/raid1/www/Hosts/bankrupt/TCRLA_Public/210112.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Tuesday, January 12, 2021, Vol. 22, No. 3
Headlines
A R G E N T I N A
YPF SA: Fitch Downgrades Long-Term IDRs to 'C'
B R A Z I L
TRANSMISSORA ALIANCA: S&P Withdraws 'BB-' LT Global Scale ICR
C O L O M B I A
COLOMBIA: New Quarantine Must Come w/ Basic-Income Policy, Says Doc
D O M I N I C A N R E P U B L I C
DOMINICAN REPUBLIC: 2020 Had Highest Peso Depreciation in 15 Yrs.
DOMINICAN REPUBLIC: International Reserves Exceed $10.75 Billion
J A M A I C A
JAMAICA: Current Public Sector Wage Bill Higher Than Projected
P U E R T O R I C O
FERRELLGAS PARTNERS: Removes Interim Tag from CEO Ferrell's Title
T R I N I D A D A N D T O B A G O
TRINIDAD & TOBAGO: Reports Impact of Covid-19 on Securities Market
V E N E Z U E L A
VENEZUELA: Assembly to Seize Migrants' Properties, Jail Opposition
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A R G E N T I N A
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YPF SA: Fitch Downgrades Long-Term IDRs to 'C'
----------------------------------------------
Fitch Ratings has downgraded YPF S.A.'s (YPF) Long-Term Foreign and
Local Currency Issuer Default Ratings (IDRs) to 'C' from 'CCC'. In
addition, Fitch has downgraded YPF's outstanding senior unsecured
notes to 'C'/'RR4' from 'CCC'/'RR4', and stand-alone credit profile
to 'c' from 'bb'.
The downgrades reflect Fitch's view that the announced exchange
offer and consent solicitation of YPF's seven outstanding
international bonds totaling $6.2 billion represent a Distressed
Debt Exchange, per Fitch's criteria. Fitch views the offer as a
material reduction of the original terms due to the proposed exit
consent level, decrease in coupons for the outstanding 2024 and
2029 notes post-exchange, and a grace period for interest payment
of two years.
Fitch sees the exchange offer as being expedited by the Central
Bank of Argentina's refusal to allow YPF to access the local FX
market to settle the outstanding $413 million of its previous $1.0
billion outstanding March 23, 2021 bond, which was not exchanged in
July of 2020.
As a result, YPF has announced a multi-tranche exchange offering.
Fitch understands that all bondholders of YPF's outstanding 2021,
2024, 2025, 2027, 2029 and 2047 international bonds have been
offered different two-part offer in the early participation offer,
which expires on Jan. 21, 2021. In all cases, the bondholders have
been offered a portion of the new 8.5% senior secured export backed
notes due 2026.
In addition, bondholders of the 8.5% notes due March 2021 have been
offered a $157 cash payment option. Bondholders of the 8.75% notes
due 2024 have been offered the new 8.5% notes due 2029. The March
2025 bondholders have been offered the new 8.5% notes due 2029
bonds. Bondholders of the 8.5% notes due July 2025 have been
offered both the new 8.5% notes due 2029 and 7.0% notes due 2033.
Finally, bondholders of the 6.95% notes due 2027, 8.5% notes due
2029, and 7.0% notes due 2047 bond holders have been offered the
new 7.0% notes due 2033
In the late exchange consideration, which expires on Feb. 4, 2021,
bondholders of the 8.5% notes due 2021 will be offered the 8.5%
export backed notes due 2026, without a cash payment. Bondholders
of the 2024 and March 2025 notes have been offered only the 8.5%
notes due 2029. Bondholders of the 2025 notes have been offered
both the new 8.5% notes due 2029 and the new 7.0% notes due 2033.
Finally, the bondholders of the 6.95% notes due 2027, 8.5% notes
due 2029 and 7.0% notes due 2047 are offered the new 7.0% notes due
2033.
Fitch understands that all three post-exchange bonds will have a
two-year grace period on interest; after which, interest will be
paid quarterly and the notes will begin amortizing in four equal
instalments four years from their respective maturities. The
consent solicitation also proposes stripping non-participating
noteholders of their existing covenants (i.e. restrictive covenants
and certain events of default) of all the notes indentures. The
proposed amendments require the affirmative vote of a majority
holders of at least 60% of the outstanding aggregate principal
amount.
In the absence of an affirmative majority vote, a second notice
will define the eligible bondholders that represent a majority of
at least 30% as quorum. Fitch views this proposed exchange offer as
coercive, and is a material reduction in the terms that dilutes the
bonds holders' original rights.
KEY RATING DRIVERS
Exchange Offer Qualifies as DDE: The exchange offer, if agreed
upon, will consist of a DDE under Fitch's criteria, as existing
bondholders face a material reduction in terms and conditions.
Fitch views this exchange as being exacerbated by the Argentine
central bank's denial of YPF's request to access the local FX
market to repay the outstanding principal of its 2021 international
notes.
The announced exchange offering is further incentivized by YPF's
investment needs required by the new plan gas 4. Fitch's forecasted
FFO levels for YPF are not sufficient to service debt and
simultaneously invest the appropriate capex levels required by plan
gas 4. Accordingly, the company is looking to allocate the average
annual interest expense payments of around $900 million to capex by
requesting the two year interest payment grace period as part of
the exchange.
Links to Sovereign: YPF has a close linkage to the Republic of
Argentina from the company's ownership structure as well as recent
government interventions. Argentina controls the company through
its 51% stake, the presence of provincial government officials on
the board of directors and various regulations. In addition, the
republic sometimes governs the company's strategy and business
decisions.
The Argentine government has a history of significant interference
in the oil and gas sector. For example, via Decree No. 1277, the
government set regulations related to investment levels in the oil
and gas sector and domestic price reference points. In 2019, it
issued Decree 566/19, which negatively affected YPF's cash flows.
Although YPF is a leading energy company in Argentina, government
policies continue to present challenges, inhibiting its business
strategy.
Volatile Operating Environment: The volatile economic environment
in Argentina has inhibited YPF from implementing its business
strategy, i.e. unconventional development in Vaca Muerta. Pandemic
quarantine orders have further stressed the company, as demand for
fuels has decreased. Gasoline volumes dropped by 70% and diesel by
34%, jet fuel 95%, with a total demand decrease of 50% in April
2020, compared with the previous year. Volumes appear to have
recovered but remain below historical averages.
Fitch estimates Argentina's real GDP will contract by 11.2% in
2020, after negative average growth rate over the last three years.
Inflation is expected to average 47% between 2020 and 2022, and
government debt/GDP ratio is estimated to be 102% in 2020 and 105%
in 2021, with a majority of government debt being external 75%-80%
over the same time frame.
YPF has an ESG Relevance Score of '4' for Governance Structure due
to Argentina federal government's majority ownership in YPF, which
has a negative impact on the credit profile, and is relevant to the
rating in conjunction with other factors.
DERIVATION SUMMARY
YPF's linkage to the sovereign is similar in nature to its Latin
American national oil companies (NOCs) peers, namely PEMEX
(BB-/Stable), Petrobras (BB-/Negative) and Ecopetrol
(BBB-/Negative), and government-owned entities ENAP (A-/Stable),
and Petroperu (BBB+/Negative). These companies all have strong
linkage to their respective sovereigns given their strategic
importance to each country and the potentially significant negative
social and financial implication a default could have at a national
level.
YPF's upstream business closest peers are Pemex, Petrobras and
Ecopetrol. YPF's total production averaged 514,000boed, and the
reserve life was 5.7 years, most comparable with Ecopetrol with a
2019 production of 725,000boed and a reserve life of 7.8 years, but
less than Petrobras' production of 2.6 million boed and a reserve
life of 10 years and Pemex's production at 2.8 million boed and a
reserve life of 9.5 years.
Unlike its peers ENAP, Petrobras, Pemex and Petroperu, YPF is not
the sole provider of refined fuels in Argentina. In 2019, the
company had nearly a 60% market share. YPF is an integrated energy
company, similar to Petrobras and Pemex, offering the company more
financial flexibility, while ENAP is predominately a refining
company that sells to marketers.
Historically, YPF has operated autonomously with periodic controls
of fuel prices and crude, which are currently in effect. Similar to
Pemex and Petrobras, YPF has administered an import-parity pricing
policy, but is evidence of government intervention with Decree
466/19 and other price controls in 2018 to tame inflation, which is
projected to be 50% in 2020. Until recently, YPF has had success in
tightening the spread between import parity and local prices.
When compared with downstream-focused entities ENAP and Petroperu,
YPF has a lower total debt/EBITDA ratio of 2.4x in 2019 compared
with ENAP at 6.7x and Petroperu at 18.0x. Petroperu's elevated
leverage is explained by its investment plan to increase capacity
by 2021, while ENAP has maintained a higher leverage profile for an
extended period of time, but the company is highly strategic for
the Chilean governments, and thus it rating is aligned as a
result.
KEY ASSUMPTIONS
-- Average gross production of 515,000boe from 2020-2023;
-- YPF will be able to increase domestic prices in pesos somewhat
but not enough to fully reflect the impact from the recent
peso depreciation and international hydrocarbon price
increase;
-- Criollo barrel of USD45/bbl in place for 2020 and applied
Fitch's price deck thereafter;
-- Natural gas prices decrease to USD2.70/MMBTU in 2020,
USD3.00/MMBTU in 2021, USD3.25/MMBTU in 2022 and USD3.57/MMBTU
in 2023;
-- Capex cut to be FCF positive over the rated horizon due to
refinancing risk;
-- Downstream sales volume follow Real GDP forecasts;
-- USD111 million of net proceeds associated with the sale of 11%
stake in Bandurria Sur to Equinor and Shell; and a 50% stake
in offshore area CAN_100 to Equinor in 2Q20;
-- Fitch ARS/USD forecasts for year average and end of period
during 2020-2022;
-- Refinancing of all maturing debt during the rated horizon at a
rate of 10%.
RATING SENSITIVITIES
Factor that could, individually or collectively, lead to positive
rating action/upgrade:
-- The IDR would be simultaneously upgraded to a rating level
reflecting the post-DDE credit profile, which will be capped
at 'CCC' in line with the Country Ceiling of Argentina.
Factor that could, individually or collectively, lead to negative
rating action/downgrade:
-- Completion of the proposed exchange offer would lead to a
downgrade of the Long-term IDRs to 'RD'
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity: YPF reported USD1.3 billion in cash and cash
equivalents in 3Q20. Per Fitch's estimates, this covers roughly one
year of interest expense. The company's debt maturity profile did
improve after the completion of its exchange offer for its USD1.0
billion international note due 2021, where the company received
nearly a 60% acceptance of the offer.
However, the central bank of Argentina (BCRA) denial to permit YPF
to access the official FX market to settle its outstanding
principal of $413 million has exacerbated the company to launch its
liability management exercise for all its outstanding international
bonds. If the exchange is successful in extending maturities and
delay interest payments, Fitch estimates the cash flow profile will
improve, but liquidity will remain neutral as YPF will allocate
cash to capex to invest in unconventional development.
ESG CONSIDERATIONS
YPF has an ESG Relevance Score of '4' for Governance Structure due
to Argentina federal government's majority ownership in YPF, which
has a negative impact on the credit profile, and is relevant to the
rating in conjunction with other factors.
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
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B R A Z I L
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TRANSMISSORA ALIANCA: S&P Withdraws 'BB-' LT Global Scale ICR
-------------------------------------------------------------
S&P Global Ratings withdrew its long-term global and national scale
issuer credit and issue-level ratings on Transmissora Alianca de
Energia Eletrica S.A. (TAESA) at its request. At the time of the
withdrawal, the global and national scale ratings on TAESA were
'BB-' and 'brAAA/brA-1+', respectively, with a stable outlook.
The global scale issuer credit rating on the company was at the
same level as the sovereign rating on Brazil (BB-/Stable/B).
TAESA's credit profile, at the moment of the withdrawal, reflected
its predictable cash flows given that its revenues are based on the
availability of its transmission assets, strong operating
performance due to almost 100%-line availability, and Brazil's
favorable regulatory framework for the transmission segment. In
addition, the ratings reflected our expectation of debt to EBITDA
slightly above 4.0x and funds from operations to debt of 13%-17% at
the end of 2020 and in 2021, higher than 2.7x and 27.7%,
respectively, in 2019, following the company's sizable investment
plan.
Ratings List
Not Rated Action
To From
Transmissora Alianca de Energia Eletrica S.A.
Senior Unsecured NR brAAA
Not Rated Action; CreditWatch/Outlook Action
To From
Transmissora Alianca de Energia Eletrica S.A.
Issuer Credit Rating NR/-- BB-/Stable/--
Brazil National Scale NR/NR brAAA/Stable/brA-1+
To From
Transmissora Alianca de Energia Eletrica S.A.
Analytical Factors NA bbb-
===============
C O L O M B I A
===============
COLOMBIA: New Quarantine Must Come w/ Basic-Income Policy, Says Doc
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EFE News reports that alarmed by the high number of Covid-19
patients in intensive-care units and the rapid spread of that
respiratory disease, Colombia's capital is set to put 2.5 million
residents of three hard-hit neighborhoods under new strict
quarantines.
Bogota Government Secretary Luis Ernesto Gomez announced that
Usaquen, Suba and Engativa, three of the metropolis' 20 localities,
will be placed under a two-week quarantine that will and run
through Jan. 18, the report discloses.
Dr. Carolina Corcho, the vice president of the Colombian Medical
Federation, said she welcomes the new measures but cautioned that
they must be accompanied by a basic-income policy for those who
will be unable to work for those two weeks, the report notes.
"There's a toll on the economy, on families, on small- and
medium-sized businesses, and these proposals . . . if they're not
accompanied by subsidy and basic-income policies could generate
rejection among citizens," she said, the report relates.
Similar concerns were expressed by Maria Martinez, a restaurant
owner in Suba who told Efe she fears her employees will suffer as a
result of the new quarantine.
"You have to heed the measures because it's for the good of
everyone. Even so, it's really tough for us because small business
owners receive absolutely no assistance," she added.
The report discloses that Martinez said that during the initial
coronavirus quarantine, which began on March 20 and lasted for six
months, her employees were reduced to working just one or two days
a week.
"Once again they're going to be left with nothing. I'm worried for
them, the people who work with me, more than I am about myself,"
she added, notes the report.
Bogota, the main focal point of the pandemic in Colombia, has
registered 480,219 confirmed coronavirus cases -- 38,433 of which
are currently active -- and 9,981 deaths attributed to Covid-19,
according to EFE News.
Coronavirus patients, meanwhile, currently occupy 1,362 of the
1,752 ICU beds set aside for the pandemic -- an occupancy rate of
77.7 percent, the report notes.
Health Secretary Gomez said that city of more than 7.5 million
inhabitants is experiencing a second wave of the pandemic and that
the objective of the limited quarantines is to avoid a repeat of
the situation of late July, when ICU-bed occupancy rates climbed
above 90 percent, the report relays.
But Dr. Corcho told Efe that the reports her organization is
receiving indicate "a considerable number of patients in emergency
services waiting for two, three or four days to be transferred to
an ICU," the report notes.
"It's not clear why the information system shows there are 80 ICU
beds available, and yet patients are not accessing them. For us,
there's a contradiction, a bottleneck that needs to be cleared up,"
she said, the report says.
The Bogota Medical College, for its part, called for the
declaration of a red alert in the city, saying that 23 of the 60
health institutions with ICUs are already at 100 percent capacity,
the report discloses.
The government secretary, who is serving as acting mayor while
Claudia Lopez is on vacation, said all non-essential retail
establishments will be shuttered in those three neighborhoods,
which will be under a strict curfew from 8 pm to 5 am, the report
relays.
The report notes that establishments deemed essential, including
supermarkets, pharmacies and stores selling basic necessities, will
be exempt from the daytime restrictions. The sale of alcoholic
beverages also will be prohibited on weekends, the report
discloses.
Only one person per household will be allowed outside to buy
essential items, although the mobility restrictions will not apply
to health care providers, caregivers and law-enforcement personnel,
the report says.
Colombia's deputy health minister, Luis Alexander Moscoso, said of
the new quarantines that the Andean nation is suffering the
"consequences of a very difficult December in which a percentage of
the population did not heed recommendations" for proper hygiene and
social distancing, the report relays.
Tighter pandemic restrictions also have been imposed on citizens in
other regions of Colombia, a country where 1,675,820 people have
tested positive for the coronavirus and the number of
Covid-19-related deaths now stands at nearly 44,000, the report
relays.
Colombia, meanwhile, is once again requiring a negative PCR test
result from all people entering the country from abroad, Moscoso
told local media, the report notes. That measure had been lifted,
but a citizen in December successfully sued to have it reinstated
for people arriving by plane, the report adds.
===================================
D O M I N I C A N R E P U B L I C
===================================
DOMINICAN REPUBLIC: 2020 Had Highest Peso Depreciation in 15 Yrs.
-----------------------------------------------------------------
Dominican Today reports that the pandemic affected not only the
health of citizens or businesses but also the local currency. In
2020, the Dominican peso faced its worst blow in 15 years: the
exchange rate depreciation last year was 10.13 %, going from 52.96
pesos for every dollar at the end of 2019 to 58.32 pesos for every
US dollar at the end of last year.
This was an intense rise, of 5.36 pesos, in a year when the total
paralysis of tourism between March and the end of June caused an
unexpected stop in the flow of dollars into the country, according
to Dominican Today. The sector is still not recovering from a
measure that sought to curb the COVID-19 contagion, and last
December, hotel occupancy was expected to be half of what it had
been a year earlier, the report relays.
Tourism is one of the great generators of foreign exchange for the
country, so its crisis became a factor of uncertainty in the
exchange market during 2020, the report discloses. Between April
and June, precisely the months when tourism was inactive, the
Dominican peso's highest rate of depreciation was registered, the
report says.
The Central Bank's strategy was to inject the most significant
foreign currency to calm the exchange agents' uncertainty, the
report discloses. The issuer allocated more than 700 million
dollars to the dollar market to stop the exchange rate increases
due to the lower availability of foreign currency in the local
economy, the report relates.
According to official data, between January and September, the
influx of foreign currency through tourism was 2,005 million
dollars, which means that the country received 3,753 million
dollars less than a year ago, the report notes.
According to the same data, for family remittances, the country
received 5,849 million dollars during the first nine months of last
year, 556.8 million dollars higher than that registered in those
months of 2019, the report discloses.
And exports -- both national and from free zones -- revealed a
decline up to that moment: between January and September last, the
country exported the equivalent of 7,494.7 million dollars, some
781 million dollars less than a year ago, the report says.
All this deficit, which could not be compensated with the growth of
family remittances, led the Dominican Government to make the
largest external bonds issue made by the Dominican Republic: for
3,800 million dollars in September last year, 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.
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, on December 4, 2020, 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 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.
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: International Reserves Exceed $10.75 Billion
----------------------------------------------------------------
Dominican Today reports that Dominican Republic's Central Bank
(BCRD) reported international reserves exceeding US$10.75 billion
at yearend 2020, the highest level historically recorded, says a
statement from the institution.
The amount is equivalent to 13.7% of GDP and a coverage of 7.3
months of imports, exceeding the thresholds of 10% of GDP and the 3
months of imports recommended by the International Monetary Fund
(IMF), the BCRD says, according to Dominican Today.
"These levels of international reserves are another important
indicator that points to the robustness of the macroeconomic
fundamentals of the Dominican Republic, while confirming that the
Central Bank maintains a strengthened position to ensure that the
sectors demanding foreign exchange continue to operate without
major setbacks," the report notes.
It adds that the historical level of international reserves was
reached in 2020, the year in which all the world's economies were
impacted by Covid-19, causing a suspension of tourism and other
activities that generate hard currency, 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.
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, on December 4, 2020, 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 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.
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: Current Public Sector Wage Bill Higher Than Projected
--------------------------------------------------------------
RJR News reports that the public sector wage bill for the current
financial year has been higher than projected by the Finance
Ministry.
According to data posted on the ministry's website, wages and
salaries between April and November amounted to $138.5 billion, the
report notes.
That was $241 million more than the government had planned to
spend, according to RJR News.
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). Fitch's credit rating for Jamaica
was last reported at B+ with stable outlook (April 2020). Moody's
credit rating for Jamaica
was last set at B2 with stable outlook (December 2019).
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
=====================
FERRELLGAS PARTNERS: Removes Interim Tag from CEO Ferrell's Title
-----------------------------------------------------------------
Ferrellgas, Inc., the general partner of Ferrellgas Partners, L.P.
and Ferrellgas, L.P., and James E. Ferrell entered into (i) an
offer letter, effective as of Dec. 30, 2020, and (ii) an Employment
Agreement and an Executive Confidentiality and Restrictive
Covenants Agreement, both effective as of Dec. 31, 2020
("Commencement Date"), pursuant to which Mr. Ferrell will serve as
president and chief executive officer of the General Partner
beginning on the Commencement Date, transitioning from his current
title of interim president and chief executive officer, which
interim title he has held since Sept. 27, 2016. Mr. Ferrell will
continue to serve as the principal executive officer for purposes
of the Securities Exchange Act of 1934, as amended.
Pursuant to the Offer Letter, Mr. Ferrell will report to the board
of directors of the General Partner. As compensation for Mr.
Ferrell's services he will: (i) be paid an annual base salary of
$900,000, (ii) receive a sign-on bonus of $2,000,000, (iii) be
eligible to participate in the General Partner's Short Term
Incentive Plan, and (iv) be eligible for medical, dental and
visions benefits provided by the General Partner. Consistent with
the terms of the Offer Letter, the Employment Agreement further
provides that Mr. Ferrell will be included, to the extent eligible
under the terms and conditions, in all of the General Partner's
plans providing benefits for its employees.
Pursuant to the terms of the Employment Agreement, Mr. Ferrell will
serve as president and chief executive officer for a period
beginning on the Commencement Date and continuing for two years,
unless earlier terminated by Mr. Ferrell or the General Partner as
provided for in the Employment Agreement, with the Employment
Agreement automatically terminating on Dec. 31, 2022, unless either
party provides no less than 90-days advance written notice prior to
expiration. Mr. Ferrell will be entitled to receive the base
salary, short-term incentive plan participation and eligibility for
medical, dental and vision benefits as described in the Offer
Letter, as well as certain severance benefits based on the nature
of his termination. Upon termination for Cause (as defined in the
Employment Agreement), or upon resignation without Good Reason (as
defined in the Employment Agreement), death or disability, Mr.
Ferrell will be entitled to receive: (i) all accrued unpaid base
salary through the date of termination; (ii) all accrued but unused
vacation days; and (iii) any properly documented reimbursable
business expenses.
If Mr. Ferrell's employment is terminated by the General Partner
without Cause or if Mr. Ferrell parts with the General Partner for
Good Reason, Mr. Ferrell will be entitled to receive: (i) the
Accrued Obligations; (ii) a lump sum payment of any amounts
remaining under the Employment Agreement; and (iii) subject to Mr.
Ferrell's election of and qualification for continuation coverage,
for a period of 12 consecutive months following termination of
employment, premium costs for certain insurance benefits in the
monthly amount the General Partner was paying toward Mr. Ferrell's
General Partner-provided group health plan insurance coverage
immediately prior to his cessation of employment.
The Employment Agreement also requires that Mr. Ferrell enter into
the Confidentiality and Restrictive Covenants Agreement, pursuant
to which Mr. Ferrell covenants not to compete with the General
Partner or any of its subsidiaries and affiliates, or solicit
members of senior leadership or business partners, during his
employment and for five years thereafter. The Confidentiality and
Restrictive Covenants Agreement also contains customary
confidentiality and non-disclosure covenants.
On Dec. 30, 2020, the Compensation Committee of the Board of
Directors of the General Partner awarded Mr. Ferrell a one-time
bonus of $1,500,000, less applicable withholdings, in his capacity
as interim chief executive officer and president, for his effort in
executing the operational turnaround of the business and overseeing
the execution of the Transaction Support Agreement entered into on
Dec. 10, 2020 by the General Partner and certain of its
affiliates.
About Ferrellgas
Ferrellgas Partners, L.P. (www.ferrellgas.com), through its
operating partnership, Ferrellgas, L.P., and subsidiaries, serves
propane customers in all 50 states, the District of Columbia, and
Puerto Rico.
Ferrellgas reported a net loss of $64.54 million for the year ended
July 31, 2019, compared to a net loss of $256.82 million for the
year ended July 31, 2018. As of Oct. 31, 2020, the Company had
$1.65 billion in total assets, $1.12 billion in total current
liabilities, $1.64 billion in long-term debt, $83.34 million in
operating lease liabilities, $49.54 million in other liabilities,
and a total partners' deficit of $1.24 billion.
* * *
As reported by the TCR on June 23, 2020, S&P Global Ratings lowered
its issuer credit rating on Kansas-based propane distributor
Ferrellgas Partners L.P. to 'SD' (selective default) from 'CC'.
The downgrade reflects Ferrellgas Partners' decision not to make
the final maturity payment on its senior unsecured notes due June
15 and its subsequent decision to enter into a forbearance
agreement with the noteholders on June 7.
=====================================
T R I N I D A D A N D T O B A G O
=====================================
TRINIDAD & TOBAGO: Reports Impact of Covid-19 on Securities Market
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Trinidad Express reports that since the imposition of public health
regulations and restrictions on movement (otherwise referred to as
'lockdown' measures) to contain the spread of the virus, the
Trinidad and Tobago Securities and Exchange Commission (TTSEC)
began enhanced monitoring of the impacts of Covid-19 on Trinidad
and Tobago's Equity and Collective Investment Schemes (generally
known as mutual funds) markets. This article seeks to highlight
some of the markets' performances observed for the year 2020.
Equity Markets
Although the major indices suffered losses due to the pandemic, the
markets, through their resilience, stymied further losses and
remained stable for the latter half of 2020, according to Trinidad
Express. Both the Trinidad and Tobago Stock Exchange (Stock
Exchange) Composite and All T&T Indices suffered significant losses
during the peak of the lockdown period (March 2020-May 2020) with
the Composite Index declining by 224.28 index points (15 per cent)
and the All T&T Index by 200.27 index points (10 per cent). shows
that during this same period, the Cross-Listed Index suffered
losses of 33.87 index points (23 per cent), the report discloses.
However, the stock exchange's Small Medium Enterprises (SME) Index
suffered minimal losses during the period with an average loss of
3.43 index points (5 per cent) throughout 2020. Table 1 outlines
the performances of the four market indices from January to
December 11, 2020, according to Trinidad Express.
Mutual Fund AUM
After reviewing the changes in Assets Under Management (AUM) for
Trinidad and Tobago's Mutual Fund market, it was observed that the
overall AUM fell by 3 per cent from March 2020 to May 2020, the
report relays. The main mutual fund type that was impacted was
equity funds, which predominantly invest in local and foreign
equities i.e. shares of companies listed on a stock exchange, the
report notes. These losses have since been recovered led by the
strong improvement of Fixed Income mutual funds, whose AUMs have
increased by 9 per cent since March 2020, the report discloses.
AUM from January 2020-November 2020 of the various types of mutual
funds within the local securities sector, the report notes.
Subscriptions and Redemptions
Subscription and redemptions in mutual funds refer respectively to
sales/purchases and withdrawals, the report discloses. Significant
redemptions were observed during the peak of the lock-down (March
2020-May 2020), with investors withdrawing approximately $2.6
billion in March 2020, the report notes. This is almost double the
monthly average redemptions that occurred for the same period in
2019, the report relays. However, in spite of the high amount of
redemptions that occurred in March 2020, the monthly average for
this year is 10 per cent less than the monthly average redemptions
for 2019, the report recalls. Subscriptions for the different
periods did not vary greatly.
Fixed and Floating NAV Mutual Funds
As the name suggests, with fixed NAV mutual funds, the Net Asset
Value (NAV) remains constant, the report relays. It is usually the
responsibility of the mutual fund manager to maintain the value of
a unit for both subscriptions and redemptions, the report notes.
Managers of Fixed NAV mutual funds will have more difficulty in
maintaining their commitment to ensure the NAV is constant while
the portfolio of securities fluctuate in value, the report
discloses.
For floating NAV mutual funds, the value of a unit changes based on
the performance of the pool of securities, the report says. Fixed
NAV mutual funds predominantly invest in local and/or foreign fixed
income securities or bonds, the report notes. While floating NAV
mutual funds typically invest in local and/or foreign
equities/shares, the report notes.
At the onset of the lock-down the AUM of Floating NAV mutual funds
were more impacted than Fixed NAV mutual funds, the report
discloses. This may have been mainly due to fluctuating security
prices as a result of the current environment. During the period of
March 2020 to May 2020, Floating NAV decreased by 8.7 per cent
while the value of fixed NAVs declined by 70 basis points (0.7 per
cent) , the report relays. Notwithstanding the decline in AUM
during March 2020 to May 2020, the latter half of 2020 demonstrated
strong growth, as AUM increased by 6 per cent during the period May
2020-November 2020, the report notes.
As they embark on this journey into 2021, the TTSEC remains
committed to the protection of investors and to bolstering
confidence in the securities market, the report adds.
=================
V E N E Z U E L A
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VENEZUELA: Assembly to Seize Migrants' Properties, Jail Opposition
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Carlos Camacho at The Latin American Herald reports that the
Maduro-controlled National Assembly will legislate to expropriate
houses and farms from Venezuelans that have emigrated as well as to
incarcerate opposition lawmakers, the Assembly's Vice President,
Iris Valera, reiterated.
Venezuela sat two National Assemblies January 5th, one answering to
Maduro and backed by the military but rejected by the international
community, and another led by Juan Guaido and elected in 2015, but
which functions clandestinely, with an expired mandate and that
can't meet in public, even if it controls vast assets outside the
country, according to The Latin American Herald.
Valera has been talking up the measures even as Maduro's Assembly
President, Jorge Rodriguez, promises a national dialogue involving
all parties . . . except the opposition led by National Assembly
President Juan Guaido, the report notes. She also promised to
revoke the Venezuelan nationality of opponents of Maduro, the
report discloses.
These measures, Valera told pro-regime newspaper Ultimas Noticias
in an interview published, will help fulfill Maduro's order to
"radicalize democracy," the report relays.
Valera, who still holds the title of minister of prisons, is
already discussing the plan to expropriate migrants with state
governors, she told Ultimas Noticias, the report notes. " I was
talking to the governor of Guarico (Jose Vasquez) and I was telling
him that there are farms that could be very productive. If someone
here, whatever his name is, assumes a good that is in production,
he is obliged to keep it producing," she added.
Both Maduro and his mentor and predecessor Hugo Chavez have
expropriated myriad assets, in a policy expressly forbidden by the
Venezuelan Constitution of 1999, the report recalls.
"Here there are mansions of those people who are now living in the
rich neighborhoods of Spain, those mansions could perfectly be
popular clinics," he added.
Some 5.5 million Venezuelans have exited the country since Maduro
first took over in 2013, in what has become the largest exodus in
the history of the Western Hemisphere and second worldwide only to
the Syrian refugee crisis, the report notes.
Varela also promised to have courts issue arrest warrants against
Juan Guaido and the lawmakers of his National Assembly, for
allegedly betraying the country, the report says. Others that she
plans on arresting are lawmaker Julio Borges and opposition
political leader Maria Corina Machado, the report notes.
A third measure will be to revoke the Venezuelan nationality to
those political leaders that, in her opinion, have betrayed the
country with conspiracies against the government of Nicolas Maduro
and calls for foreign military intervention, the report discloses.
The government can't revoke a citizen's Venezuelan nationality,
according to the Constitution, the report says.
"That Venezuelan nationality be revoked for all those who have
ridden the wave of conspiracy asking for military invasion, because
what they have asked for is war and that war has generated deaths.
These people are unworthy of carrying the Venezuelan nationality.
With all the options on the table, here they burned our compatriots
alive, they sabotaged public services, inflation is something
horrendous," she added.
Venezuela
Venezuela, officially the Bolivarian Republic of Venezuela, is a
country on the northern coast of South America, consisting of a
continental landmass and a large number of small islands and
islets in the Caribbean sea. The capital is the city of Caracas.
Hugo Chavez was president to Venezuela from 1999 to 2013. The
Chavez presidency was plagued with challenges, which included a
2002 coup d'etat, a 2002 national strike and a 2004 recall
referendum. Nicolas Maduro was elected president in 2013 after
the death of Chavez. Maduro won a second term at the May 2018
Venezuela elections, but this result has been challenged by
countries including Argentina, Chile, Colombia, Brazil, Canada,
Germany, France and the United States who deemed it fraudulent and
moved to recognize Juan Guaido as president.
The presidencies of Chavez and Maduro have challenged Venezuela
with a socioeconomic and political crisis. It is marked by
hyperinflation, climbing hunger, poverty, disease, crime and death
rates, social unrest, corruption and emigration from the country.
S&P Global Ratings, in May 2019, removed its long- and short-term
local currency sovereign credit ratings on Venezuela from
CreditWatch with negative implications and affirmed them at
'CCC-/C'. The outlook on the long-term local currency rating is
negative. At the same time, S&P affirmed its 'SD/D' long- and
short-term foreign currency sovereign credit ratings on Venezuela.
Moody's credit rating (long term foreign and domestic issuer
ratings) for Venezuela was last set at C with stable outlook in
March 2018. Meanwhile, Fitch's long term issuer default rating
for Venezuela was last in 2017 at RD and country ceiling was CC.
Fitch, on June 27, 2019, affirmed then withdrew the ratings due
to the imposition of U.S. sanctions on Venezuela.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Latin America is a daily newsletter
co-published by Bankruptcy Creditors' Service, Inc., Fairless
Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C.,
USA, Marites O. Claro, Joy A. Agravante, Rousel Elaine T.
Fernandez, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A.
Chapman, Editors.
Copyright 2021. 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 * * *