/raid1/www/Hosts/bankrupt/TCRLA_Public/200904.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
Friday, September 4, 2020, Vol. 21, No. 178
Headlines
A R G E N T I N A
ARGENTINA: Guzman Says 99% of Overseas Debt Restructured in Swap
ARGENTINA: Investors Welcome Debt Deal Amid Grim Economic Outlook
BANCO DE LA CUIDAD: Moody's Rates Global LC Sr. Unsec. Notes Caa2
BANCO MACRO: Announces Results for the Second Quarter of 2020
B R A Z I L
BRAZIL: Virus Plunges Economy Into Recession With Record 9.7% Drop
P U E R T O R I C O
ASCENA RETAIL: Sept. 10 Hearing on Disclosure Statement
BANCO SANTANDER PUERTO RICO: First BanCorp. Completes Acquisition
BANCO SANTANDER: Fitch Cuts LT IDR to B+ on Sale to First Bancorp
CARLOS ROBLES: ACM Objects to Disclosure Statement
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A R G E N T I N A
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ARGENTINA: Guzman Says 99% of Overseas Debt Restructured in Swap
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Bloomberg News reports that Economy Minister Martin Guzman revealed
that 93.55 percent of bondholders in Argentina's US$66-billion
foreign debt restructuring deal have agreed to the government's
terms, activating collective action clauses to lift overall
acceptance to 99 percent.
The minister, speaking at an event at the Casa Rosada's
Bicentennial Museum, delivered the news to applause from President
Alberto Fernandez and a host of officials, including Vice President
Cristina Fernandez de Kirchner, according to Bloomberg News.
"Ninety-nine percent of the debt under foreign legislation has
already been restructured," said Guzman, Bloomberg News relays.
"There was adherence [to the exchange] of 93.55 percent, which due
to the collective action clauses raises the restructuring to 99
percent," he added.
"We achieved massive support on the part of our creditors," he
added with a smile, saying that the deal "put Argentina in a much
healthier and more solid situation" than when the government took
office last December, Bloomberg News relays.
Argentina needed sign-off from at least 85 percent of holders of
all bonds issued in 2005 and 2010, and two-thirds acceptance from
securities issued more recently for the collective action clauses
to kick in, Bloomberg News notes.
Bloomberg News discloses that the news comes around a month after
the government reached an agreement with three major creditor
groups to renegotiate the terms of the debt following months of
strained talks and several missed deadlines.
The deal, reached on August 4, is worth 54.8 cents on the dollar, a
significant increase on the government's original offer of 39
cents, Bloomberg News says.
The bonds represent roughly a fifth of Argentina's US$324 billion
total debt, which amounts to around 90 percent of its GDP,
Bloomberg News notes.
Final step
Bloomberg News relays the announcement marks a key final step in
the restructuring process after four months of intense negotiations
with bondholders that culminated in a deal valued at an average 55
cents on the dollar. Argentina pushed back due dates for its bonds
and chopped the interest rates, giving the economy a better chance
of recovery as it enters its third straight year of contraction,
Bloomberg News notes.
Guzman said the deal would allow the government to tackle other
imbalances in the economy and would provide Argentina with US$37.7
billion in debt relief over the next decade, Bloomberg News relays.
Interest rates on the bonds in the deal had been cut from seven
percent to just over three percent, Bloomberg News notes.
"This gives us a sufficient economic timeframe to generate
sustainable policies and allow development," said Guzman, notes the
report.
The minister also said that the government's upcoming budget
proposal, which would be sent to Congress "in the coming weeks,"
would specify that next year's fiscal deficit "will be around 4.5
percent," Bloomberg News relays.
He also confirmed the government's intention to seek a new
agreement with the International Monetary Fund (IMF), with payments
on its US$57-billion credit-line due in the coming months,
Bloomberg News notes. Guzman said those talks would "not be done
behind the people's backs, but will be debated in Congress," he
added.
The economy minister also called on Argentina's provincial
governments to continue their own talks to restructure debt in
dollars, saying they should "respect the sustainability guidelines
established by the national government," Bloomberg News says.
Argentina is also in the process of restructuring its foreign debt
under local law, Bloomberg News notes. The period of early
acceptance for holders ends September 1, and the results will be
published before the deal's September 4 settlement date, Bloomberg
News relates.
'Lost its way'
The announcement had been eagerly awaited by markets, investors and
media outlets, though officials had briefed over the weekend that
the government was "optimistic" about the results of the exchange,
Bloomberg News notes.
A host of government officials were in attendance, joined by a
number of provincial governors by videoconference. Of those
gathered in person, only three officials were without a face mask
for the majority of the time: Fernandez, Guzman (while he spoke)
and Fernandez de Kirchner, Bloomberg News relays.
The president delivered only a brief introduction before ceding the
word to Guzman, though he spoke at greater length, and with some
sense of relief, after the main news had been dealt with, Bloomberg
News notes.
Describing the debt talks at a "labyrinth," in which external
interests were entwined with domestic, Fernandez said that
Argentina had "lost its way" over the last two years, arguing that
the country had really entered into default "in January 2018," when
markets stopped lending to the country, Bloomberg News says.
Argentina has officially been in default--the ninth in its
history--since May 22 when the country missed a deadline to pay
US$500 million in interest on debt subject to the debt talks,
Bloomberg News notes.
Fernandez said pressure to take a quick deal at any price had been
high and that the government had been "fighting against two years
of lies," Bloomberg News notes.
"Both the government and bondholders can claim success here," said
Patrick Esteruelas, head of research at Emso Asset Management. He
added the government will have a chance to build up hard-currency
reserves over the next few years, while investors can take some
comfort in reaching a considerably better deal than they were first
offered, Bloomberg News discloses.
While the government will still have to deal with the bonds held
out of the deal, the plan to swap 99 percent of overseas bonds
draws a stark contrast to 2005, when investors holding almost a
quarter of the notes outstanding rejected the deal they were
offered, Bloomberg News relays. That created all sorts of
headaches for Argentina, including a decade-long court battle with
billionaire Paul Singer's Elliott Management that left overseas
assets vulnerable to seizure and locked the nation out of
international debt markets, Bloomberg News notes.
'Structural change'
President Fernandez framed the moment as a campaign promise
fulfilled, having told voters on the trail that they wouldn't bear
the brunt of Argentina's debt burden, Bloomberg News relays.
"We don't want to condemn any more Argentines to grovelling," he
added, says the report.
Highlighting that the deal had been reached in the height of the
coronavirus pandemic, the Peronist leader also warned that
Argentina still had to "be able to comply" with its scheduled
payments, saying it was essential to get the economy back on track,
Bloomberg News notes.
"We've come out of the labyrinth," he declared, calling on the
country to learn its lesson this time out and not to return to
excessive indebtedness in the future.
The country must now "produce, grow, export, accumulate reserves
and then pay" down the debt, he added, saying this would entail
"structural change."
Fernandez then thanked a host of European leaders for their support
in the process, even picking out Pope Francis, saying the leader of
the Catholic Church had been "silently" helping his country debt
restructuring bid, Bloomberg News says.
Fernandez also voiced thanks for International Monetary Fund chief
Kristalina Georgieva, describing upcoming talks with the Fund as
"the other obstacle" that lay ahead, Bloomberg News relays.
The government formally asked for talks to replace its financing
arrangement from 2018. Officials will only request enough money to
refinance the existing obligations, and the nation plans to
continue making interest payments during the talks, IMF executive
director for the Southern Cone and Argentina' representative to the
Fund, Sergio Chodos, said recently, Bloomberg News recalls.
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.
ARGENTINA: Investors Welcome Debt Deal Amid Grim Economic Outlook
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Sydney Maki at Bloomberg News reports that investors are caught
between relief over Argentina's debt deal and concern over the grim
economic reality facing the nation after it won approval to
restructure 99 percent of its foreign debt.
President Alberto Fernandez's government received tenders for 93.5
percent of the US$66 billion of debt eligible for restructuring,
activating collective action clauses and bringing a total 99
percent of the country's international debt into the deal. It's the
final step in the restructuring and should allow the nation to
emerge from its ninth default, according to Bloomberg News.
"In this case, with no capital haircut, it didn't make any sense to
stay out as a holdout," said Joaquin Almeyra, a fixed income trader
at Bulltick LLC in Miami, the report notes. "Now with the new
bonds we will see if there is any demand for Argentina risk," Mr.
Almeyra added.
The new bonds will start trading after the September 4 deal
settlement and may yield an average of 12 percent, according to
analysts, the report notes. Those premiums will be key in luring
yield-hungry investors back to Argentina. Still, the nation will
need to address a deep recession, high infection rates of Covid-19
and negotiations with International Monetary Fund, the report
relays.
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.
BANCO DE LA CUIDAD: Moody's Rates Global LC Sr. Unsec. Notes Caa2
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Moody's Latin America Agente de Calificacion de Riesgo (MLA)
assigned a Caa2 global local currency senior unsecured debt rating
and a B1.ar senior debt rating in the Argentinean national scale to
Banco de la Ciudad de Buenos Aires' (Ciudad) XXII inflation linked
(UVA) senior unsecured notes. The notes will be due July 2023 and
will be issued under Ciudad's existing multi-currency senior
unsecured program of USD1,500 million. The notes will be issued for
ARS2,000 million, with possible upsize to ARS4,000 million, and the
proceeds will be used for lending to small and medium sized
companies in Argentina. The outlook on the global and national
scale debt ratings is negative.
The following ratings were assigned to Banco de la Ciudad de Buenos
Aires' Class XXII notes:
Global local currency senior unsecured debt rating of Caa2;
negative outlook
Argentinean national scale local currency senior debt rating of
B1.ar; negative outlook
RATINGS RATIONALE
Ciudad's ratings, which are equal to one of the highest ratings
assigned to any domestically-owned Argentine bank, reflect its good
capitalization levels and adequate asset risk and liquidity
metrics. However, these credit strengths are offset by risks
associated with Argentina's ongoing economic weakness and which may
continue to pressure Ciudad's financial performance in the coming
quarters.
Ciudad's role as financial agent of the City of Buenos Aires (Caa3
negative) provides it access to stable, low-cost funding,
supporting its well-established deposit franchise, and allows the
bank to offer financial services to a large base of civil servants,
ensuring recurring earnings generation and lower credit risk, which
help mitigate the effects of the economic recession worsened by the
coronavirus outbreak that imposed social distancing measures since
the 1Q 2020.
In March 2020, the bank's problem loans ratio improved slightly
reaching 4.1% from 4.5% at the end of 2019, but continues to
reflect the weak economic scenario in Argentina, with high
inflation, deteriorating job markets and low industrial production,
which have contributed to a severe slowdown in credit demand and
origination. Ciudad has a diversified loan book, with about 28% of
loans in the form of low-risk mortgage loans, which have
historically demanded lower loan loss reserves than unsecured
loans. In March 2020, reserves were 79% of problem loans or 3.3% of
total loans. However, the bank will continue to reinforce
provisions in the second and third quarters, particularly to cover
for rising risks in the corporate segment.
While asset risk will continue to challenge Ciudad's credit risk
profile, as for similarly rated banks, its capitalization, measured
as tangible common equity as a percentage of risk weighted assets,
has remained stable at 10.2% on average in the past five years,
which would help absorb potential increases in loan losses
resulting from the negative economic scenario in Argentina.
Ciudad's actions to support clients at the outbreak of the
coronavirus pandemic included loan deferrals and grace periods for
about 2% of loans. As grace periods mature, roughly 90% of deferred
loans are again paying the full balance, reducing potential credit
losses. Since the onset of the crisis, the bank has been active in
lending to small and medium sized companies and affected
households, as well as companies that are suppliers of the City of
Buenos Aires, a portfolio that accounted for 7.4% of total loans in
June 2020.
Ciudad's profitability will continue to be impacted by a reduction
in business volumes, lower interest rates, and higher provisions
for loan losses, which increased 20.4% in the first three months of
2020 compared to the Q1 2019. Net income to tangible assets was
1.2% in March 2020, but preprovision income dropped almost 9%,
compared to same period in 2019, largely resulting from a 10%
decline in interest income in the period and lower fee income. The
bank's lower cost of funding as a result of low policy rates in
Argentina and entrenched core deposit base will continue to benefit
its margins. Ciudad's B1.ar NSR is at the high end of the three NSR
categories in Argentina that correspond to Moody's Caa2 global debt
ratings. The NSR is supported by Ciudad's entrenched market
presence in retail banking that ensures a steady core funding
position and recurring earnings generation.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ciudad's ratings are currently one notch above the rating assigned
to its shareholder, the City of Buenos Aires, and two notches above
the Government of Argentina's bond rating of Ca. Upward pressure on
Ciudad's ratings is limited at this point as the rating outlook is
negative. A downgrade of Argentina's sovereign rating could put
downward pressure on the bank's global scale rating (GSR).
Both the global and national scale ratings could be downgraded if
Ciudad experiences a significant deterioration in its financial
fundamentals without a corresponding deterioration in the
government of Argentina's creditworthiness.
The principal Rating Procedure Manual used in assigning these
ratings was the Procedures Manual for Rating of Deposits, Debt
Instruments, Counterparty Obligations and Shares of Financial
Institutions published in September 2018 registered with the CNV --
Comision Nacional de Valores in Argentina.
BANCO MACRO: Announces Results for the Second Quarter of 2020
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Banco Macro S.A. disclosed its results for the second quarter ended
June 30, 2020 ("2Q20"). All figures are in Argentine pesos (Ps.)
and have been restated in terms of the measuring unit current at
the end of the reporting period. As of 1Q20, the Bank began
reporting results applying Hyperinflation Accounting, in accordance
with IFRS IAS 29 as established by the Central Bank. For ease of
comparison, figures of previous quarters of 2019 have been restated
applying IAS 29 to reflect the accumulated effect of the inflation
adjustment for each period through June 30, 2020.
Summary
The Bank's net income totaled Ps.6.4 billion in 2Q20. This result
was 14% lower than the result posted in 1Q20 and 111% higher than
in 2Q19. In 2Q20, the accumulated annualized return on average
equity ("ROAE") and the accumulated annualized return on average
assets ("ROAA") were 23% and 5.2%, respectively.
In 2Q20, Banco Macro's financing to the private sector decreased 5%
or Ps.12.2 billion quarter over quarter ("QoQ") totaling Ps.219.4
billion and 12% or Ps.30.4 billion year over year ("YoY").
In the quarter commercial loans stand out, among which Others stand
out; with a 58% increase QoQ, mainly driven by the 24% loans to
SMEs.
In 2Q20, Banco Macro's total deposits increased 24% or Ps.78
billion QoQ, totaling Ps.406 billion and representing 80% of the
Bank's total liabilities. Private sector deposits increased 16% or
Ps.47 billion QoQ.
Banco Macro continued showing a strong solvency ratio, with an
excess capital of Ps.101.8 billion, 32.1% regulatory capital
ratio--Basel III and 25% Tier 1 Ratio. In addition, the Bank's
liquid assets remained at an adequate level, reaching 54% of its
total deposits in 2Q20.
As of 2Q20, the accumulated efficiency ratio reached 41.6%,
deteriorating from the 39.8% posted in 1Q20.
In 2Q20, the Bank's non-performing to total financing ratio was
1.52% and the coverage ratio improved to 210%.
As reported in the Troubled Company Reporter-Latin America on Sept.
1, 2020, Fitch Ratings has affirmed Banco Macro S.A.'s
Local-Currency Long-Term Issuer Default Ratings (IDR) at 'CC'
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B R A Z I L
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BRAZIL: Virus Plunges Economy Into Recession With Record 9.7% Drop
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Agence France-Presse reports that Brazil's economy, the biggest in
Latin America, contracted by a record 9.7 percent in the second
quarter of 2020, plunging into recession as coronavirus lockdowns
hit home, the official statistics agency said.
Brazil has been hit hard by the pandemic, with the second-highest
number of infections and deaths worldwide after the United States,
and stay-at-home measures to contain the virus have taken a heavy
toll, according to Agence France-Presse.
"GDP is now at the same level as late 2009, at the height of the
global financial crisis," the Brazilian Institute of Geography and
Statistics (IBGE) said in a statement obtained by the news agency.
It was the biggest drop since the current system of records began
in 1996, it said, the report notes.
There were record contractions of 12.3 percent in the industrial
sector and 9.7 percent in the services sector, which together
account for 95 percent of the Brazilian economy, IBGE said, the
report says.
"These results refer to the peak of social distancing, when many
economic activities were partially or totally paralyzsed to fight
the pandemic," IBGE national accounts coordinator Rebeca Palis said
in the statement obtained by the news agency.
The contraction was worse than the 9.2 percent average forecast by
49 economists polled by business daily Valor Economico, the report
relays.
However, it was better than the 11.1 percent drop economists were
predicting in May, the report notes.
Brazil fared better in the second quarter than many other
economies, including Britain (-20.4 percent), France (-13.8
percent), Mexico (-17.1 percent) and Chile (-13.4 percent), the
report discloses.
"The country suffered one of the more modest downturns in Latin
America," consulting firm Capital Economics said in a note, the
report discloses.
"But with fiscal policy set to turn from a tailwind to a headwind,
the pace of the recovery is likely to lose momentum," he added.
Stimulus Extended, But Halved
Analysts say Brazil's improvement was largely thanks to the
decision by President Jair Bolsonaro's administration to launch a
massive stimulus program that has been paying 600 reals (US$110) a
month to 66.4 million Brazilians hit hardest by lockdown measures,
the report notes.
That is nearly one-third of the population, the report relays.
Bolsonaro, who faces pressure from deficit hawks to rein emergency
spending back in, announced the government would extend the measure
for four more months, but halve the payout to 300 reals, the report
relays.
"The Brazilian fiscal package was brutal, it was absolutely
enormous," Margarida Gutierrez, an economist at the Federal
University of Rio de Janeiro, told AFP.
Brazil's economy shrank a revised 2.5 percent in the first quarter,
as the impact of the pandemic began to hit, IBGE said, the report
notes.
Since then, Covid-19 has exploded in Brazil: the country has now
registered more than 3.9 million infections and 121,000 deaths, the
report says.
The economy was only just recovering from its longest recession in
history, driven by the fallout of a massive corruption scandal
centred on state-run oil giant Petrobras, the report notes.
Brazil's economy shrank a revised 2.5 percent in the first quarter,
as the impact of the pandemic began to hit, IBGE said, the report
discloses.
Since then, Covid-19 has exploded in Brazil: the country has now
registered more than 3.9 million infections and 121,000 deaths, the
report relays.
The economy was only just recovering from its longest recession in
history, driven by the fallout of a massive corruption scandal
centred on state-run oil giant Petrobras, the report adds.
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.
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P U E R T O R I C O
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ASCENA RETAIL: Sept. 10 Hearing on Disclosure Statement
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On July 31, 2020, Ascena Retail Group, Inc., et al., filed their
Plan of Reorganization and the Disclosure Statement related
thereto.
The Bankruptcy Court will hold a hearing to consider approval of
the Disclosure Statement on September 10, 2020 at 11:00 a.m. (ET).
Ascena Retail sought Chapter 11 protection with a debt-for-equity
plan it says will cut $1 billion in debt and allow the company to
bounce back from months of COVID-19 store closures.
"This comprehensive restructuring, as well as the actions we are
taking to optimize our brand portfolio and store fleet, mark a new
start for our company and will allow us to expand our
customer-focused strategies across her mobile, online, and store
experiences," CEO Gary Muto said in a statement.
The New Jersey-based company operates about 2,800 women's clothing
stores in the U.S., Canada and Mexico, including 291 Ann Taylor
stores, 688 Lane Bryant stores and 826 Justice stores. It has about
40,000 employees, according to its Chapter 11 filings.
According to its Chapter 11 filings, the company has $1.6 billion
in funded debt, with $1.27 million in term loans outstanding from
the $1.8 billion it borrowed for the Ann Taylor acquisition and a
$330 million asset-based loan facility.
In her Chapter 11 declaration, Carrie Teffner, chairwoman of
Ascena's board, said that under the plan, participating term
lenders will provide $75 million in debtor-in-possession financing
and receive 44.9% of the equity in the reorganized Ascena, while
all term lenders will receive a share in the remaining equity along
with $88.2 million in new second-out term loan and the opportunity
to participate in another $75 million DIP, with both DIPs rolling
over into new term loans.
She said the company was in talks with its asset-based lender for
another $400 million DIP that would also roll over into a
post-petition facility. Unsecured creditors will receive a share of
$500,000 if the class approves the plan, she said.
Teffner said the plan also involved "right-sizing" the company's
store profile. About 680 Justice stores and all 320 Catherines
stores are slated for closure, she said. The company said in its
announcement it has received a stalking horse bid for the
Catherines e-commerce platform and intellectual property.
About 600 Ann Taylor, LOFT, Lane Bryant and Lou & Grey locations
will also be closing, including all stores in Puerto Rico and
outside the U.S., she said.
About Ascena Retail Group
Ascena Retail Group, Inc. (Nasdaq: ASNA) 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 Retail Group, through its retail brands,
operates e-commerce websites and approximately 2,800 stores
throughout the United States, Canada and Puerto Rico. Visit
http://www.ascenaretail.comfor more information.
Ascena Retail Group 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 and its affiliates sought
Chapter 11 protection (Bankr. E.D. Va. Case No. 20-33113). As of
Feb. 1, 2020, Ascena Retail Group 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, Kirkland & Ellis
International LLP and Cooley LLP as bankruptcy counsel, Guggenheim
Securities, LLC as financial advisor, and Alvarez and Marsal North
America, LLC as restructuring advisor. Prime Clerk, LLC is the
claims agent.
BANCO SANTANDER PUERTO RICO: First BanCorp. Completes Acquisition
-----------------------------------------------------------------
First BanCorp., the bank holding company for FirstBank Puerto Rico
("FirstBank"), disclosed the completion of its previously announced
acquisition of Santander BanCorp ("Santander BanCorp") and its
wholly-owned subsidiary Banco Santander Puerto Rico ("Banco
Santander"). In connection with the acquisition, Santander BanCorp
and Banco Santander will be merged into FirstBank, with FirstBank
being the surviving entity. As of July 31, 2020, Banco Santander
had approximately $5.5 billion in assets, $2.7 billion in total
loans and $4.2 billion in deposits. In consideration for the
acquisition of Santander BanCorp and Banco Santander, the
Corporation paid Seller cash in an amount of approximately (i)
$394.8 million base purchase price for 117.5% of Banco Santander's
core tangible common equity, comprised of a $58.8 million premium
on $336 million of core tangible common equity, plus (ii) $882.8
million for Santander's BanCorp excess capital (paid at par), which
represents the estimated closing payment pursuant to the terms of
the Purchase Agreement.
Aurelio Aleman, President and Chief Executive Officer of the
Corporation, commented: "Today we completed the acquisition of
Banco Santander announced back in October 2019. The completion of
this transaction marks a significant milestone in our journey. I
want to acknowledge the hard work and dedication of both teams who
have worked diligently on integration planning and execution
throughout the operational disruption caused by the pandemic.
We welcome the Banco Santander employees and customers and look
forward to exceeding their expectations with an expanded branch
network and service channels and enhanced technological offerings.
This transaction significantly improves our scale, talent strength
and competitiveness in retail, commercial and business banking. Our
existing customers will also benefit from this expanded reach.
Furthermore, we have and will continue to make considerable
investments in technological innovations and talent development to
enhance our portfolio of product offerings and ability to service
our customers.
The integration process will be carried out gradually to minimize
the impact on FirstBank and Banco Santander customers, and we
expect to complete the integration process during the second
quarter of 2021. In the meantime, each of the FirstBank and Banco
Santander customers prior to the merger will continue to conduct
their banking business through their existing relationship branches
and corresponding bank platforms. We expect that the combined
strength of our franchises will expand our earnings power and
capital ratios, which already exceed the well-capitalized
regulatory guidelines. This is a new chapter for First BanCorp and
we are delighted to make evident to our shareholders, customers and
employees what we are capable of accomplishing together."
This transaction further cements the Corporation's prominent
position in the island's financial services industry and
significantly expands our ability to serve our customers by
providing them with:
A network of 73 branches throughout Puerto Rico, significantly
expanding our presence in San Juan, Bayamon, Caguas, and Guaynabo,
as well as in the western and southern regions of the island. Over
the next few months, we will be working on integrating the branch
systems so that we can serve customers of both banks in all
branches;
More than 445 ATMs throughout Puerto Rico. Moreover, both FirstBank
and Banco Santander customers will be able to use both FirstBank
and Banco Santander ATMs free of charge. In addition, upon the
completion of the system integration process, customers will have
access to more than 100 ATMs with remote deposit capacity;
An extensive portfolio of financial products and services,
including innovative digital banking alternatives, to conveniently
address the needs of our individual and commercial customers; and
enhanced resources, professional knowhow, and talents focused on
helping our customers achieve all their goals and dreams.
About First BanCorp.
First BanCorp. is the parent corporation of FirstBank Puerto Rico,
a Puerto Rico-chartered commercial bank with operations in Puerto
Rico, the U.S. and British Virgin Islands and Florida, and of
FirstBank Insurance Agency, LLC. Among the subsidiaries of
FirstBank Puerto Rico are First Federal Finance Limited Liability
Company and First Express, Inc., both small loan companies. First
BanCorp's shares of common stock trade on the New York Stock
Exchange under the symbol "FBP."
BANCO SANTANDER: Fitch Cuts LT IDR to B+ on Sale to First Bancorp
-----------------------------------------------------------------
Fitch Ratings has downgraded Banco Santander Puerto Rico's
support-driven Long-Term Issuer Default Rating to 'B+' from 'BBB+'
and downgraded its Short-Term IDR to 'B' from 'F2'. Fitch has
removed all of BSPR's ratings from Rating Watch Negative (RWN) and
simultaneously withdrawn all ratings. BSPR's ratings were placed on
RWN subsequent to the announced sale of its operations to First
Bancorp (FBP; B+/Stable) in October 2019. The actions follow the
completion of that sale on Sept. 1, 2020. BSPR's rating Outlook is
Stable.
Fitch has withdrawn the ratings of BSPR as it no longer exists as a
standalone operating entity. Accordingly, Fitch will no longer
provide ratings or analytical coverage for BSPR.
KEY RATING DRIVERS
IDRS
The downgrade of BSPR's support-driven IDRs reflects the sale of
its operations to FBP (B+/Stable) by Santander Holdings USA, Inc.
(SHUSA;'BBB+/Negative). BSPR's IDRs, which had been driven by
potential support from SHUSA, are now in line with those of FBP and
its primary operating bank, FirstBank Puerto Rico (B+/Stable) with
which BSPR's operations will be merged and integrated. FirstBank
Puerto Rico will be the surviving entity.
The IDRs of FBP and FirstBank Puerto Rico have a Stable Outlook,
notwithstanding uncertainty around the economic implications of the
coronavirus pandemic, as Fitch believes they entered the downturn
from a position of strength relative to their current rating level.
The ratings of FBP, FirstBank Puerto Rico and SHUSA are unaffected
by the action.
SUPPORT RATING
BSPR's Support Rating is revised to '5' from '2', in line with that
of FirstBank Puerto Rico, and simultaneously withdrawn.
LONG- AND SHORT-TERM DEPOSIT RATINGS
BSPR's long- term deposit ratings are downgraded to 'BB-' from
'A-', and its short-term deposit ratings are similarly downgraded
to 'B' from 'F2', bringing them in line with those of FirstBank
Puerto Rico, and simultaneously withdrawn.
RATING SENSITIVITIES
RATING SENSITIVITIES
Ratings sensitivities are not applicable as Fitch will no longer
provide analytical coverage of BSPR.
CARLOS ROBLES: ACM Objects to Disclosure Statement
--------------------------------------------------
ACM CCSC OB VII (CAYMAN) Asset Company filed an objection to a
Second Amended Disclosure Statement filed by Carlos Robles Tile &
Stone, Inc.
ACM points out that the Disclosure Statement and Plan failed to
disclose the extent and limits of insurance coverage regarding the
real property secured by ACM. Furthermore, the Debtor must provide
ACM with evidence of the current insurance policy in place.
ACM asserts that the Debtor must explain why it is designating
Class 2 of General Secured Creditors as unimpaired in both the
Disclosure Statement and Plan, when the truth is that Debtor is
modifying the repayment terms to ACM through the proposed plan; and
therefore, ACM is entitled to vote on the Plan.
ACM complains that the Debtor must explain how it will be able to
make plan payments of $12,406, when Debtor's monthly operating
reports show that since the filing of the petition Debtor's net
income has averaged $844.05 monthly.
According to ACM, Debtor must explain the basis for the projected
increase of daily sales volume to 5% for the year 2019-2020 and 10%
for years 2020-2021, and 5% for the years 2022-2025, in view that
the Debtor's Monthly Operating Reports show that Debtor's monthly
average Sales Income has been constantly decreasing since the
filing of the petition.
ACM points out that the Debtor must explain why monthly plan
payments are reduced from $12,462 (Years 1-5) to $4,912 (Years
6-7), while both secured and unsecured creditors are still been
paid.
ACM asserts that the Debtor must explain why in its projections,
Debtor is proposing a $10,000 expense as "Unprovided" for
"unforeseen or underestimated expenses".
ACM complains that neither the Plan nor the Disclosure Statement
specifies the rights and remedies that would be available to
creditors in the event of a default by Debtor in making the monthly
payments due them under the Plan.
According to ACM, Debtor has not filed the Monthly Operating Report
corresponding to June 2020.
Attorney for ACM CCSC OB VII (CAYMAN) ASSET COMPANY:
MARISTELLA SÃNCHEZ RODRÃGUEZ
DELGADO & FERNÃNDEZ, LLC
PO Box 11750
Fernández Juncos Station
San Juan, Puerto Rico 00910-1750
Tel: (787) 274-1414
Tel: (787) 764-8241
E-mail: msanchez@delgadofernandez.com
About Carlos Robles Tile & Stone
Carlos Robles Tile & Stone, Inc., operates a store that sells
tiles, stones and related materials. Its business and office are
located at 383 Ave. Cesar Gonzalez, Urb. Eleanor Roosevelt, San
Juan, Puerto Rico.
Carlos Robles Tile & Stone previously sought bankruptcy protection
on March 19, 2015 (Bankr. D.P.R. Case No. 15-02004).
Carlos Robles Tile & Stone sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. D.P.R. Case No. 18-05145) on Sept. 5,
2018. In the petition signed by Carlos Robles Marin, president,
the Debtor disclosed $486,000 in assets and $3,517,613 in
liabilities. Judge Mildred Caban Flores oversees the case. The
Debtor tapped the Law Offices of Luis D. Flores Gonzalez as its
legal counsel.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Latin America is a daily newsletter
co-published by Bankruptcy Creditors' Service, Inc., Fairless
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USA, Marites O. Claro, Joy A. Agravante, Rousel Elaine T.
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
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