/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/200727.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 27, 2020, Vol. 21, No. 149 Headlines A R G E N T I N A ARGENTINA: Fails in Bid to Halt EUR645MM UK Suit Over GDP Warrants B A H A M A S SANDALS EMERALD: To Reclose as Country Bans US Visitors B R A Z I L BRAZIL: Figures Undercut Claim of Progress Against Covid-19 D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: Extension for PHASE & Financing for SMEs Sought DOMINICAN REPUBLIC: Gyms Ask Gov't. Not to Close Their Doors DOMINICAN REPUBLIC: Revenue Drops 14.3% to US$4.8 Billion E C U A D O R ECUADOR: S&P Affirms CCC- Rating on Social Housing Notes H O N D U R A S BANCO ATLANTIDA: Fitch Affirms B+ LT IDR, Alters Outlook to Neg. X X X X X X X X LATAM: ECLAC Seeks Urgent Regional Cooperation to Avert Food Crisis [*] BOND PRICING: For the Week July 20 to July 24, 2020 - - - - - ================= A R G E N T I N A ================= ARGENTINA: Fails in Bid to Halt EUR645MM UK Suit Over GDP Warrants ------------------------------------------------------------------ Karin Strohecker and Rodrigo Campos at Reuters report that Argentina has lost an attempt to halt a lawsuit in English courts brought by four hedge funds which say the country has manipulated economic data to avert payments in connection with growth-linked sovereign debt instruments. Asset managers Palladian Partners L.P., HBK Master Fund L.P, Hirsh Group LLC and Virtual Emerald International Limited said they are owed from EUR525 million-645 million in payments linked to the GDP warrants designed to pay out to investors if a number of growth criteria targets are met or exceeded, according to Reuters. The funds allege that a change in statistics published by Argentina had resulted in the instruments', which were issued in 2005 and 2010 as part of a debt restructuring, no longer qualifying for payout, the report notes. The government said it had to change the way it measured gross domestic product as the previous way of doing so no longer accurately reflected the country's economy, the report relates. Judge Sara Cockerill in a ruling handed down at the High Court in London dismissed Argentina's application to halt proceedings, paving the way for a full trial to go ahead, the report discloses. In January, a U.S. judge dismissed a lawsuit filed in 2019 by New York-based hedge fund Aurelius Capital against Argentina, also related to an alleged payment shortfall linked to 2013 GDP warrants the report adds. About Argentina Argentina is a country located mostly in the southern half of South America. It's capital is Buenos Aires. Alberto Angel Fernandez is the current president of Argentina after winning the October 2019 general election. He succeeded Mauricio Macri in the position. Argentina has the third largest economy in Latin America. The country's economy is an upper middle-income economy for fiscal year 2019 according to the World Bank. Historically, however, its economic performance has been very uneven, with high economic growth alternating with severe recessions, income maldistribution and in the recent decades, increasing poverty. As reported by the Troubled Company Reporter - Latin America on April 14, 2020, Fitch Ratings upgraded Argentina's Long-Term Foreign Currency Issuer Default Rating to 'CC' from 'RD' and Short-Term Foreign Currency IDR to 'C' from 'RD'. The TCR-LA reported on April 13, 2020, that S&P Global Ratings also lowered its long- and short-term foreign currency sovereign credit ratings on Argentina to 'SD/SD' from 'CCC-/C'. S&P also affirmed the local currency sovereign credit ratings at 'SD/SD'. There is no outlook on 'SD' ratings. On April 9, the TCR-LA reported that Moody's Investors Service downgraded the Government of Argentina's foreign-currency and local-currency long-term issuer and senior unsecured ratings to Ca from Caa2. ============= B A H A M A S ============= SANDALS EMERALD: To Reclose as Country Bans US Visitors ------------------------------------------------------- RJR News reports that Sandals Emerald Bay in Great Exuma in the Bahamas will be closing its doors, three weeks after reopening and welcoming guests for the first time since the COVID-19 pandemic. The Nassau Guardian is reporting that the closure is a result of Prime Minister Dr. Hubert Minnis's recent announcement that commercial flights from the United States carrying passengers would not be permitted to enter the country, according to RJR News. The United States is the resort's primary market for guests, the report notes. While Sandals Royal Bahamian on New Providence delayed its reopening to November 1, the hotel chain opened Emerald Bay on July 2, the report adds. =========== B R A Z I L =========== BRAZIL: Figures Undercut Claim of Progress Against Covid-19 ----------------------------------------------------------- EFE News reports that Brazilian authorities say they have flattened the curve of Covid-19 infections, but figures released by the health ministry show the second-largest increase in cases in a single day since the virus appeared in this Latin American nation of 210 million. The number of people testing positive for coronavirus climbed by 59,961 to reach 2.28 million, while the death toll increased by 1,311 to surpass 84,000, according to EFE News. The latest figure represents some improvement, when the health ministry reported 67,780 new infections over the previous 24 hours, the report relays. Brazil trails only the United States in both cases and fatalities. More than 1.57 million Brazilians have recovered from Covid-19, according to the health ministry, which calculates the mortality rate from the illness at roughly 40 per every 100,000 people, the report points out. A few days ago, the World Health Organization said that the pandemic appeared to have reached its apogee in Brazil, with an end to the stretch of exponential growth in contagion, the report discloses. Yet even Brazilian officials have expressed concern that infections may surge as the Southern Hemisphere winter takes hold in the temperate regions of the country, the report relates. The report notes that during a visit to Curitiba, capital of the southern state of Parana, where cases have multiplied in recent weeks, interim Health Minister Eduardo Pazuello called the onset of winter "the most critical moment for serious acute respiratory syndromes." Despite the worrisome numbers, the gradual re-opening of the economy continues across Brazil with encouragement from President Jair Bolsonaro, himself infected with Covid-19, the report points out. The right-wing leader tested positive July 7 and a second test done found that he still has the virus, the report relates. Since being diagnosed, Bolsonaro has isolated himself inside the presidential palace, conducting official business via teleconference, the report relays. Though he claims to be observing quarantine, the president remains nonchalant about the threat posed by the pandemic, the report discloses. Bolsonaro rode a motorcycle inside the palace grounds in Brasilia, stopping at one point to chat with maintenance workers, the report points out. When he took off his helmet, it was apparent that he wasn't wearing a mask, the report adds. At dusk, the president came outside to the palace gardens to watch the daily flag-lowering ceremony, the report relays. He took the opportunity to talk with supporters, separated from the grounds by a narrow stream, cracking jokes and reaffirming his conviction that "sooner or later, everyone will catch" Covid-19, the report adds. 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. =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: Extension for PHASE & Financing for SMEs Sought ------------------------------------------------------------------- Dominican Today reports that extending the Employee Solidarity Assistance Fund (FASE) program, expanding the range of options and access to financing, as well as reviewing and updating the current legislation related to the Labor Code and Bankruptcy Law are part of the initiatives that must be implemented in the country to support small and medium-sized enterprises (SMEs). The statement was made by the Vice Minister of Development for SMEs of the Ministry of Industry and Commerce and MSMEs, Ignacio Mendez, who spoke at the event "SMEs: successful transit to a new normal," organized by the American Chamber of Commerce of the Dominican Republic (AmchamDR), according to Dominican Today. The official also stressed the importance of removing obstacles and promoting the transition from informality to formality, so that SMEs that are not regulated can be inserted into the national productive apparatus, the report notes. In this sense, he highlighted the need to provide close support so that these businesses can adopt and use new technologies to enhance their commercial management, the report relates. Digital Transformation Mendez said that the COVID-19 pandemic accelerated the transformation process so that small and medium-sized companies embrace the digital culture and break technological gaps, the report discloses. He also outlined that small and medium-sized companies have a high dependence on cash flow, low use of technology in their businesses, and disruption in the supply chain, but they will have flexibility, resilience, and new business opportunities if they open up to the digital economy, the report relates. 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: Gyms Ask Gov't. Not to Close Their Doors ------------------------------------------------------------ Dominican Today reports that the industry of gyms and sports and wellness centers asked the High-Level Commission for the management of this crisis by COVID-19 to define a formal protocol of requirements for its operation with the participation of experts due to the importance of these centers in strengthening the immune system. "The nature of our economic activity plays a role of special importance at this time, as it has been shown that regular physical activity contributes to strengthening the immune system, preventing high-risk conditions for the disease, such as hypertension, obesity, diabetes, among others; and the decrease in the level of stress caused by confinement, something unprecedented for current generations," said the representatives of these businesses, according to Dominican Today. Owners of these businesses agree to apply a formal protocol and that audits be carried out to verify compliance with the measures, the report notes. In a press release, they said that they are willing to put in place a formal inspection and audit process so that their physical facilities and operating models of each company are evaluated, allowing those who meet the requirements for distance, ventilation to operate, air conditioning, and hygiene necessary to offer society safe environments for physical activity, the report discloses. They regretted that since the closure of operations, for four months, they have had a devastating financial and labor effect for the industry, without having fiscal protection measures or access to special financing conditions, the report relays. "Today, we are facing a new decision to close by the authorities with no defined time horizon, which places us in a much more dramatic and unsustainable situation, which puts the jobs of thousands of people at risk," they indicated, the report points out. They clarified that they have made considerable investments in the adequacy of their operating models and in the strengthening of the rules of physical distance and hygiene, the report notes. Business The statement is signed by Golds Gym, Club Body Shop, Smart Fit, Spex, Exercise, OrangeTheory, Workout, Title, CoActice, and Biomotion, 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 14.3% to US$4.8 Billion --------------------------------------------------------- Dominican Today report that Budget Directorate (Digepres) data indicate that for the first half of the year the treasury received about RD$285.5 billion (US$4.8 billion)) in income, which was less than half of what the government calculated in the supplementary budget recently approved by Congress. The accumulated income registered in the first six months means a 14.3% drop, according to Dominican Today. Only in June, the year-on-year decrease was 25%, when registering revenue of RD$41.1 billion, according to official data, the report notes. In the Complementary Budget approved recently, a new tax revenue goal of RD$673.2 billion was defined at the end of this year, the report relates. However, the tax revenue received in the first half of the year only represents 42% of the money estimated by the authorities in the reformulated budget, the report discloses. The main income that the country received between January and June this year was from ITBIS (VAT), about RD$88.8 billion, while companies received RD$33.9 billion pesos from income tax, the report relates. 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: S&P Affirms CCC- Rating on Social Housing Notes -------------------------------------------------------- S&P Global Ratings affirmed its 'CCC-' issue rating on Ecuador's social housing notes due 2035 and removed it from CreditWatch negative, where it had placed it on March 25, 2020. There is no outlook on this issue rating. The 'SD' (selective default) foreign and local currency sovereign credit ratings on Ecuador remain unchanged. Ecuador formally presented its restructuring offer on its foreign-law bonds on July 20, 2020. The proposal consists of exchanging 10 global bonds, with an outstanding face value of US$17.4 billion, for three new securities maturing in 2030, 2035, and 2040, and a zero coupon bond due 2030. The offer includes net present value losses for bondholders of the eligible bonds because it entails a reduction in principal and interest payments and extension of maturities. The specifics of the proposal, coupled with the stressed economic and financial conditions in the country, are consistent with its view of it as a distressed exchange and tantamount to default, according to S&P's methodology. However, this offer does not apply to the social housing notes due 2035. S&P's understanding is the government intends to pay these notes in a timely manner. To that end, on July 20, the government issued another consent solicitation to remove the cross-default clauses in the social notes--which does not alter their debt service payment profile or the guarantor's guarantee. The first US$14 million coupon on these notes issued in January 2020 is due July 30. S&P is removing the rating from CreditWatch given the consent solicitation and expectations of timely payment. Ratings List Ratings Unchanged Ecuador Sovereign Credit Ratin SD/--/SD Senior Unsecured D Ratings Affirmed; Off CreditWatch To From Ecuador Senior Unsecured Social housing notes due 2035 CCC- CCC-/Watch Neg =============== H O N D U R A S =============== BANCO ATLANTIDA: Fitch Affirms B+ LT IDR, Alters Outlook to Neg. ---------------------------------------------------------------- Fitch Ratings has affirmed Banco Atlantida, S.A.'s Long-Term Issuer Default Ratings at 'B+'. Fitch also affirmed Atlantida's Viability Rating at 'b+' and its National Ratings at 'A+(hnd)' and 'F1(hnd)'. The Ratings Outlook on the LT ratings was revised to Negative from Stable. Fitch withdrew the USD350 million senior unsecured notes international rating of 'B+(EXP)'/'RR4', and published the National Rating of 'A+(hnd)' to the outstanding senior unsecured notes issued in the local capital market Bonos Bancatlan 2016. Fitch has placed both Inversiones Atlantida, S.A. y Subsidiarias's LT and Short-Term IDRs, each at 'B', and the USD150 million senior secured notes 'B'/'RR4' on Rating Watch Negative. The LT and ST National Ratings of Invatlan's subsidiaries, Leasing Atlantida, S.A. and Inversiones Financieras Atlantida, S.A., were also placed on RWN. The Negative Outlook on Atlantida LT IDRs and National Rating reflects the increased downside risks from the economic implications of the coronavirus pandemic, which has resulted in an adjustment of the Outlook for the operating environment score to Negative from Stable. Fitch believes that although the ultimate impact of the weaker economic conditions is yet unclear; this could materially affect the banks' financial performance. Invatlan's RWN reflects the delay in the delivery of the audited 2019 financial information due to operational issues with the external auditor derived from the pandemic, according to management. This has also affected the generation of intermediate financial statements. Fitch considers this lack of clarity as adding uncertainty in the assessment of Invatlan's attributes, specifically its financial profile, and could impact Fitch's assessment of support from its main subsidiary, which is a regulated entity. It is expected these statements will be ready in July 2020. The RWN indicates that the ratings could be downgraded if the entity does not finalize its audited statements. Fitch would not expect resolution of the RWN to extend beyond the usual six-month period for review. Invatlan's subsidiaries' RWNs reflect its parent company's RWN. Fitch expects to resolve these RWNs once Invatlan's RWN is resolved. Atlantida's expected senior global notes international rating and Recovery Rating, 'B+(EXP)'/'RR4', are withdrawn as Atlantida is not planning to issue them. KEY RATING DRIVERS ATLANTIDA IDRS, VR AND SENIOR DEBT The bank's IDRs and National ratings are driven by its intrinsic creditworthiness as reflected in its VR of 'b+'. Atlantida's ratings continue to be highly influenced by the Honduran operating environment and its company profile. The VR is moderately influenced by an asset quality and profitability that could face pressures in the medium and long term, along with a limited capitalization that could also be pressured. The stable and diversified funding profile of the bank was considered as well in the VR. Atlantida's leading local franchise and a consolidated business model have enabled it to sustain a stable financial performance over the business cycle. As of March 2020 (1Q20), Atlantida was the largest bank in Honduras in terms of both loan portfolio and customer deposits, with a participation of around 20% in each one. Even with these features, Atlantida is small on a global basis. Atlantida's asset quality is pressured given the challenging economic environment. As of 1Q20, Atlantida's NPL ratio increased to around 2.7%, comparing above its last 4 fiscal years average (2.4%), and below some regional peers. Debtors' concentration remains high by international standards. The top 20 borrowers represented 2.7x of Atlantida's Fitch Core Capital, which is a material risk exposure in case of unexpected impairments of its largest debtors and given the lower reserve coverage. This coverage decreased to 117% as of 1Q20 (system average: 183%) from 145% as of December 2019. In terms of metrics, the effective recognition of asset quality deterioration could be delayed due to the implementation of the regulatory measures. The bank's profitability has decreased during 1Q20 following a recently favorable trend. As of March 2020, its operating profit to risk-weighted assets reached a minimum in the periods analyzed (1.73%; December 2019: 2.13%), reflecting higher credit costs, and despite a controlled operating efficiency and an improved Net Interest Margin. Under the challenging scenario, Fitch expects Atlantida's to face pressures on its profitability due to credit contraction as well as from higher credit costs. Atlantida's funding structure reflects its solid franchise and ample branch network in the country as the customer deposit base increases over time and constitutes its key funding source. Atlantida's loan-to-deposits ratio remains below 100% and decreasing due to the relatively accelerated deposits expansion against the loan portfolio. Fitch maintains that the bank's exposure to liquidity risk is mitigated by its historical deposit stability, a wide access to alternative funding sources and material liquid assets. Fitch believes sector wide deferment payment measures for loans facing difficulties as a result of the crisis could relieve some asset quality and loan loss reserve pressures in the near term; however, longer-term effects on the asset quality and recognition of losses remain a risk for banks. The bank's FCC-to-RWA ratio continued its drop, declining to 9.44% as of March 2020. This capitalization is still commensurate to the 'B' category range. According to management, a capital injection is planned for 2020 in order to comply with stricter capital regulatory requirements. This is due to be discussed at the bank's shareholder meeting, which is delayed because of the pandemic. Under a slower internal capital generation for 2020 and asset quality deterioration, Fitch considers the bank's capital position would be under pressure to absorb unexpected losses amid the coronavirus fallout. In that regard, size and timing of any capital injection are of importance. Fitch is publishing the National Rating of 'A+(hnd)' to the outstanding senior unsecured notes issued in the local capital market Bonos Bancatlan 2016. Atlantida has an ESG credit relevance score of 4 for Governance driven by an organizational structure that is more complex than other issuers. This has a negative impact on the credit profile, and is relevant to the ratings in conjunction with other factors. SUPPORT RATING AND SUPPORT RATING FLOOR Atlantida's Support Rating of '5' and Support Rating Floor of 'NF' reflect Fitch's belief that despite the bank's sizable market share in deposits, it cannot rely on external support due to Honduras' limited ability to provide such support. INVATLAN IDRS AND SENIOR DEBT Invatlan's IDRs reflect the creditworthiness of its main subsidiary, Atlantida, rated 'B+'. Invatlan, with operations in Honduras, El Salvador and Nicaragua, has continued with its geographical business expansion plan. On June 2020, Invatlan announced the acquisition of a 55% stake in Grupo Accival, financial non-banking group domiciled in Ecuador. This transaction also includes a financial advisory company in Peru. The amount of this deal represents less than 2% of Invatlan's September 2019 total assets, and will be financed by Invatlan's cash. When incorporating the Ecuadorian operation, Fitch estimates that the double leverage ratio would remain above 120% (127%). Grupo Accival's business model is based on asset management and brokerage services. Grupo Accival (now, Grupo Sur Atlantida) is comprised of five companies with the following business lines: brokerage, asset management and financial advisory. The most representative company is Atlantida Casa de Valores, with more than 10 years' operating in the brokerage business in Ecuador. It has consolidated as a leading brokerage house in that market. The USD150 million senior secured notes rating, 'B'/'RR4', is also placed on Rating Watch Negative as these follow Invatlan's IDRs. LEASING ATLANTIDA and IFA Leasing Atlantida and IFA's ratings reflect Invatlan's propensity and ability to support them subsidiaries if needed. In Fitch's view, both entities are a key and integral part of Invatlan's diversified financial business model as well as expanding its geographic scope. Moreover, a clear branding identification among these entities with Invatlan and the rest of subsidiaries, and the reputational risk at which they would be exposed in the case of potential financial difficulties in Leasing Atlantida or IFA ultimately result in a high probability of direct or indirect support by Invatlan, should it be required. RATING SENSITIVITIES Factors that could, individually or collectively, lead to a negative rating action/downgrade: ATLANTIDA IDRs, VR, National Ratings and Senior Debt -- Atlantida's IDRs are sensitive to changes in the Honduras's operating environment. A prolonged and severe economic disruption from the coronavirus pandemic could lead to a lower operating environment score for Honduras's banks, which would pressure the Atlantida's VR and National Ratings; -- Downgrades in Atlantida's VR and National Ratings could also come from significant pressure on the bank's financial profile, due to the weakening in economic activity, such as a relevant deterioration in asset quality or profitability combined with a sustained fall of the Fitch core capital to risk weighted assets ratio to below 8.5%. -- The bank's national LT-senior unsecured debt is sensitive to changes in Atlantida's National LT-rating. SR AND SRF -- Because these are the lowest levels in the respective scale, there is no downside potential for these ratings. INVATLAN IDRs AND SENIOR DEBT -- Fitch could resolve the Rating Watch Negative and downgrade Invatlan's ratings if there is no availability of 2019 audited financial statements, or if there is any other issue with transparency and quality of information, causing opacity in Invatlan's financial profile; -- Invatlan's ratings will likely move in line with those of its main subsidiary, Atlantida; -- A significant reduction on dividend transfers from Invatlan's main subsidiaries which ultimately affect its liquidity to service debt; -- The global senior secured debt rating would mirror any change to Invatlan's IDRs. LEASING ATLANTIDA and IFA National Ratings -- A negative change in the capacity or propensity of Invatlan to provide support could pressure Leasing Atlantida and IFA creditworthiness. Factors that could, individually or collectively, lead to a positive rating action/upgrade: ATLANTIDA IDRs, VR, National Ratings and Senior Debt -- Given Atlantida's current ratings, there is limited upside potential; -- A positive change on Fitch operating environment assessment; -- The Negative Rating Outlook on Atlantida's ratings would be revised to Stable if the operating environment assessment is maintained in the 'b' range, and its Outlook changed to Stable, while credit metrics remain at pre-crisis levels or recover rapidly; -- Atlantida's VR and National Ratings could be upgraded if the bank shows a sustained improvement in capital and profitability metrics, which would be materialized in a FCC-to-RWA ratio standing above 10% and an operating profitability to RWA ratio consistently above 2%, respectively. -- The bank's national LT senior unsecured debt is sensitive to changes in Atlantida's National LT-rating. SR AND SRF -- Honduras's propensity or ability to provide timely support to Atlantida is not likely to change given the operating environment's structural weaknesses. As such, the SR and SRF have limited upside potential. INVATLAN IDRs AND SENIOR DEBT -- Given Atlantida's current ratings, there is limited upside potential; -- Invatlan's IDRs could be upgraded by one notch if the company's double-leverage ratio remains consistently below 120% resulting from a continued expansion financed by capital injections; -- The global senior secured debt rating would mirror any change to Invatlan's IDRs. LEASING ATLANTIDA and IFA National Ratings -- There is limited upside potential for Leasing Atlantida and IFA's national ratings. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Financial Institutions and Covered Bond 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 four 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. SUMMARY OF FINANCIAL ADJUSTMENTS Pre-paid expenses and other deferred assets were classified as intangibles and deducted from Fitch Core Capital to reflect its low absorption capacity. 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 Invatlan's IDRs are linked to Banco Atlantida's IDRs. Leasing Atlantida's ratings are linked to Invatlan's ratings. IFA's ratings are linked to Invatlan's ratings. ESG CONSIDERATIONS Banco Atlantida S.A.: Group Structure: 4 Atlantida has an ESG credit relevance score of 4 for Governance driven by an organizational structure more complex than other issuers. This has a negative impact on the credit profile, and is relevant to the ratings in conjunction with other factors. Except for the matters discussed, the highest level of ESG credit relevance, if present, is a score of 3 - ESG issues are credit neutral or have only a minimal credit impact on the entity(ies), either due to their nature or the way in which they are being managed by the entity(ies). Banco Atlantida S.A. - LT IDR B+; Affirmed - ST IDR B; Affirmed - LC LT IDR B+; Affirmed - LC ST IDR B; Affirmed - Natl LT A+(hnd); Affirmed - Natl ST F1(hnd); Affirmed - Viability b+; Affirmed - Support 5; Affirmed - Support Floor NF; Affirmed - Senior unsecured; LT WD; Withdrawn - Senior unsecured; Natl LT; A+(hnd) Inversiones Atlantida S.A. - LT IDR B; Rating Watch On - ST IDR B; Rating Watch On - LC LT IDR B; Rating Watch On - LC ST IDR B; Rating Watch On - Senior secured; LT B; Rating Watch On Inversiones Financieras Atlantida, S.A. - Natl LT EA+(slv); Rating Watch On - Natl ST F1(slv); Rating Watch On Leasing Atlantida, S.A. - Natl LT A(hnd); Rating Watch On - Natl ST F1(hnd); Rating Watch On =============== X X X X X X X X =============== LATAM: ECLAC Seeks Urgent Regional Cooperation to Avert Food Crisis ------------------------------------------------------------------- The Executive Secretary of the Economic Commission for Latin America and the Caribbean (ECLAC), Alicia Barcena, urged the region's countries to implement urgent cooperation beyond the pandemic and foster greater productive, trade and social integration, during a virtual conference held under the organization of the Community of Latin American and Caribbean States (CELAC) and the regional office of the Food and Agriculture Organization of the United Nations (FAO) for Latin America and the Caribbean. Other participants in the webinar entitled Multilateral Action to Prevent the Health Crisis from Becoming a Food Crisis included Marcelo Ebrard, Secretary of Foreign Affairs of Mexico, in its capacity as President Pro Tempore of CELAC; Joseph Cox, Assistant Secretary-General of the Caribbean Community (CARICOM); Vinicio Cerezo, Secretary-General of the Central American Integration System (SICA); and Julio Berdegué, FAO's Regional Representative for Latin America and the Caribbean. Serving as moderator was Camila Zepeda, Director General for Global Issues at the Secretariat for Multilateral Affairs and Human Rights of the Ministry of Foreign Affairs of Mexico. During her presentation, Alicia Barcena emphasized that the region is at risk of experiencing a true food crisis. She specified that more than 96 million people will be living in extreme poverty -- 11.8% of all people living in cities and 29% of the residents in rural areas. "This is a huge warning, the income of households is declining along with their access to the food basket. It is not that there is a shortage of food, it is that people do not have the resources to be able to acquire it. This comes on top of the low nutritional quality that people are experiencing, above all the poorest families," she warned. She added that in the region, we are in a lost decade in social and economic terms. "This downturn will lead us to the worst crisis in a century: GDP will fall -9.1%, poverty will affect 37.3% of the population, and unemployment will reach 13.5%. In Central America and Mexico, the drop in GDP will be 8.4% with a big impact from the recession and unemployment in the United States. South America, meanwhile, will be the subregion most affected by the fall in international prices (-9.4%) due to its specialization in the production and exportation of commodities," she said. With regard to Caribbean countries, she indicated that while they have managed the pandemic crisis better in relative terms, they are experiencing a great plunge in tourism and have high external debt (68.5% of GDP). The GDP of the Caribbean will fall by -5.4%, she added. ECLAC's most senior representative added that governments have taken important measures, but they are not enough to account for the magnitude of the gap. She explained that to confront the crisis, ECLAC proposes implementing an emergency basic income equivalent to one poverty line ($147 dollars) for six months, at a cost of 1.9% of GDP, along with an anti-hunger grant equivalent to 70% of one extreme poverty line ($57 dollars), which would cost 0.45% of GDP. The Commission also recommends longer repayment periods and grace periods for credits to Micro, Small and Medium-sized Enterprises (MSMEs) and partial co-financing of the payroll; conditional support for at-risk big companies in strategic sectors; expansive and progressive fiscal and monetary policies; and cooperation for financing under favorable conditions. It also proposes a political compact for a welfare State and universal, progressive and distributive social policies aimed at dismantling the culture of privilege. Alicia Barcena noted that to prevent the health crisis from becoming a food crisis, ECLAC proposes (in addition to complementing the emergency basic income with the provision of an anti-hunger grant) the granting of subsidies, debt restructuring and/or liquidity provision for agricultural and food-related SMEs and for family businesses, to guarantee the production and distribution chain. Furthermore, she called for deepening regional integration through greater resilience in production networks, diversifying suppliers in terms of countries and companies, favoring locations that are closer to final consumption markets, and relocating strategic production-related and technological processes. The senior United Nations official warned about the fragility of multilateralism and its exacerbation with the unilateral restrictions placed on the exportation of medical supplies in more than 60 countries. She also explained that in the post-pandemic period, globalization will not be rolled back, but there will be a more regionalized global economy organized around 3 poles: Europe, North America and Asia Pacific. Finally, ECLAC's Executive Secretary highlighted the importance of CELAC for expressing the region's needs and urgencies, with a single voice, on the international stage, primarily in areas such as the search for financial support for middle-income countries under flexible conditions and guaranteeing the unfettered movement of food, medicine and goods. [*] BOND PRICING: For the Week July 20 to July 24, 2020 ------------------------------------------------------- Issuer Name Cpn Price Maturity Country Curr ----------- --- ----- -------- ------- --- 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 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 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 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 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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