/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/200804.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, August 4, 2020, Vol. 21, No. 155 Headlines A R G E N T I N A ARGENTINA: To Seek New IMF Plan However Debt Talks Turn Out TRANSPORTADORA DE GAS: S&P Affirms CCC+ Currency Ratings B R A Z I L OI SA: Tim, Telefonica and Claro Raise Bid to Buy Assets to $3.21B PPLA INVESTMENTS: Fitch Affirms Then Withdraws B+ LT IDR C A Y M A N I S L A N D S FALCON GROUP: S&P Affirms BB-/B ICRs, Alters Outlook to Stable C O S T A R I C A BANCO BAC: Fitch Affirms LT IDR at B+, Outlook Negative BANCO DAVIVIENDA: Fitch Affirms LT IDR at B+, Outlook Negative D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: Only More Loans Can Avert Massive Bankruptcies J A M A I C A JAMAICA: Aiming for Manufacturing Sector to Contribute $81B to GDP M E X I C O GRUPO AEROMEXICO: Aims to Lift Operations Nearly 20% in August GRUPO AEROMEXICO: To Pay 30% of Interest Due on Stock Certificate GRUPO POSADAS: Fitch Cuts LT IDRs to RD on Grace Period Expiry P U E R T O R I C O ASCENA RETAIL: Wins Approval of First-Day Motions J.C. PENNEY: Ad Hoc Committee Taps Okin Adams as Counsel PUERTO RICO: PREPA Bondholders File 12th Modified Statement SPANISH BROADCASTING: Deregisters its Common Stock Due to Pandemic - - - - - ================= A R G E N T I N A ================= ARGENTINA: To Seek New IMF Plan However Debt Talks Turn Out ----------------------------------------------------------- Jorgelina Do Rosario at Bloomberg News reports that Economy minister Martin Guzman said Argentina will seek a new program with the International Monetary Fund whatever the outcome of talks with holders of its $65 billion of defaulted overseas bonds. Guzman also reiterated that the country has reached the upper limit in what it's prepared to offer creditors, though it said the government would consider improving the legal terms of the offer, according to Bloomberg News. "After the debt restructuring process with the private creditors, we expect to request a new IMF program that replaces the previous one that didn't work," Guzman told Bloomberg Television in an interview. "This is going to happen regardless of what happens with private creditors," he added. South America's second-largest economy, which is at a crucial point in its bond restructuring process, also has on hold a $56 billion stand-by IMF agreement negotiated by the previous administration, the report notes. The government is working on plans to boost tax revenue and curb the fiscal deficit, though due to the pandemic this will take longer than the country and the IMF originally projected, Guzman said, the report relays. "Fiscal consolidation has to occur to a pace that allows the economy to recover, and to sustain that recovery," he added. Argentina faces a deadline today, Aug. 4, with its proposal to restructure its overseas debt after falling into default this year for the ninth time in its history, the report notes. "We significantly improved the offer, and we reached a point that is the maximum effort Argentina can make without compromising the social course we are trying to achieve," Guzman said, echoing comments made recently by President Alberto Fernandez, the report relays. "We have made a massive effort," he added. Fernandez said that the government will support its citizens in need as long as the coronavirus pandemic exists, the report notes. "All creditors should know that we are not going to leave any Argentine behind to pay a debt we cannot afford," Fernandez said in a webcast event from the presidential residence during a hospital inauguration in Buenos Aires province, the report discloses. The country still doesn't have the support of the three main creditor groups, which say they represent holders of more than 50% of Argentina's overseas debt after joining forces with other funds, the report discloses. The latest creditor proposal demands a net present value about 3 cents per dollar above current government offer of about 53 cents, according to a Goldman Sachs Group Inc, report relays. The groups originally included funds such as BlackRock Inc., AllianceBernstein and Monarch Alternative Capital LP, and now includes BlueBay Asset Management LLP, Fidelity Management & Research Co. and Amundi Asset Management, among thirty firms that have joined forces. Whatever the outcome, it'll be a long time before Argentina issues new foreign-denominated debt, Guzman said, the report notes. "We don't expect to tap the international markets for a while," he added. 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 July 30, 2020, S&P Global Ratings said it lowered its issue ratings on two of Argentina's foreign currency-denominated bonds, BIRADs due January 2022 and January 2027, to 'D' from 'CC'. These are New York-law U.S. dollar-denominated bonds that had a total of about US$220 million in interest due July 26, 2020, and an applicable payment date of July 27. Other similar bonds S&P already lowered to 'D' include the BIRADs due 2021, 2026, January 2028, July 2028, 2036, 2046, 2048, and 2117, as well as a New York-law U.S. dollar-denominated discount bond due December 2033 and an English-law euro-denominated discount bond due December 2033. These bonds will remain at 'D' pending conclusion of the debt renegotiations that are underway. The current deadline for acceptance remains Aug. 4, with a settlement date of Sept. 4. The TCR-LA reported on April 14, 2020, that 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'. 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. TRANSPORTADORA DE GAS: S&P Affirms CCC+ Currency Ratings -------------------------------------------------------- On July 31, 2020, S&P Global Ratings affirmed its 'CCC+' foreign and local currency ratings on Argentina-based natural gas transportation company Transportadora de Gas del Sur S.A. (TGS). At the same time, S&P affirmed its 'CCC+' rating on the company's senior unsecured notes for $500 million due 2025. In addition, it revised downwards its stand-alone credit profile (SACP) to 'b' from 'bb-'. In the last 12 months, the Argentinean government has taken several measures to reduce the billing cost of gas service to residential users who are affected by the country's recession, which worsened after the lockdown in mid-March 2020 in order to control the spread of COVID-19 in the country. So far, the last two tariff adjustments that were supposed to be applied in October 2019 and April 2020 haven't been granted yet. Moreover, the new administration has recently announced it is extending the renegotiation process of the current ITR until December 2020. This raises uncertainty about the application of the ITR going forward, which otherwise would adjust rates following the domestic inflation twice a year (in April and October) until 2021. Because of the mentioned delays, S&P doesn't apply any tariff adjustments because it now views them as discretional, which hampers TGS' EBITDA generation in the next few years. In addition to flat tariffs in the regulated segment, our updated forecast for 2020 also incorporates the lower GNL prices at about $300 per ton (versus the previous expected $350 per ton). On the other hand, we believe the expected currency depreciation of about 30% for 2020 will partially counterbalance the lower revenues (in ARS) given that GNL tariffs are set in dollars. Regarding costs, we now expect a haircut of maintenance expenses at about $30 million that will partially offset their increases due to the high inflation expected this year. Overall, we now expect EBITDA generation of about $340 million, debt to EBITDA of 1.7x, and funds from operations (FFO) to debt of 40%; slightly weaker than our previous expectations. However, from 2021 on, and considering that TGS won't be able to continue reducing its operating costs, we believe the EBITDA will decrease further –and thus credit metrics will significantly worsen. This would lead to EBITDA generation below $200 million, debt to EBITDA above 2.5x, and FFO to debt below 30%, while we previously projected EBITDA generation above $350 million, debt to EBITDA ratios below 1.5x, and FFO to debt above 45%. =========== B R A Z I L =========== OI SA: Tim, Telefonica and Claro Raise Bid to Buy Assets to $3.21B ------------------------------------------------------------------ Marcelo Rochabrun at Reuters reports that Telecoms Tim Participacoes, Telefonica Brasil and America Movil's Claro raised their bid to buy Oi SA's mobile assets out of bankruptcy for BRL16.5 billion ($3.21 billion). The new offer comes after Oi said it had begun exclusive talks with another potential buyer, called Highline do Brasil, a portfolio company of U.S. private equity firm Digital Colony, according to Reuters. Oi has not disclosed the value of Highline's offer, but said it was above BRL15 billion, the report relays. Tim, Telefonica Brasil and America Movil's Claro brand have a large presence in Brazil. The companies added that their proposal also considers "the possibility of signing long-term contracts for the use of Oi Group's infrastructure," the report adds. About Oi SA Headquartered in Rio de Janeiro, and operating almost exclusively within Brazil, the Oi Group provides services like fixed-line data transmission and network usage for phones, internet, and cable, Wi-Fi hot-spots in public areas, and mobile phone and data services, and employs approximately 142,000 direct and indirect employees. On June 20, 2016, pursuant to Brazilian Law No. 11.101/05 (the 'Brazilian Bankruptcy Law'), Oi S.A. and certain of its subsidiaries filed for recuperao judicial (judicial reorganization) in Brazil. On June 21, 2016, OI SA and its affiliates Telemar Norte Leste S.A. and Oi Brasil Holdings Cooperatief U.A. commenced Chapter 15 proceedings (Bankr. S.D.N.Y. Lead Case No. 16-11791). Ojas N. Shah, as foreign representative, signed the petitions. Coop and PTIF are also subject to proceedings in the Netherlands. The Chapter 15 cases are assigned to Judge Sean H. Lane. In the Chapter 15 cases, the Debtors are represented by John K. Cunningham, Esq., and Mark P. Franke, Esq., at White & Case LLP, in New York; and Jason N. Zakia, Esq., Richard S. Kebrdle, Esq., and Laura L. Femino, Esq., at White & Case LLP, in Miami, Florida. On July 22, 2016, the New York Court recognized the Brazilian Proceedings as foreign main proceedings with respect to the Chapter 15 Debtors, and granted certain additional related relief. As reported in the Troubled Company Reporter-Latin America on May 28, 2020, Fitch Ratings has downgraded Oi S.A's ratings, including the Long-Term Foreign Currency Issuer Default Rating to 'CCC+' from 'B-', the LT Local Currency IDR to 'CCC+' from 'B-', the National LT Rating to 'B(bra)'/Stable' from 'BB-(bra')/Stable, and the 2025 notes to 'CCC+'/'RR4' from 'B-'/'RR4'. The Rating Outlook on the international ratings has been removed. PPLA INVESTMENTS: Fitch Affirms Then Withdraws B+ LT IDR -------------------------------------------------------- Fitch Ratings has affirmed and withdrawn the Long-Term Issuer Default Rating and Local Currency LT IDR of PPLA Investments LP at 'B+'. The Rating Outlook is Negative. Fitch has also affirmed and withdrawn PPLA's Support Rating at '4'. Fitch is withdrawing the ratings for commercial reasons and will no longer provide ratings (or analytical coverage) for the issuer. KEY RATING DRIVERS The affirmation of PPLA's ratings reflects limited change on its support-driven assessment since Fitch's last review on May 2020. PPLA ratings continue to be driven by the expected support from its sister company Banco BTG Pactual SA. (BB-/Negative). Fitch considers PPLA a strategic part of the BTG Pactual group as it has clear links with the group in terms of franchise, integration and support track record. The Negative Outlook on PPLA ratings mirrors the recent action on BTG Pactual. RATING SENSITIVITIES Rating Sensitivities do not apply as the ratings have been withdrawn. 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. 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 PPLA ratings were driven by the expected support from its sister company Banco BTG Pactual SA. PPLA Investments LP - LT IDR B+; Affirmed - LT IDR WD; Withdrawn - LC LT IDR B+; Affirmed - LC LT IDR WD; Withdrawn - Support 4; Affirmed - Support WD; Withdrawn =========================== C A Y M A N I S L A N D S =========================== FALCON GROUP: S&P Affirms BB-/B ICRs, Alters Outlook to Stable -------------------------------------------------------------- S&P Global Ratings affirmed the long- and short-term issuer credit ratings on trade finance provider Falcon Group Holdings (Cayman) Ltd. (Falcon) at 'BB-/B'. The outlook is stable. S&P said, "The affirmation of our ratings on Falcon follows the company's recent finalization of a new on-balance-sheet secured term loan facility, and its progress on building relationships with midsize and large corporate clients. In our view, the new debt facility will support Falcon to expand its client base and maintain a diversified funding profile. Given the coronavirus pandemic and oil price volatility, we expect that the company will need more time to show a transformational change in its client base, volumes, and revenues. Therefore, we are revising the outlook to stable from positive. "Under our revised assumptions, we estimate that Falcon will raise $100 million in on-balance-sheet debt and, at the same time, maintain at least $40 million in cash and liquid assets on its balance sheet at all times. We recognize $10 million of this sum as surplus cash in our debt leverage metrics. Previously, we reflected the possibility of Falcon operating with higher debt levels through our negative view of its financial policy, which is now a neutral factor to ratings. "Falcon's new loan facility is secured by trade finance transactions that are fully hedged with standby letters of credit or similar instruments provided by investment grade banks. We expect our cash flow metrics debt to EBITDA and funds from operations (FFO)-to-debt to be between 5x and 6x and at the lower end of 12%-20% range, respectively. These metrics are supported by its low-risk assets and very strong equity levels, and we expect its debt-to-tangible-equity ratio will remain below 1x. "As Falcon progresses with its revised strategy and finances a higher proportion of transactions on-balance sheet, we think equity-based ratios will provide more meaningful insight into its financial risk profile than cash flow-based metrics. Therefore, we could switch our rating analysis to our nonbank financial institutions methodology. However, we expect that there would be no rating impact from such a change in approach." During its financial year (FY) ending Jan. 31, 2020, Falcon prepaid the remaining balance outstanding on its five-year term loan from KKR Credit. Falcon has also repaid its drawings under a securitization facility from Natixis. In addition, Falcon's outstanding $66.3 million balance under its $150 million trade finance facility with Lloyds Bank PLC came on balance sheet at Jan. 31, 2020, but S&P understands that Falcon expects to fully repay it by the year-end. Therefore, its financial projections are driven by the new loan facility, which is more supportive of Falcon's revised strategy. In 2019, Falcon signed up five large corporate clients, and it continues to deliver on the strategy in 2020. S&P said, "It has a healthy pipeline but we expect the COVID-19 pandemic will slow down the onboarding process. We understand that Falcon exited most small to midsize enterprise (SME) relationships, and we believe that it will prioritize sourcing increased volumes from its recently acquired clients. We forecast that Falcon's revenues will stay flat in 2020 and project revenue growth of 5% in 2021, as we expect that the company's newly acquired clients will start to increase their transaction volumes." Given the shift in strategy toward larger corporate accounts, Falcon reported an operating margin of 2.2% in FY2020 and FY2019, down from 2.5%-2.6% in past years. S&P said, "Although Falcon is not immune to the economic downturn triggered by COVID-19, we expect its credit losses will remain very low due to the intrinsically low-risk nature of short-term trade finance business. Data from the International Chamber of Commerce trade register suggest that the average default rate per transaction across short-term trade finance products during 2008–2011 was 0.02%, while the average loss rate was 0.01%. "Liquidity is a neutral factor for our ratings, reflecting our expectation that liquidity sources will cover uses by about 1.6x over the next 12 months. We consider that the company does not yet meet the qualitative factors that would support a strong liquidity assessment." S&P anticipates the company will have the following principal liquidity sources over the next 12 months: -- Minimum reserve level of $40 million cash and cash equivalents on the balance; -- Stable cash flow from operating activities; -- Ability to refinance hedged transactions quickly following origination; and -- $100 million drawdown under the new facility. S&P anticipates the company will have the following principal liquidity uses over the same period: -- Funding new transactions before refinancing; -- $66.3 million outflow on repayment of the outstanding amounts under the Lloyds facility; -- Capital expenditure; and -- No dividend payment. Debt outstanding at Jan. 31, 2020: -- Falcon has $66.3 million debt outstanding on the $150 million Lloyds trade finance facility that matures in 2020. S&P said, "Our stable outlook on Falcon reflects our expectation that the company will continue to pursue its recalibrated strategy in the currently difficult global environment. We expect Falcon to maintain its balance sheet leverage and debt-servicing metrics during the next 12 months. "We could raise the ratings in the next 12 months if Falcon executed its recalibrated strategy successfully, benefiting its franchise debt-servicing capacity and business position. We would also consider whether Falcon is maintaining its low-risk appetite and disciplined underwriting criteria, benefiting its revenue, client base, and financial metrics. "We could lower the ratings if Falcon does not manage to implement its strategy; that is, if volumes and operating profit continue to fall to the extent that it becomes a threat to Falcon's business model. We could also lower the ratings if we consider that Falcon expanded in noncore and riskier business areas." =================== C O S T A R I C A =================== BANCO BAC: Fitch Affirms LT IDR at B+, Outlook Negative ------------------------------------------------------- Fitch Ratings affirmed Banco BAC San Jose, S.A.'s Long-Term Foreign Currency Issuer Default Rating at 'B+'. Fitch also affirmed the bank's LT Local Currency IDR at 'BB-' and its National LT Rating at 'AAA(cri)', respectively. In addition, Fitch affirmed the viability rating at 'b'. The Rating Outlook of the LT IDRs is Negative and the Outlook of the LT National Rating is Stable. KEY RATING DRIVERS IDR, SUPPORT RATING AND NATIONAL RATINGS BAC San Jose's IDRs and National Scale Ratings are driven by Fitch's appreciation of the potential support it would receive from its parent company, Banco de Bogota, S.A. (Banco de Bogota), if required. Banco de Bogota's ability to support is reflected in its LT Foreign Currency IDR of 'BBB-' with a Negative Outlook. BAC San Jose's IDRs are constrained by Costa Rica's sovereign ratings as reflected in the country ceiling. BAC San Jose's Foreign Currency LT IDR is rated four notches below Banco de Bogota's IDR. Costa Rica's country ceiling of 'B+', which, according to Fitch's criteria, captures transfer and convertibility risks, constrains the bank's rating to a lower level than would be possible based solely on Banco de Bogota's ability and propensity to provide support. The LT Local Currency IDR is at the maximum uplift of two notches above Costa Rica's sovereign rating (B/Outlook Negative). The Negative Outlooks on BAC San Jose's IDRs are in line with the Negative Outlook on Costa Rica's sovereign rating. In addition, Fitch's support opinion is moderately influenced by the relevant role BAC San Jose plays on its parent's regional strategy. The bank is the largest operation of the BAC Credomatic brand, which has important banking and financial operations in Central America. BAC San Jose has a relevant market position in the country and provides universal banking services with a strong focus and dominant position in the credit card segment. The bank's Support Rating of '4' reflects Fitch's opinion of limited probability of support because of the heightened risks in the operating environment. Fitch believes that foreign bank subsidiaries in Costa Rica may be affected by reduced support due to the negative impact of the the coronavirus pandemic on the business and financial profiles of their parent companies. Although foreign bank subsidiaries rated by Fitch operating in Costa Rica are relatively small compared to the group to which they belong, which facilitates support if necessary, Fitch will closely monitor the parent companies' ability to support their subsidiaries. BAC San Jose's national ratings are at the highest point of the national ratings scale, according to the parent's relative credit strength when compared to other rated issuers in Costa Rica. VR BAC San Jose's Viability Rating of 'b' remains at the same level of the sovereign rating, reflecting the high influence of the worsening operating environment on the financial sector. The negative trend on the operating environment score reflects that this has further downside potential as Fitch expects deteriorating operating conditions due to the coronavirus outbreak to pressure asset quality and weigh on the bank's earnings due to lower loan growth and higher credit costs over the medium term. The bank's VR is also highly influenced by its sound company profile, as reflected in its good local franchise and its universal banking model with a relevant orientation in retail financial services and leading position in the credit card segment. BAC San Jose is the third largest bank of Costa Rica and the largest private bank in the country with assets that represented close to 14% of the system as of March 2020. BAC San Jose's VR is moderately influenced by its adequate financial performance. However, the agency expects the bank's financial profile could continue under pressure as result of reduced commercial activities and lower consumption. Although the bank's nonperforming loans have declined over 2020 as result of credit recoveries initiatives, Fitch expects BAC San Jose's asset quality will face deterioration over the short to medium term as retail segments are more exposed under stressed conditions. Consumer and mortgages loans were automatically granted with payment deferrals. Nevertheless, Fitch believes liquidity pressures as well as the longer-term effects on asset quality remain a risk. As of March, BAC San Jose's NPL metric was 2.4% (YE 2019: 2.9%) BAC San Jose's profits increased during 2020 and remain higher than that of similarly rated local peers. However, given the higher exposure of sectors more sensitive to the potential economic disruption such as consumer and commercial, Fitch expects the bank's profitability to decrease over the short to medium term. As of March 2020, BAC San Jose's operating profits-to-risk-weighted assets metric was 3.2%. Fitch expects the bank's capitalization to be moderately pressured by the expected asset quality deterioration and reduced profits, but partially offset by lower loan growth and expected support by Banco de Bogota if necessary. As of the same period, the Fitch Core Capital to RWAs ratio was 13.5%. Fitch believes the bank's strong deposit base, relevant franchise and sound liquidity would favor its funding profile under a challenging operating environment. As of March 2020, its loans-to-deposit ratio was 93.5%, similar to the banking system average. Fitch considers that BAC San Jose's refinancing risk is partially mitigated by its reasonable liquidity levels which the entity will seek to maintain. During the same period, its liquid assets represented 32% of its deposits, adequate for liquidity requirements in the current conjuncture. Also, BAC San Jose's current liquidity position covers well its debt maturities in the next 12 months. SENIOR DEBT NATIONAL RATINGS BAC San Jose's senior unsecured debt National Scale Ratings are at the same level of the issuer's national ratings. In Fitch's opinion, their debt issuances' likelihood of default is the same than BAC San Jose. RATING SENSITIVITIES Factors that could, individually or collectively, lead to a positive rating action/upgrade: -- The Negative Rating Outlooks on BAC San Jose's IDRs indicate positive actions in the bank's ratings are highly unlikely in the foreseeable future. However, over the medium term, BAC San Jose's IDRs, VR and SR could be upgraded in the event of an upgrade of Costa Rica's sovereign rating and Country Ceiling. -- The VR could be upgraded only over the medium term and in the event of an improvement in the local operating environment, especially if accompanied by further and consistent improvements in its financial performance metrics -- The national scale ratings of the bank and its debt issuances are at the top of the scale. Therefore, there is no room for positive actions. Factors that could, individually or collectively, lead to a negative rating action/downgrade: -- BAC San Jose's IDRs and SR remain sensitive to changes in Costa Rica's sovereign and Country Ceiling ratings. Negative changes in the bank's IDRs and SR would mirror any movement in Costa Rica's sovereign ratings and Country Ceiling; -- Any perception by Fitch of reduced strategic importance of BAC San Jose to its parent company may trigger a downgrade of its IDRs, SR and National Ratings; -- BAC San Jose's IDRs could be downgraded by a multi-notch downgrade of Banco de Bogota's IDRs; -- A downgrade of BAC San Jose's VR could result from a material deterioration of the bank's financial performance that drops its operating profits to RWAs ratio and FCC ratio consistently below 1% and 9%, respectively; -- BAC San Jose's senior unsecured debt National ratings would be downgraded in case of negative rating actions on the bank'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 Prepaid expenses and other deferred assets were reclassified as intangible assets and were deducted from FCC since Fitch considers these to have low capacity to absorb losses. Impaired loans were adjusted to reflect only loans that are overdue by 90 days or more to be consistent with Fitch's criteria and global industry practices. Recoveries from charge-offs were reclassified to nonoperating income. 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 BAC San Jose's IDRs are based on Fitch's opinion of the ability and propensity of the potential support it could receive from its respective shareholder, Banco de Bogota, rated 'BBB-'/Negative. BAC San Jose's FC LT IDR is capped at the Costa Rican Country Ceiling of 'B+'. In turn, the bank's LC IDR of 'BB-' is consistent with a maximum uplift of two notches above the sovereign rating. 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). Banco BAC San Jose, S.A. - LT IDR B+; Affirmed - ST IDR B; Affirmed - LC LT IDR BB-; Affirmed - LC ST IDR B; Affirmed - Natl LT AAA(cri); Affirmed - Natl ST F1+(cri); Affirmed - Viability b; Affirmed - Support 4; Affirmed - Senior unsecured; Natl LT AAA(cri); Affirmed - Senior unsecured; Natl ST F1+(cri); Affirmed BANCO DAVIVIENDA: Fitch Affirms LT IDR at B+, Outlook Negative -------------------------------------------------------------- Fitch Ratings has affirmed Banco Davivienda (Costa Rica), S.A.'s Long-Term Foreign Currency Issuer Default Rating at 'B+' and Long-Term Local Currency IDR at 'BB-'. Fitch has also affirmed the bank's Short-Term Foreign and Local Currency IDR at 'B' and the Viability Rating at 'b'. The Rating Outlooks of the Long-Term IDRs remain Negative. KEY RATING DRIVERS IDRs, SUPPORT RATING AND NATIONAL RATINGS Davivienda CR's IDRs, national ratings and senior debt are driven by Fitch's assessment regarding the potential support it would receive from its parent Banco Davivienda, S.A., if required. Davivienda's ability to support is reflected in its Long-Term Foreign Currency IDR of 'BBB-' with a Negative Outlook. Davivienda's IDRs are constrained by Costa Rica's sovereign ratings as reflected in the country ceiling. Davivienda CR's Long-Term Foreign Currency IDR is rated four notches below Davivienda's IDR. Fitch's assessment of Davivienda's ability to support its subsidiary is highly influenced by Costa Rica's country risk constraints, captured in the 'B+' country ceiling, which, according to Fitch's criteria, captures transfer and convertibility risks, which imposes restrictions to Davivienda CR's Long-Term Foreign Currency IDR to a lower level than would be possible based solely on Davivienda's ability and propensity to provide support. While the Long-Term Local Currency IDR is at the maximum uplift of two notches above Costa Rica's sovereign rating (B/Negative). Moreover, Fitch also modestly considers the huge reputational risk that Davivienda CR's default on its obligations could constitute to its parent businesses. Also, in Fitch's opinion, the subsidiary is considered a key part of Davivienda's diversification strategy in the Central American region. The bank's Support Rating of '4' reflects Fitch's opinion of limited probability of support because of the heightened risks in the operating environment. The banks' SR is based on Fitch's opinion of shareholders' capacity and propensity to give support to its subsidiary, if required. Davivienda CR's SR is also constrained by the sovereign rating, as reflected in the country ceiling. According to Fitch's criteria, Davivienda CR's IDR of 'B+' corresponds to a SR of '4'. Fitch believes that foreign bank subsidiaries in Costa Rica may be affected by reduced support due to the negative impact of the international contingency caused by the coronavirus pandemic on the business and financial profiles of their parent companies. Although most foreign bank subsidiaries operating in Costa Rica are relatively small compared to the group to which they belong, which facilitates support if necessary, Fitch will closely monitor the parent companies' ability to support their subsidiaries. Davivienda's CR national ratings are at the highest point of the national ratings scale, according to the parent's relative credit strength when compared to other rated issuers in Costa Rica. VR Davivienda CR's VR is highly influenced by the challenging operating environment, which in Fitch's view imposes negative pressures to the financial profile of the bank, given the economic slowdown caused by the international health emergency. Fitch expects this tendency to continue to the extent of the pandemic. Moreover, the VR is also driven by its company profile explained by a modest franchise, with market shares of nearly 7% in terms of assets, deposits and loans as of June 2020, as well as, a relatively diversified business model. In Fitch's opinion, Davivienda CR's credit quality will deteriorate, as a consequence of the economic slowdown caused by the sanitary emergency. Despite the actions taken by the bank given that the relief measures were applied to a fair part of its credit portfolio (around 40%), Fitch believes liquidity pressures as well as the longer-term effects on asset quality remain a risk. The bank steps into the crisis with good credit quality metrics, reflected in lower non-performing loans over 90 days (June 2020: 1.5%) than local peers and banking system (2.7%). In Fitch's view, Davivienda CR's profitability metrics are sensitive to potential the deteriorations of its credit quality metrics. Fitch believes that relief measures will pressure interest income in the short term; further operating income might be challenged by loan impairment charges, arising as clients' needs for restructuring. As of March 2020, operating profit represented 1.9% of risk weighed assets from an average of 0.8% during 2017-2019. In Fitch's opinion, capital metrics are low compared to local peers with a Fitch Core Capital to RWA of around 11% as of March 2020. Moreover, the agency considers that these tight capital levels limit the bank's loss absorption capacity given a stress scenario. However, Fitch considers Daviviendas CR's solvency will benefit from the potential support of its major shareholder, if needed. Funding and liquidity profiles are strong and also benefits from parent's support. As one of the major private owned banks with a well stablished franchise, deposits are stable and liquidity is high, yet net interest margin might be impacted due to the liquidity excess, that Fitch expects the bank to maintain, given the lower demand for credit and investment in the short term. As of March 2020, loans to deposit ratio stood at 128% (average 2017-2019: 124%). Fitch considers that Davivienda's CR refinancing risk is partially mitigated by its reasonable liquidity levels. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: IDR, VR, SR -- The Negative Rating Outlooks on Davivienda CR's IDRs indicate positive actions in the bank's ratings are highly unlikely in the foreseeable future. However, over the medium term, Davivienda CR's IDRs, VR and SR could be upgraded in the event of an upgrade of Costa Rica's sovereign rating and Country Ceiling. -- The VR could be upgraded only over the medium term and in the event of an improvement in the local operating environment, especially if accompanied by further and consistent improvements in its financial performance metrics. -- The national scale ratings of the bank and its debt issuances are at the top of the scale. Therefore, there is no room for positive actions. Factors that could, individually or collectively, lead to negative rating action/downgrade: IDR, VR, SR -- Davivienda CR's IDRs and SR remain sensitive to changes in Costa Rica's sovereign and Country Ceiling ratings. Negative changes in the bank's IDRs and SR would mirror any movement in Costa Rica's sovereign ratings and Country Ceiling. -- Any perception by Fitch of reduced strategic importance of Davivienda CR to its parent company may trigger a downgrade of its IDRs, SR and national ratings. -- Davivienda CR's IDRs could be downgraded by a multi-notch downgrade of Davivienda's IDRs. -- A downgrade of Davivienda CR's VR could result from a material deterioration of the bank's financial performance that drops the bank's Fitch Core Capital to RWA ratio consistently below 9% and sustained operating losses. -- Davivienda CR's senior unsecured debt national ratings would be downgraded in case of negative rating actions on the bank'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 Prepaid expenses were reclassified as intangibles in order to calculate the Fitch Core Capital. 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 Davivienda Costa Rica's ratings are support ratings based upon its Colombian parent Banco Davivienda, S.A. ratings (BBB-/Negative). 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). Banco Davivienda (Costa Rica), S.A. - LT IDR B+; Affirmed - ST IDR B; Affirmed - LC LT IDR BB-; Affirmed - LC ST IDR B; Affirmed - Natl LT AAA (cri); Affirmed - Natl ST F1+(cri); Affirmed - Viability b; Affirmed - Support 4; Affirmed - Senior unsecured; Natl LT AAA (cri); Affirmed - Senior unsecured; Natl ST F1+(cri); Affirmed =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: Only More Loans Can Avert Massive Bankruptcies ------------------------------------------------------------------ Dominican Today reports that Economy Minister Juan Ariel Jimenez, warned that due to the impact of the COVID-19 pandemic, it will be necessary to resort to more loans to boost the economy and avert a massive closure of companies. He said the measures are necessary for economic activity to continue, since if it stops, collections also fall, according to Dominican Today. "In this particular situation, a fiscal deficit is needed that will lead to higher levels of indebtedness, but that the Dominican economy can bear," the report relays. Jimenez said the economic projections are for a fiscal deficit close to 5% for this year, the report notes. "In the current context of a fall in economic activity, it is not much, it is reasonable, and it could even be greater, but we always take care to take prudent steps, little by little," he relays. He added that these measures are necessary because if there is a general bankruptcy of companies, no one will save the country, the report relays. "Better now than in the coming years to see how we help companies and how to create companies that went bankrupt in this period, a greater deficit implies that in the future, in the third year or the fourth year, it is necessary to compensate for this greater current deficit and the compensation will be with reduction of expenses or with increase of taxes," he 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). ============= J A M A I C A ============= JAMAICA: Aiming for Manufacturing Sector to Contribute $81B to GDP ------------------------------------------------------------------ RJR News reports that Jamaica is aiming to increase the contribution of the manufacturing sector to gross domestic product (GDP) to $81 billion over the next five years. This is up from $66 billion in 2018. The disclosure was made by Leslie Campbell, Minister without Portfolio in the Ministry of Industry, Commerce, Agriculture and Fisheries (MICAF), during the tabling of the National Five Year Manufacturing Growth Strategy, 2020-2025 for Jamaica in parliament, according to RJR News. The strategy was developed by MICAF, the Jamaica Manufacturers and Exporters Association (JMEA), and Jamaica Promotions Corporation (JAMPRO) and is aimed at increasing jobs, as well as foreign and local direct investment in the manufacturing industry, the report notes. As reported in the Troubled Company Reporter-Latin America, S&P Global Ratings revised on April 16, 2020 its outlook on Jamaica to negative from stable. At the same time, S&P affirmed its 'B+' long-term foreign and local currency sovereign credit ratings, its 'B' short-term foreign and local currency sovereign credit ratings on the country, and its 'BB-' transfer and convertibility assessment. The TCR-LA also reported that Fitch Ratings, in April 2020, revised Jamaica's Outlook to Stable from Positive. The Long-Term Foreign-Currency Issuer Default Rating is affirmed at B+. The Outlook change reflects the shock to Jamaica from the coronavirus pandemic, which is expected to lead to a sharp contraction in its main sources of foreign currency revenues: tourism, remittances and alumina exports. =========== M E X I C O =========== GRUPO AEROMEXICO: Aims to Lift Operations Nearly 20% in August -------------------------------------------------------------- Noe Torres at Reuters reports that Airline Aeromexico said it plans to increase operations by almost 20% in August from July as the Mexican company moves ahead with bankruptcy proceedings that began July in the United States. In a statement, the company said August would be the third month in a row in which it would ramp up operations, according to Reuters. Aeromexico shares rose after the announcement, closing the day 5.04% above the prior session at 5 pesos a share, despite the carrier posting a second-quarter loss of nearly $1.2 billion after the market closed, the report relays. The company said in a filing to the Mexican stock exchange that a New York bankruptcy court had given the airline permission to keep paying salaries, loans and its tax obligations, the report notes. The court also gave the green light to "keep existing contracts with key suppliers, travel agencies, partner airlines and insurance companies," the report discloses. The court authorized Aeromexico to meet obligations in certain "customer programs," including for co-branded American Express cards and Chubb Seguros Mexico insurance, and to continue with existing derivative contracts, the report relays. The Mexican airline can "fulfill and honor" obligations to customers as it sees fit, according to the court, as well as continue to use third-party services for customers, the report notes. The bankruptcy court in New York's Southern District also ruled that the company could maintain and renew its letter of credit and surety bond programs without interruption, the report discloses. Aeromexico, part-owned by Delta Air Lines (DAL.N), late last month became the third airline in Latin America to file for bankruptcy protection, where carriers hit by the coronavirus have had limited help from governments, the report adds. 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. GRUPO AEROMEXICO: To Pay 30% of Interest Due on Stock Certificate ----------------------------------------------------------------- Noe Torres at Reuters reports that Mexican Grupo Aeromexico, S.A.B. de C.V. will pay 30% of the interest, or 525,000 pesos, due on its Aeromex 00320 stock certificate in the period June 25 to July 23, said bank CIBanco, which represents investors in the securities. In June, Aeromexico filed for Chapter 11 bankruptcy protection, according to Reuters. 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. GRUPO POSADAS: Fitch Cuts LT IDRs to RD on Grace Period Expiry -------------------------------------------------------------- Fitch Ratings has downgraded Grupo Posadas, S.A.B. de C.V.'s Long-Term Local and Foreign Currency Issuer Default Ratings to 'RD' from 'C', following the expiration of the 30-day grace period on interest payment, which constitutes a restricted default under Fitch's ratings definition. In addition, Fitch has also affirmed the company's senior notes due 2022 at 'C'/'RR4'. On June 25, 2020, Posadas announced that it will not meet the company's senior unsecured notes' USD15.5 million coupon payment due June 30, 2020. The company also announced that it did not intend to make the payment during the 30-day cure period. The 30-day grace period ended on July 30. The 'RR4' Recovery Rating assigned to the senior note's issuances indicate average recovery prospects given default. 'RR4'-rated securities have characteristics consistent with historically recovering 31%-50% of current principal and related interest. KEY RATING DRIVERS Expiration of Grace Period: Ratings of RD indicate an issuer that in Fitch's opinion has experienced an uncured payment default or Distressed Debt Exchange, but has not otherwise ceased operating. This includes the uncured expiry of any applicable grace period following a payment default on financial obligations. Tight Liquidity Headroom: The downgrade reflects the confirmation that Posadas did not make the USD15.5 million coupon payment, which was due on June 30, 2020, of its 2022 senior unsecured notes. Fitch estimates that the effect on the company's operations from closed hotels during April, May and the first half of June resulted in a monthly cash burn of around MXN90 million-100 million. Posadas' liquidity position is compromised given estimated monthly cash burn. Cash burn intensity is expected to decrease as hotels gradually resume operations; all hotels are expected to reopen by the end of July. Debt Restructuring: The company announced that it has hired advisors to evaluate strategic options, which Fitch believes could include a debt restructuring process in the mid-term in order to achieve a sustainable capital structure. DERIVATION SUMMARY The rating has been downgraded to 'RD'. KEY ASSUMPTIONS Fitch's Key Assumptions Within the Agency's Rating Case for the Issuer - Hotel closures in response to social distancing measures and limited occupancy rates as operations gradually recover will affect revenues in 2020; Fitch expects a recovery during 2021; - Sales for the vacation club segment materially decrease during 2020; - Pressured KPI's in the short to medium term; - EBITDA margins lower than previously estimated; - Capex reflects expected recurring maintenance capex; - Tax settlement payment outflows continue until 2023. KEY RECOVERY RATING ASSUMPTIONS The 'RR4' Recovery Rating assigned to the senior notes' issuances indicate average recovery prospects given default. 'RR4'-rated securities have characteristics consistent with historically recovering 31%-50% of current principal and related interest. The recovery analysis assumes that Grupo Posadas, S.A.B. de C.V. would be reorganized as a going-concern in bankruptcy rather than liquidated. Fitch has assumed a 10% administrative claim. The going-concern EBITDA estimate reflects Fitch's view of a sustainable, post-reorganization EBITDA level upon which Fitch bases the enterprise valuation. The post-reorganization EBITDA assumption is MXN647.6 million; it represents an 8.3% discount from an already stressed EBITDA generation scenario during 2019. This stressed EBITDA covers annual interest payments reflecting a distressed level of revenue generation across business lines. An EV multiple of 5.0x was used to calculate post organization valuation based on the industry multiple, which was adjusted for the country risk premium. Fitch calculates recovery prospects for the senior unsecured notes in the 31% to 50% range based on the waterfall approach. This level of recovery results in the company's senior unsecured notes being rated the same as its IDR of 'C'/'RR4'. The 'RR4' Recovery Rating assigned to the senior notes' issuance indicates average recovery prospects given default. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: - The IDRs would be reassessed upon the completion of a debt restructuring process; the IDRs would reflect the new capital structure and credit profile of the issuer. Factors that could, individually or collectively, lead to negative rating action/downgrade: - The company is rated 'RD', and therefore, there can be no negative rating action on the IDRs. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Non-Financial Corporate 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. LIQUIDITY AND DEBT STRUCTURE Weak Liquidity: Cash and equivalents as of June 2020 was MXN 924.4 million (around USD40.3 million). SUMMARY OF FINANCIAL ADJUSTMENTS Fitch adjustments for operating lease treatment under IFRS 16. Also, income from the sale of assets is included in revenues on Posadas' financial statements; Fitch takes these nonrecurring items out of operating profits. REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING The principal sources of information used in the analysis are described in the Applicable Criteria. ESG CONSIDERATIONS 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). ===================== P U E R T O R I C O ===================== ASCENA RETAIL: Wins Approval of First-Day Motions ------------------------------------------------- Ascena retail group, inc. announced that, on July 23, 2020, it received approvals from the United States Bankruptcy Court for the Eastern District of Virginia for its "First Day" motions related to the Company's voluntary Chapter 11 petitions. Among other approvals, the Court granted ascena approval for the Company to access and use its more than $430 million in cash collateral. In addition, the Court has authorized the Company to meet necessary obligations and fulfill its duties during the restructuring process, including authority to continue payment of employee wages and benefits, honor certain customer and vendor commitments and otherwise manage its day-to-day operations as usual. The Court also approved procedures for store closing sales, including all Catherines stores, a significant number of Justice stores and a select number of Ann Taylor, LOFT, Lane Bryant and Lou & Grey stores. The Company will continue to operate its Ann Taylor, LOFT, Lane Bryant, Justice and Lou & Grey brands through a reduced number of retail stores and online. Gary Muto, Chief Executive Officer of ascena stated, We are pleased to have received prompt approval of these First Day motions, which will enable us to continue providing our associates with wages and benefits, maintain our outstanding relationship with our vendor community and serve our customers across our brand portfolio with fashion, inspiration and meaningful experiences every day. We are appreciative of the strong support from our lenders to help mark a new start for our company. By entering into a comprehensive plan to deleverage our balance sheet, right-size our operations and inject new capital into the business, we will be better positioned to deliver profitable growth of our iconic brands and drive value for all of our stakeholders. As previously announced, ascena entered into a restructuring support agreement ("RSA") with over 68% of its secured term lenders. The RSA contemplates agreed-upon terms for a pre-arranged financial restructuring plan (the "Plan") that is expected to significantly reduce ascena's debt by approximately $1 billion. The Company will seek authorization at its second day hearing to access the $150 million in a new money term loan from the Company's existing lenders. This financing, combined with cash on hand and cash flow generated by the Company's ongoing operations, is expected to be sufficient to meet ascena's operational and restructuring needs. About Ascena Retail Group Ascena Retail Group, Inc. (Nasdaq: ASNA) -- http://www.ascenaretail.com/-- is a national specialty retailer offering apparel, shoes, and accessories for women under the Premium Fashion (Ann Taylor, LOFT, and Lou & Grey), Plus Fashion (Lane Bryant, Catherines and Cacique), and Value Fashion (Dressbarn) segments, and for tween girls under the Kids Fashion segment (Justice). Ascena, through its retail brands, operates ecommerce websites and approximately 2,800 stores throughout the United States, Canada, and Puerto Rico. Ascena Retail reported a net loss of $661.4 million for the fiscal year ended Aug. 3, 2019, a net loss of $39.7 million for the year ended Aug. 4, 2018, and a net loss of $1.06 billion for the year ended July 29, 2017. On July 23, 2020, Ascena Retail Group, Inc., and its affiliates sought Chapter 11 protection (Bankr. E.D. Va. Case No. 20-33113). As of Feb. 1, 2020, Ascena Retail had $13,690,710,379 in assets and $12,516,261,149 in total liabilities. The Hon. Kevin R. Huennekens is the case judge. The Debtors tapped KIRKLAND & ELLIS LLP and COOLEY LLP as general bankruptcy counsel, and GUGGENHEIM SECURITIES, LLC, as financial advisor; and ALVAREZ AND MARSAL NORTH AMERICA, LLC, as restructuring advisor. PRIME CLERK LLC is the claims agent. J.C. PENNEY: Ad Hoc Committee Taps Okin Adams as Counsel -------------------------------------------------------- The Ad Hoc Committee of Equity Interest Holders of J.C. Penney Company, Inc., and its debtor-affiliates seeks authority from the U.S. Bankruptcy Court for the Southern District of Texas to retain Okin Adams LLP as its counsel. The Committee requires Okin Adams to: a) advise the Ad Hoc Equity Committee with respect to its rights, duties and powers in the Bankruptcy Cases; b) assist and advise the Ad Hoc Equity Committee in its consultations relative to the administration of the Bankruptcy Cases; c) assist the Ad Hoc Equity Committee in analyzing the claims of the creditors and in negotiating with such creditors; d) assist the Ad Hoc Equity Committee's investigation of the acts, conduct, assets, liabilities, and financial condition of the Debtors and of the operation of Debtors™ businesses; e) advise and represent the Ad Hoc Equity Committee in connection with administrative matters arising in these Bankruptcy Cases, including the obtaining of credit, the sale of assets, and the rejection or assumption of executory contracts and unexpired leases; f) assist the Ad Hoc Equity Committee in the analysis of, and negotiations with, the Debtors or any third-party concerning matters relating to, among other things, the terms of a plan of reorganization; g) assist and advise the Ad Hoc Equity Committee with respect to its communications with the general creditor/shareholder body regarding significant matters in these Bankruptcy Cases; h) review, analyze and respond as necessary to all applications, notions, orders, statements of operations and schedules filed with the Court, and advise the Ad Hoc Equity Committee as to their propriety; i) assist the Ad Hoc Equity Committee in evaluating claims and causes of action, if any, against the Debtors' secured lender(s) or other parties; j) assist the Ad Hoc Equity Committee in preparing pleadings and applications as may be necessary in furtherance of the Ad Hoc Equity Committee's interests and objectives; and k) represent the Ad Hoc Equity Committee at all hearings and other proceedings, and perform such other legal services as may be required and are deemed to be in the interests of the Ad Hoc Equity Committee in accordance with the Committee's powers and duties as set forth in the Bankruptcy Code. The firm charges $575 per hour for services rendered by Matthew S. Okin, Esq. and between $250 and $550 per hour for other lawyers in the firm. Hourly rates for paralegals and other support staff range from $75 to $175 per hour. Okin Adams is a "disinterested person" as that term is defined in section 101(14) of the Bankruptcy Code, as modified by section 1103(b), according to court filings. The firm can be reached through: Matthew S. Okin, Esq. David L. Curry, Jr., Esq. Johnie A. Maraist, Esq. OKIN ADAMS LLP 1113 Vine St., Suite 240 Houston, TX 77002 Tel: 713-228-4100 Fax: 888-865-2118 Email: mokin@okinadams.com dcurry@okinadams.com jmaraist@okinadams.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: PREPA Bondholders File 12th Modified Statement ----------------------------------------------------------- In the Chapter 11 cases of The Financial Oversight and Management Board for Puerto Rico, as representative of The Puerto Rico Electric Power Authority, the law firms of Toro Colon Mullet P.S.C. and Kramer Levin Naftalis & Frankel LLP submitted a twelfth supplemental verified statement under Rule 2019 of the Federal Rules of Bankruptcy Procedure, to disclose an updated list of Ad Hoc Group of PREPA Bondholders that they are representing. On or about June 26 and June 27, 2014, certain funds managed or advised by OppenheimerFunds, Inc. and Franklin Advisers, Inc. retained Kramer Levin Naftalis & Frankel LLP to challenge as unconstitutional the recently passed and soon to be enacted Puerto Rico Debt Enforcement and Recovery Act. Over the course of the next two months, certain holders of Bonds, including Franklin and Oppenheimer, contacted and then engaged Kramer Levin to represent a group of holders in connection with a potential restructuring of the Bonds. From time to time thereafter, certain additional holders of the Bonds have joined the Ad Hoc Group. On August 2, 2017, counsel to the Ad Hoc Group submitted the Verified Statement of the Ad Hoc Group of PREPA Bondholders Pursuant to Bankruptcy Rule 2019 [Case No. 17-4780, Dkt. No. 164]. On November 7, 2017, counsel to the Ad Hoc Group submitted the First Supplemental Verified Statement of the Ad Hoc Group of PREPA Bondholders Pursuant to Federal Rule of Bankruptcy Procedure 2019 [Case No. 17-4780, Dkt. No. 407]. On December 13, 2017, counsel to the Ad Hoc Group submitted the Second Supplemental Verified Statement of the Ad Hoc Group of PREPA Bondholders Pursuant to Federal Rule of Bankruptcy Procedure 2019 [Case No. 17-4780, Dkt. No. 490]. On February 6, 2018, counsel to the Ad Hoc Group submitted the Third Supplemental Verified Statement of the Ad Hoc Group of PREPA Bondholders Pursuant to Federal Rule of Bankruptcy Procedure 2019 [Case No. 17-4780, Dkt. No. 633]. On August 15, 2018, counsel to the Ad Hoc Group submitted corrected versions of the Verified Statement, the Second Supplemental Verified Statement and the Third Supplemental Verified Statement [Case No. 17-4780, Dkt. Nos. 939, 941 and 940, respectively]. On September 11, 2018, counsel to the Ad Hoc Group submitted the Fourth Supplemental Verified Statement of the Ad Hoc Group of PREPA Bondholders Pursuant to Federal Rule of Bankruptcy Procedure 2019 [Case No. 17-4780, Dkt. No. 959]. On November 29, 2018, counsel to the Ad Hoc Group submitted the Fifth Supplemental Verified Statement of the Ad Hoc Group of PREPA Bondholders Pursuant to Federal Rule of Bankruptcy Procedure 2019 [Case No. 17-4780, Dkt. No. 1037]. On May 10, 2019, counsel to the Ad Hoc Group submitted the Sixth Supplemental Verified Statement of the Ad Hoc Group of PREPA Bondholders Pursuant to Federal Rule of Bankruptcy Procedure 2019 [Case No. 17-4780, Dkt. No. 1237]. On August 23, 2019, counsel to the Ad Hoc Group Submitted the Seventh Supplemental Verified Statement of the Ad Hoc Group of PREPA Bondholders Pursuant to Federal Rule of Bankruptcy Procedure 2019 [Case No. 17-4780, Dkt. No. 1610]. On November 13, 2019, counsel to the Ad Hoc Group submitted the Eighth Supplemental Verified Statement of the Ad Hoc Group of PREPA Bondholders Pursuant to Federal Rule of Bankruptcy Procedure 2019 [Case No. 17-4780, Dkt. No. 1735]. On November 27, 2019, counsel to the Ad Hoc Group submitted the Ninth Supplemental Verified Statement of the Ad Hoc Group of PREPA Bondholders Pursuant to Federal Rule of Bankruptcy Procedure 2019 [Case No. 17-4780, Dkt. No. 1789]. On January 21, 2020, counsel to the Ad Hoc Group submitted the Tenth Supplemental Verified Statement of the Ad Hoc Group of PREPA Bondholders Pursuant to Federal Rule of Bankruptcy Procedure 2019 [Case No. 17-4780, Dkt. No. 1871]. On March 3, 2020, counsel to the Ad Hoc Group submitted the Eleventh Supplemental Verified Statement of the Ad Hoc Group of PREPA Bondholders Pursuant to Federal Rule of Bankruptcy Procedure 2019 [Case No. 17-4780, Dkt. No. 1926]. Counsel to the Ad Hoc Group submits this Twelfth Supplemental Verified Statement in accordance with the Twelfth Amended Notice, Case Management and Administrative Procedures, which are attached to the Case Management Order, to update the disclosable economic interests currently held by Members of the Ad Hoc Group and to restate prior supplemental verified statements. As of Jan. 14, 2019, and June 24, 2020, members of the Ad Hoc Group and their disclosable economic interests are: BlackRock Financial Management, Inc 40 East 52nd Street New York, NY 10022 Franklin Advisers, Inc. One Franklin Parkway San Mateo, CA 94403 GoldenTree Asset Management LP 300 Park Avenue, 21st Floor New York, NY 10021 Invesco Advisers, Inc. 350 Linden Oaks Rochester, NY 14625 Knighthead Capital Management, LLC 1140 Avenue of the Americas, 12th Floor New York, NY 10036 Nuveen Asset Management, LLC 333 West Wacker Dr. Chicago, IL 60606 Nothing contained in this Twelfth Supplemental Statement (or Exhibit A hereto) is intended to or should be construed to constitute (a) a waiver or release of any claims filed or to be filed against or interests in PREPA held by any Member, its affiliates or any other entity, or (b) an admission with respect to any fact or legal theory. Nothing herein should be construed as a limitation upon, or waiver of, any rights of any Member to assert, file and/or amend any proof of claim in accordance with applicable law and any orders entered in these cases. Counsel for the Ad Hoc Group of PREPA Bondholders can be reached at: TORO COLON MULLET P.S.C. Manuel Fernandez-Bared, Esq. Linette Figueroa-Torres, Esq. Nayda Perez-Roman, Esq. P.O. Box 195383 San Juan, PR 00919-5383 Tel: (787) 751-8999 Fax: (787) 763-7760 Email: mfb@tcm.law lft@tcm.law nperez@tcm.law - and - KRAMER LEVIN NAFTALIS & FRANKEL LLP Amy Caton, Esq. Thomas Moers Mayer, Esq. Alice J. Byowitz, Esq. 1177 Avenue of the Americas New York, NY 10036 Tel: (212) 715-9100 Fax: (212) 715-8000 Email: acaton@kramerlevin.com tmayer@kramerlevin.com abyowitz@kramerlevin.com A copy of the Rule 2019 filing, downloaded from PacerMonitor.com, is available at https://is.gd/mBTOG8 and https://is.gd/Mr1gJ3 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. SPANISH BROADCASTING: Deregisters its Common Stock Due to Pandemic ------------------------------------------------------------------ Spanish Broadcasting System, Inc. has voluntarily deregistered from the reporting requirements of the Securities Exchange Act of 1934, as amended. For the Company, as it is and has been for all companies, the global pandemic has provided need, reason and basis for the Company to reduce expenses and operate with utmost efficiency. With that continuing goal and objective, the decision of the Company to deregister the Company's common stock, par value $0.0001 per share was driven by elimination of the significant costs and administrative burdens of preparing and filing current and periodic reports with the Securities and Exchange Commission, the demands placed on management and the Company to comply with the requirements of the Exchange Act, and the low number of holders of the Common Stock of the Company. The Company believes the expected savings of more than $1.5 million per year outweigh the advantages of continuing to be an SEC reporting company. The Company had filed a Form 15 Certification and Notice of Termination of Registration under Section 12(g) of the Exchange Act with the SEC in connection with its intention to deregister its Common Stock and suspend its obligations to file reports with the SEC. The Company is eligible to file Form 15 because the Company's Common Stock is held by less than 300 holders of record. About Spanish Broadcasting Spanish Broadcasting System, Inc. (SBS) -- http://www.spanishbroadcasting.com/-- owns and operates radio stations located in the top U.S. Hispanic markets of New York, Los Angeles, Miami, Chicago, San Francisco and Puerto Rico, airing the Tropical, Regional Mexican, Spanish Adult Contemporary, Top 40 and Urbano format genres. SBS also operates AIRE Radio Networks, a national radio platform of over 275 affiliated stations reaching 95% of the U.S. Hispanic audience. SBS also owns MegaTV, a network television operation with over-the-air, cable and satellite distribution and affiliates throughout the U.S. and Puerto Rico, produces a nationwide roster of live concerts and events, and owns a stable of digital properties, including La Musica, a mobile app providing Latino-focused audio and video streaming content and HitzMaker, a new-talent destination for aspiring artists. Spanish Broadcasting recorded a net loss of $928,000 for the year ended Dec. 31, 2019, compared to net income of $16.49 million for the year ended Dec. 31, 2018. As of March 31, 2020, the Company had $453.36 million in total assets, $547.98 million in total liabilities, and a total stockholders' deficit of $94.62 million. Crowe LLP, in Fort Lauderdale, Florida, the Company's auditor since 2013, issued a "going concern" qualification in its report dated March 30, 2020, citing that the 12.5% Senior Secured Notes had a maturity date of April 15, 2017. Cash from operations or the sale of assets was not sufficient to repay the notes when they became due. In addition, at Dec. 31, 2019, the Company had a working capital deficiency. These factors raise substantial doubt about its ability to continue as a going concern. ********* 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. 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