: (1) against the Commonwealth: grievances, grievance settlements and arbitration awards related to breach or alleged breach of collective bargaining agreements and/or applicable labor and employment laws (estimated to be in the aggregate magnitude of between $1 million and $10 million), and (2) against the Commonwealth and against the Employees Retirement System: accrued pension obligations (in the aggregate magnitude of greater than $10 million). July 1, 2020: * No change Tradewinds Energy Barceloneta, LLC 1760 Loiza Street, Suite 303 San Juan PR 00911 January 14, 2019: * Tradewinds and its affiliate, Tradewinds Energy Vega Baja, LLC hold prepetition unsecured claims against PREPA in the amount of $20,400,000 and $13,600,000, respectively, based upon certain rights and breaches arising under Power Purchase and Operating Agreements executed on or about October 19 and October 20, 2011 in which Tradewinds Energy LLC (an affiliate of Tradewinds and Tradewinds Vega Baja) agreed to build wind turbine electricity generating plant facilities and PREPA, in return, contractually agreed to buy the electricity from Tradewinds Energy LLC. Subsequently, Tradewinds Energy, LLC assigned its interest in the PPO Agreements to Tradewinds and Tradewinds Vega Baja. July 1, 2020: * No change The Unitech Engineering Group, S.E. Urb Sabanera 40 Camino de la Cascada Cidra Puerto Rico 00739 As of January 24, 2019: * Unitech holds prepetition unsecured claims against the Commonwealth of Puerto Rico under certain construction contracts, in the approximate amount of $11,284,462.70, plus interest. As of January 31, 2020: * Unitech holds prepetition unsecured claims against the Puerto Rico Public Buildings Authority under certain construction contracts, in the approximate amount of $2,513,241.46, plus interest. July 1, 2020: * No change Counsel to the Official Committee of Unsecured Creditors can be reached at: PAUL HASTINGS LLP Luc A. Despins, Esq. James R. Bliss, Esq. James B. Worthington, Esq. G. Alexander Bongartz, Esq. 200 Park Avenue New York, NY 10166 Telephone: (212) 318-6000 Email: lucdespins@paulhastings.com jamesbliss@paulhastings.com jamesworthington@paulhastings.com alexbongartz@paulhastings.com Local Counsel to the Official Committee of Unsecured Creditors can be reached at: CASILLAS, SANTIAGO & TORRES LLC Juan J. Casillas Ayala, Esq. Israel FernÃ¡ndez RodrÃguez, Esq. Juan C. Nieves GonzÃ¡lez, Esq. Cristina B. FernÃ¡ndez Niggemann, Esq. PO Box 195075 San Juan, PR 00919-5075 Telephone: (787) 523-3434 Fax: (787) 523-3433 Email: jcasillas@cstlawpr.com ifernandez@cstlawpr.com jnieves@cstlawpr.com cfernandez@cstlawpr.com A copy of the Rule 2019 filing, downloaded from PacerMonitor.com, is available at https://is.gd/P6tbbt and https://is.gd/2ETBw3 About Puerto Rico Puerto Rico is a self-governing commonwealth in association with the United States that's facing a massive bond debt of $70 billion, a 68% debt-to-GDP ratio and negative economic growth in nine of the last 10 years. The Commonwealth of Puerto Rico has sought bankruptcy protection, aiming to restructure its massive $74 billion debt-load and $49 billion in pension obligations. The debt restructuring petition was filed by Puerto Rico's financial oversight board in U.S. District Court in Puerto Rico (Case No. 17-01578) on May 3, 2017, and was made under Title III of 2016's U.S. Congressional rescue law known as the Puerto Rico Oversight, Management, and Economic Stability Act ('PROMESA'). The Financial Oversight and Management Board later commenced Title III cases for the Puerto Rico Sales Tax Financing Corporation (COFINA) on May 5, 2017, and the Employees Retirement System (ERS) and the Puerto Rico Highways and Transportation Authority (HTA) on May 21, 2017. On July 2, 2017, a Title III case was commenced for the Puerto Rico Electric Power Authority ("PREPA"). U.S. Chief Justice John Roberts has appointed U.S. District Judge Laura Taylor Swain to oversee the Title III cases. The Honorable Judith Dein, a United States Magistrate Judge for the District of Massachusetts, has been designated to preside over matters that may be referred to her by Judge Swain, including discovery disputes, and management of other pretrial proceedings. Joint administration of the Title III cases, under Lead Case No. 17-3283, was granted on June 29, 2017. The Oversight Board has hired as advisors, Proskauer Rose LLP and O'Neill & Borges LLC as legal counsel, McKinsey & Co. as strategic consultant, Citigroup Global Markets, as municipal investment banker, and Ernst & Young, as financial advisor. Martin J. Bienenstock, Esq., Scott K. Rutsky, Esq., and Philip M. Abelson, Esq., of Proskauer Rose; and Hermann D. Bauer, Esq., at O'Neill & Borges are on-board as attorneys. McKinsey & Co. is the Board's strategic consultant, Ernst & Young is the Board's financial advisor, and Citigroup Global Markets Inc. is the Board's municipal investment banker. Prime Clerk LLC is the claims and noticing agent. Prime Clerk maintains a case web site at https://cases.primeclerk.com/puertorico Epiq Bankruptcy Solutions LLC is the service agent for ERS, HTA, and PREPA. O'Melveny & Myers LLP is counsel to the Commonwealth's Puerto Rico Fiscal Agency and Financial Advisory Authority (AAFAF), the agency responsible for negotiations with bondholders. The Oversight Board named Professor Nancy B. Rapoport as fee examiner and to chair a committee to review professionals' fees. =============== S U R I N A M E =============== SURINAME: Fitch Hikes IDR to CC on Completed Consent Solicitation ----------------------------------------------------------------- Fitch Ratings has upgraded Suriname's Long-Term Foreign-Currency Issuer Default Rating to 'CC' from 'RD'. Fitch has also upgraded the issue rating on Suriname's 2023 notes to 'CC' from 'D'. KEY RATING DRIVERS The upgrades follow the completion of the "consent solicitation" to reschedule the principal payments of Suriname's 2023 notes and amend the terms of the related accounts agreement, which Fitch deems to constitute the execution and completion of a distressed debt restructuring. The 'CC' LT-FC IDR indicates a broader restructuring of Suriname's FC debt is probable, reflecting the government's high government debt burden, acute shortage of foreign currency and distressed financing conditions. Moreover, in its manifesto, the Progressive Reform Party, which is the leading political party in the new government, indicated debt rescheduling as one avenue to improving government debt sustainability. At the same time, the VHP highlighted aims to strengthen government revenues, narrow the government deficit, and access sustainable financing. Fitch has affirmed the issue ratings on Suriname's 2026 notes at 'CC'. On July 9, the Government of Suriname obtained agreement from creditors to reschedule the first USD15 million principal payment on the USD125 million 2023 notes originally due June 30. The amended amortization schedule slates the first principal payment of USD15 million on Dec. 30, 2020 followed by six semi-annual instalments of USD18.3 million. Alternatively, if the government formalizes an IMF funding arrangement including policy benchmarks by Dec. 30, 2020 under the amended terms, the notes will amortize in six equal payments starting June 30, 2021. Further changes to terms relating to the state oil company dividend grant the sovereign greater FC cash flow flexibility. By July 13, the government had paid a USD624,000 "consent payment" to noteholders and cured the USD8.0 million interest coupon due June 30, which had fallen into a 30-calendar-day grace period. The government remains current on the USD550 million 2026 notes with a bullet maturity. The next USD25.4 million semi-annual interest coupon on the 2026 notes is due Oct. 26, 2020. Fitch views the risk of a broader restructuring of FC debt as probable, reflecting the government's high government debt burden, acute shortage of FC and distressed financing conditions. Large government cash deficits averaging 10.4% of GDP during the past three years (2017-2019) have increased Suriname's high government debt burden, which Fitch expects to exceed 100% of GDP at the end of 2020 up from 80% of GDP in 2019. Over three-quarters of the debt is denominated in foreign currency, rendering it vulnerable to devaluation of the Suriname dollar. Amid limited net external disbursements and commercial bank exposure to the government near 9% of GDP at the end of 2019, the central bank ramped up lending to the government, providing net financing totaling 16% of projected annual GDP during January-June 2020 and raising the stock of government liabilities held by the central bank to 23% of GDP at the end of June, according to central bank balance sheet figures. Suriname's external liquidity is exceptionally low with unrestricted international reserves (including gold) at USD188 million in May. Suriname's international reserves have come under pressure during 2019-2020 as a result of widened current account deficits (10% of GDP in 2019) driven by large government deficits, increased imports, and more recently low oil export prices. On the capital account, FX cash outflows have also been recorded. Net external debt is high at 58% of GDP at YE 2019, nearly double the current 'B' median. Fitch expects the central bank to implement an exchange-rate adjustment in the near term; the parallel exchange market continues to show a material premium over the official stabilized SRD-USD exchange rate. Macro instability followed the last large currency devaluation in 2016. Contingent liabilities in the financial system are also material in view of an impending currency devaluation and the constraint of Suriname's weak macro environment and deleveraging processes on financial institutions' profitability and capacity to rebuild their capital buffers, with their return on assets has been less than 1% the past four years (2016-2019). The banks' regulatory capital to risk-weighted capital has steadily improved to 10.5% as of July 2019 (latest available figure published in the IMF AIV staff report December 2019) up from a low of 5.5% in 2016. Non-performing loans remained elevated near 12.5% as of July 2019 (latest data). There is also material risk that public accounts may be restated, as highlighted by the government's information addendum dated July 1. Government liabilities were revised upward in 2016 after material government arrears to construction and other private contractors were disclosed. The latest government operational accounts are dated October 2019, although government debt reports are available through April 2020. On July 16, Suriname inaugurated President Chandrikapersad Santokhi, leader of the VHP and a four-party governing parliamentary coalition that sat June 29. President Desi Bouterse and the National Democratic Party conceded the result of the May 25 general elections. The leading VHP party delineated broad macroeconomic objectives, including strengthened public finances (citing revenue and budget improvements as well as government debt sustainability) and greater macroeconomic stability (citing central bank independence and price stability) in its party platform. Fiscal adjustment faced counter-pressure during the preceding administration, which point to risks to the potential fiscal adjustment, in Fitch's view. Peaceful public protests against electricity tariff increases immediately following a large exchange-rate adjustment resulting in double-digit inflation contributed to the derailment of Suriname's first IMF program in 2016. The planned introduction of a value-added tax to broaden the tax base was postponed indefinitely in 2018. The affirmation of Suriname's Country Ceiling at 'CCC' reflects the deterioration of Suriname's external liquidity and inconsistent macroeconomic policies, which Fitch views undermines the conditions for timely private external debt service payment. ESG Considerations: ESG - Governance: Suriname has an ESG Relevance Score 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. These scores reflect the high weight that the World Bank Governance Indicators have in Fitch's proprietary Sovereign Rating Model. Suriname has a medium WBGI ranking at the 43rd percentile, reflecting a recent track record of peaceful political transitions, a moderate level of rights for participation in the political process, moderate institutional capacity, established rule of law and a moderate level of corruption. In November 2019, a Suriname court convicted President Bouterse for the execution of 15 civic dissidents in 1982 during the former military government he led. Following general elections in May 2020, a new Suriname parliament has elected a new President-elect, Chandrikapersad Santokhi, a former minister of justice, who will be inaugurated on July 16. ESG - Creditor Rights: Suriname has an ESG Relevance Score 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. SOVEREIGN RATING MODEL AND QUALITATIVE OVERLAY 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 Fitch's criteria that are not fully quantifiable and/or not fully reflected in the SRM. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Formulation of a credible fiscal and economic adjustment plan that avoids a debt restructuring. -- Improved outlook for external financing, such as substantial inflows of external support that do not require debt restructuring. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Signs that a default is imminent, for example the announcement by the new government of a debt restructuring. -- The rating for the LT Local Currency IDR would be downgraded to 'CC' if a default becomes probable and to 'C' if the government announces plans to restructure its Suriname dollar-denominated debt. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Sovereigns, Public Finance and Infrastructure 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 global indicators to move broadly in line with Fitch's Global Economic Outlook forecasts; -- Fitch's baseline forecasts exclude the impact of Apache Corp. and Total S.A.'s find of significant, but as yet unquantified, oil reserves in Suriname waters on Suriname's balance of payments (given the discovery's early nature) as well as the first oil production (which has a roughly three- to five-year development timeline). SUMMARY OF DATA ADJUSTMENTS -- Fitch analyzes government operations on a cash basis (which includes net payments of supplier arrears) using published Ministry of Finance statistics on arrears flows because this treatment better explains the scale of the government's financing needs and change in government debt/GDP during 2015-2019, in its view, than the government commitment balance also published by the Ministry of Finance; -- Fitch values government debt at reference period-end market exchange rates; this differs from valuation according to Suriname's National Debt Law. 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. -- The stock of government arrears to suppliers is not publicly disclosed. However, the flows of arrears incurred and payments thereof are publicly disclosed; -- Financial soundness indicators of the banking system are released periodically for the IMF Article IV reports, but not published on a regular basis. ESG CONSIDERATIONS Suriname 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. Suriname has an ESG Relevance Score of 5 for Rule of Law, Institutional & Regulatory Quality and Control of Corruption as WBGI 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. Suriname has an ESG Relevance Score 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. Suriname has an ESG Relevance Score of 4 for Human Rights and Political Freedoms as the Voice and Accountability pillar of the WBGI are relevant to the rating and a rating driver. Except for the matters discussed above, the highest level of ESG credit relevance, if present, is a score of 3. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or to the way in which they are being managed by the entity. Suriname - LT IDR CC; Upgrade - ST IDR C; Affirmed - LC LT IDR CCC; Affirmed - LC ST IDR C; Affirmed - Country Ceiling CCC; Affirmed - Senior unsecured; LT CC; Affirmed - Senior unsecured; LT CC; Upgrade SURINAME: S&P Raises Sovereign Credit Rating to CCC, Outlook Stable ------------------------------------------------------------------- On July 16, 2020, S&P Global Ratings raised its long-term foreign and local currency sovereign credit rating on the Republic of Suriname to 'CCC' from 'SD' and 'CCC-', respectively. S&P Global Ratings also raised is issue-level ratings on the restructured US$125 million December 2023 bond to 'CCC' from 'D' and on the US$550 million October 2026 bond to 'CCC' from 'CCC-'. At the same time, S&P Global Ratings raised its short-term foreign currency sovereign credit rating on Suriname to 'C' from 'SD', and affirmed its 'C' short-term local currency sovereign credit rating on the country. Finally, S&P Global Ratings raised its transfer and convertibility assessment on Suriname to 'CCC' from 'CCC-'. The outlook is stable. Outlook The stable outlook balances the possibility that Suriname will receive new official funding to support its budget in the next six to 12 months with the possibility that the country will not have sufficient liquidity, or the willingness, to honor its foreign or local currency debt obligations. Suriname's foreign and local debt obligations are substantial and the country faces unprecedented fiscal challenges from the COVID-19 pandemic. As well, S&P believes political uncertainty could constrain the new government's ability or willingness to implement the reforms necessary to put Suriname's finances back on the path to fiscal sustainability. S&P said, "We could lower the ratings if continuing economic weakness and a lack of confidence that the new government will implement necessary reforms discourages new funding from official and commercial lenders, resulting in a lack of sufficient liquidity to honor the country's foreign and local currency debt obligations, or should the government's willingness to service these obligations falter. "We could raise the ratings if the new government adopts measures to restart the economy and implements reforms that give official and commercial lenders the confidence to provide new funding to Suriname to support its budget, including its foreign and local currency debt obligations, and we believe that the risks to debt service have receded." Rationale On June 30, 2020, the government sought the consent from bondholders to restructure the amortization schedule of its US$125 million December 2023 bond. S&P said, "We view this kind of restructuring as a distressed debt exchange, under our criteria. On July 9, the overwhelming majority of bondholders gave their consent to the restructuring. With the restructuring complete, we are raising our ratings to reflect Suriname's post-restructuring creditworthiness." S&P said, "We are raising our foreign and local currency sovereign credit ratings to 'CCC', reflecting our view of the ongoing risks that Suriname might fail to honor its debt obligations over the next 12 months in the absence of some unforeseen positive development." Suriname has substantial foreign currency debt obligations to commercial and official lenders, and local currency debt obligations to domestic banks. The country faces considerable economic and fiscal challenges, as well as fiscal policy uncertainty stemming from the change in government. Institutional and economic profile: The pandemic will reduce real GDP by about 8% in 2020. -- Social distancing measures to contain an outbreak, which began in June 2020, will result in a contraction of real GDP of about 8% in 2020. -- A work stoppage at IAMGOLD Corp.'s Rosebel mine began in June after personnel tested positive for COVID-19. -- The Progressive Reform Party (PRP) won the election in May 2020 with 26 seats and has formed government in a coalition with junior partners. S&P said, "We expect that the recent COVID-19 outbreak will lead to a contraction of real GDP of about 8% in 2020, owing to social distancing and the measures the government has put in place to combat the virus. Real GDP growth should move back into positive territory in 2021. We believe the work stoppage at the Rosebel mine will have a minor effect on gold production and exports in 2020. Despite the decline in real GDP, GDP per capita should be close to US$7,200 in 2020 and should rise again in 2021." The PRP's leader, Chan Santonkhi, was recently elected president. The PRP has formed a government in a coalition with junior partners. It could be difficult for the coalition government to make tough decisions during this period of stress and implement on a timely basis the reforms necessary to put Suriname's finances on the path to sustainability. The country has a stable democratic government, but poor public policy choices in the past have threatened the sustainability of its finances. Suriname's society, however, remains civil. Parties largely represent different ethnic groups and relations between groups have been harmonious. Flexibility and performance profile: The current account deficit will shrink in 2020; strengthening useable reserves have reduced Suriname's external vulnerabilities. -- The general government deficit will increase to about 12% of GDP in 2020 and improve gradually beginning in 2021 as the net general government debt burden rises to about 73% of GDP by 2023. -- The current account deficit should be close to about 4% in 2020, but the country's external position will weaken somewhat. -- Suriname's monetary flexibility is constrained by its small capital markets, lack of monetary policy tools, and high dollarization of both bank assets and liabilities. With the economic contraction, fiscal balances will worsen in 2020. The general government deficit should rise moderately to about 12% of GDP and begin to strengthen in 2021. Although the government's spending on measures to combat the coronavirus will contribute somewhat to the increase in the 2020 deficit, the pandemic's effect on economic activity and revenues will be the chief driver of the increase. The deficit could shrink more substantially if the new government implements the long-awaited VAT. The effect of the deficits on general government debt and interest expense will be somewhat muted by inflation. Net general government debt will rise to 69% of GDP in 2020 and reach 73% by 2023. Interest expense should be about 16% of general government revenues in 2020. S&P believes that the financial system will remain a contingent liability to the government. The current account should improve to a deficit of 4% in 2020. Gross external financing needs should be about 115% of CARs and useable reserves for the 2020-2023 period; narrow net external debt should represent 80% of CARs in 2020 and could worsen to over 100% of CARs by 2023 with increased debt and a potential depreciation of the exchange rate. S&P said, "We believe that Suriname will continue to lack monetary policy flexibility. Small capital markets and high dollarization of both bank assets and liabilities should continue to constrain the effectiveness of monetary policy. The central bank has limited monetary policy tools. Its primary tool is reserve requirements on local and foreign currency deposits, which it uses to manage credit growth in the local banking system. We expect inflation will be above 20% in 2020." 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 Upgraded To From Suriname Transfer & Convertibility Assessment Local Currency CCC CCC- Suriname Senior Unsecured CCC CCC- Senior Unsecured CCC D Upgraded; CreditWatch/Outlook Action To From Suriname Sovereign Credit Rating Foreign Currency CCC/Stable/C SD/--/SD Upgraded; CreditWatch/Outlook Action; Ratings Affirmed To From Suriname Sovereign Credit Rating Local Currency CCC/Stable/C CCC-/Negative/C =============== X X X X X X X X =============== [* ] BOND PRICING: For the Week July 13 to July 17, 2020 -------------------------------------------------------- Issuer Name Cpn Price Maturity Country Curr ----------- --- ----- -------- ------- --- 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 YPF SA 16.5 67.3 5/9/2022 AR ARS MIE Holdings Corp 7.5 56.4 4/25/2019 HK USD Provincia de Rio Negro 7.8 70.3 12/7/2025 AR USD Argentine Republic Gov 6.9 75.2 1/11/2048 AR USD Polarcus Ltd 5.6 71.8 7/1/2022 AE 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 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 Argentine Republic Gov 8.3 72.9 12/31/2033 AR USD MIE Holdings Corp 7.5 56.2 4/25/2019 HK USD Odebrecht Finance Ltd 6.0 16.4 4/5/2023 KY USD Banco Security SA 3.0 27.4 6/1/2021 CL CLP Provincia de Buenos Ai 7.9 75.3 6/15/2027 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 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 SACI Falabella 2.3 50.6 7/15/2020 CL CLP Sylph Ltd 2.4 65.1 9/25/2036 KY 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 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 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 Empresa de Transporte 4.3 30.9 7/15/2020 CL CLP 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 Odebrecht Finance Ltd 6.0 16.4 4/5/2023 KY USD Cia Energetica de Pern 6.2 1.1 1/15/2022 BR BRL 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 Argentina Bonar Bonds 7.6 74.4 4/18/2037 AR USD Automotores Gildemeist 6.8 54.9 1/15/2023 CL USD Province of Santa Fe 6.9 75.2 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 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 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 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 YPF SA 16.5 67.3 5/9/2022 AR ARS Banco Macro SA 17.5 65.2 5/8/2022 AR ARS 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 ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Latin America is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA, Marites O. 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