/raid1/www/Hosts/bankrupt/TCRLA_Public/201106.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, November 6, 2020, Vol. 21, No. 223
Headlines
A R G E N T I N A
GENNEIA SA: Fitch Lowers Issuer Default Ratings to C
B R A Z I L
USIMINAS INT'L: Moody's Affirms Ba3 Rating on $750MM Unsec. Notes
USINAS SIDERURGICAS: Moody's Alters Outlook on Ba3 CFR to Stable
C A Y M A N I S L A N D S
CORSAIR GROUP: S&P Ups ICR to 'B+' on IPO Proceeds, Outlook Stable
D O M I N I C A N R E P U B L I C
DOMINICAN REPUBLIC: Barclays is Bullish on the Country, Bank Says
E C U A D O R
ECUADOR: Seeks Details After China Finds Virus on Imported Seafood
H O N D U R A S
HONDURAS: IDB Approves $18MM-Loan to Improve Energy Integration
J A M A I C A
JAMAICA: Almost 800 Covid-Hit Companies Formally Shut Down
P E R U
PERU: Embraces Innovation to Tackle Covid-19 Crisis
P U E R T O R I C O
ALICE'S SCHOOL: Plan to be Funded by Continued Business Operation
ALLIED FINANCIAL: $34K Sale of Aguadilla Property to Barreto OK'd
T R I N I D A D A N D T O B A G O
CARIBBEAN CEMENT: Weathers Covid-19 Storm, Posts $5BB Qtr. Revenues
V E N E Z U E L A
VENEZUELA: Crude Oil Exports Hit 77-Year Low
- - - - -
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A R G E N T I N A
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GENNEIA SA: Fitch Lowers Issuer Default Ratings to C
----------------------------------------------------
Fitch Ratings has downgraded Genneia S.A.'s foreign and local
currency Issuer Default Ratings (IDRs) to 'C' from 'CCC'. Fitch has
also downgraded Genneia's USD500 million notes due 2022 to
'C'/'RR4' from 'CCC'/'RR4'. The downgrades follow Genneia's
announced launch of a tender offer to exchange its USD51.5 million
class XXI notes due Nov. 23, 2020 for new notes, named class XXX,
due in 2022. The rating reflects the risk the company will be
prohibited from accessing the official exchange rate market, under
the new capital control rules issued by the Central Bank of
Argentina, to repay noteholders that do not participate in the
exchange, resulting in a default per Fitch's definition. Fitch does
not consider this offer a distressed debt exchange (DDE) per its
DDE criteria as the proposal does not amend the terms of the class
XXI notes, and Fitch does not consider the offer coercive to class
XXI noteholders and estimates that the company has the ability to
repay the note in whole given its strong liquidity. Fitch does not
rate Genneia's class XXI notes.
On Oct. 28, 2020, Genneia announced a debt exchange offer for the
USD51.5 million outstanding on its class XXI Notes due Nov. 23,
2020. Fitch estimates that Genneia S.A. has approximately USD90
million in cash on hand but only USD10 million of which is in USD.
Due to recently implemented capital controls by the Central Bank of
Argentina, Argentine corporates are only allowed to access the
foreign exchange dollar market to repay up to 40% of debt
maturities in dollars due between Oct. 15, 2020 and March 31, 2021.
In order to have access to the 40% of the amount maturing, the
remaining 60% has to be extended with at least a two-year average
life.
Genneia's exchange offer provides two options, a Base Option and a
Par Option. The Base Option offers a minimum 40% repayment of
principal in USD with the remaining principal payable in 24 months.
The Par Option provides a 24-month deferral of principal payment,
payable in USD at maturity. Under both options, investors may
receive the deferred principal in New York. Both options carry an
interest rate of 12%. For investors responding by Nov. 5, the Base
Option offers a 1% early acceptance incentive while the Par option
offers a 4% early acceptance incentive. The incentive payments
would be made in Argentine pesos. The deadline to respond is Nov.
10. Investors who do not respond by Nov. 10 would, as it stands,
remain in the class XXI notes, which the company may be unable to
repay in dollars due to the capital controls.
KEY RATING DRIVERS
Impact of Capital Controls: Genneia's 'C' ratings reflects the high
likelihood that the Argentine central bank will not allow the
company to convert currency to make the principal payments to any
bondholders that do not participate in the company's ongoing tender
offer of its existing class XXI notes. Should the company be able
to obtain 100% bondholder acceptance of its exchange offer, it will
avoid missing principle payments and its ratings will likely be
upgraded. Genneia currently has sufficient liquidity consisting of
approximately USD90 million of cash on hand, of which USD10 million
is in dollars, to cover the USD51.5 million principle payment due
in November. Yet, the ongoing capital controls imposed by the
central bank will not allow the company to convert pesos into
dollars in order to fulfill the obligation to non-tendering
bondholders.
Dominant Player in Renewables: Although Genneia is considered a
relatively small player in the local power generation industry
(3.3% of the system's installed capacity), the company is the
leading wind power generation provider in the country, with
approximately 41% of the renewable installed capacity of Argentina
as of November 2019. The company is expected to add 167MW (Chubut
Norte II, III and IV) of wind capacity in 2020, increasing its
national market share to 52% by year end and exposing it to greater
execution risk. Fitch expects that, by 2021, renewables, including
wind, solar and biomass, will constitute 73% of the company's
revenue and 76% of its EBITDA.
Heightened Counterparty Exposure: Genneia depends on payments from
CAMMESA, which acts as an agent on behalf of an association
representing agents of electricity generators, transmission,
distribution and large consumers or the wholesale market
participants (Mercado Electrico Mayorista; MEM). CAMMESA's payment
delays to the electricity sector have risen from 50 days at the
beginning of 2019 to currently over 70 days. This risk is slightly
mitigated in the RenovAR program with the presence of the FODER
trust fund, which is prefunded with one year of revenue. Payment
days for the FODER are 42 days, resulting in a consolidated payment
lag for Genneia of approximately 54 days. The company estimates 20%
of its consolidated EBITDA is backed by a World Bank guarantee.
Predictable Operating Cash Flow: Genneia's cash flow generation is
relatively stable and predictable. Almost all of the company's
revenue is related to sales to the MEM under contracts signed under
RenovAr, GENREN and 21/16. The company benefits from
USD-denominated power purchase agreements (PPAs) expiring between
2018 and 2027 for its thermal capacity and between 2027 and 2041
for renewables. These PPAs support the company's cash flow
stability and predictability through fixed payments and fuel
supplied by CAMMESA.
Strong EBITDA Margins: Fitch expects the company's EBITDA to be
USD241 million in 2020, 76% of which will be from renewables. The
company's EBITDA margins remained high in 2020 at 86%, in line with
83% in 2019. Fitch expects EBITDA margins to remain stable at 86%
in 2021 and beyond as the company does not plan any expansions
after 2020 and no PPA or regulatory changes are anticipated until
2027. Due to their low variable cost, EBITDA margins on the
company's renewable assets are 88%, while margins for its thermal
projects are approximately 84%. Genneia has relatively fixed and
stable operating costs and does not need to acquire fuel.
Improving Credit Metrics: Fitch expects Genneia to de-lever to
2.0x-3.0x in 2021 and 2022, in line with its Argentine utility
peers. The company's leverage peaked in 2018 at 6.1x to finance the
addition of 500MW of renewable energy capacity between 2017 and
2020 with an additional 167MW of new wind capacity expected in
2H20. Fitch estimates Genneia will be FCF positive starting in 2021
after its imminent expansion capex has concluded. Fitch expects the
company to begin paying dividends in 2023, the year after its 2022
bond matures, at a rate of 50% of the previous year's adjusted net
income, or approximately USD72 million.
Uncertain Regulatory Environment: Fitch believes Argentina's
current economic and political environment increases the regulatory
uncertainty. Following the presidential elections in October 2019,
Fitch believes power companies are exposed to uncertain regulatory
changes that could negatively affect their bottom lines, which is
reflected in their ratings being aligned with the sovereign. The
market has already witnessed the pesification of Base Energy with
other changes to PPAs being considered as the Argentina's
government is currently facing a possible restructuring of its
external bonds. Fitch believes the government may adjust prices
paid to generation companies and force them to absorb some of the
cost.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- An upgrade to Argentina's ratings could result in a positive
rating action.
-- Maintaining a gross leverage ratio of below 4.0x.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- A default on either principal or interest of a financial
obligation.
-- A downgrade of Argentina's ratings would result in a downgrade
of the issuer's ratings given that the company's ratings are
constrained by the sovereign's credit quality.
-- A significant deterioration of credit metrics and/or
significant payment delays from CAMMESA.
-- Material delays or cancellation of its expansion projects that
results in penalties or significant increase in the company's
leverage may be viewed negatively by Fitch.
-- A significant deterioration of credit metrics to total
debt/EBITDA of 5.5x on a sustained basis.
===========
B R A Z I L
===========
USIMINAS INT'L: Moody's Affirms Ba3 Rating on $750MM Unsec. Notes
-----------------------------------------------------------------
Moody's Investors Service affirmed the Ba3 rating of the $750
million senior unsecured notes due 2026 issued by Usiminas
International S.a r.l. and unconditionally guaranteed by Usinas
Siderurgicas de Minas Gerais S.A. ("Usiminas", Ba3 stable). The
outlook for the rating was changed to stable from negative.
At the same time, Moody's America Latina Ltda. affirmed Usiminas'
corporate family ratings at Ba3 (global scale) and A2.br (national
scale) and changed the outlook for the ratings to stable from
negative.
Ratings affirmed:
Issuer: Usiminas International S.a r.l.
- $750 million Gtd Senior Unsecured Notes due 2026: Ba3 (global
scale)
Outlook changed to stable from negative.
RATINGS RATIONALE
The change in Usiminas' ratings outlook to stable reflects its
expectations that the toll on operations coming from the
coronavirus outbreak will be much smaller than initially expected,
reducing the strain in the company's credit metrics and liquidity.
Usiminas' gross leverage peaked at 4.6x in the twelve months ended
June 2020 due to a 43% drop in steel sales volumes in second
quarter, but the company's consolidated EBITDA in the third quarter
already increased to BRL826 million. The improvement was mainly
pulled by a 54% recovery in steel sales and a strong performance of
iron ore, reducing adjusted gross leverage to 3.8x. Excluding the
impact of the currency depreciation (about 70% and 65% of Usiminas
debt and EBITDA are indexed to the US dollar), gross leverage would
be at 3.2x. Moody's expects the ratio to decline further and remain
at around 3x through 2021 based on a combination of low debt levels
and normalized EBITDA.
Even considering potential volatility in the recovery of the main
steel consuming industries in Brazil, Moody's expects Usiminas'
iron ore business alone to generate about BRL1.5 billion in annual
EBITDA in 2020 and 2021, which is sufficient to cover
non-discretionary cash outflows such as sustaining capex (about
BRL800 million per year) and net interest payments (about BRL300
million per year). With that, potential liquidity risks coming from
a cash burn in operations or covenant breach have abated.
Usiminas' Ba3/A2.br ratings reflect the company's solid position in
the Brazilian flat-steel market and its track record of quickly
adjusting operations to market conditions in Brazil. The ratings
are also supported by Usiminas' adequate credit metrics and
liquidity, and enhanced financial flexibility to withstand the
volatility in its main end-markets. Even with potential volatility
in end-markets in 2020-21, Moody's believes Usiminas will be able
to pull levers to prevent cash burn and maintain covenant
compliance, thus reducing potential liquidity risks in times of
tougher operating environment.
The ratings are mainly constrained by Usiminas' exposure to the
volatility of the automotive industry in Brazil, given its
concentration in flat steel production in the country. Usiminas'
concentration of operations in the Ipatinga mill (responsible for
100% of its crude steel production) introduces event risks and is
an additional negative credit consideration, although Moody's
recognizes that the downsized operations provide Usiminas with
flexibility.
Brazil's steel demand will retreat in 2020, but not as steeply as
initially thought. IABR, Brazil's steel institute, revised steel
sales forecast for 2020 upward several times, and now expects only
a 3.1% decline, up from an initial expectation of 20% drop.
Steelmakers announced price increases of about 20-30% in the
domestic market during the crisis, backed by an adjusted
supply-demand balance, currency depreciation, rising prices in
China and import-parity discounts. With that, profitability on
steel operations will remain adequate even with a 40%
foreign-exchange depreciation on US-denominated costs and higher
average iron ore prices of about $100/ton so far in 2020.
In addition, Usiminas will continue to generate meaningful cash
flows from the sale of iron ore based on current high prices,
relatively stable sales volumes and a favorable exchange rate for
exports. To respond to the steep decline in demand for flat steel
in Brazil, Usiminas temporarily suspended its operations at the
Cubatao mill and halted two blast furnaces and a steelworks area at
the Ipatinga mill, which accounted for 30% of its nominal crude
steel production capacity (or 3 million tons). The better than
expected demand environment led Usiminas to restart its blast
furnace 1 and steelworks areas at Ipatinga, and its rolling
facilities at Cubatao plant, restoring around 2.4 million tons of
rolling capacity, which is now only 650 thousand tons per year
below pre-pandemic levels. This will support growth in sales
volumes as the Brazilian flat-steel market recovers gradually
through 2021.
LIQUIDITY
Usiminas has an adequate liquidity position and significant cushion
under financial covenants, which provides it with flexibility to
withstand short term shocks. Usiminas had a BRL3.7 billion cash
position at the end of September 2020 (of which BRL2.1 billion is
available at the parent level), and virtually no maturities until
October 2023. The company also has flexibility to reduce capex and
dividends payments to the minimum required by law to adjust its
cash outflows in times of weakened demand. In addition to the
adjustments in its cost base, the company cut investments for the
year to BRL800 million from previously announced BRL1 billion and
is currently benefiting from high iron ore prices and the
depreciation of the local currency to generate cash from its mining
operations. In its view, Usiminas' quick response to the current
crisis shows its commitment to a certain degree of financial
discipline, and provide us comfort that the company will continue
to pull levers to prevent cash burn, thus reducing liquidity
risks.
The stable outlook incorporates its assumptions that Usiminas will
maintain adequate liquidity and that the market conditions for
flat-steel products in Brazil will continue to recover after the
slump caused by the coronavirus, allowing the company to maintain
credit metrics near current levels.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
The ratings could be downgraded if performance materially
deteriorates, with leverage increasing to 4.0x and EBIT/interest
declining to levels below 2.0x (2.2x in the twelve months ended
September 2020) without prospects for improvement. The ratings
could also be downgraded if liquidity contract meaningfully or if
market conditions deteriorate.
The ratings could be upgraded if Usiminas is able to improve its
operating performance sustainably along with market fundamentals,
with stronger EBIT margin, adjusted leverage trending below 2.5x
and interest coverage of at least 3.0x (EBIT/Interest Expense) all
on a sustained basis. Further improvement in liquidity and cash
flow generation that provides Usiminas more cushion to withstand
the volatility of its end-markets would also be required for an
upgrade.
The principal methodology used in this rating was Steel Industry
published in September 2017.
Headquartered in Belo Horizonte, Minas Gerais, Usiminas is the
largest integrated flat-steel manufacturer in Latin America, with
production of 2.8 million tons of crude steel and 3.5 million tons
of rolling steel, and consolidated net revenue of BRL14.5 billion
($3.0 billion) in the twelve months ended September 2020. Usiminas
also owns iron ore mining properties, steel distribution and
capital goods subsidiaries in Brazil.
USINAS SIDERURGICAS: Moody's Alters Outlook on Ba3 CFR to Stable
----------------------------------------------------------------
Moody's America Latina Ltda. affirmed Usinas Siderurgicas de Minas
Gerais S.A.'s Ba3 (global scale) and A2.br (national scale)
corporate family ratings. The outlook for the ratings was changed
to stable from negative.
Ratings affirmed:
Issuer: Usinas Siderurgicas de Minas Gerais S.A.
- Corporate Family Rating: Ba3 (global scale) / A2.br (national
scale).
Outlook changed to stable from negative
RATINGS RATIONALE
The change in Usiminas' ratings outlook to stable reflects its
expectations that the toll on operations coming from the
coronavirus outbreak will be much smaller than initially expected,
reducing the strain in the company's credit metrics and liquidity.
Usiminas' gross leverage peaked at 4.6x in the twelve months ended
June 2020 due to a 43% drop in steel sales volumes in second
quarter, but the company's consolidated EBITDA in the third quarter
already increased to BRL826 million. The improvement was mainly
pulled by a 54% recovery in steel sales and a strong performance of
iron ore, reducing adjusted gross leverage to 3.8x. Excluding the
impact of the currency depreciation (about 70% and 65% of Usiminas
debt and EBITDA are indexed to the US dollar), gross leverage would
be at 3.2x. Moody's expects the ratio to decline further and remain
at around 3x through 2021 based on a combination of low debt levels
and normalized EBITDA.
Even considering potential volatility in the recovery of the main
steel consuming industries in Brazil, Moody's expects Usiminas'
iron ore business alone to generate about BRL1.5 billion in annual
EBITDA in 2020 and 2021, which is sufficient to cover
non-discretionary cash outflows such as sustaining capex (about
BRL800 million per year) and net interest payments (about BRL300
million per year). With that, potential liquidity risks coming from
a cash burn in operations or covenant breach have abated.
Usiminas' Ba3/A2.br ratings reflect the company's solid position in
the Brazilian flat-steel market and its track record of quickly
adjusting operations to market conditions in Brazil. The ratings
are also supported by Usiminas' adequate credit metrics and
liquidity, and enhanced financial flexibility to withstand the
volatility in its main end-markets. Even with potential volatility
in end-markets in 2020-21, Moody's believes Usiminas will be able
to pull levers to prevent cash burn and maintain covenant
compliance, thus reducing potential liquidity risks in times of
tougher operating environment.
The ratings are mainly constrained by Usiminas' exposure to the
volatility of the automotive industry in Brazil, given its
concentration in flat steel production in the country. Usiminas'
concentration of operations in the Ipatinga mill (responsible for
100% of its crude steel production) introduces event risks and is
an additional negative credit consideration, although Moody's
recognizes that the downsized operations provide Usiminas with
flexibility.
Brazil's steel demand will retreat in 2020, but not as steeply as
initially thought. IABR, Brazil's steel institute, revised steel
sales forecast for 2020 upward several times, and now expects only
a 3.1% decline, up from an initial expectation of 20% drop.
Steelmakers announced price increases of about 20-30% in the
domestic market during the crisis, backed by an adjusted
supply-demand balance, currency depreciation, rising prices in
China and import-parity discounts. With that, profitability on
steel operations will remain adequate even with a 40%
foreign-exchange depreciation on US-denominated costs and higher
average iron ore prices of about $100/ton so far in 2020.
In addition, Usiminas will continue to generate meaningful cash
flows from the sale of iron ore based on current high prices,
relatively stable sales volumes and a favorable exchange rate for
exports. To respond to the steep decline in demand for flat steel
in Brazil, Usiminas temporarily suspended its operations at the
Cubatao mill and halted two blast furnaces and a steelworks area at
the Ipatinga mill, which accounted for 30% of its nominal crude
steel production capacity (or 3 million tons). The better than
expected demand environment led Usiminas to restart its blast
furnace 1 and steelworks areas at Ipatinga, and its rolling
facilities at Cubatao plant, restoring around 2.4 million tons of
rolling capacity, which is now only 650 thousand tons per year
below pre-pandemic levels. This will support growth in sales
volumes as the Brazilian flat-steel market recovers gradually
through 2021.
LIQUIDITY
Usiminas has an adequate liquidity position and significant cushion
under financial covenants, which provides it with flexibility to
withstand short term shocks. Usiminas had a BRL3.7 billion cash
position at the end of September 2020 (of which BRL2.1 billion is
available at the parent level), and virtually no maturities until
October 2023. The company also has flexibility to reduce capex and
dividends payments to the minimum required by law to adjust its
cash outflows in times of weakened demand. In addition to the
adjustments in its cost base, the company cut investments for the
year to BRL800 million from previously announced BRL1 billion and
is currently benefiting from high iron ore prices and the
depreciation of the local currency to generate cash from its mining
operations. In its view, Usiminas' quick response to the current
crisis shows its commitment to a certain degree of financial
discipline, and provide us comfort that the company will continue
to pull levers to prevent cash burn, thus reducing liquidity
risks.
The stable outlook incorporates its assumptions that Usiminas will
maintain adequate liquidity and that the market conditions for
flat-steel products in Brazil will continue to recover after the
slump caused by the coronavirus, allowing the company to maintain
credit metrics near current levels.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be downgraded if performance materially
deteriorates, with leverage increasing to 4.0x and EBIT/interest
declining to levels below 2.0x (2.2x in the twelve months ended
September 2020) without prospects for improvement. The ratings
could also be downgraded if liquidity contract meaningfully or if
market conditions deteriorate.
The ratings could be upgraded if Usiminas is able to improve its
operating performance sustainably along with market fundamentals,
with stronger EBIT margin, adjusted leverage trending below 2.5x
and interest coverage of at least 3.0x (EBIT/Interest Expense) all
on a sustained basis. Further improvement in liquidity and cash
flow generation that provides Usiminas more cushion to withstand
the volatility of its end-markets would also be required for an
upgrade.
The principal methodology used in these ratings was Steel Industry
published in September 2017.
Headquartered in Belo Horizonte, Minas Gerais, Usiminas is the
largest integrated flat-steel manufacturer in Latin America, with
production of 2.8 million tons of crude steel and 3.5 million tons
of rolling steel, and consolidated net revenue of BRL14.5 billion
($3.0 billion) in the twelve months ended September 2020. Usiminas
also owns iron ore mining properties, steel distribution and
capital goods subsidiaries in Brazil.
===========================
C A Y M A N I S L A N D S
===========================
CORSAIR GROUP: S&P Ups ICR to 'B+' on IPO Proceeds, Outlook Stable
------------------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on Corsair Group
(Cayman), LP to 'B+' from 'B', reflecting the firm's lower
financial leverage.
S&P said, "At the same time, we also raised our rating on the
firm's first-lien debt to 'B+' from 'B'; the '3' recovery rating on
the remaining debt is unchanged. Concurrently, we withdrew our
'CCC+' rating on the repaid second-lien loan.
"We also assigned our 'B+' issuer credit rating to Corsair Gaming,
Inc., the issuer of Corsair's public equity. Going forward, this
entity will bear our public corporate rating and all outstanding
debt has been redomiciled to the new parent.
"Corsair has earmarked its IPO proceeds to repay debt, which will
reduce leverage reduction and improving cash-flow generation. The
upgrade primarily reflects our expectation that Corsair's repayment
of a portion (about $87 million) of its first-lien term loan will
reduce its leverage to below 5.0x, our previous upside trigger. In
addition, the company's free cash flow generation will also improve
as its interest burden is reduced by about $8 million-$10 million.
With approximately $377 million of debt remaining (pro forma), we
anticipate that Corsair will maintain leverage near 4x, as we
expect slower growth and modest margin compression in fiscal 2021.
However, we expect Corsair to benefit from its improved free
cash-flow profile such that its free operating cash flow
(FOCF)-to-debt ratio improves to the 14%-16% area over the next 12
months versus our prior expectations of about 10%-12%."
In the near term, Corsair's remaining financial sponsor ownership
and lack of a clear leverage target remain constraints to a higher
rating. Following the IPO, private equity firm EagleTree will
retain about 76% of the company's outstanding shares and continues
to exert significant control over financial decision making. S&P
said, "Our longer-term view of the company's financial risk profile
is constrained by this significant financial sponsor ownership, as
we believe it may limit the scale and pace of Corsair's
deleveraging, particularly as the company lacks a clear long-term
leverage target. Nevertheless, we anticipate that the financial
sponsor will continue to sell its ownership stake gradually over
the coming years, and could revisit this assumption if ownership
changes over time. We see deleveraging from further EBITDA growth
likely to be offset by the use of debt to further pursue
opportunistic acquisitions or maximize shareholder returns. We
forecast that Corsair's leverage is less likely to rise above 5.0x,
due in part to our view that the company will follow a moderately
more conservative financial policy now that it is a public
company."
Robust work-from-home and e-gaming trends provide strong momentum
for Corsair in the back half of 2020. Corsair's business risk
profile reflects S&P's view of the company's small scale, weak
profitability, and niche focus on PC gaming hardware. Overall,
industry trends remain robust (demonstrated by stronger competitor
guidance), and S&P believes that the upcoming console launches
should provide strong momentum for Corsair going into the back half
of 2020. That said, this will likely lead to tougher year-over-year
comps, and S&P remains cautious heading into 2021. Moreover, there
could be another economic downturn due to a second COVID-19 wave,
which could reduce consumer spending for a prolonged period and
lead to weaker-than-expected performance.
S&P said, "The stable outlook reflects our expectation that Corsair
will be able to generate double-digit percent revenue growth in
2020 as demand in gaming systems and peripherals remains robust and
e-sports markets continue to outgrow broader computing hardware
sales for the remainder of the year. Moreover, the modestly
improving macroeconomic backdrop could further support top-line
growth, profitability, and free cash flow, subsequently improving
the company's ability to maintain an adjusted debt-to-EBITDA ratio
at about 4x. Our base-case scenario assumes Corsair will not pursue
any major acquisitions over the next 12 months."
S&P could lower the rating over the next year if the company
sustains adjusted debt to EBITDA above 5x, if the company
experiences significant operational missteps, or if there is a
deterioration in free cash flow. Such a scenario could occur if the
company loses key distribution partners, there is a sharp decline
in discretionary spending, or there is a general downturn in the PC
gaming hardware market.
Corsair's current financial sponsor ownership limits further
ratings upside over the near term. Over the longer term, however,
S&P would look to adjusted debt to EBITDA sustained at below 3x and
a defined policy to maintain leverage at or below this level
through acquisitions and business cycles as supportive of a higher
rating.
===================================
D O M I N I C A N R E P U B L I C
===================================
DOMINICAN REPUBLIC: Barclays is Bullish on the Country, Bank Says
-----------------------------------------------------------------
Dominican Today reports that the Central Bank of the Dominican
Republic said that various investment banks of international
prestige continue to give a highly positive assessment to the
Dominican Republic, amid the delicate evolution of the pandemic at
a global level.
It indicates that, in its most recent report published on September
23, Barclays highlights that the recent issue of a Dominican
sovereign bond in global markets for US$3.8 billion was a
"successful transaction that exceeded expectations," according to
Dominican Today.
In addition, that the country continues to give constructive
signals to investors, giving the Dominican Republic a favorable
evaluation as an investment destination. This perception is
manifested in a lower urgency of external financing, as well as in
the recent sample of recovery of economic activity, which stands
out as "relatively fast" compared to other countries in the region,
such as Costa Rica, El Salvador and Jamaica, the report notes.
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. Luis
Rodolfo Abinader Corona is the current president of the nation.
The Troubled Company Reporter-Latin America reported in April 2019
that the Dominican Today related that Juan Del Rosario of the UASD
Economic Faculty cited a current economic slowdown for the
Dominican Republic and cautioned that if the trend continues,
growth would reach only 4% by 2023. Mr. Del Rosario said that if
that happens, "we'll face difficulties in meeting international
commitments."
An ongoing concern in the Dominican Republic is the inability of
participants in the electricity sector to establish financial
viability for the system.
Standard & Poor's credit rating for Dominican Republic stands at
BB- with negative outlook (April 2020). Moody's credit rating for
Dominican Republic was last set at Ba3 with stable outlook (July
2017). Fitch's credit rating for Dominican Republic was last
reported at BB- with negative outlook (May 8, 2020).
=============
E C U A D O R
=============
ECUADOR: Seeks Details After China Finds Virus on Imported Seafood
------------------------------------------------------------------
EFE News reports that Ecuador has sought details from China after
traces of the novel coronavirus were detected on the packaging of a
batch of imported frozen fish.
The government ratified compliance with biosafety protocols of
export products after China suspended imports of an Ecuadorian
company, Firexpa, following the detection of traces of the virus in
a container of frozen pomfret, according to EFE News.
An official statement said the Ecuadorian foreign trade ministry
"has requested additional details" from China about the traces of
the virus on the container to enable "necessary corrective
measures, if applicable," the report notes.
The Chinese customs authorities decided to suspend the clearance of
products of the Ecuadorian company for a week if frozen food
products tested positive for coronavirus, the report discloses.
The suspension would be for a month if a supplier's products tested
positive for a third time or more, the report says.
The statement noted that the aquaculture and fisheries department
officials maintain permanent control and monitoring throughout its
production chain, the report relays.
It said the strategies and action plans include strict compliance
with the national control plan and the biosafety protocols,
guidelines for the prevention of Covid-19 of the National Committee
for Emergency Operations, the report notes.
The statement said the government was open to address all the
concerns "to guarantee the safety and biosecurity of the food
exported from our country," the report discloses.
It said permanent contact would continue with the Chinese
authorities "to carry out all the necessary verifications to
strengthen these processes," the report says.
China, on July 10, found traces of the coronavirus on the outer
packaging of Ecuadorian white shrimp from three companies:
Industrial Pesquera Santa Priscila, Empacreci and Edpacif, the
report relays.
The authorities temporarily suspended imports from the three
companies and ordered the withdrawal of all such packages that had
arrived in the country since March 12, the report notes.
Subsequently, the companies were authorized to resume exports to
China after improving their control protocols, the report says.
Ecuador alleges that since the traces of the virus have been found
on the outer packaging or on container walls, the infection can
have any origin, and not specifically be related to the handling of
the product in Ecuadorian industries, the report relays.
Even so, and to continue exporting to China and other markets, the
country's production ministry has intensified surveillance measures
in all fishing and packaging processes, the report notes.
On Aug. 13, traces of coronavirus were also found on the surface of
a batch of frozen chicken wings imported from Brazil in the Chinese
city of Shenzhen, in the southern province of Guangzhou, the report
adds.
===============
H O N D U R A S
===============
HONDURAS: IDB Approves $18MM-Loan to Improve Energy Integration
---------------------------------------------------------------
The Inter-American Development Bank (IDB) has approved an $18
million loan to help Honduras refit the Francisco Morazán
hydroelectric dam and boost the adaptability and integration of
renewable energies to the country's power system.
The Francisco Morazan Hydroelectric Plant started operations in
1986 and currently has an installed capacity of 300 MW. In 2018,
generation reached 1,625 GWh. It is now the main hydroelectric dam
in Honduras, and the one with the largest contribution to the
national grid-16% of generated energy.
But with aging equipment, the plant could suffer service
interruptions due to failures and increasingly longer unscheduled
stops. In addition, the growing presence of Variable Renewable
Energies, which are playing an ever bigger role in Honduras's
generation matrix, is leading to an increasing wear and tear of
certain elements of the dam, which provides support services that
are crucial for a sustained and reliable power supply.
With this operation, Honduras is seeking to boost the hydroelectric
plant's reliability and operational efficiency in order to meet the
system's needs and make up for the fluctuations of the renewable
energy variables in a cost-effective and efficient way.
This renovation project also contemplates replacing the monitoring
and control mechanisms that are part of the command and supervision
system, leading to increased digitalization of the plant's
management, operation and maintenance.
The IDB loan consists of a $1.1 million concessional tranche for a
40-year repayment term and a period of grace also of 40 years; a
$500,000 credit from the Bank's ordinary capital; and $16.4 million
in concessional financing from the Clean Technology Trust Fund
(CTF), with a 10-year period of grace. The operation, for a total
$36.8 million, will also have $18.8 million in local counterpart
funding. The executing agency will be the Empresa Nacional de
Energía Electrica (ENEE) public utility.
About the IDB
The Inter-American Development Bank is devoted to improving lives.
Established in 1959, the IDB is a leading source of long-term
financing for economic, social and institutional development in
Latin America and the Caribbean. The IDB also conducts cutting-edge
research and provides policy advice, technical assistance and
training to public and private sector clients throughout the
region.
=============
J A M A I C A
=============
JAMAICA: Almost 800 Covid-Hit Companies Formally Shut Down
----------------------------------------------------------
Jamaica Observer reports that between August and September, 780
local companies formally applied to shutter their doors, taking up
a Ministry of Industry offer to wrap up their COVID-19-hit
operations at significantly reduced fees. More local companies,
and now overseas ones as well, will have a chance to participate as
the deadline for the four-month-old Companies Office of Jamaica
(COJ) COVID-19 Relief Initiative has been pushed back to the end of
December, the report relates.
For the period January 1 to September 30 of last year, 559
companies applied to the COJ to wrap up operations. This is in
stark contrast to the almost 800 applications filed under the
relief program over the most recent two-month period for which data
is available, the report says.
Companies wishing to cease operations will now pay a fee ($7,500
for locals and $6,000 for overseas firms), and file a statutory
declaration indicating they have no outstanding liabilities or
assets, the report discloses. Before the ongoing thrust, they
would have needed to provide a letter from an auditor or chartered
accountant and the fee would have been between $40,000 and $60,000,
the report relays.
"The fact that there is no request for an auditor's certificate
removes a significant hurdle to closure. With the added waivers,
it is in the best interest of these companies and businesses to
close," said Shellie Leon, deputy CEO & director of operations, in
a release from the COJ, the report notes.
Entities registered with the COJ are legally required to formally
file for closure within half a year of ceasing operations, the
discloses. There are currently 67,238 companies and more than
150,000 businesses registered.
Citing a Small Business Association survey that showed 35 per cent
of the group's 300-plus members had closed their doors, Leon spoke
of the need for companies to regularize their status and formally
complete the process with the COJ, the report notes. According to
COJ data, 79 per cent of companies and 71 per cent of businesses
that have closed across the island have failed to tie up loose ends
with the COJ, the report says.
"We are encouraging entities to take advantage of the opportunity
as it allows them to refocus and possibly restart without the
obligation of clearing late fees and law suits. It is a win for
entrepreneurs, especially in this time of uncertainty," said Leon.
"Oftentimes, companies and businesses do not go through the formal
channels of closing the business which proves to be a challenge to
their business endeavors in the future as they may be barred from
registering additional entities until the late fees are cleared and
due diligence done to bring the entity into compliance. This can be
an obstacle to taking advantage of opportunities in the future,"
the report adds.
About Jamaica
Jamaica is an island country situated in the Caribbean Sea. Jamaica
is an upper-middle income country with an economy heavily dependent
on tourism. Other major sectors of the Jamaican economy include
agriculture, mining, manufacturing, petroleum refining, financial
and insurance services.
Standard & Poor's credit rating for Jamaica stands at B+ with
negative outlook (April 2020). Moody's credit rating for Jamaica
was last set at B2 with stable outlook (December 2019). Fitch's
credit rating for Jamaica was last reported at B+ with stable
outlook (April 2020).
As reported in the Troubled Company Reporter-Latin America, Fitch's
revision of Jamaica's outlook in April 2020 to Stable from Positive
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.
=======
P E R U
=======
PERU: Embraces Innovation to Tackle Covid-19 Crisis
---------------------------------------------------
EFE News reports that for Peru, innovation and entrepreneurship are
the way out of the crisis caused by the Covid-19 pandemic, in a way
that "for every problem there is an opportunity" and only with new
ideas can the tough choice between "health and the economy" be
avoided.
Innovate Peru Summit 2020, the largest event in the country for
entrepreneurs, investors, innovators, business associations,
universities, multilateral stakeholders and in general everyone
interested in the innovation and development ecosystem of new
companies and businesses, will demonstrate, according to EFE News.
=====================
P U E R T O R I C O
=====================
ALICE'S SCHOOL: Plan to be Funded by Continued Business Operation
-----------------------------------------------------------------
Alice's School, Inc., filed with the U.S. Bankruptcy Court for the
District of Puerto Rico a Plan of Reorganization and a Disclosure
Statement on August 28, 2020.
Class 2(a)-CRIM's unsecured portion in the amount of $3,292 plus
annual interest rate of 4.25% for 120 months in total since filing
date, will be paid on and after month 51 since the Effective Date
of the Plan, commencing on month 51, and shall be paid in full in
monthly installments of not less than $68.00 for 60 months, after
the first 50 months period of the Plan since the Effective Date has
elapsed. The Debtor will pay a total of $4,080, which includes
100% of the unsecured liability and annual interest rate of 4.25%
calculated for 120 months in total since filing date.
Class 2(b)-INTERNAL REVENUE SERVICES (IRS)'s unsecured portion in
the amount of $55,864 plus annual interest rate of 4.25% for a
total amount of $68,700 to be paid on and after month 51 since the
Effective Date of the Plan, commencing on month 51 since the
Effective Date of the Plan, and shall be paid in full in monthly
installments of not less than $1145 for 60 months, after the
initial 50-months period after Effective Date.
The funds required to implement the Plan will come from income
derived by Debtor from its continued business operation.
A full-text copy of the Disclosure Statement dated August 28, 2020,
is available at https://tinyurl.com/y59f7dgf from PacerMonitor at
no charge.
Attorney for Alice's School:
Moreno Law Office, LLC
Rosana Moreno Rodriguez
P.O. Box 679
Trujillo Alto, Puerto Rico 00977
Telephone: (787) 750-8160
Facsimile: (787) 750-8243
E-mail: rmoreno@morenolawpr.com
About Alices School Inc.
Based in Carolina, Puerto Rico, Alices School Inc. filed its
petition for relief under Chapter 11 of the Bankruptcy Code (Bankr.
D.P.R. Case No. 19-05929) on Oct. 15, 2019, listing under $1
million in both assets and liabilities. Rosana Moreno Rodriguez,
Esq., at Moreno & Soltero Law Office, LLC, represents the Debtor.
ALLIED FINANCIAL: $34K Sale of Aguadilla Property to Barreto OK'd
-----------------------------------------------------------------
Judge Mildred Caban Flores of the U.S. Bankruptcy Court for the
District of Puerto Rico authorized Allied Financial, Inc.'s sale of
the lot of land located at Barrio Aguacate in Aguadilla, Puerto
Rico, Registered as Property Num. 30,066, of Vol. 558 in Aguadilla
Property Registry, to Sandro Escobar Barreto for $34,000.
The sale is free and clear of all liens, claims, interest and
encumbrances.
About Allied Financial
Allied Financial, Inc., filed a Chapter 11 bankruptcy petition
(Bankr. D.P.R. Case No. 16-00180) on Jan. 15, 2016. At the time of
the filing, Debtor disclosed total assets of $10.3 million and
total debt of $9.14 million. Judge Mildred Caban Flores oversees
the case. C. Conde & Assoc. is the Debtor's legal counsel.
=====================================
T R I N I D A D A N D T O B A G O
=====================================
CARIBBEAN CEMENT: Weathers Covid-19 Storm, Posts $5BB Qtr. Revenues
-------------------------------------------------------------------
Jamaica Observer reports that Caribbean Cement Company has done
what several other listed companies have been failing to do, record
increased profits and revenues in despite COVID-19 challenges.
For the quarter under revenue, Carib Cement posted revenues of $5.8
billion, a 32 per cent growth when compared with the corresponding
period in 2019, according to Jamaica Observer. This is coming at a
time when economic activity in the country has slowed down, the
report notes.
Earnings before other income and expenses for the period amounted
to $2.3 billion, as the cement manufacturer reported increased
business for the period, the report relays. Operating earnings
after other expenses totalled $2.2 billion, an increase of $1.4
billion when compared to Q3 of 2019, the report notes.
The management has attributed this solid performance to "higher
volumes sold, prudent cost containment measures and operational
efficiencies" that have allowed Carib Cement to keep operational
costs and expenses in check despite the increased rate of
production, the report says.
The company recorded earnings before taxation of $1.8 billion,
representing an improvement over the $200 million achieved in the
third quarter last year, the report notes.
In the unaudited interim financial report for the nine months ended
September 30, the directors report that the company will continue
with its aggressive US dollar debt repayment policy, which has
allowed it to reduce financial expenses by $36 million and the
company's foreign exchange risk compared with the third quarter of
2019, the report discloses.
They reported that the overall consolidated net income of $1.2
billion was higher than that of the third quarter of 2019 by $1.2
billion, Jamaica Observer notes. In relation to cash flow, net
cash provided by operating activities was $2.6 billion for the
quarter and $5.2 billion for the year, the report adds.
About Caribbean Cement
Caribbean Cement Company Limited, together with its subsidiaries,
manufactures and sells cement and clinker in Jamaica and other
Caribbean countries. The company was incorporated in 1947 and is
based in Kingston, Jamaica.
As reported in the Troubled Company Reporter-Latin America on Oct.
30, 2017, RJR News said that Caribbean Cement Limited is reporting
improved profits for the three months ending September. For the
quarter, the company earned J$747.8 million compared with a loss of
J$81 million for the corresponding period last year, according to
RJR News.
=================
V E N E Z U E L A
=================
VENEZUELA: Crude Oil Exports Hit 77-Year Low
--------------------------------------------
The Latin American Herald, citing Reuters, reports that oil-rich
Venezuela saw its crude exports drop again last month, this time to
their lowest level in 77 years after most of the long-term clients
of Petroleos de Venezuela (PDVSA) decided to stop doing business
with the state-run oil company to meet a deadline set by Washington
between October and November allowing some companies and refiners
to still receive the South American producer's oil.
International oil companies including Italy's Eni, Spain's Repsol,
and India's Reliance Industries, cancelled their usual oil
purchases, a reason for which exports volume dropped 58% to 359,000
barrels per day (bpd) in October, making it the lowest average
since 1943 according to official figures, according to The Latin
American Herald.
Reuters said that none of the companies ordered Venezuelan oil
shipments in October, which drastically reduced PDVSA's customer
base according to internal documents and tracking data from
Refinitiv Eikon, the report notes.
Moreover, internal documents from PDVSA and Refinitiv showed that
the state-owned oil company and its joint ventures exported 381,000
bpd in June and 388,000 bpd in July, but experienced a rebound to
440,000 bpd in August and 703,000 bpd in September helped by
last-minute purchases from their regular clients, the report
relays.
The main destination for the oil shipments was Asia with nearly a
third of total exports, followed by longtime partner Cuba with
about 104,000 bpd.
Lastly, PDVSA saw a dramatic contraction in its cash flow with
sales of only $130 million last month according to estimates by
local oil expert Antonio de La Cruz, who also said Cuba received
some 900,000 barrels from three of the vessels that set sail from
the nation's ports in October.
Venezuela
Venezuela, officially the Bolivarian Republic of Venezuela, is a
country on the northern coast of South America, consisting of a
continental landmass and a large number of small islands and islets
in the Caribbean sea. The capital is the city of Caracas.
Hugo Chavez was president to Venezuela from 1999 to 2013. The
Chavez presidency was plagued with challenges, which included a
2002 coup d'etat, a 2002 national strike and a 2004 recall
referendum. Nicolas Maduro was elected president in 2013 after the
death of Chavez. Maduro won a second term at the May 2018
Venezuela elections, but this result has been challenged by
countries including Argentina, Chile, Colombia, Brazil, Canada,
Germany, France and the United States who deemed it fraudulent and
moved to recognize Juan Guaido as president.
The presidencies of Chavez and Maduro have challenged Venezuela
with a socioeconomic and political crisis. It is marked by
hyperinflation, climbing hunger, poverty, disease, crime and death
rates, social unrest, corruption and emigration from the country.
S&P Global Ratings, in May 2019, removed its long- and short-term
local currency sovereign credit ratings on Venezuela from
CreditWatch with negative implications and affirmed them at
'CCC-/C'. The outlook on the long-term local currency rating is
negative. At the same time, S&P affirmed its 'SD/D' long- and
short-term foreign currency sovereign credit ratings on Venezuela.
Moody's credit rating (long term foreign and domestic issuer
ratings) for Venezuela was last set at C with stable outlook in
March 2018. Meanwhile, Fitch's long term issuer default rating for
Venezuela was last in 2017 at RD and country ceiling was CC. Fitch,
on June 27, 2019, affirmed then withdrew the ratings due to the
imposition of U.S. sanctions on Venezuela.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Latin America is a daily newsletter
co-published by Bankruptcy Creditors' Service, Inc., Fairless
Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C.,
USA, Marites O. Claro, Joy A. Agravante, Rousel Elaine T.
Fernandez, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A.
Chapman, Editors.
Copyright 2020. All rights reserved. ISSN 1529-2746.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.
Information contained herein is obtained from sources believed to
be reliable, but is not guaranteed.
The TCR Latin America subscription rate is US$775 per half-year,
delivered via e-mail. Additional e-mail subscriptions for members
of the same firm for the term of the initial subscription or
balance thereof are US$25 each. For subscription information,
contact Peter A. Chapman at 215-945-7000.
.
* * * End of Transmission * * *