/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/201204.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, December 4, 2020, Vol. 21, No. 243 Headlines A N T I G U A A N D B A R B U D A LIAT: Resumes Flights to Seven Destinations A R G E N T I N A ARGENTINA: Officials Head to U.S. for Debt Revamp Talks With IMF B R A Z I L BANCO BTG: Moody's Assigns Ba2 Rating to $50MM Sr. Unsec. Notes BRAZIL: Investors Anxious Over Coronavirus Stimulus Splurge D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: Gov't to Modernize 4 Ports to Attract Investors DOMINICAN REPUBLIC: IDB Unveils Roadmap for Sustainable Development DOMINICAN REPUBLIC: S&P Affirms 'BB-/B' SCRs, Outlook Negative J A M A I C A JAMAICA: Government to Relax Another Set of Fiscal Rules P A N A M A UEP PENONOME II: Moody's Gives Ba3 Rating to New $275MM Sec. Notes P A R A G U A Y BANCO CONTINENTAL: Fitch Puts BB+(EXP) Rating to Sr. Unsec. Notes BANCO CONTINENTAL: Moody's Puts Ba1 Rating to New Sr. Unsec. Notes P U E R T O R I C O CARLOS ORTIZ: To Reply to Trustee's Objection to Property Sale J.J.W. METAL: Seeks Approval to Hire Charles A. Cuprill as Counsel NOSCE TE IPSUM: Creditors to Get Paid by Property Sale Proceeds PUERTO RICO HOSPITAL: Century Buying Carolina Realty for $4MM S U R I N A M E REPUBLIC OF SURINAME: S&P Lowers US$125MM Bond Rating to 'D' - - - - - ===================================== A N T I G U A A N D B A R B U D A ===================================== LIAT: Resumes Flights to Seven Destinations ------------------------------------------- Barbados Today reports that the cash-strapped regional airline, LIAT Ltd., formerly known as Leeward Islands Air Transport or LIAT, resumed its commercial schedule with flights to a limited number of destinations. The Antigua-based LIAT, which is now under administration, said it will operate flights five days a week to seven destinations across its network, according to Barbados Today. The seven destinations are: Antigua, Barbados, Dominica, Grenada, St Lucia, St Kitts, and St Vincent and LIAT said that the limited schedule of flights will return connectivity to these destinations which were impacted by the airline's suspension of commercial services in March due to financial problems and the coronavirus (COVID-19) pandemic that forced many Caribbean countries to shut down their borders, the report notes. The first resumed flight left Antigua for Barbados at 9 a.m. (local time) on Monday, and Foreign Affairs Minister EP Chet Greene said the resumption of flights "is more than an Antigua success, but a regional success, the report discloses. "As we factor in the regional integration process we will be able to move goods and services across the region. The whole question of the region re-opening eventually for tourism also puts LIAT in a good position in terms of the feeder services it provides. "So for all those reasons and more there is no region in the world that operates without a regional carrier and so the sub-region of the OECS (Organisation of Eastern Caribbean States) in particular is counting on LIAT for its services and to have LIAT back in the skies at this time augurs well for the development of the sub-region…and it portrays us a modern developing society," Greene said on Observer radio, the report notes. Prior to its collapse, LIAT, which owes creditors an estimated EC$100 million flew to 21 destinations, operating an average of 112 daily flights within a complex network combining profitable and uneconomic routes, the report discloses. Airline observers said that these 39 unprofitable flights were to 18 territories. LIAT, whose former major shareholders were the governments of Antigua and Barbuda, Barbados, Dominica and St Vincent and the Grenadines, said it will announce shortly the addition of other destinations to the schedule for December 2020, the report says. The airline, which said it has completed all the training and regulatory requirements for the territories, also indicated that several new procedures have been implemented to ensure the safety of staff and passengers as well as reduce the risk of transmission of the coronavirus, the report relays. These include the mandatory wearing of masks at check-in and on board, enhancement in its cleaning and sanitization protocols and new boarding procedures, the report discloses. The airline, which is currently under administration, is being restructured following a decision by the government of Antigua and Barbuda to have it reorganized because of its financial situation, the report notes. The court-appointed administrator Cleveland Seaforth said the former employees of the regional airline, LIAT, are owed an estimated EC$80 million in severance payments, but that payment will not be made in the near future, the report discloses. Last month, Prime Minister Gaston Browne said that his administration is prepared to "collapse" the regional airline if it does not emerge as a "new and lean," entity as part of the re-organizational plans, the report says. LIAT currently employs 103 people with Seaforth indicating that this number could be increased by as many as 30 with increased operations, the report notes. Seaforth said that going forward, the Antigua and Barbuda government will have to decide who it will partner with to ensure the viability of the airline. He also hinted at the possibility of the Browne administration being a minority partner in the deal, the report adds. About LIAT LIAT Ltd., formerly known as Leeward Islands Air Transport or LIAT, is an airline headquartered on the grounds of V. C. Bird International Airport in Antigua. It operates high-frequency inter-island scheduled services serving 15 destinations in the Caribbean. The airline's main base is VC Bird International Airport, Antigua and Barbuda, with bases at Grantley Adams International Airport, Barbados and Piarco International Airport, Trinidad and Tobago. The airline is owned by seven Caribbean governments, with three being the major shareholders: Barbados, Antigua & Barbuda and St. Vincent and the Grenadines along with Dominica(94.7 %); other Caribbean governments, private shareholders and employees (5.3%). In the last few years, LIAT has been challenged with financial difficulties, often needing additional funding as the airline dealt with the high cost of operations. In November 2016, the Barbados government defended LIAT's operations, even as opposition legislators called for a cessation of the business. In early 2015, LIAT offered early retirement packages to employees in efforts to downsize. In 2014, LIAT knew it had to deal with unprofitable routes to make operations viable. In the third quarter of 2013, the airline's top management was shaken, with news Chief Executive Officer Captain Ian Brunton's sudden resignation. LIAT's current chief executive officer is Julie Reifer-Jones, chairman is Jean Holder, and chief financial officer is Rojer Inglis. Dr. Ralph Gonsalves, prime minister of St. Vincent & the Grenadines, serves as chairman of LIAT shareholders. ================= A R G E N T I N A ================= ARGENTINA: Officials Head to U.S. for Debt Revamp Talks With IMF ---------------------------------------------------------------- Hugh Bronstein at Reuters reports that Argentine officials will travel to the United States to meet with the International Monetary Fund (IMF), as the country renegotiates already-disbursed loans of about $44 billion, a government source said. The fund said at the end of November that it had begun to outline, together with Argentina, a new program to help the government face the country's profound economic and social challenges, which have been aggravated by the COVID-19 pandemic, according to Reuters. "Diego Bastourre, Ramiro Tosi and Mariano Sardi will travel to Washington to hold meetings based on an agenda of strengthening and developing the capital market. In addition, technical exchanges with the IMF on the financing program are planned," said the source on condition of anonymity, the report relays. Bastourre is Argentina's finance secretary. Tosi and Sardi hold the positions of undersecretary of finance and undersecretary of financial services, respectively, the report notes. The delegation will also include Sergio Chodos, representative of Argentina to the IMF, the report says. The Argentine delegation may meet with private investors while in the United States as well, after having restructured about $100 billon in sovereign bonds this year, the report discloses. Argentina, hard hit by the pandemic, is entering its third year of recession while Argentines contend with high inflation and a peso currency that has weakened dramatically this year, the report adds. About Argentina Argentina is a country located mostly in the southern half of South America. It's capital is Buenos Aires. Alberto Angel Fernandez is the current president of Argentina after winning the October 2019 general election. He succeeded Mauricio Macri in the position. Argentina has the third largest economy in Latin America. The country's economy is an upper middle-income economy for fiscal year 2019 according to the World Bank. Historically, however, its economic performance has been very uneven, with high economic growth alternating with severe recessions, income maldistribution and in the recent decades, increasing poverty. Standard & Poor's credit rating for Argentina stands at CCC+ with stable outlook, which was a rating upgrade issued on Sept. 8, 2020. Fitch's credit rating for Argentina was last reported at CCC with n/a outlook, a rating upgrade from CC on Sept. 11, 2020. DBRS' credit rating for Argentina is CCC with n/a outlook, a rating upgrade on Sept. 11, 2020. Moody's credit rating for Argentina was last set at Ca, a rating downgrade from Caa2 on April 4, 2020, with a negative outlook. As reported by The Troubled Company Reporter - Latin American, DBRS noted that the recent upgrade in Argentina's ratings (September 2020) follows the closing of two debt restructuring agreements between the Argentine government and private creditors. The first restructuring involved $65 billion in foreign-law bonds. The deal achieved the requisite participation necessary to trigger the collective action clauses and finalize the restructuring on 99% on the aggregate principal outstanding of eligible bonds. DBRS added that the debt restructurings conclude a prolonged default and provide the government with substantial principal and interest payment relief over the next four years. DBRS further relayed that Argentina is also seeking a new agreement with the International Monetary Fund (IMF) to replace the canceled 2018 Stand-by Agreement. Obligations to the IMF amount to $44 billion, with major repayments coming due in 2022 and 2023. =========== B R A Z I L =========== BANCO BTG: Moody's Assigns Ba2 Rating to $50MM Sr. Unsec. Notes --------------------------------------------------------------- Moody's Investors Service assigned a Ba2 foreign currency debt rating to the $50 million USD-denominated senior unsecured notes issued by Banco BTG Pactual S.A., Grand Cayman Branch (BTG Pactual). The notes are being issued under the existing $5 billion Global Medium-Term Note Program, rated (P)Ba2, and will be due in 2025. The outlook on the rating is stable. Assignment: Issuer: Banco BTG Pactual S.A., Grand Cayman Branch Foreign Currency Senior Unsecured Debt Rating, Ba2 RATINGS RATIONALE The rating agency explained that the foreign currency senior unsecured debt rating derives from Banco BTG Pactual S.A.'s Ba2 global local currency deposit rating, which, in turn, reflects the bank's baseline credit assessment (BCA) of ba2. The rating does not benefit from any uplift from systemic support considerations because of the bank's modest share of the deposits market in Brazil. Banco BTG Pactual S.A.'s (BTG Pactual) ba2 baseline credit assessment (BCA) incorporates the bank's adequate liquidity and capitalization that has been supporting its expansion into digital banking and corporate lending over the past year. BTG Pactual' solid asset and wealth management activities, along with corporate lending led to growing earnings recurrence, accounting for 38% of total revenues during quarter ended September 2020. The bank's established position in the investment banking segment in Brazil has supported its performance in the quarter, benefiting from high volatility and a rebound in local capital market activities following the sharp contraction at the onset of the pandemic. Sales and trading accounted for 37% of BTG Pactual's total quarterly revenues, and earnings from principal investments contributed to 5%, down 16% from prior quarter. For the first nine months of 2020, the bank reported net income of 1.45% relative to tangible assets, still below the 2.33% reached in 2019, and reflecting the historical low interest rates in Brazil and the gradual recovery in business volumes that started in June. BTG Pactual's capitalization, measured as tangible common equity as a proportion of risk weighted assets (TCE/RWA), remained high at 12.43% in Q32020, supported by internal earnings retention and the follow-on offering completed last June that added 184 basis point to Moody's TCE ratio. The capitalization, which is higher than that of large Brazilian bank peers, will support its lending growth strategy, and the digital banking expansion, focused on medium and high-income clients. In September 2020, the problem loan ratio increased to 1%, from just 0.24% at the end of 2019, reflecting the recent expansion into the low-corporate segment, and will likely add granularity to a traditionally concentrated loan portfolio. In September 2020, reserves for loan losses accounted for 3.8% of total loans. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING The Ba2 rating assigned to BTG Pactual's senior unsecured notes is unlikely to face upward pressure, as the bank´s adjusted BCA, which is the anchor credit risk assessment for the instrument rating, is currently at the same level as the Ba2 sovereign rating, which carries a stable outlook. Conversely, the rating could be downgraded if Brazil's sovereign rating is downgraded, or if rapid loan growth leads to a sharp increase in asset risk for BTG Pactual or if the bank's capitalization ratio drops sharply. Downward rating pressure could also be triggered by weakening liquidity, which could increase the bank's intrinsic vulnerability to its institutional-based funding structure. PRINCIPAL METHODOLOGY The principal methodology used in this rating was Banks Methodology published in November 2019. Banco BTG Pactual S.A. is headquartered in Sao Paulo, and had consolidated assets in the amount of BRL253.21 billion and shareholders' equity of BRL26.05 billion as of September 30, 2020. BRAZIL: Investors Anxious Over Coronavirus Stimulus Splurge ------------------------------------------------------------ Martha Viotti Beck and Andrew Rosati at Bloomberg New report that President Jair Bolsonaro's stimulus spending spree won praise far and wide for saving Brazilians from the worst of the pandemic's economic pain. But now, as the worst of the health crisis eases, anxiety is mounting in financial circles about how he's going to pay for it. Investors have been unloading the currency and stocks, sparking routs that are almost unparalleled in the world this year, and they're increasingly refusing to buy anything but the shortest of short-term government bonds, according to Bloomberg New. At $107 billion, Bolsonaro's relief program looks more like the massive stimulus packages engineered by the world's wealthiest nations than those cobbled together by Brazil's junk-rated peers in emerging markets, Bloomberg New relays. Equal to 8.4% of the country's annual economic output, it's even proportionally bigger than the plans enacted by the U.K. and New Zealand, Bloomberg New notes. All of which turns Brazil into something of a Covid-19 economic case study: Can a mid-tier developing nation emulate the fiscal and monetary response of the world's most credit-worthy countries and get away with it? Or will it sink into financial crisis? Bloomberg New says that Arminio Fraga, perhaps Brazil's most respected former central banker, says a full-blown disaster is a very real possibility now. "I can see mature economies doing all kinds of acrobatic moves with their central banks. That's fine, they can," says Fraga, who helped stave off a debt default back in 1999 and today runs a hedge fund, Gavea Investimentos, in Rio de Janeiro. "Here in Brazil, it's different. We have a lot of debt." Of course, most rich countries have lots of debt too. The International Monetary Fund predicts that the U.S. and Canada will end this year with debt-to-gross-domestic-product ratios above 100% and says Japan's will soar to 266%, all well above the 95% ratio that the Bolsonaro administration forecasts for year-end, Bloomberg New relays. But Brazil, with its long history of defaults and runaway inflation, doesn't have the hard-earned credibility in markets that those countries have. Moreover, the pace at which the debt ratio is climbing -- it's up 30 percentage points in the past five years alone -- alarms investors, Bloomberg New notes. Expectations for inflation in Brazil, while nothing even vaguely resembling the hyper-inflationary years of the mid-1990s, are climbing quickly amid concern that the government lacks the political will to rein in spending, Bloomberg New discloses. Amid the pandemic, other developing countries, like Peru and Chile, actually produced more stimulus relative to the sizes of their economies, but they enjoy investment-grade credit ratings and started off with much smaller debtloads, Bloomberg New relays. Corona Vouchers In Brazil, the lion's share of the stimulus -- some $57 billion -- was dedicated to monthly stipends for the poorest, who stayed fed and kept spending as the economy was shrinking, Bloomberg News notes. The cash transfers, which came to be known as corona vouchers, ultimately drove down poverty and sent Bolsonaro's popularity soaring. The IMF applauded the response for averting a deeper economic downturn and stabilizing financial markets, Bloomberg New discloses. What has economists wringing their hands is how the president, a self-styled budget hawk, reconciles a record primary deficit with a sudden desire to make part of the aid permanent after the stimulus expires on Dec. 31, Bloomberg News relays . The IMF officials, in the same report praising the initial aid, cautioned that growing levels of public debt represented a risk to Brazil, Bloomberg News discloses. A primary budget gap estimated at 12.1% of GDP and growing doubts about Bolsonaro's ability to find a way to pay for more social spending have roiled markets, Bloomberg News says. The premium traders demand to hold longer-dated debt has soared amid the increased risk, with swap rates expiring in about five years at 6.82%, up from 5.39% in July, Bloomberg News relays. Brazil's real has tumbled almost 30% this year, dragging down dollar-based returns for stocks, Bloomberg News notes. The currency, already under pressure as record low rates eroded its carry trade appeal, has seen volatility soar as traders react to headlines about government spending, Bloomberg News discloses. Breakeven Rates Inflation expectations have also shot up, with investors now pricing in annual price increases of 4.4% over the next decade, up from 3.8% just 12 months earlier, Bloomberg News relays. Perhaps the most ominous sign is the difficulty selling longer-term debt, even as nations such as the U.S. flirt with the idea of offering securities with maturities of 50 to 100 years, Bloomberg News discloses. In Brazil, the average maturity of local government bonds sold at auction was 2.36 years in August, down from 4.95 years a year earlier. Since then, the move toward shorter-term notes has only grown, Bloomberg News relays. In bond auctions so far this month, for example, six-month notes -- the shortest term available with a fixed rate -- accounted for 44% of the fixed-rate debt sold, compared with just 11% during October 2019, Bloomberg News notes. "Without reforms, it's possible that the country faces another serious macroeconomic crisis," said Alberto Ramos, an economist at Goldman Sachs Group Inc. in New York. "High government spending has been a problem for Brazil for decades. Fiscal deterioration brought high inflation, low growth and the need from IMF help in the past. Today, the situation is not better," he added. Budget Deficit The shift to selling shorter-term bonds in recent months stemmed from investor concerns about the amount of public spending, Jose Franco de Morais, the Treasury Department's public debt subsecretary, acknowledged in an interview. He expects things to normalize in coming months as investors gain confidence that outlays will be reeled in, Bloomberg News relays. Big Spenders Brazil's pandemic response rivals those of some rich nations. But the problem investors have with Brazil is its track record of excessive spending and allowing consumer-price increases to inflate away its debt, Bloomberg News relays. Brazil has defaulted on its external debt nine times since 1800, according to the book "This Time Is Different: Eight Centuries of Financial Folly." That's tied for third-most globally during that span, Bloomberg News notes. The country defaulted in 1987 and wasn't able to resume payments until 1994, a year when inflation peaked at 4,923%, Bloomberg News says. During the 2008 financial crisis, Brazil pumped money into public banks and reduced taxes to help dig its way out of recession. But temporary relief turned permanent, leading to budget deficits and eventual downgrades of its debt, which ultimately cost the government billions in higher borrowing costs, Bloomberg News relays. "Our own internal dynamics are unsustainable," Fraga said in an interview. "The response has to be broad and deep and it has to cover fiscal matters, which is difficult," he added. Almost a decade after the 2008 crisis, Bolsonaro's predecessor instated constitutionally mandated spending ceiling to help regain investor confidence, Bloomberg News notes. But Congress gave Bolsonaro a one-time pass to blow past it this year, and investors are anxiously watching for signals he'll set the country back on the road to fiscal stability, Bloomberg News discloses. Future Generations "The spending cap is a symbol, a flag that some of us in the trenches use to defend future generations," Economy Minister Paulo Guedes said at an event this month. "We can't go on with snowballing debt, high interest rates and high taxes," he added. But so far it's hard to tell what Bolsonaro is planning. His last pitch to pay post-pandemic aid whipsawed markets last month, leaving his own economic team to run damage control on growing concerns that the commitment to spending limits isn't serious, Bloomberg News relays. He since shelved future discussions until after next month's municipal elections, leaving him with just a short window to hammer out a deal between when the polls close and the new year begins, Bloomberg News notes. Morais said the fiscal rule will be respected and the next stimulus program will be smaller than some investors had feared. He added that there's plenty of liquidity in the local bond market, Bloomberg News relays. "Time will be working against the government," said Roberto Secemski, an economist focused on Brazil at Barclays Plc. Investors ultimately want a plan "that tells us public indebtedness will stabilize," he added. 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. =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: Gov't to Modernize 4 Ports to Attract Investors ------------------------------------------------------------------- Dominican Today reports that Dominican Port Authority (Apordom) Director Jean Luis Rodriguez, intends to start the recovery of the fishing piers, as well as restructure and modernize the ports of San Pedro de Macois, Manzanillo, Pedernales and Haina, as well as the entire process of technological transformation in the country's harbors. "This will represent a transformation for these communities, their people and without a doubt, of great value for the country with the interest of continuing to attract more investors and tourists to our ports," he said, according to Dominican Today. Rodriguez noted Apordom's achievements in the first three months of management, "where the recovery of port finances stands out, thanks to hard work that included the intervention of specific areas such as Human Resources, Accounting and Administration," the report relays. 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). DOMINICAN REPUBLIC: IDB Unveils Roadmap for Sustainable Development ------------------------------------------------------------------- The Dominican Republic is at a turning point in terms of economic and social development. This is the conclusion of a study by the Inter-American Development Bank (IDB) that identifies three fundamental challenges that the country must address in order to move more toward greater inclusion and economic and social well-being: human capital, institutional capacity and productive transformation. The study, entitled BIDeconomics the Dominican Republic: Opportunities for Sustainable, Inclusive and Resilient Development, makes more than 120 public policy proposals to meet these challenges and achieve better human capital at every stage of the life cycle, more independence and quality in public institutions and more production potential so as to lead growth in the region. Finally, in a transversal way, the study also looks at how the Dominican Republic must improve its ability to prevent and respond to natural disasters. The report is the result of a rigorous process of analysis that was enriched by the IDB's lengthy record as a strategic partner of the Dominican Republic in its path toward development. The study aims to help establish the foundations for a society that guarantees equal opportunities for everyone in the Dominican Republic. In the words of the IDB Group representative for the Dominican Republic, Miguel Coronado Hunter, "the country not only faces the challenge of returning to growth, but of growing better and in a more inclusive way. The best way to do this is to go deeper in a program of structural reforms, which are more appropriate than ever today, which drive sustainable and inclusive growth and prepare the country to confront new challenges in a world context that is more and more complex and changing. If it reaches this goal, the country will continue to be a leader in economic and social growth in Latin America and the Caribbean and will serve as a model for the region." At the launch of BIDeconomics Dominican Republic, Marta Ruiz-Arranz, the principal economic adviser for the IDB Country Department Central America, Haiti, Mexico, Panama and the Dominican Republic, said that "in order to close social and economic gaps it is important to build a Dominican productive sector that is less vulnerable, more able to bounce back from shocks, and create good-paying jobs. This means consolidating and expanding productive opportunities, helping strategic sectors recover from the current crisis while reforms are implemented to lure new business opportunities that diversify the means of production. With that in mind, it is necessary to focus on infrastructure to improve competitiveness and sustainability, consolidate the business climate and of course improve access to production-related financing." Ruiz-Arranz said one priority should be to help vulnerable populations affected by the pandemic and strengthen human capital in stage of the cycle of life. This means addressing early infancy, improving the quality of education and preparing young people for the jobs demanded by a changing world, with decent wages. It also means achieving a quality health care system with a focus on prevention and a consolidated primary care network, as well as an effective social protection grid for the most vulnerable people. Ruiz-Arranz also said that in order to meet these challenges it will be necessary to go further in reforms designed to boost the equity, efficiency and sustainability of public finances, improve the quality of public spending, address the challenges of the digital economy, with greater connectivity and insertion in global value chains, and better and more efficient provision of the services that State provides to the people. 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). DOMINICAN REPUBLIC: S&P Affirms 'BB-/B' SCRs, Outlook Negative -------------------------------------------------------------- S&P Global Ratings affirmed its 'BB-' long-term foreign and local currency sovereign credit ratings on the Dominican Republic. The outlook remains negative. S&P also affirmed its 'B' short-term sovereign credit ratings. The transfer and convertibility (T&C) assessment remains 'BB+'. Outlook The negative outlook reflects S&P's view that it could lower the ratings on the Dominican Republic over the next six to 18 months, given the severe impact of the COVID-19 pandemic on the sovereign's already vulnerable fiscal and external profiles, as well as the potential for a weaker-than-expected economic recovery. Downside scenario S&P said, "We could lower the ratings if the government is unable to pass reforms to curb the fiscal deficit, which otherwise could lead to a substantial increase in external debt. We could also lower the ratings if the expected economic recovery is weaker, due to further external shocks, or if the COVID-19 pandemic and its related containment measures lower the country's potential economic growth." Upside scenario S&P said, "We could revise the outlook to stable over the next six to 18 months if risks of a more severe or prolonged crisis subside, the government is able to implement measures to ensure a structurally smaller fiscal deficit, and economic activity rebounds. We would also look for a longer record of demonstrated capacity to pass long-standing economic reforms." Rationale S&P said, "Our 'BB-' long-term ratings on the Dominican Republic reflect its fast-growing and resilient economy, which is vulnerable to external shocks. The country's sustained economic dynamism over the past decade has offset some of the sovereign's structural weaknesses. The ratings also reflect the Dominican Republic's likely better potential to return to high economic growth and alleviate recent external weaknesses compared with most rating peers. "Our ratings are constrained by the country's historical political challenges in passing structural reforms to contain large fiscal deficits. Weak debt and external profiles also constrain the ratings." Institutional and economic profile: Reform outlook could improve under the new administration's strong mandate -- The new administration's strong mandate in Congress and high popularity could unlock some of the delayed reforms. -- The country's institutional assessment reflects its vibrant democracy and its historical challenges in passing timely reforms to contain fiscal and external vulnerabilities. -- Following a severe contraction in 2020, the country's economic diversification should sustain an economic rebound in 2021 and strong growth thereafter. President Luis Abinader (Partido Revolucionario Moderno, or PRM) took office in August 2020 for a four-year term. His strong mandate could bode well for the reform outlook. The PRM has strong majorities in Congress and the Senate and holds most of the municipalities in the country. The president ran on a platform to improve transparency and anti-corruption policies, coupled with maintaining pro-business economic policies. While the government's immediate priority has been dealing with the health emergency, following his campaign promises, the president appointed an independent prosecutor, and his government has taken important steps to dismantle the highly inefficient energy utilities conglomerate Dominican Corporation of State Electrical Companies. That said, the difficulties prior governments have had in passing reforms have translated into a deterioration of the country's fiscal and external profiles over the last decade. In the past, high economic growth lowered the sense of urgency for passing reforms. However, the recent severe recession has highlighted the country's fiscal and external vulnerabilities. The new administration faces the challenge of addressing the impact of the economic shock in 2020, as well as the social discontent that stems from alleged corruption and public-sector inefficiencies over the years. The global spread of COVID-19 is having unprecedented implications for the Dominican Republic's economy, particularly in tourism. In addition to the human costs, the pandemic will reduce GDP by 6.5% in 2020 and lower per capita GDP to about $7,600. The Dominican Republic's growth prospects continue to compare positively with its peers with a similar level of economic development. S&P said, "Our base case assumes the impact of COVID-19 will be transitory, with the economy bouncing back to growth of 5% in 2021-2023. The recovery will likely be helped by the country's economic diversification. Tourism, one of the economic pillars of the country, will most likely lag behind other sectors in the recovery, fully recovering only when COVID-19 vaccines become generally available. The ongoing recovery in construction, manufacturing, mining, and exports from free-trade zones could allow for a faster reactivation in coming years. However, our forecasts are subject to downside risks, given the uncertainty about both the extent of the COVID-19 pandemic and its economic implications." To contain the spread of the virus, the country imposed mandatory quarantines and curfews, temporarily closing borders during the second quarter. The government is currently implementing protocols to allow for a broader economic reactivation, including bolstering the health system and keeping high testing rates. Flexibility and performance profile: A rapid buildup in external debt is narrowing fiscal flexibility ahead of further potential external shocks -- The fiscal deficit and debt have spiked in 2020 as the government implemented a fiscal package to mitigate the impact of the pandemic. -- Sizable external borrowings are weakening the sovereign's external profile and limiting the fiscal policy flexibility ahead of further external shocks. -- S&P expects only a marginal deterioration of the current account deficit (CAD) as the sharp fall in tourism receipts is being compensated by high remittances and a significant correction in imports. S&P said, "The government's fiscal response to the pandemic has focused on subsidies to suspended formal employees, direct money transfers aimed at the large share of informal workers, and various tax relief measures. We estimate the cost of the countercyclical measures at 4% of GDP. In our view, higher spending, along with revenue losses due to the recession, will likely boost the general government deficit in 2020, approaching 11% of GDP. Our definition of general government includes the central government and the central bank quasi-fiscal deficit. "We expect the government to narrow its fiscal deficits only gradually as it rolls back the COVID-19-related programs deployed this year, revenue recovers with higher economic activity, and the government reduces losses in the energy sector. We project general government deficits to fall toward 5% of GDP over 2021-2023, of which around 1% of GDP corresponds to the central bank quasi-fiscal deficit." The government has acknowledged the need for a fiscal reform and plans to introduce it in 2021. A successful reform would likely be an upside for fiscal consolidation. The government will continue to finance its fiscal deficits largely through external borrowings, mainly in the debt market but some from multilateral institutions. Despite some deepening in recent years, shallow domestic markets limit its capacity to raise debt internally. S&P said, "We expect the change in net general government debt to spike to about 12.5% of GDP in 2020 and to decline to 5% in 2022-2023. The sovereign's net debt (which includes the central bank's debt) is expected to reach over 60% of GDP in 2021, up from 49% of GDP in 2019 and 32% of GDP in 2010. In our view, the rapid buildup in debt, a result of fiscal weaknesses, diminishes the sovereign's buffers to deal with potential external shocks." The net debt stock includes central bank certificates (14% of GDP) and excludes the bonds that the central government issued to capitalize the central bank (3% of GDP) following the 2003-2004 bailout of the banking sector. Higher debt will keep interest payments high, at an average of 25% of general government revenue over the next three years, also reflecting the country's low tax burden. This ratio captures the interest paid to the central bank (2.5% of general government revenue) as a result of its quasi deficit. The sovereign has tapped international markets at favorable rates to cover its borrowing needs. It has issued US$6.3 billion this year at a comparable rate to its prior issuances. That said, the historical reliance on international markets results in vulnerability to currency depreciation, given foreign currency denominated debt is about 60% of total debt. The rise in external debt, combined with a sharp decline in current account receipts (CARs), has worsened the country's external profile. S&P said, "We project narrow net external debt to spike toward 115% of CARs, from 82% in 2019, and remain above 100% over the next three years. Furthermore, the Dominican Republic could be vulnerable to sudden changes in foreign direct investment (FDI) flows, since net external liabilities, which include the high stock of FDI in the country, account for about 230% of CARs. FDI inflows are likely to drop modestly in 2020 but still fully fund the CAD. On the other hand, external liquidity has remained relatively strong during the current recession, and the central bank has been increasing usable reserves, which currently account for about 12% of GDP. As a result, we expect the country's gross external financing needs to remain about 87% of CARs plus usable reserves during 2020-2023." Despite the sharp fall in tourism inflows in 2020, the country has benefited from substantially higher remittances and a sizable correction in imports. The CAD is likely to increase marginally in 2020, to about 2.5% of GDP, and gradually narrow in coming years as manufacturing exports from free-trade zones and tourism recover. The significant share of Dominicans living and working abroad, coupled with the fiscal packages deployed in the U.S., have led to a substantial increase in remittances, which we expect to hike about 15% in 2020. Gold exports, which historically accounted for 6% of total CARs, are also helping to mitigate the impact on lost tourism. Furthermore, lower oil prices, coupled with a significant fall in other imports, have contained the external deficit. S&P expects the CAD to continue being fully financed by FDI, which we project at 3.5% of GDP in 2020-2023. The central bank has eased monetary conditions and implemented a monetary package of 4% of GDP. Among other measures, it cut monetary policy rates, reduced reserve requirements, and provided liquidity lines to banks. Since 2012, when the central bank became operationally independent, inflation has remained below its target range (4% plus or minus 1%). S&P said, "We expect inflation to temporarily increase due to short-term pressures, but to remain within the target in the coming years. Still, we consider monetary policy to be constrained by the central bank's quasi-fiscal losses, a low level of domestic credit (about 30% of GDP), and shallow domestic debt and capital markets. A memorandum of understanding signed by the Finance Ministry and the central bank could allow for a gradual recapitalization of the bank over the next seven years, easing the central government's interest burden and strengthening its policy tools." S&P considers banking-sector contingent liabilities to be limited, given the sector's total assets are estimated at less than 50% of GDP. The financial sector is concentrated in a few large banks, which we consider to be systemic and have stronger capital and liquidity ratios. Since the last banking crisis in 2003, the central bank has improved regulation and financial sector oversight. In accordance with S&P's relevant policies and procedures, the Rating Committee was composed of analysts that are qualified to vote in the committee, with sufficient experience to convey the appropriate level of knowledge and understanding of the methodology applicable. At the onset of the committee, the chair confirmed that the information provided to the Rating Committee by the primary analyst had been distributed in a timely manner and was sufficient for Committee members to make an informed decision. After the primary analyst gave opening remarks and explained the recommendation, the Committee discussed key rating factors and critical issues in accordance with the relevant criteria. Qualitative and quantitative risk factors were considered and discussed, looking at track-record and forecasts. The committee's assessment of the key rating factors is reflected in the Ratings Score Snapshot above. The chair ensured every voting member was given the opportunity to articulate his/her opinion. The chair or designee reviewed the draft report to ensure consistency with the Committee decision. The views and the decision of the rating committee are summarized in the above rationale and outlook. The weighting of all rating factors is described in the methodology used in this rating action. Ratings List Ratings Affirmed Dominican Republic Sovereign Credit Rating BB-/Negative/B Transfer & Convertibility Assessment Local Currency BB+ Dominican Republic Senior Unsecured BB- ============= J A M A I C A ============= JAMAICA: Government to Relax Another Set of Fiscal Rules -------------------------------------------------------- RJR News reports that the government is seeking to relax another set of the fiscal rules designed to keep Jamaica from deviating from the economic goals currently being pursued. Finance Minister Dr. Nigel Clarke says the projected 10 percent economic downturn caused by the covid-19 pandemic has resulted in significant deviation from the set targets and would require steep correction, according to RJR News. He wants parliament to agree to a gentler correction by amending the Financial Audit and Administration Act to allow the government to run a lower primary balance, the report notes. Dr. Clarke argues that maintaining the current fiscal rules would result in a slower return to growth, the report relays. He added that lowering the primary balance target would allow more room for spending in critical areas, the report notes. The government has already amended the fiscal rules to push back the 60 per cent debt to gross domestic target by two years, 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 A N A M A =========== UEP PENONOME II: Moody's Gives Ba3 Rating to New $275MM Sec. Notes ------------------------------------------------------------------ Moody's Investors Service assigned first-time Ba3 debt rating to UEP Penonome II, S.A. and its proposed $275 million Reg S/144 A Senior Secured Notes due 2038. The outlook on the rating is stable. UEP II owns 5 wind farms with a combined capacity of 215 MW located in the Cocle Province, Republic of Panama, which began operations in January 2015. Tecnisol I, S.A., Tecnisol II, S.A., Tecnisol III, S.A. and Tecnisol IV, S.A. (together "Tecnisol" or "Guarantors") are four integrated solar farms which began operations in August 2018 and are also located in Panama, with a combined capacity of 40 MW (10 MW each). Tecnisol will be guarantors of the transaction. UEP II and Tecnisol are majority and fully owned by InterEnergy Group Ltd., respectively. Assignments: Issuer: UEP Penonome II, S.A. Gtd Senior Secured Regular Bond/Debenture, Assigned Ba3 Outlook Actions: Issuer: UEP Penonome II, S.A. Outlook, Assigned Stable RATINGS RATIONALE The Ba3 rating assigned consider the material contracted cash flows from UEP II's creditworthy counterparties, the Panamanian distribution companies, stemming from the public auctioned PPAs. In addition, the ratings reflect the competitiveness of UEP II and Tecnisol assets as well as the role of non-hydro renewables that complement Panama's energy matrix. In addition, its assessment considers the project finance features embedded in the transaction and the fully amortizing debt profile. The strengths mentioned are partially mitigated by the transaction's exposure to the energy market, particularly the 5-year merchant tail. While InterEnergy will seek to renew or close new PPAs to mitigate the merchant tail, the company will be exposed to market prices at the time of renewal. According to Panamanian energy market regulation, distribution companies are required to contract 100% of their yearly projected energy and capacity needs through public tenders organized by ETESA (Empresa de Transmision Electrica, S.A., Baa1 negative), the transmission company and dispatch center operator. As such, UEP II's PPAs with the distribution companies could be extended in the future. In addition, the rating considers that the debt service reserve of 6-months that steps up to 12-months in March 2034, at the start of the merchant tail, is below the 12-month standard for wind projects. The Issuer and Guarantors have faced some technical issues in the past, although InterEnergy has been able to implement action plans to address and correct them. The technical issues had an impact on wind generation of the Issuer but have been partially mitigated with the availability guarantee of Goldwind under the Service and Maintenance Agreement ("SMA"). In the case of the Guarantors, the corrections have been 100% completed as of now, and are expected to partially address the weaker than expected generation performance of the solar assets. Its rating also recognizes that the transaction has a non-standard structure, where Tecnisol acts as Guarantor instead of co-issuer, mainly explained as InterEnergy is a majority shareholder of UEP II (83.78%) while sole owner of Tecnisol. The rating also considers that the SMA is signed with an experienced counterparty, Goldwind International Holdings (HK), albeit it will expire in December 2023, which generates uncertainty regarding the scope and price of the agreement renewal. Under Moody's Base Case, projected Moody's Debt Service Coverage Ratio ("DSCR", Cash Flow Available for Debt Service / Debt Service) over the life of the debt averages 1.14x, consistent with its B score under its methodology. Moody's Base Case considers a P95 generation scenario for wind farms given that the 5 wind farms are contiguous and exposed to the same resource, consistent with its rating methodology, and a P99 scenario for the solar assets to incorporate the lack of a track record of adequate generation performance although the technical issues have been resolved by the company. Moody's Base Case also considers a haircut in projected spot prices of 20% and an increase in O&M costs of 10%. Moody's recognizes that under P90 generation scenarios for wind and solar, with the haircut in projected spot prices of 20% and an increase in O&M costs of 10%, DSCR improves to an average of 1.22x, consistent with a Ba score. The Ba3 rating assigned considers that the transaction benefits from project finance features including restrictions on additional indebtedness, distributions and change of control and a security package. ENVIRONMENTAL, SOCIAL, GOVERNANCE CONSIDERATIONS No material effects related to environmental issues have been highlighted in the Independent Engineer report for the issuer. Given that the issuer owns wind and solar assets, Moody's does not expect any environmental considerations that would affect the rating. Social Considerations component is not considered material in the sector. A number of power generation projects in the region have been interrupted as a result of social issues such as the Ituango power project in Colombia. No material effects related to social issues have been highlighted in the Independent Engineer report for the Issuer. Given that the transaction benefits from a project finance structure, that considers covenants, additional indebtedness and distribution tests, governance risks are not considered material. The outlook is stable, reflecting its expectation of visible and stable cash flows derived from long term PPAs in the next 12-18 months. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING The rating could face upward pressure if recorded DSCRs are expected to be sustained above 1.3x with little volatility, a generation profile closer to P50 and more predictability over operation and maintenance costs in the middle term. Generation issues leading to a generation profile lower than P95 volumes for the wind project and/or cost increases that lead to DSCRs below 1.10x on a sustained basis could trigger downward pressure on the rating. The principal methodology used in this rating was Power Generation Projects Methodology published in July 2020. =============== P A R A G U A Y =============== BANCO CONTINENTAL: Fitch Puts BB+(EXP) Rating to Sr. Unsec. Notes ----------------------------------------------------------------- Fitch Ratings has assigned a 'BB+(EXP)' rating to Banco Continental SAECA's (Continental) upcoming senior unsecured fixed-rate notes. The U.S. dollar-denominated notes are for an amount yet to be determined at a fixed interest rate to be set at the time of the issuance. The tenor of these notes is also yet to be determined but is likely to be five years. The final rating is contingent on the receipt of final documents materially conforming to the information already received. The use of proceeds will finance or refinance new or existing eligible green projects and/or eligible social projects. KEY RATING DRIVERS Continental's senior unsecured notes are rated at the same level as Continental's Long-Term Issuer Default Rating (IDR) of 'BB+', as the likelihood of default of the notes is the same as that of the bank. The notes will constitute Continental's direct, unsecured, unsubordinated and senior obligations and rank pari passu in right of payment with other existing and future unsecured and unsubordinated obligations. Continental's IDRs are driven by its Viability Rating (VR) of 'bb+', which is highly influenced by its company profile due to its strong local franchise as the largest Paraguayan bank, with nearly 14% of banking system loans, albeit moderate on a regional basis. Its strong capitalization metrics relative to its local and similarly rated international peers also highly influence the bank's ratings. Additionally, the VR considers current challenges from the operating environment, the bank's good liquidity ratios, still reasonable but deteriorating profitability and asset quality, as well as its stable but concentrated funding. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- An upgrade is unlikely over the foreseeable future but could result from potential changes in Fitch´s assessment of the Paraguayan operating environment faced by local banks. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Continental's senior unsecured debt ratings are directly linked to the bank's Long-Term IDR. Any negative rating action on the IDR will result in a similar rating action on these debt ratings. -- Continental's ratings could be affected by a material weakening of the bank´s currently strong capital metrics (a Fitch Core Capital ratio [FCC] sustained below 18%), which could arise from a higher-than-expected operating environment deterioration that materially impacts the bank´s asset quality or profitability metrics, or from a change to its strong competitive position in the local market. ESG CONSIDERATIONS Continental has an ESG credit relevance score of '4' for Governance Structure, in contrast to a relevance score of '3' for most private peers, to reflect the low board independence compared to regional peers, along with the fact that the bank's main owner has a high influence on Continental's strategic decisions, considered a key person risk by Fitch. This has a negative impact on the credit profile and is relevant to the ratings in conjunction with other factors. Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. ESG issues are credit neutral or have only a minimal credit impact on the entity, due to either their nature or the way in which they are being managed by the entity. BANCO CONTINENTAL: Moody's Puts Ba1 Rating to New Sr. Unsec. Notes ------------------------------------------------------------------ Moody's Investors Service assigned a Ba1 long-term foreign currency debt rating, with a negative outlook, to the proposed senior unsecured notes to be issued by Banco Continental S.A.E.C.A. (Banco Continental). The notes will rank pari passu in right of payment with all of Banco Continental's existing and future unsecured and unsubordinated liabilities and will be listed on the Luxembourg stock exchange. The net proceeds from the issuance will be used to finance or refinance new or existing eligible green projects and/or eligible social projects. The outlook on the notes is negative in line with the outlook on Banco Continental's deposit ratings. The following rating was assigned to Banco Continental S.A.E.C.A.: - Long term foreign currency senior unsecured debt rating of Ba1, negative outlook RATINGS RATIONALE Banco Continental's Ba1 foreign currency senior unsecured debt rating derives from the bank's local currency deposit rating of Ba1. The deposit rating benefits from one notch of uplift from the bank's baseline credit assessment (BCA) of ba2 to reflect systemic support considerations because of Banco Continental's large market share of deposits in the Paraguayan banking system. The bank's BCA reflects its above-peer capitalization levels, historically strong profitability and high levels of liquidity. However, the challenges to the bank`s asset risk and potentially higher provisioning expenses that would pressure profitability are also incorporated into its BCA. As measured by Moody's as tangible common equity (TCE) to risk weighted assets (RWA), Banco Continental's capitalization ratio was 17.5% as of June 2020, significantly higher than its peers and bolstered by historically strong profitability as shown by net income to tangible assets of 2.3% in 2019. The profitability, however, has fallen to 1.4% by June 2020 because of lower business volumes and higher provisioning costs resulting from the economic disruptions caused by the coronavirus pandemic. The bank has a greater reliance on confidence-sensitive market funds than peers, but it also holds liquid assets equivalent to 25.9% of its tangible banking assets that gives ample coverage to market funding risk. Banco Continental's asset risk and its high exposure to the agricultural sector remains a key credit challenge. The 60-day problem loan ratio was 2.8% as of October 2020 up from 1.7% in 2019, while refinanced and restructured loans rose to 3.0% of total loans. Importantly, foreclosed assets continued to rise to 5.0% of total loans and now it represents about one third of total foreclosed assets in the Paraguayan banking system. Modest business volumes, low interest rates and additional provisioning costs as assessed by Moody's will weigh on Continental's financial performance. The negative outlook on Banco Continental's ratings reflects the heightened asset risk and challenges to profitability the bank faces. The net proceeds of the issuance will be used to finance or refinance eligible projects under Banco Continental's sustainability bond framework that has been set up in line with the International Capital Market Association's social and green bond principles. Eligible projects include those targeting energy efficiency, renewable energy and green buildings, among others. Moody's assesses a high probability of government support to the bank in an event of stress, in light of its systemic importance. Banco Continental is the largest lender in Paraguay with market share of 14.0% as of October 2020 and the second largest deposit taker with market share of 13.8%. Deposits represented over 70% of total funding as of October 2020. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The bank`s ratings, including the debt rating, and assessments could be downgraded if Banco Continental suffered a substantial deterioration in its asset quality, particularly a further buildup of foreclosed assets. Extensive usage of central bank measures to smooth out provisioning, which could affect its core earnings profile, could also have negative credit implications to its BCA. Banco Continental's outlook could be stabilized if its asset risk does not show material signs of weakness and its profitability remains strong, in line with historical levels. The principal methodology used in this rating was Banks Methodology published in November 2019. ===================== P U E R T O R I C O ===================== CARLOS ORTIZ: To Reply to Trustee's Objection to Property Sale -------------------------------------------------------------- Judge Enrique S. Lamoutte of the U.S. Bankruptcy Court for the District of Puerto Rico ordered Carlos H. Ortiz Colon and his wife, Maribel Rodriguez, to state their position within seven days as to the U.S. Trustee's objection to their proposed sale of the real property located at Apt. D-302 in Condominion Bayside Cove, San Juan, Puerto Rico, Juan Francisco Rivera Hernandez for $195,000, filed on Nov. 25, 2020. As part of the Debtors' reorganization, they have decided to sell various properties that are not needed for the reorganization and for their Dairy Farm business operations. The property is one of the properties to be sold. On April 4, 2019, secured creditor, Banco Popular de Puerto Rico ("BPPR") filed a secured claim numbered 4, in the amount of $52,904 for property. On June 11, 2019, BPPR filed a Motion for Relief from Stay Under 36 regarding the property. The Motion was granted by the Court and the Stay was lifted as per Order entered on July 1, 2019. BPPR then filed an In Rem foreclosure complaint over the property which was numbered SJ2019CV09822. The funds will be used to pay the following liens: (i) First Rank Mortgage Lien owed to BPPR; (ii) Second Mortgage Rank Lien owed to First Bank de Puerto Rico. A copy of the Contract is available at https://tinyurl.com/y559zyyh from PacerMonitor.com free of charge. Carlos H. Ortiz Colon and Maribel Rodriguez Rios (Bankr. D.P.R. Case No. 19-01384-ESL11) and Vaqueria Ortiz Rodriguez, Inc. (Bankr. D.P.R. Case No. 19-01386-ESL11) sought Chapter 11 protection on March 14, 2019. The cases are administratively consolidated under Case No. 19-01384. Homel Mercado Justiniano, Esq. represent the Debtors. J.J.W. METAL: Seeks Approval to Hire Charles A. Cuprill as Counsel ------------------------------------------------------------------ J.J.W. Metal Corp. seeks approval from the U.S. Bankruptcy Court for the District of Puerto Rico to employ Charles A. Cuprill, P.S.C., Law Offices to handle its Chapter 11 case. The Debtor desires to retain the firm on the basis of a $15,000 retainer. The Debtor will compensate Charles Cuprill-Hernandez, Esq., the firm's attorney who will be handling the case, at his hourly rate of $350, plus expenses. Paralegals will be paid at $85 per hour. Mr. Cuprill-Hernandez disclosed in court filings that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Charles A. Cuprill-Hernandez, Esq. Charles A. Cuprill, P.S.C., Law Offices 356 Fortaleza Street, Second Floor San Juan, PR 00901 Telephone: (787) 977-0515 Facsimile: (787) 977-0518 Email: ccuprill@cuprill.com About J.J.W. Metal Corp. J.J.W. Metal Corp. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D.P.R. Case No. 20-04536) on Nov. 23, 2020. The petition was signed by Jorge Rodriguez Quinones, president. At the time of filing, the Debtor disclosed total assets of $1,649,341 and total liabilities of $1,750,865. The Debtor tapped Charles A. Cuprill, P.S.C., Law Offices, as counsel and Luis R. Carrasquillo & Co. P.S.C. as financial consultant. NOSCE TE IPSUM: Creditors to Get Paid by Property Sale Proceeds --------------------------------------------------------------- Nosce Te Ipsum, Inc., filed the First Amended Disclosure Statement for the Plan of Reorganization on November 20, 2020. The Debtor has continued to operate its business under the extreme health and economic conditions created by the COVID-19 pandemic. As a result of the pandemic, the Government of Puerto Rico has imposed various measures geared towards protecting the public from the rapid spread of the coronavirus. The government imposed measures include a curfew, closing of schools, restrictions in the number of persons allowed in business establishments, mandatory use of face masks, and the closure of then restricted reopening of certain businesses considered non-essential, among others. The health crisis of COVID-19 has had an economic impact across all sectors of the local economy. The tenants of NTI, who are commercial tenants, have been directly impacted by the government restrictions on business activities. Despite the challenges presented by the pandemic, NTI has continued to operate its business providing its tenants all required services without interruption. Thus, preserving the ongoing concern of the business. There is interest in the market for the Debtor's real property. Prospective buyers have expressed their interest in the real property in Metro Office Park and made purchase offers prior to the pandemic. However, the pandemic crisis has delayed negotiations for a sale transaction. NTI is proposing a plan of reorganization, which contemplates the sale of its real property in Metro Office Park, #3 Calle 1, Guaynabo, Puerto Rico. This real property has enough value to pay all secured and unsecured claims. Considering the health crisis created by the COVID-19 pandemic, the government mandated restrictions, and its overall effect on the economy, the sale should take place in 2021 to guaranty that enough value is realized in the transaction to pay all allowed claims. A full-text copy of the First Amended Disclosure Statement dated November 20, 2020, is available at https://tinyurl.com/y63mnlev from PacerMonitor at no charge. The Debtor is represented by: Andrew Jimenez Cancel ANDREW JIMENEZ LLC P.O. Box 9023654 San Juan, PR 00902-3654 Tel. (787) 638-4778 E-mail: ajimenez@ajlawoffices.com About Nosce Te Ipsum Nosce Te Ipsum, Inc. classifies its business as single asset real estate (as defined in 11 U.S.C. Section 101(51B)). It owns in fee simple a five-story building with office and commercial spaces for lease, and adjacent parking lot structure in Guaynabo, P.R., valued at $7 million. Nosce Te Ipsum filed a Chapter 11 petition (Bankr. D.P.R. Case No. 19-05155) on Sept. 9, 2019. In the petition signed by Maria De Los A. Ubarri, general manager, the Debtor disclosed $7,046,991 in assets and $5,210,939 in liabilities. The Hon. Brian K. Tester oversees the case. Andrew Jimenez Cancel, Esq., at Andrew Jimenez Law Offices, is the Debtor's bankruptcy counsel. PUERTO RICO HOSPITAL: Century Buying Carolina Realty for $4MM ------------------------------------------------------------- Puerto Rico Hospital Supply, Inc., asks the U.S. Bankruptcy Court for the District of Puerto Rico to authorize the Purchase and Sale Agreement with Century Frozen Foods, LLC in connection with the sale of the warehouse and office building located at Puerto Rico's State Road #860, Carolina, Puerto Rico, with all improvements thereto, for $4 million. Through the Sale Motion, the Debtor proposes to preserve and maximize the value of its operations by selling the Carolina Realty. The proceeds of the sale will be used to pay all secured claims encumbering the Carolina Realty, the commission to the realtor, as more specifically set forth in the PSA in order to comply with the Debtor's settlement agreement with its Lenders, and provide funds required by its Plan of Reorganization. Pursuant to the terms of the sale, the Debtor will sell and transfer the Carolina Realty to Century Frozen, through the PSA for an aggregate purchase price of $4 million. The sale will be free and clear of all liens, claims, interests, charges and encumbrances, with any such liens, claims, interests, charges and encumbrances attaching to the net proceeds of the sale. Upon the approval of the Sale by the Court and the execution of the corresponding Deed of Purchase and Sale by the later of (i) five days after the order approving the sale becomes final and unappealable and (ii) Dec. 31, 2020. The Purchase Price will be used to pay: The Lenders Secured Claim under the Settlement Agreement, which encumbers the Carolina Realty; and the commission of the realtor, consisting of 3% of the purchase price of the Carolina Realty. As previously disclosed, the Debtor will be moving its operations to a facility to be leased from Puerto Rico Industrial Development Company ("PRIDCO"), in Rio Grande, Puerto Rico, which will result in tax incentives to assist it in the implementation of the Plan. The sales price of the Carolina Realty to be sold to Century Frozen, which the Debtor considers to be the fair actual market value of the Carolina Property, premised on its marketing, the offers received therefor and the withdrawal of the previous offer therefor made by Lifescience Logistics, LLC, and Mr. Awad Yassin. The sale to Century Frozen will provide benefits to the Debtor's Estate for a number of reasons. First, the Carolina Realty is to be sold as a result of an arm's-length negotiation therewith. Second, the sale ensures that Debtor will have sufficient funds to comply with the Settlement Agreement and the Plan, which will greatly benefit its employees and its bankruptcy Estate. Third, the sale will allow the Debtor to remain the Carolina Property after the Closing Date, until June 30, 2021, without paying any sent while it transition its move to Rio Grande. Finally, and notwithstanding the Debtor's marketing efforts, there are no other formal current offers to purchase the Carolina Realty and, thus, it is a viable alternative that will ensure recovery to all creditors under the Plan, and the most benefit to the various constituents of the Estate. For these reasons, the Debtor asks that the Court approves the Sale Motion. Due to the terms of the Settlement Agreement, including the time table for its effectiveness and for the confirmation of the Plan, Debtors ask that pursuant to Rule 9006(c) of the Federal Rules of Bankruptcy Procedure that the notice process for any objection to the sale be reduced to 10 days. The Objection Deadline is Nov. 30, 2020. A copy of the PSA is available at https://tinyurl.com/y2f9t3p5 from PacerMonitor.com free of charge. About Puerto Rico Hospital Supply Puerto Rico Hospital Supply, Inc., distributes medical supplies in Puerto Rico. Customed Inc., founded in 1991, manufactures surgical appliances and supplies. Puerto Rico Hospital Supply, Inc. and Customed, Inc., filed voluntary Chapter 11 petitions (Bankr. D.P.R. Case Nos. 19-01022 and 19-01023) on Feb. 26, 2019. The petitions were signed by Felix B. Santos, president. The cases are assigned to Judge Enrique S. Lamoutte Inclan. At the time of the filing, Puerto Rico Hospital was estimated to have $50 million to $100 million in assets and $10 million to $100 million in liabilities while Customed, Inc., was estimated to have $10 million to $50 million in both assets and liabilities. Alexis Fuentes Hernandez, Esq., at Fuentes Law Offices, represents the Debtors. =============== S U R I N A M E =============== REPUBLIC OF SURINAME: S&P Lowers US$125MM Bond Rating to 'D' ------------------------------------------------------------ On Dec. 2, 2020, S&P Global Ratings lowered its issue-level rating on Republic of Suriname's US$125 million bond due in December 2023 to 'D' from 'CC'. At the same time, S&P Global Ratings affirmed its 'SD' long-term foreign currency and 'CC' long-term local currency sovereign credit ratings on the Republic of Suriname, and its 'D' issue-level rating on the US$550 million bond due in October 2026. As well, S&P Global Ratings affirmed its 'SD' short-term foreign currency and its 'C' short-term local currency sovereign credit ratings, and its 'CCC' transfer and convertibility assessment on Suriname. The outlook on the local currency sovereign credit rating is negative. Outlook S&P said, "The negative outlook reflects our opinion that Suriname could default on its local currency debt within the next six-to-12 months. We could lower the local currency sovereign credit ratings to 'SD' if Suriname fails to make debt service payments on its local currency debt, or if we determine this debt to be subject to a distressed debt exchange. "On completion of any bond restructuring, we will assign new sovereign credit ratings that reflect Suriname's post-exchange creditworthiness." Rationale On Nov. 13, 2020, the government announced the commencement of a consent solicitation process that sought to amend its US$550 million October 2026 and US$125 million December 2023 bonds to obtain short-term relief from certain debt service obligations and thereby confirming a debt restructuring negotiation with bondholders with the aim of making Suriname's debt sustainable. After an extension and amendment of the solicitation by the government, bondholders gave their consent on Nov. 30, 2020. S&P said, "We view this kind of restructuring as a distressed debt exchange. Therefore, in accordance with our S&P Global Ratings Definitions, published Aug. 7, 2020, we lowered our issue-level rating on Suriname's December 2023 bond to 'D'. On completion of any bond restructuring, we expect to assign a new foreign currency sovereign credit rating and new issue-level ratings, likely in the 'CCC' category, that reflects Suriname's post-exchange creditworthiness." Ratings List Downgraded To From Suriname $125 mil 9.875% Notes Due 2023 Senior Unsecured D CC Ratings Affirmed Suriname Sovereign Credit Rating Foreign Currency SD/--/SD Local Currency CC/Negative/C Transfer & Convertibility Assessment Local Currency CCC Suriname $550 mil 9.25% Notes Due 2026 Senior Unsecured D ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Latin America is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA, Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A. Chapman, Editors. Copyright 2020. All rights reserved. ISSN 1529-2746. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. 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