/raid1/www/Hosts/bankrupt/TCRLA_Public/200721.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Tuesday, July 21, 2020, Vol. 21, No. 145
Headlines
B R A Z I L
BRAZIL: Has Over 2 Million COVID-19 Cases
COMPANHIA SIDERURGICA: S&P Affirms B- Global Rating, Off Watch Neg.
D O M I N I C A N R E P U B L I C
DOMINICAN REPUBLIC: Cabinet Priority is Crisis Management
DOMINICAN REPUBLIC: Revenue Drops 14.5% to US$48.2BB in First Half
E C U A D O R
ECUADOR: Bondholders Make Counter Offer in $17.4BB Debt Revamp
E L S A L V A D O R
EL SALVADOR: Scotiabank Helps Raise US$1BB Through Bond Issuance
G U A T E M A L A
CENTRAL AMERICAN: Moody's Affirms CFR & Sr. Unsec. Rating at Ba2
M E X I C O
GRUPO AEROMEXICO: U.S. Trustee Appoints Creditors' Committee
P U E R T O R I C O
J.C. PENNEY: Creditors' Committee Hires Cooley LLP as Co-Counsel
PUERTO RICO: Implements More Measures Over Increase in COVID Cases
V E N E Z U E L A
VENEZUELA: Economic Survival is Top of Mind for Venezuelans
X X X X X X X X
LATAM: COVID-19 Caseload Keeps Growing
- - - - -
===========
B R A Z I L
===========
BRAZIL: Has Over 2 Million COVID-19 Cases
-----------------------------------------
The Latin American Herald reported on July 20 that in Brazil,
health authorities has exceeded the 2 million threshold for
confirmed coronavirus cases--registering a total of 2,012,151 since
the virus hit the country--1,322 of them in the past 24 hours, the
report relays.
Meanwhile, Brazilian President Jair Bolsonaro tested positive a
second time for COVID-19 and will remain in quarantine at his
official residence, the second test confirming the diagnosis made a
week ago, according to The Latin American Herald. The
ultrarightist leader has consistently tried to downplay the
pandemic, which has killed some 75,000 people so far in Brazil,
calling it nothing but "the sniffles," or a little bit of the flu,"
the report notes.
About Brazil
Brazil is the fifth largest country in the world and third largest
in the Americas. Jair Bolsonaro is the current president, having
been sworn in on Jan. 1, 2019.
As reported in the Troubled Company Reporter-Latin America on May
8, 2020, Fitch Ratings affirmed Brazil's Long-Term Foreign
Currency
Issuer Default Rating at 'BB-' and has revised the Rating Outlook
to Negative. The Outlook revision to Negative reflects the
deterioration of Brazil's economic and fiscal outlook, and
downside
risks to both given renewed political uncertainty, including
tensions between the executive and congress, and uncertainty over
the duration and intensity of the coronavirus pandemic.
On April 10, 2020, the TCR-LA reported that S&P Global Ratings
revised on April 6, 2020, its outlook on its long-term ratings on
Brazil to stable from positive. At the same time, S&P affirmed
its
'BB-/B' long- and short-term foreign and local currency sovereign
credit ratings. S&P also affirmed its 'brAAA' national scale
rating
and its transfer and convertibility assessment of 'BB+'. The
outlook on the national scale rating remains stable.
COMPANHIA SIDERURGICA: S&P Affirms B- Global Rating, Off Watch Neg.
-------------------------------------------------------------------
On July 17, 2020, S&P Global Ratings affirmed its 'B-' global and
'brBBB-' national scale ratings on Brazilian iron ore and steel
producer Companhia Siderurgica Nacional (CSN). At the same time, it
affirmed its 'B-' issue-level ratings on CSN Islands XII Corp. and
CSN Resources S.A.'s senior unsecured notes. The issue-level
ratings remain at the same level as the long-term issuer credit
rating, along with the recovery rating of '4', given the expected
average recovery of 40% (rounded estimate). S&P also removed the
ratings from CreditWatch with negative implications, where it
placed them on April 22, 2020.
CSN has completed the refinancing of debt owed to Banco do Brasil
and Caixa Econômica Federal (CEF) totaling about R$1.7 billion,
and announced another iron ore prepayment deal with Glencore,
totaling $115 million. These, coupled with an expected higher cash
flows in the next 12 months, will reduce liquidity pressures for
the company, but additional refinancing for 2021 and 2022 debt is
required.
S&P said, "We estimate adjusted EBITDA of about R$5.9 billion in
2020, 3.5% above the 2019 level due to the weaker Brazilian real,
the currently high iron ore prices, and a gradual recovery of the
company's steel segment following the completion of the
refurbishment of blast furnace #3, despite the lower volumes in the
domestic market stemming from the pandemic. However, while the
depreciation of the real potentially opens room for further steel
price adjustments in Brazil, it will also raise CSN's
dollar-denominated debt. We forecast adjusted debt to EBITDA to
remain above 6.0x for the next few years, and a more structural
deleveraging, with reduction of gross debt, would depend on asset
sales, in our opinion."
Environmental, social, and governance (ESG) credit factors for this
credit rating change:
-- Health and safety factors
===================================
D O M I N I C A N R E P U B L I C
===================================
DOMINICAN REPUBLIC: Cabinet Priority is Crisis Management
---------------------------------------------------------
Dominican Today reports that President-elect Luis Abinader began
his second round of designations by announcing appointments of
technicians rather than politicians.
He has presented a crisis management cabinet, giving priority to
the capacity and curriculum developed in the area of those who have
been published as future ministers and directors to various
positions, according to Dominican Today.
The president-elect has initially focused on sending messages of
confidence to economic agents and on responding to sectors that
require transparent administration, with people without political
ties, the report notes.
With the announcement of the appointment of Antoliano Peralta as
Legal consultant to the Executive Power, who was legal director of
the Presidential Cabinet, and Antonio Almonte as Minister of Energy
and Mines, the next president places two of his main political
collaborators and legal adviser and collaborator in energy, 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: Revenue Drops 14.5% to US$48.2BB in First Half
------------------------------------------------------------------
Dominican Today reports that the COVID-19 pandemic continues to hit
the finances of the Dominican State. In the first half of 2020,
collections fell by 14.5%, a collapse that could have been worse
had it not been for the revenue received by the National Treasury,
according to Dominican Today.
The State collected RD$284.7 billion (US$48.2 billion) during the
first half of the year, lower than the RD$332.9 billion it received
in the same period of 2019, a drop of RD$48.2 billion, the report
notes.
State revenues via Customs were the most affected, the report
relays. Between January and June last, the institution's
collections fell by 20%, compared to the same period in 2019, the
report discloses.
From registering collections of RD$67.3 billion in the first half
of last year, Customs revenues in the first six months of 2020
totaled RD$53.9 billion, a net fall of RD$13.5 billion, the report
notes.
Similarly, the income of Internal Taxes (DGII) suffered a reduction
of 18.3%. Between January and June 2020, the collection entity
stopped lost out on RD$45.1 billion, when compared to the first
half of the previous year, the report relays.
The institution had revenues of RD$201.2 billion between January
and June of this year, lower than RD$246.3 billion in the same
period of 2019, 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).
=============
E C U A D O R
=============
ECUADOR: Bondholders Make Counter Offer in $17.4BB Debt Revamp
--------------------------------------------------------------
Tom Arnold and Karin Strohecker at Reuters report that two groups
of Ecuador bondholders have proposed revised restructuring terms to
the government as it seeks to strike a deal to renegotiate $17.4
billion in debt.
The government's proposal already has the backing of one group of
creditors, holding around half of the bonds and including
AllianceBernstein, Ashmore and BlackRock, according to Reuters.
Yet a steering committee including Amundi, Contrarian Capital
Management, Grantham Mayo Van Otterloo & Co, and T Rowe Price
Associates, representing a group of more than 25 institutional
investors and an ad hoc group of holders of notes due in 2024, have
said the terms must be improved, the report notes. They have
holdings of more than 25% in certain series of the bonds and more
than 35% in others, the committee, advised by BroadSpan Capital and
UBS, said in a statement, the report relays.
The government needs to get approval from two-thirds of the
aggregate majority of bondholders, or 75% in the case of the 2024
bonds, to push ahead with a deal, the report notes.
That would trigger collective action clauses, designed to help push
through an orderly debt restructuring by requiring only a majority
of creditors to agree to change payment terms or restructuring, the
report says.
Under the current deal, 10 existing bonds maturing between 2022 and
2030 would be swapped for three bonds due in 2030, 2035, and 2040,
with a nominal 9.2% haircut on the face value of the bonds,
trimming $1.7 billion off the principal due, the report discloses.
The steering committee for the group of more than 25 institutional
investors and ad hoc group of holders of notes due in 2024 proposed
a 10% principal haircut be applied to the outstanding principal of
the new bonds, the report relays. However, the new bonds exchanged
for the existing 2024 bonds would not be subject to any principal
haircut, it said in the statement, the report notes.
The committee proposed an extension of maturities in existing bonds
in the new bonds, with the earliest final maturity in 2030.
Amortization would begin in 2026, the report discloses.
The government in April reached a deal with the bondholders to
delay interest payments through August, as the oil plunge and
coronavirus weighed on public finances, the report notes.
Quito said it planned to formally launch consent solicitation over
the debt revamp in the short term, the report relays.
"The SC (steering committee) remains engaged in good faith
discussions with the Ecuadorean authorities and hopes to have an
agreement in principle in the very near-term," the statement added,
the report note.
Speaking earlier in the day, Tiago Severo, vice president of Latin
America economic research at Goldman Sachs said the scope for
adjustment in the government's offer was "not large given the
challenging fiscal and macro situation," the report discloses.
Reaching a deal with creditors by August was a realistic timeline,
said a source familiar with the thinking of creditors, the report
says.
"There is an urgency about dealing with the situation - the crisis
on the ground is quite severe so removing the uncertainty is quite
important," the source said, the report notes. "Also, there are
elections coming up next year in Ecuador and if the government
doesn't deal responsibly with the debt and reach an agreement with
the IMF on the back of the restructuring with the private sector,
which could create real political chaos in the country in the run
up to the election."
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.
=====================
E L S A L V A D O R
=====================
EL SALVADOR: Scotiabank Helps Raise US$1BB Through Bond Issuance
----------------------------------------------------------------
RJR News reports that Scotiabank recently assisted the Republic of
El Salvador to raise a total of US$1 billion by issuing a 32-year
bond to the market.
The bond was issued in an effort to bolster El Salvador's economic
response to the negative impact of the COVID-19 pandemic, according
to RJR News.
Scotiabank's Global Banking and Markets New York office acted as
Joint Bookrunner and Billing & Delivery Agent for the transaction,
the report notes.
The bonds, which have a yield of 9.5%, become due in 2052, the
report adds.
As reported in the Troubled Company Reporter-Latin America on July
13, 2020, S&P Global Ratings said it assigned its 'B-' issue rating
to El Salvador's (B-/Stable/B) US$1 billion senior unsecured notes
due in July 2052. El Salvador will use the proceeds from the
issuance for general budgetary purposes, including funding for
COVID-19 relief and recovery efforts. The rating on the notes is
the same as the long-term foreign currency sovereign credit rating
on El Salvador.
=================
G U A T E M A L A
=================
CENTRAL AMERICAN: Moody's Affirms CFR & Sr. Unsec. Rating at Ba2
----------------------------------------------------------------
Moody's Investors Service affirmed the Ba2 senior unsecured and
corporate family ratings of The Central American Bottling
Corporation. The outlook is stable.
CBC will upsize its $500 million 5.750% senior notes due 2027 by an
additional $200 million add-on. The proceeds of the add-on will be
used to refinance existing debt and for general corporate
purposes.
Assignments:
Issuer: Central American Bottling Corp. (The)
Senior Unsecured Regular Bond/Debenture, Assigned Ba2
Outlook Actions:
Issuer: Central American Bottling Corp. (The)
Outlook, Remains Stable
Affirmations:
Issuer: Central American Bottling Corp. (The)
Corporate Family Rating, Affirmed Ba2
Senior Unsecured Regular Bond/Debenture, Affirmed Ba2
RATINGS RATIONALE
CBC's Ba2 ratings reflect its adequate credit metrics and
liquidity, solid market position in its territories of operation,
ample soft beverage products portfolio, geographic diversification
and relationship with PepsiCo, Inc. (A1 stable), which has a 12%
stake in CBC and two seats on its board. The ratings also
incorporate CBC's relatively small scale compared with that of its
industry peers, the company's presence in some riskier markets and
the ongoing event risk, given its strategy to grow through
acquisitions.
CBC's operation has been only modestly affected by the Covid-19
outbreak. The soft beverage industry has deemed to be essential in
all territories where CBC operates, which allowed the company to
maintain its plants operating. Still, as many hotels and
restaurants were closed due to the pandemic, CBC's on-premise
sales, accounting for around 6% of revenues, were hurt.
Nonetheless, sales in other channels partly offset this drop and
remain relatively stable as people in quarantine continue to buy
bottled beverages.
CBC's credit metrics will be modestly affected in 2020 from the
Covid-19 outbreak but Moody's expects them to improve in 2021 as
operating conditions and economic growth recover. The company's
debt/EBITDA, as adjusted by Moody's, increased slightly to 4x as of
March 31, 2020, up from 3.7x as of December 31, 2019 mainly driven
by higher debt. Similar to other companies in Latin America and
globally, CBC withdrew $130 million from its lines of credit to
further enhance its liquidity. However, the company has been
maintaining the proceeds in cash and plans to pay down the
additional debt as operating conditions gradually recover. Moody's
estimates that CBC's adj. debt/EBITDA will decline towards 3.5x by
year end 2021 as the company reduces debt and EBITDA improves.
Similarly, Moody's estimates CBC will continue to maintain adequate
debt service coverage with adj. EBITDA/Interest expense over 3.5x
in 2021.
The company holds strong market positions in CSDs, which is its
most important product category, contributing around 43% of total
revenue. CBC has the first or second market position in CSDs in all
the countries where it operates, except for Nicaragua and Peru,
where it has the third-largest market share. According to
Euromonitor, the PepsiCo brands maintained the 2nd market position
in soft drinks in Guatemala with a 19% steady market share in
2014-19. Other competitors in Guatemala include Fabricas de Bebidas
Gaseosas Salvavidas (24% market share), Aje Group (17% market
share), and The Coca-Cola Company (14% market share). According to
Euromonitor, the soft drink market in Guatemala will grow at a
compound annual growth rate of 3.9% over 2019-24 and reach close to
3,572 million liters by 2024. CBC's strong market share, ample
product portfolio and product innovation will allow the company to
capture the growth potential in these markets.
CBC has adequate liquidity. As of March 31, 2020, the company
reported cash on hand of $225 million, which can cover 1.2x its
short-term debt. Pro-forma for the proposed $200 million add-on and
debt refinancing, CBC's cash on hand will cover by 3.3x its
short-term debt. In addition, CBC has $498 million in advised lines
of credit, out of which 74% is available as earlier this year the
company withdrew $130 million from its lines of credit to support
its liquidity throughout the Covid-19 outbreak. Similarly, to other
companies in the region, CBC plans to maintain the proceeds in cash
and repay the debt once the operating environment is less
volatile.
Pro-forma for the notes add-on, CBC will have a comfortable
long-term debt maturity profile with $25 million due 2020, $35
million due 2021, $54 million due 2022, $9 million due 2023, and
$707 million due 2027 and thereafter. The company's free cash flow
(defined as cash from operations minus dividends minus capital
spending) was hurt in 2017-19 by the high capital spending used to
increase the installed capacity in several plants and to acquire
coolers and returnable bottles. As a result, the company posted
negative free cash flow over the same period. However, Moody's
expects CBC to generate positive free cash flow in 2021 and 2020
because it concluded its high capital spending cycle and its EBITDA
will recover as the world gradually emerges from the Covid-19
pandemic.
The stable outlook incorporates an expected modest improvement in
profitability, positive free cash flow generation and a gradual
reduction in leverage over the next couple of years.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
An upgrade could be triggered as a result of an increase in CBC's
size while it maintains debt/ EBITDA below 2.5x. In addition, the
company would need to generate free cash flow/debt of at least 15%
on a sustained basis.
A downgrade could be triggered if credit metrics deteriorate
materially, for example, as a result of an acquisition or because
of negative results in the markets in which CBC operates. An EBIT
margin lower than 5%, debt/EBITDA above 4.5x or retained cash
flow/net debt below 12% on a sustained basis could lead to a
downgrade.
The principal methodology used in these ratings was Global Soft
Beverage Industry published in January 2017.
CBC has been the anchor bottler of PepsiCo in Central America since
1998. CBC has 17 bottling facilities with a capacity to produce
over 900 million-unit cases and has over 700,000 points of sale.
The company's largest market is Guatemala where it generates 39% of
its revenues, followed by Ecuador (16%). The company also operates
in El Salvador, Puerto Rico, Peru, Honduras, Jamaica and Nicaragua.
CBC also exports its products to over 32 countries including the
US, Mexico, Colombia, Costa Rica, Panama, Dominican Republic, the
UK and Senegal, among others. The company reported revenues of $1.7
billion and EBITDA of $244 million over the twelve months ended
March 31, 2020.
===========
M E X I C O
===========
GRUPO AEROMEXICO: U.S. Trustee Appoints Creditors' Committee
------------------------------------------------------------
The U.S. Trustee for Region 2 appointed a committee to represent
unsecured creditors in the Chapter 11 cases of Grupo Aeromexico,
S.A.B. de C.V. and its affiliates.
The committee members are:
1. The Bank of New York Mellon, as Indenture Trustee
Corporate Trust, Default Administration Group
240 Greenwich Street, Floor 7 East
New York, NY 10286
Attention: Mr. David M. Kerr
Tel: 973.715.0195
Email: david.m.kerr@bnymellon.com
2. Asociacion Sindical de Pilotos Aviadores
Palomas 110 1ER Piso Reforma Social
CDMX, Miguel Hidalgo 11650 MEXICO
Attn.: Santiago Lopez Cadena
Tel: 52.55.1224.0012
Email: santiagolopezcad@gmail.com
-- and --
Attn: Francisco Eduardo Gomez Ortigoza Gonzalez
Tel: 52.55.8548.3855
Email: avioneto@hotmail.com
3. Nordic Aviation Capital
401 E. Las Olas Blvd., 17th Floor
Fort Lauderdale, FL 33301
Attn: Mr. Philip M. Bolger
Tel: 802.310.0114
Email: PHB@NAC
4. Falko Regional Aircraft Limited
1 Bishop Square, St. Albans Rd. West,
Hatfield, AL10 9NE, United Kingdom
Attn.: Mr. Marcus Rowley
Tel: 44.1707.25516
Email: marcus.rowley@falko.com
5. General Electric Company
3135 Easton Turnpike
Fairfield, CT 06828
Attn.: T. Kellan Grant, Esq.
Tel: 513.243.0880
Email: kellan.grant@ge.com
6. World Fuel Services, Inc.
9800 N.W. 41st St.
Miami, FL 33178
Attn: Mr. Richard D. McMichael
Tel: 305.428.8233
Email: rmcmichael@wfscorp.com
7. Sabre GLBL Inc.
3150 Sabre Drive
Southlake, TX 76092
Attn.: Jane Ann Neiswender, Esq.
Tel: 817.233.8759
Email: janeann.neiswender@sabre.com
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 Grupo Aeromexico
Grupo Aeromexico, S.A.B. de C.V. -- https://www.aeromexico.com/ --
is a holding company whose subsidiaries are engaged in commercial
aviation in Mexico and the promotion of passenger loyalty
programs.
Aeromexico, Mexico's global airline, has its main hub at Terminal
2 at the Mexico City International Airport. Its destinations
network features the United States, Canada, Central America, South
America, Asia and Europe.
Grupo Aeromexico and three of its subsidiaries sought Chapter 11
protection (Bankr. S.D.N.Y. Lead Case No. 20-11563) on June 30,
2020. In the petitions signed by CFO Ricardo Javier Sanchez
Baker,
the Debtors reported consolidated assets and liabilities of $1
billion to $10 billion.
Timothy Graulich, Esq., of Davis Polk and Wardell LLP, serves as
counsel to the Debtors.
=====================
P U E R T O R I C O
=====================
J.C. PENNEY: Creditors' Committee Hires Cooley LLP as Co-Counsel
----------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed to the
Chapter 11 cases of J.C. Penney Company, Inc. and its debtor
affiliates seeks approval from the U.S. Bankruptcy Court for the
Southern District of Texas to employ Cooley LLP as co-counsel to
the Committee effective as of May 29, 2020.
Cooley will perform the following services to the Committee:
(a) attend the meetings of the Committee;
(b) review financial and operational information furnished by
the Debtors to the Committee;
(c) analyze and negotiate the budget and the terms and use of
the Debtors' debtor-in-possession financing;
(d) assist in the Debtors' efforts to market and sell their
assets in a manner that maximizes value for creditors;
(e) assist the Committee in negotiations with the Debtors and
other parties-in-interest on the Debtors' proposed chapter 11 plan
and/or exit strategy for these chapter 11 cases;
(f) confer with the Debtors' management, counsel, and
financial advisor and any other retained professional;
(g) confer with the principals, counsel, and advisors of the
Debtors' lenders and equityholders;
(h) advise the Committee as to the ramifications regarding
all
of the Debtors' activities and motions before this Court;
(i) review and analyze the Debtors' financial advisors' work
product and report to the Committee;
(j) investigate and analyze certain of the Debtors'
prepetition conduct, transactions, and transfers;
(k) provide the Committee with legal advice in relation to
these chapter 11 cases;
(l) prepare various pleadings to be submitted to the Court for
consideration; and
(m) perform such other legal services for the Committee as may
be necessary or proper in these proceedings.
Cooley will coordinate with co-counsel Cole Schotz P.C. to avoid
unnecessary duplication of services rendered on behalf of the
Committee.
Cooley's attorneys and paralegals primarily responsible for
representing the Committee, and their current customary hourly
rates are:
Jay R. Indyke, Partner $1,400
Cathy Hershcopf, Partner $1,250
Richard Kanowitz, Partner $1,250
Philip Bowman, Partner $1,200
Jonathan Kim, Partner $1,075
Michael Klein, Special Counsel $1,015
Summer McKee, Associate $970
Lauren Reichardt, Associate $970
Evan Lazerowitz, Associate $875
Paul Springer, Associate $800
David Fleischer, Paralegal $450
Mollie Canby, Paralegal $300
In addition, Cooley will charge the Committee for out-of-pocket
expenses incurred related to the representation.
Cooley did not receive a retainer with respect to this
representation.
The following is provided in response to the request for additional
information set forth in Paragraph D.1. of the U.S. Trustee
Guidelines:
Question: Did you agree to any variations from, or alternatives to,
your standard or customary billing arrangements for this
engagement?
Response: No.
Question: Do any of the professionals included in this engagement
vary their rate based on the geographic location of the bankruptcy
case?
Response: No.
Question: If you represented the client in the 12 months
prepetition, disclose your billing rates and material financial
terms for the prepetition engagement, including any adjustments
during the 12 months prepetition. If your billing rates and
material financial terms have changed post-petition, explain the
difference and the reasons for the difference.
Response: Cooley has not represented the client in the 12 months
prepetition. Cooley currently represents, or in the past 12 months
has represented, and/or may represent in the future certain
Committee members and/or their affiliates in their capacities as
official committee members in other chapter 11 cases, all of which
involve matters wholly unrelated to the Debtors and these chapter
11 cases.
Question: Has your client approved your prospective budget and
staffing plan, and, if so, for what budget period?
Response: Yes. For the period from May 29, 2020 through August 31,
2020.
Jay R. Indyke, a partner of the law firm of Cooley LLP, disclosed
in court filings that the firm is a "disinterested person" as that
term is defined in section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Jay R. Indyke, Esq.
COOLEY LLP
55 Hudson Yards
New York, NY 10001-2157
Telephone: (212) 479-6080
Facsimile: (212) 479-6275
E-mail: jindyke@cooley.com
About J.C. Penney Company
J.C. Penney Company, Inc., one of the U.S.'s largest department
store operators with about 1,100 locations in the United States and
Puerto Rico, and its debtor affiliates filed their voluntary
petitions for relief under Chapter 11 of the Bankruptcy Code
(Bankr. S.D. Tex. Case No. 20-20182) on May 15, 2020. Judge David
R. Jones oversees the cases. Debtors tapped Kirkland & Ellis LLP
and Kirkland & Ellis International LLP as their counsel, Jackson
Walker LLP as their local and conflicts counsel, and KPMG LLP as
tax consultant.
The Official Committee of Unsecured Creditors appointed to these
Chapter 11 cases tapped Cooley LLP and Cole Schotz P.C. as
co-counsels and FTI Consulting, Inc. as financial advisor.
PUERTO RICO: Implements More Measures Over Increase in COVID Cases
------------------------------------------------------------------
The Latin American Herald reports that Puerto Rico Gov. Wanda
Vazquez disclosed that island authorities will implement further
restrictive measures due to the recent increase in coronavirus
cases and hospitalizations, once again closing gyms, movie
theaters, bars and casinos and preventing the sale of alcoholic
beverages starting at 7:00 pm.
A curfew will be in effect from 10:00 pm until 6:00 am and everyone
age 20-29 will have to remain in their homes, as much as possible,
given that this is the cohort of the population hardest hit by the
virus in recent weeks, according to The Latin American Herald.
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.
=================
V E N E Z U E L A
=================
VENEZUELA: Economic Survival is Top of Mind for Venezuelans
-----------------------------------------------------------
EFE News reports that three neighbors chat at the door of Rene
Solarte's home, just as they would on any other day in Catia, a
poor neighborhood on the Venezuelan capital's west side.
Hundreds of nearby fellow street vendors crowd around him as if the
pandemic were now nothing more than a bad dream. Like the majority
of Venezuelans--including those with salaried positions who must
supplement their income with informal work--Solarte has no choice
but to continue to eke out a living on the street, according to EFE
News.
"How can I stay at home? I have to go out. If I don't, how do I
survive?" he told Efe.
The idea of a quarantine only elicits a wry smile from Solarte,
visible underneath a makeshift mask that covers half of his face
but is of dubious quality, notes the report. He can't be totally
cavalier, however, because police officers patrol the streets in an
attempt to enforce compliance with the country's
coronavirus-triggered lockdown.
When they approach his part of the neighborhood, Solarte hides his
merchandise--garlic cloves, ginger and papelon (whole cane
sugar)--and scurries away with the other vendors. They'll go home
empty-handed if the authorities catch them and remove their
products, EFE says.
According to the report, in Caracas, like in much of Latin America,
a large portion of the population lives hand to mouth. The
difference is that seven years of economic recession and a sky-high
inflation rate have drastically reduced the purchasing power of
salaried workers and forced them to seek out additional income to
make ends meet.
Solarte must go every day before dawn to a wholesale market and buy
a selection of products that he hopes to sell later. He needs to
subsist on the roughly $10 he earns daily. There is no other
alternative, EFE relates.
The situation is equally challenging for people like Alexander
Pita, the owner of a formal fruit shop in Catia who provided cover
to the group of vendors hiding from the police.
"It's been extremely difficult because people are living day to
day, and (fruit) is a very delicate product. They let us work a
half day . . . There are days that it's 9 am and they force you to
close. A lot of merchandise here goes bad and there's no one who's
going to replace it," he said in a store that lacks refrigeration
and is practically devoid of products, reports EFE.
Pita speaks for many Venezuelans when he says the four-month-long
quarantine, which has been eased in recent weeks under a system of
alternating lockdowns and economic openings, feels like an
eternity.
According to official figures, more than 10,000 people have been
infected with the novel coronavirus in that South American country,
including governors, mayors and other high-ranking officials, and a
total of 96 deaths have been attributed to Covid-19, EFE relays.
Elsewhere in the city, middle-class Venezuelans, those with a
stable monthly income that covers their expenses, walk along the
downtown Sabana Grande boulevard during a 72-hour
government-imposed pause in the country's strict quarantine.
Juana Llanes, a nurse who was enjoying the start of her vacation
after four months of hard work, strolls past ice-cream shops and
appliance and clothing stores.
Although she cannot afford to live extravagantly, she does have a
level of economic security that many of her countrymen do not
enjoy, notes the report.
"We're out today, and that's because she (her niece) went to the
doctor's. (We've been) inside. We don't visit anyone. We go out to
shop and that's it. I'm on vacation at my work," the report quoted
Llanes, who took advantage of the walk to the doctor's office to
enjoy a bit of sunshine, as saying.
A fortunate few upper-class Venezuelans, meanwhile, are able to
endure the coronavirus crisis without major economic concerns.
Although luxury shopping areas like Las Mercedes have largely been
empty during the quarantine, people can be seen buying tickets at
cineplexes that operate intermittently at reduced capacity or
observing social-distancing rules at upscale grocery stores, notes
the report.
High-quality masks and gloves are abundant in Caracas' more
affluent areas, and even the occasional plastic face shield is
used. The fear of the disease is evident, but people's economic
concerns are not nearly as pressing, says the report.
Venezuela
Venezuela, officially the Bolivarian Republic of Venezuela, is a
country on the northern coast of South America, consisting of a
continental landmass and a large number of small islands and islets
in the Caribbean sea. The capital is the city of Caracas.
Hugo Chavez was president to Venezuela from 1999 to 2013. The
Chavez presidency was plagued with challenges, which included a
2002 coup d'etat, a 2002 national strike and a 2004 recall
referendum. Nicolas Maduro was elected president in 2013 after the
death of Chavez. Maduro won a second term at the May 2018
Venezuela elections, but this result has been challenged by
countries including Argentina, Chile, Colombia, Brazil, Canada,
Germany, France and the United States who deemed it fraudulent and
moved to recognize Juan Guaido as president.
The presidencies of Chavez and Maduro have challenged Venezuela
with a socioeconomic and political crisis. It is marked by
hyperinflation, climbing hunger, poverty, disease, crime and death
rates, social unrest, corruption and emigration from the country.
S&P Global Ratings, in May 2019, removed its long- and short-term
local currency sovereign credit ratings on Venezuela from
CreditWatch with negative implications and affirmed them at
'CCC-/C'. The outlook on the long-term local currency rating is
negative. At the same time, S&P affirmed its 'SD/D' long- and
short-term foreign currency sovereign credit ratings on Venezuela.
Moody's credit rating (long term foreign and domestic issuer
ratings) for Venezuela was last set at C with stable outlook in
March 2018. Meanwhile, Fitch's long term issuer default rating for
Venezuela was last in 2017 at RD and country ceiling was CC. Fitch,
on June 27, 2019, affirmed then withdrew the ratings due to the
imposition of U.S. sanctions on Venezuela.
===============
X X X X X X X X
===============
LATAM: COVID-19 Caseload Keeps Growing
--------------------------------------
The Latin American Herald reported on July 20 that in Argentina,
authorities reported 62 deaths from COVID-19 in the past 24 hours
along with 3,624 new cases, bringing the death toll to 2,112 and
the caseload to 114,783 so far, the report notes.
In Ecuador, authorities registered 71,365 confirmed COVID-19 cases
on Thursday, more than 1,000 of them detected within the past 24
hours, bringing the total caseload to 71,365 and the death toll to
5,207, with another 3,355 people "probably" having died from the
virus, the report relates.
Meanwhile, Peru reported a total caseload of 341,586 confirmed
coronavirus cases on Thursday along with a death toll of 12,615. In
the past 24 hours, 3,862 new cases have been detected and 198
people have died, the report dicloses.
In Colombia, a total of 173,206 people has been infected with
COVID-19 as of July 16, 8.037 in the past 24 hours, and the death
toll currently stands at 6,029, with 215 deaths occurring since
July 15, the report notes.
In Paraguay, another two deaths from COVID-19 were registered
overnight, raising the death toll since the virus first arrived in
the South American country to 27, according to the Health
Ministry's daily report, the report relate. Another 144 virus
cases were detected in the past 24 hours, bringing the caseload to
3,342, the report relates.
In a separate report, the Latin America Herald reported that in
Guatemala, authorities reported 48 new deaths from COVID-19, along
with 1,202 newly confirmed cases, bringing the death toll so far to
1,350 and the caseload to 32,074, the report relates.
In Costa Rica, Health Minister Daniel Salas reported 504 new
coronavirus cases and three deaths in the past 24 hours, bringing
the caseload so far to 8,986 and the death toll to 40, with the
most recent 10 fatalities occurring since July 13, the report
relates. At the current infection rate, the health care system
will collapse by Aug. 14 if measures to limit the spread of
COVID-19 are not complied with, according to the president of the
National Emergency Commission, Alexander Solis, who added that the
average number of new cases being detected per day is 464, the
report adds.
In Mexico, the government officially thanked the United Arab
Emirates for its support in helping the country deal with the
coronavirus pandemic by contributing medical supplies, the report
note. A specially arranged Etihad airlines flight arrived in
Mexico with some 155,000 N95 facemasks, 125,000 doses of
immunoglobin, 350,000 surgical gloves and assorted other supplies
donated by the UAE, the report adds
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Latin America is a daily newsletter
co-published by Bankruptcy Creditors' Service, Inc., Fairless
Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C.,
USA, Marites O. Claro, Joy A. Agravante, Rousel Elaine T.
Fernandez, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A.
Chapman, Editors.
Copyright 2020. All rights reserved. ISSN 1529-2746.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.
Information contained herein is obtained from sources believed to
be reliable, but is not guaranteed.
The TCR Latin America subscription rate is US$775 per half-year,
delivered via e-mail. Additional e-mail subscriptions for members
of the same firm for the term of the initial subscription or
balance thereof are US$25 each. For subscription information,
contact Peter A. Chapman at 215-945-7000.
.
* * * End of Transmission * * *