/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/201203.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 Thursday, December 3, 2020, Vol. 21, No. 242 Headlines B E R M U D A SEADRILL LTD: Reports $183-Mil. Net Loss for the June 30 Quarter B R A Z I L BRAZIL: 12-Mo. Deficit Shrinks to Smallest Since Feb 2018 BRAZIL: IDB OKs US$1.2BB Loan for Public Safety & Justice Programs C O S T A R I C A BANCO DE COSTA RICA: S&P Withdraws 'B/B' Issuer Credit Rating D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: Public Debt Soars to US$51.9 Billion [*] DOMINICAN REPUBLIC: US$43.1MM to Widen, Improve Busiest Highway J A M A I C A JAMAICA: Cabinet Approves US$25 Million MASP Program JAMAICA: JHTA Takes COVID-19 Prevention Steps to Where Workers Live P U E R T O R I C O ASCENA RETAIL: Asks Court Nod to Sell Lane Bryant & Ann Taylor - - - - - ============= B E R M U D A ============= SEADRILL LTD: Reports $183-Mil. Net Loss for the June 30 Quarter ---------------------------------------------------------------- Seadrill Limited filed its quarterly report on Form 6-K, disclosing a net loss of $183 million on $277 million of total operating revenues for the three months ended June 30, 2020, compared to a net loss of $206 million on $321 million of total operating revenues for the same period in 2019. At June 30, 2020, the Company had total assets of $7,291 million, total liabilities of $7,363 million, and $98 million in total deficit. The Company said, "Since the fourth quarter of 2019, we have been engaged in discussions with our secured lenders regarding potential amendments to our credit facilities to provide operational flexibility and additional near-term liquidity by, among other things, converting certain interest payments under our credit facilities to payment-in-kind ("PIK") interest and deferring certain scheduled amortization payments (or increasing the aggregate amount of such payments that may be converted to loans payable at the final scheduled maturity date of the relevant facility pursuant to the amortization conversion election provisions contained in the facility agreements). Our debt service is anticipated to be primarily comprised of interest through at least Q1 2021 because our facility agreements contain certain provisions that allow us to elect to defer and convert up to US$500 million in the aggregate of scheduled amortization payments under certain of our credit facilities. We have already elected to use a portion of this capacity with respect to the scheduled amortization installments under our credit facilities occurring in Q1, Q2 and Q3 2020. We intend to continue exercising this option for each subsequent scheduled amortization payment date until such capacity is fully utilized; however, we cannot guarantee that we will be able to satisfy the conditions set forth in the facility agreements in order to be able to do so. We have forecasted that we will not be able to meet the requirements under our ongoing liquidity financial covenant contained in the facility agreements within a twelve-month period following the date of this report and had requested consent for certain liquidity enhancing measures in order to mitigate this. Failure to comply with such liquidity requirements could result in a default under the terms of our facility agreements if we are unable to obtain a waiver or amendment from our lenders for such non-compliance. We had also requested that our lenders consent to an extension of the periods before which we are required to comply with the net leverage and debt service coverage financial covenants in our facility agreements because we currently anticipate that we will not be able to meet these requirements when such covenants begin to be tested at the end of Q1 2021. If we are unable to comply with the net leverage and debt service covenants in our debt agreements between Q1 2021 and Q4 2021 this will lead to an interest margin increase of up to 100 bps in the form of PIK interest. However, this does not constitute an event of default. "Whilst substantial support was indicated by our secured lenders for the consents, as certain of the amendments impacting economic terms required 100% approval across 43 institutions, recent market uncertainties have prevented a coalescing of views. As a consequence, Seadrill has decided not to proceed with the bank consent and has retained financial and legal advisors to prepare for a comprehensive restructuring of the balance sheet. With the help of these advisors, we have engaged in negotiations with our lenders surrounding a comprehensive restructuring. Whilst we continue to evaluate various alternatives to address the cost of debt service and overall volume of debt, we anticipate that a comprehensive restructuring will require the use of an in-court process and may require a substantial conversion of our indebtedness to equity. As of June 30, 2020, Seadrill had US$1.0 billion of cash which we believe provides sufficient liquidity to complete a comprehensive restructuring process. However, until such time that an agreement is reached to restructure our borrowing commitments, substantial doubt remains over our ability to continue as a going concern. Our business operations remain unaffected by the negotiations and related contingency planning efforts, and we expect to meet our ongoing customer and business counterparty obligations as they become due." A copy of the Form 6-K is available at: https://bit.ly/2HTPjza Seadrill Limited is an offshore drilling contractor providing worldwide offshore drilling services to the oil and gas industry. The Company is based in Bermuda. =========== B R A Z I L =========== BRAZIL: 12-Mo. Deficit Shrinks to Smallest Since Feb 2018 --------------------------------------------------------- Reuters reports that Brazil's balance of payments position with the rest of the world improved in October, figures showed on November 25, as a $1.5 billion current account surplus helped shrink the 12-month accumulated deficit to its smallest in two and a half years. Investors poured money into local stocks and bonds too, with net inflows of $5.3 billion into domestic markets the highest since January 2019, according to central bank data. "The short-term current account dynamics are quite favorable given solid export demand and improving terms of trade compounded by the significant contraction of domestic demand and real effective currency depreciation," said Alberto Ramos, head of Latin American research at Goldman Sachs in New York, notes Reuters. October's surplus was more than the $1.3 billion forecast in a Reuters poll of economists. As the central bank chart below shows, the overall deficit in the preceding 12 months of 1% of gross domestic product was the smallest since February 2018, Reuters relates. Goods exports fell 8.6% in October from the same month last year to $18 billion, the central bank said, while imports fell 26.3% to $13.1 billion, giving a trade surplus of $4.9 billion. This year, exports have fallen 7.8% and imports have slumped 15.1%. The services deficit shrank by 55.2% from a year earlier to $1.6 billion and the primary income deficit shrank by 70.6% to $1.9 billion, the central bank said. The current account deficit in the first 10 months of the year stood at $7.6 billion, notes Reuters. Foreign direct investment totaled $1.8 billion in October, sharply down from $8.2 billion a year ago, the central bank said, adding it forecasts FDI of $1 billion in November. On the portfolio side, Brazil posted an overall net inflow of $5.3 billion last month. The net $2.65 billion inflow into domestic stock markets was the most since July last year, and $2.7 billion into local debt markets was the most since January. According to the report, inflows have returned in recent months, but so far this year a net $21.6 billion has been pulled from domestic markets and $27.4 billion has been pulled in the last 12 months, the central bank said. About Brazil Brazil is the fifth largest country in the world and third largest in the Americas. Jair Bolsonaro is the current president, having been sworn in on Jan. 1, 2019. Fitch Ratings affirmed on November 23, 2020, Brazil's Long-Term Foreign Currency Issuer Default Rating at 'BB-' with a Negative Outlook. Standard & Poor's credit rating for Brazil stands at BB- with stable outlook (April 2020). Moody's credit rating for Brazil was last set at Ba2 with stable outlook (April 2018). DBRS's credit rating for Brazil is BB (low) with stable outlook (March 2018). As reported in the Troubled Company Reporter-Latin America, Fitch Ratings' negative outlook this November 2020 for Brazil reflects the severe deterioration in fiscal deficit and public debt burden during 2020 and persisting uncertainty regarding fiscal consolidation prospects. Fitch expects the economy to recover from 2021; however, uncertainty around political and policy developments, combined with a resurgence in global coronavirus infections, continue to cloud the outlook. BRAZIL: IDB OKs US$1.2BB Loan for Public Safety & Justice Programs ------------------------------------------------------------------ The Inter-American Development Bank (IDB) has approved a credit line of up to $1.2 billion to help Brazil boost the efficiency and efficacy of its public safety and justice programs. The financing consists of a conditional credit line for investment projects (CCLIP) that will be made available through three resource-allocation channels: federal government agencies, subnational governments (state or municipal), and national or regional development banks. The CCLIP will provide Brazil with a strategic tool to strengthen the Single Public Safety System, promoting integration and alignment of safety policies among the three levels of governments - federal, states, and municipal - and the implementation of the multisector approach of the 2018-2028 Public Safety and Social Defense National Plan. The credit line will focus on four areas: public safety management and governance; violence prevention; police modernization; and justice and social reinsertion. Espirito Santo is the first state to benefit from a CCLIP loan of $82.3 million, which will be used to support the Program for the Modernization and Enhancement of the Espirito Santo Penitentiary System (MODERNIZA-ES). The program will contribute to social reinsertion and crime recidivism reduction in an effective and efficient way. It aims to boost the use of social reinsertion policies and evidence-based programs; and increase spending efficiency through the use of new management and monitoring technologies and the improvement of penitentiary infrastructure for social reinsertion. The Espirito Santo program will benefit all 23,000 inmates in the state by improving penitentiaries’ technology and infrastructure management. It will also help other specific segments of the population by providing social reinsertion services, which will include individual recidivism risk assessments, alternative correctional facilities, cognitive-behavioral treatment programs, establishment of work cooperatives, technical assistance, and seed capital for ventures, among other benefits. The IDB’s CCLIP lending has a 25-year repayment term, with a 5.5-year grace period and an interest rate based on LIBOR. The Espirito Santo State will provide an additional $20,582,300 in local counterpart funds. About Brazil Brazil is the fifth largest country in the world and third largest in the Americas. Jair Bolsonaro is the current president, having been sworn in on Jan. 1, 2019. Fitch Ratings affirmed on November 23, 2020, Brazil's Long-Term Foreign Currency Issuer Default Rating at 'BB-' with a Negative Outlook. Standard & Poor's credit rating for Brazil stands at BB- with stable outlook (April 2020). Moody's credit rating for Brazil was last set at Ba2 with stable outlook (April 2018). DBRS's credit rating for Brazil is BB (low) with stable outlook (March 2018). As reported in the Troubled Company Reporter-Latin America, Fitch Ratings' negative outlook this November 2020 for Brazil reflects the severe deterioration in fiscal deficit and public debt burden during 2020 and persisting uncertainty regarding fiscal consolidation prospects. Fitch expects the economy to recover from 2021; however, uncertainty around political and policy developments, combined with a resurgence in global coronavirus infections, continue to cloud the outlook. =================== C O S T A R I C A =================== BANCO DE COSTA RICA: S&P Withdraws 'B/B' Issuer Credit Rating ------------------------------------------------------------- S&P Global Ratings withdrew at issuer's request its 'B/B' global scale issuer credit ratings on Banco de Costa Rica (BCR). At the time of the withdrawal, the outlook was negative, mirroring that on Costa Rica. S&P said, "At the time of the withdrawal, our ratings on BCR reflected its sound market position as the second-largest lender in Costa Rica that helped the bank to mitigate the pandemic's impact on operations. This helped BCR to continue generating operating revenue, and consequently, maintain the business stability. However, the rating weakness was the unplanned turnover in critical senior management positions in 2017 and 2018, stemming from the "Cementazo" investigation. The ratings also incorporated our projected risk-adjusted capital ratio of about 8.5% for the next 12-18 months, which stems from the bank's capital generation despite meager lending growth. Our risk position incorporated a worsening in the bank's asset quality ratios given the pandemic-induced economic shock. BCR's funding profile continued to benefit from an expanding deposit base that provided enough liquidity for any eventuality that could arise. The bank's stand-alone credit profile was 'b+'." =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: Public Debt Soars to US$51.9 Billion -------------------------------------------------------- Dominican Today reports that consolidated public debt continues to increase, this time due to the emergency commitments that the country had to assume due to COVID-19, and already amounted to US$51.9 billion at the end of the third quarter of the year. The data published by the Public Credit Directorate of the Ministry of Finance indicates that the consolidated public debt - which includes both that of the central and decentralized government as well as that of the Central Bank - increased by 8.2 billion dollars or 66% of GDP during the last year, according to Dominican Today. It is a similar amount to the total of the international reserves that the country has, the report notes. Consolidated public debt in the third quarter was equivalent to 66% of a Gross Domestic Product reduced by the pandemic, the report relays. "The debt will possibly reach 70% of GDP next year," estimates the Vice Dean of Economics of the Autonomous University of Santo Domingo (UASD), Antonio Ciriaco, the report notes. He believes that this level will occur because the General State Budget presented for 2021 is supported by income that may not be achieved on time, the report addss. 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. Luis0020Rodolfo 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). [*] DOMINICAN REPUBLIC: US$43.1MM to Widen, Improve Busiest Highway ------------------------------------------------------------------- Dominican Today reports that Jamaica Public Works began to rehabilitate and expand the Duarte highway at a cost of RD$2.5 billion (US$43.1 million) including a road safety plan to "guarantee the integrity and tranquility of motorists and passengers." Speaking in La Vega (central) Public Works minister Deligne Ascencion unveiled a short-term and medium-term emergency program, which includes the construction of several overpasses for pedestrians and motorcycles, widening of lanes, signaling, lighting and repaving from the Santiago exit to 9 kilometers north of the capital, according to Dominican Today. "Four pedestrian and motor bridges will be erected on the highway in those places with the highest population concentration and occurrence of accidents. Among the places that will be intervened is the Cruce de Soto and also the so-called Cruce de la Muerte," the report notes. Public works said the Duarte highway integrates 6.7 million inhabitants by land, equivalent to 63% of the country's population, in a 270-kilometer route, which ranges from Kilometer 9 in the National District to Montecristi (northwest), the report adds. About Dominican Republic The Dominican Republic is a Caribbean nation that shares the island of Hispaniola with Haiti to the west. Capital city Santo Domingo has Spanish landmarks like the Gothic Catedral Primada de America dating back 5 centuries in its Zona Colonial district. Luis0020Rodolfo 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). ============= J A M A I C A ============= JAMAICA: Cabinet Approves US$25 Million MASP Program ---------------------------------------------------- RJR News report that the Cabinet has given approval for the US$25 million Modernization of the Agriculture Sector Program (MASP) to be included in the Public Sector Investment Program. The initiative is a five-year project that will be executed by the Ministry of Agriculture and Fisheries and financed by a US$25 million loan from the Inter-American Development Bank (IDB), according to RJR News. Speaking at the post-Cabinet press briefing, Floyd Green, Minister of Agriculture and Fisheries, said the objective of the MASP is to increase agricultural productivity and income for beneficiary smallholder farmers, the report notes. 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. JAMAICA: JHTA Takes COVID-19 Prevention Steps to Where Workers Live ------------------------------------------------------------------- RJR News report that The Jamaica Hotel and Tourist Association (JHTA) has launched a programme to take COVID-19 prevention measures into communities where workers in the tourism sector live. It comes on the heels of the disclosure from the Ministry of Health evening that there have been COVID-19 cases in the tourism industry, according to RJR News. Dr Diane Campbell-Stennett, Technical Director at the Western Regional Health Authority, said the authorities do not know if the cases are linked to tourists, the report notes. Speaking at the launch of the COVID-19 Ambassadors programme in Montego Bay, St. James, JHTA President Clifton Reader said, while the workers are observing protocols, there is also a need to ensure that their communities do the same, the report notes. "We thought that we had so many trained workers in the industry, certified by TPDCo and they were keeping themselves, us, and the guests safe. But we said to ourselves, how can we be safe without the community? There was definitely a gap right there," he reflected, the report relays. According to Mr. Reader, the ambassadors program is vital to ensuring that COVID-19 cases in the sector remain low, the report says. "We have done exceptionally well in the industry keeping our team safe, our communities safe and our guests safe. The level of transmission within hotels and other businesses who observe the protocols, they're very, very low, and we want to keep it that way," he asserted, the report notes. The COVID-19 ambassadors program has been launched in Kingston as well as St. Ann. Mr. Reader has sought to caution tourism sector stakeholders against becoming complacent in enforcing the COVID-19 prevention protocols, the report relays. "So, this is another reason I'm challenging TPDCo, JTB as a partner, and Ministry of Health, in particular, that they must now come in, re-sensitize, retrain our employees as if it was day one. I think some of us, we've gotten battle-worn and we probably are not paying as much attention as we did six months ago," he reasoned, 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 U E R T O R I C O ===================== ASCENA RETAIL: Asks Court Nod to Sell Lane Bryant & Ann Taylor -------------------------------------------------------------- Law360 reports that Ascena Retail Partners has asked a Virginia bankruptcy court for permission to sell its Ann Taylor and Lane Bryant stores to an affiliate of private equity firm Sycamore Partners for $540 million. On Nov. 26, 2020, Ascena asked U.S. Bankruptcy Judge Kevon Hunnekens to hear the sale motion by Dec. 8, 2020 in order to close the deal with Sycamore affiliate Premium Apparel LLC before the end of 2020. "At Ascena, we have made significant progress in our financial restructuring process. We have worked diligently to maximize the value of all of our brands, and today's agreement with Sycamore is the latest example," said Ann Taylor CEO Gary Muto. 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, through its retail brands, operates ecommerce websites and approximately 2,800 stores throughout the United States, Canada, and Puerto Rico. Visit http://www.ascenaretail.com/for more information. Ascena Retail reported a net loss of $661.4 million for the fiscal year ended Aug. 3, 2019, a net loss of $39.7 million for the year ended Aug. 4, 2018, and a net loss of $1.06 billion for the year ended July 29, 2017. On July 23, 2020, Ascena Retail Group and its affiliates sought Chapter 11 protection (Bankr. E.D. Va. Case No. 20-33113). As of Feb. 1, 2020, Ascena Retail had $13,690,710,379 in assets and $12,516,261,149 in total liabilities. The Hon. Kevin R. Huennekens is the case judge. The Debtors tapped Kirkland & Ellis LLP and Cooley LLP as 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. ********* 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 * * *