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/raid1/www/Hosts/bankrupt/TCRLA_Public/210202.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, February 2, 2021, Vol. 22, No. 18 Headlines A R G E N T I N A CORDOBA: Fitch Upgrades LongTerm IDRs to 'CCC' on DDE Conclusion B R A Z I L BRAZIL: Could Lose US$336 Billion if Vaccination is Restricted BRAZIL: Market Slightly Upgrades 2021 Growth Forecast to 3.49% CEMIG: S&P Hikes Issuer Credit Rating to 'BB-', Outlook Stable D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: Debt Jumps US$8.7 Billion to US$44.7 Billion DOMINICAN REPUBLIC: Rolls Out US$69MM in Soft Loans for Businesses DOMINICAN REPUBLIC: Signs Agreement to Reduce Price of Chicken J A M A I C A NATIONAL COMMERCIAL BANK: Fitch Affirms 'B+' LongTerm IDRs P U E R T O R I C O ORGANIC POWER: Former COO Says Plan Disclosures Inadequate T R I N I D A D A N D T O B A G O CL FINANCIAL: Central Bank Wanted to Exit Years Ago, Hilaire Says TRINIDAD & TOBAGO: Must Seize Opportunities to Avoid Lost Decade - - - - - ================= A R G E N T I N A ================= CORDOBA: Fitch Upgrades LongTerm IDRs to 'CCC' on DDE Conclusion ---------------------------------------------------------------- Fitch Ratings has upgraded the Province of Cordoba's Long-Term Foreign Currency and Local Currency Issuer Default Ratings (IDRs) to 'CCC' from 'RD' on the recent conclusion of its debt restructuring process, which closed on Jan. 26, 2021, as Fitch considered it a distressed debt exchange (DDE) under the agency's DDE criteria. Additionally, Fitch raised Cordoba's Stand-alone Credit Profile (SCP) to 'ccc' from 'rd'. Fitch relied on its rating definitions to position the province's ratings and SCP. In addition, Fitch has downgraded to 'D' from 'C' the province's 7.450% USD510.0 million senior unsecured notes due in 2024 and 7.125% USD450.0 million senior unsecured notes due in 2027, as these notes were subject to a DDE; subsequently Fitch has upgraded to 'CCC' from 'D' the USD510.0 million senior unsecured notes with a new due date of 2027 and USD450.0 million senior unsecured notes with a new due date of 2029 following the recent conclusion of the province's external debt restructuring process. The notes are rated at the same level as the province's IDRs. Additionally, Fitch has assigned a Long-Term Foreign Currency issue rating of 'CCC' to senior unsecured notes for USD725 million due in 2025. These notes were originally issued in 2016 and were recently modified as part of the debt restructuring process. The notes are rated at the same level as the province's IDRs. KEY RATING DRIVERS The Province of Cordoba completed its DDE on Jan. 26, 2021 for three USD notes (60% of its total debt). The province received and accepted a total of USD494.6 million of its USD510 million 7.450% senior unsecured notes due in 2024, or 96.99% of acceptance; for its 7.125% USD450 million senior unsecured notes, the province received and accepted a total of USD433.4 million, or 96.32% of acceptance. Finally, for its 7.125% USD725 million senior unsecured notes, the acceptance rate was at 95.77%. The acceptance rate for the three notes (96.29%) was above the thresholds set in the collective action clauses (CACs). The rating actions reflect Cordoba's recent successful external debt restructuring process, its exposure to Argentina's challenging macro and public finance environment amid the coronavirus pandemic and worsening economy; all of which weigh on the province's refinancing risk. It also incorporates the recent failure to cure the missed interest payment on its USD725 million notes. The debt restructuring provides some external debt service relief for the province until 2023, when principal payments start. Despite this relief, however, the 'CCC' IDRs reflect challenges ahead that could hinder the province's repayment capacity, such as economic recession greatly exacerbated by the pandemic and the province's inability to access external markets to address financing needs. The main amendments to the notes include the extension to the notes' maturity (from 2021 to 2025; 2024 to 2027; and 2027 to 2029); the amortization profile update from bullet payments to semiannual installments starting from June 10, 2023; and the easing of the interest rate conditions (step-up scheme) with a lower average interest rate. With the amended structure, the province will achieve a maximum cumulative debt service relief of around USD200 million between 2021 and 2029, along with a smoother amortizing debt profile versus its current bullet payment, and a lower average interest rate of 6.08%, down from 7.23%. The province did not include in the restructuring debt process its 7.125% USD300 million senior unsecured notes due in 2026, issued under local law (8.2% of total debt as of December 2020). These notes could be restructured under Law No. 10.697 (the Liabilities Management Law), which Fitch deems to have a low probability of materializing in the short term. Should the province engage in a restructuring process, a credit event could be triggered that negatively impacting its ratings. Risk Profile: 'Vulnerable' Cordoba's Vulnerable Risk Profile reflects a 'Weaker' evaluation on the six key risk factors (KRFs), considering the country's structural weaknesses, in which Argentine local and regional governments (LRGs) operate. Argentine LRGs operate in the context of a weak institutional revenue framework and sustainability, high expenditure structures and tight liquidity and foreign exchange (FX) debt risks, which are further worsened by macroeconomic recession, high inflation, sharp currency depreciation and market uncertainty. The risk profile for Argentine LRGs is assessed as 'Vulnerable', meaning there is a high risk of operating cashflow not covering debt repayments coming due. Debt Sustainability: 'aa' category Fitch classifies the Province of Cordoba as a type B LRG, as it covers debt service from cashflow on an annual basis. In line with its LRG criteria, for an entity with a base case financial profile indicating an SCP category of 'b' or below, the base case analysis alone may be sufficient to evaluate the risk of default and transition for the debt. Therefore, in the case of Cordoba, Fitch's base case is the rating case, which already incorporates a very stressful scenario. Considering the current adverse economic scenario, sovereign debt distress situation and economic and fiscal uncertainty, Fitch is only projecting a rating case for YE23. Debt sustainability metrics are analyzed to evaluate Province of Cordoba-specific debt repayment capacity and its liquidity position. In circumstances other than those previously referenced, Fitch's rating case will incorporate a negative shock from the pandemic to the province's economy and fiscal accounts for the next five years. Under Fitch's rating case (2020-2023), the debt payback ratio (net adjusted debt to operating balance), the primary metric of debt sustainability for type B LRGs would remain below 5.0x toward the end of 2023, which corresponds to an 'aaa' assessment. In addition, the actual debt service coverage ratio (ADSCR; operating balance to debt service) will remain between 1.0x and 1.2x in Fitch's rating case, which leads to a final 'aa' debt sustainability. Cordoba is Argentina's second-largest economic center after Buenos Aires and has a diversified economic profile. However, Fitch views the economy as weak for all domestic subnationals compared with international peers because they operate in a macroeconomic environment of high inflation, currency depreciation and volatile economic performance. ESG - Governance: Cordoba has an ESG Relevance Score of '5' for Creditor Rights. The province's recent DDE and breach of a formal agreement impeded the payment of debt service to bondholders and, in Fitch's view, the limitation of access to the external market will weigh on the province's ability to repay its debt obligations. This expectation has suppressed the current rating assignment from a higher rating level and, therefore, creditor rights remains a key rating driver. ESG - Governance: The Province has an ESG Relevance Score of '4' for Rule of Law, Institutional and Regulatory Quality and Control of Corruption, reflecting the negative impact the weak regulatory framework and national policies of the sovereign have over the province 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. DERIVATION SUMMARY Cordoba has a Vulnerable Risk Profile and an 'aa' debt sustainability score. However, Fitch has relied on its rating definitions and has incorporated the province's recent restrictive-default event to position the province's ratings and its SCP. KEY ASSUMPTIONS Fitch's rating case scenario is a "through-the-cycle" scenario, which incorporates a combination of revenue, cost and financial risk stresses. It is based on the 2015-2019 figures and 2020-2023 projected ratios. The key assumptions for Fitch's rating case scenario include: -- A 33.9% yoy increase in operating revenue, including a real term decrease in royalties, taxes and federal transfers in 2020, followed by an average increase of 28.5% from 2021 to 2023. -- A 20.7% yoy increase in operating expenditures in 2020, followed by an average increase of 30% from 2021 to 2023. -- An average net capital balance of approximately negative ARS26.7 billion for 2020-2023. -- Cost and stock of debt considers noncash debt movements due to currency depreciation, with an annual average exchange rate of ARS74.9 per U.S. dollar for 2020, ARS110.3 for 2021, ARS155.0 for 2022 and ARS213.8 for 2023. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- If Cordoba relentlessly has the capacity to withstand a sovereign default due to a strong budget, has no need to undertake external refinancing of debt over the following one to two years and has sufficient liquidity available for it not to face an imminent default. -- Operating balance that maintains its debt repayment capacity in line with Fitch's rating case projections would steadily improve its track record that was lessened by the recent restrictive default event, in tandem with the ability to tap the international capital market, which eases refinancing risks. -- An upgrade on the sovereign rating of Argentina could positively affect Cordoba's ratings if debt sustainability metrics remain in line with projections. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- A downgrade of Argentina's sovereign rating would negatively impact Cordoba's rating. -- Refinancing risks underpinned by an inability to tap the international capital market could compromise debt repayment capacity in the coming years. -- Any formal announcement by the province or its agent of a potential exchange offer for its 2026 foreign currency (FC) local law bond that is assessed under Fitch's 'Distressed Debt Exchange Rating Criteria'. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Sovereigns, Public Finance and Infrastructure 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 three 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. ESG CONSIDERATIONS The province has an ESG Relevance Score of '4' for Rule of Law, Institutional and Regulatory Quality, Control of Corruption, reflecting the negative impact the weak regulatory framework and national policies of the sovereign have over the province in conjunction with other factors. Cordoba has an ESG Relevance Score of '5' for Creditor Rights due to both the province's recent DDE and breach of a formal agreement, which impeded the payment of debt service to bondholders, and Fitch's view that access to the external market will continue to weigh on the province's ability to repay its debt obligations. This expectation has suppressed the current rating assignment from a higher rating level and, therefore, creditor rights remains a key rating driver. 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. =========== B R A Z I L =========== BRAZIL: Could Lose US$336 Billion if Vaccination is Restricted -------------------------------------------------------------- Oliver Mason at RJR News reports that a study commissioned by the International Chamber of Commerce (ICC) estimates that Brazil could have an economic cost of tens of billions of dollars depending on the pace of vaccination against the Covid-19 pandemic. This cost could be as high as US$224 billion (R$1.2 trillion) if all emerging markets were able to vaccinate only half of their populations, according to RJR News. The cost rises to US$336 billion if access is restricted throughout 2021, the report notes. According to the ICC, losses do not depend on whether or not the country imposes a lockdown, the report adds. 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. S&P Global Ratings affirmed on December 14, 2020, its 'BB-/B' long-and short-term foreign and local currency sovereign credit ratings on Brazil. The outlook on the long-term ratings remains stable. Fitch Ratings' credit rating for Brazil stands at 'BB-' with a negative outlook (November 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, S&P Global Ratings' stable outlook assumes that timely implementation of fiscal adjustment and modest economic recovery will help preserve market confidence and adequate funding conditions for the government in local markets in the next two years, despite a sustained increase in the debt burden. BRAZIL: Market Slightly Upgrades 2021 Growth Forecast to 3.49% -------------------------------------------------------------- Rio Times Online reports that Brazilian financial analysts upgraded their economic growth forecast for the year, from a 3.45 percent expansion in gross domestic product (GDP) to 3.49 percent, the Central Bank of Brazil said. According to the bank's weekly survey of leading financial institutions in the South American country, analysts maintained their growth forecast for 2022 at 2.5 percent. Analysts raised their inflation estimate for 2021, from 3.43 to 3.5 percent, and maintained the estimate for 2022 at 3.5 percent. 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. S&P Global Ratings affirmed on December 14, 2020, its 'BB-/B' long-and short-term foreign and local currency sovereign credit ratings on Brazil. The outlook on the long-term ratings remains stable. Fitch Ratings' credit rating for Brazil stands at 'BB-' with a negative outlook (November 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, S&P Global Ratings' stable outlook assumes that timely implementation of fiscal adjustment and modest economic recovery will help preserve market confidence and adequate funding conditions for the government in local markets in the next two years, despite a sustained increase in the debt burden. CEMIG: S&P Hikes Issuer Credit Rating to 'BB-', Outlook Stable -------------------------------------------------------------- S&P Global Ratings, on Jan. 28, 2021, upwardly revised its stand-alone credit profile (SACP) on Brazilian electric utility CEMIG and its operating subsidiaries, Cemig Distribuicao S.A. (CEMIG-D) and Cemig Geracao e Transmissao S.A. (CEMIG-GT), to 'bb-' from 'b', and its issuer credit ratings to 'BB-' from 'B'. S&P also raised the national scale and issue ratings on the group to 'brAA+' from 'brA+', and the global scale issue-level rating on CEMIG-GT's senior unsecured notes to 'BB-' from 'B'; the same level of the issuer credit rating. The stable outlook reflects S&P's expectation that in the next 12 to 18 months, the group will keep debt to EBITDA around 4.5x, funds from operations (FFO) to debt of 13%-15%, and sources over uses of liquidity comfortably above 1.1x. CEMIG is gradually posting stronger credit metrics and a more comfortable liquidity position, despite the pandemic's effects, following the company's improved operating efficiency, especially at its distributor CEMIG-D, which contributes about 50% of the group's EBITDA. In the past few years, CEMIG implemented cost reduction initiatives and efficiency measures, benefited from a favorable tariff revision in 2018, and the favorable decision in a tax dispute in 2019. As a result, CEMIG-D had reached its regulatory operating expenditures target level as of Sept. 30, 2020. In addition, CEMIG-D received R$1.3 billion from "Conta Covid," an off-balance financing program put in place by the regulator and Brazilian government, which helped the company offset the 2.2% drop in energy sales in the first nine months of 2020 and higher customer delinquency caused by the pandemic. Because of the one-time effect from Conta Covid, S&P forecasts the group's adjusted debt to EBITDA to be in the low 4.0x area in 2020 and about 4.5x in the next two years, and FFO to debt of 15%-17% in 2020 and 13%-15% afterward. CEMIG concluded the sale of its 22.58% stake in Light on Jan. 22, 2021. S&P said, "In our view, the R$1.372 billion proceeds will help sustain the group's liquidity position and foster its deleveraging by paying down more expensive debt. Nevertheless, we believe a more meaningful improvement in the company's financial profile would depend on the execution of its divestment plan, which includes the sale of its stakes in the Santo Antonio and Belo Monte hydro plants, because those would release an aggregate R$4.7 billion of contingent guarantees that we include in the adjusted debt." S&P said, "Although the fiscal condition of CEMIG's controlling shareholder, the state of Minas Gerais, remains weak, we haven't seen negative interference in the group since the former missed debt service payments in February 2019. We consider there to be features that protect CEMIG from potential cash burdens, including debt covenants that limit distribution of dividends to the 50% payout set in the bylaws, and its regulatory framework at the national level through Agencia Nacional de Energia Eletrica (ANEEL). In our view, these factors allow us to rate CEMIG above the state of Minas Gerais. We highlight that CEMIG managed to preserve its cash position following the outbreak of COVID-19, having postponed non-essential investments and dividend payments. In addition, the company accessed local capital markets in September 2020, issuing R$850 million debentures at its gas distributor subsidiary, Gasmig." =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: Debt Jumps US$8.7 Billion to US$44.7 Billion ---------------------------------------------------------------- Dominican Today reports that the non-financial public sector debt (NFPS) stood at US$44.7 billion at yearend 2020, a US$8.7 billion jump in new commitments during that year, compared to the US$35.9 billion that the debt accumulated a year before. This is the highest increase in debt recorded in the last five decades, and occurs amid the collapse of tax revenues prompted by the measures adopted to stop COVID-19 infections in the country, according to Dominican Today. According to preliminary data from the Finance Ministry's Public Credit Directorate, the largest contracting of new debt was concentrated in international markets, through a US$5.6 billion sovereign bond at the end of last year, the report relays. The accumulated amount of commitments with holders of foreign debt papers was US$22.2 billion, 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: Rolls Out US$69MM in Soft Loans for Businesses ------------------------------------------------------------------ Dominican Today reports that the Dominican Government has for the micro, small and medium-sized companies some RD$4.1 billion (US$69.0 million) for soft loans as part of the plan to reactivate businesses with sales of up to RD$58 million per year. "The plan that seeks to support one of the sectors most affected by the coronavirus pandemic, will be led by the Ministry of Industry, Commerce and Mipymes (MICM) and consists of three programs of immediate application through Promipyme, the Institute of Cooperative Development and Credit (Idecoop), Banco Agricola, Fiduciaria Banreservas and Fundacion Reservas del Pais," the Presidency said in a statement obtained by the news agency. At the event, led by the President Luis Abinader, the Minister of Industry and Commerce, Victor -Ito- Bisono, said the first program will be executed through Promipyme / Banca Solidaria, from where it will be used for formal and informal business, RD$2.5 billion for new loans with fixed annual rates between 6% and 10% and 6 months of capital grace (only interest payments), the report notes. About Dominican Republic The Dominican Republic is a Caribbean nation that shares the island of Hispaniola with Haiti to the west. Capital city Santo Domingo has Spanish landmarks like the Gothic Catedral Primada de America dating back 5 centuries in its Zona Colonial district. Luis Rodolfo Abinader Corona is the current president of the nation. The Troubled Company Reporter-Latin America reported in April 2019 that the Dominican Today related that Juan Del Rosario of the UASD Economic Faculty cited a current economic slowdown for the Dominican Republic and cautioned that if the trend continues, growth would reach only 4% by 2023. Mr. Del Rosario said that if that happens, "we'll face difficulties in meeting international commitments." An ongoing concern in the Dominican Republic is the inability of participants in the electricity sector to establish financial viability for the system. Fitch Ratings on Jan. 18, assigned a 'BB-' rating to Dominican Republic's USD1.5 billion 5.3% notes due Jan. 21, 2041. Concurrently, the Dominican Republic reopened its 2030 4.5% notes for an additional USD1.0 billion, which Fitch rates 'BB-', raising the total outstanding amount of the 2030 notes to USD2.0 billion. 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: Signs Agreement to Reduce Price of Chicken -------------------------------------------------------------- The Dominican Today reports that President Luis Abinader signed an agreement with poultry producers that seeks to reduce the chicken price. During the signing of a pact between public institutions and agricultural sectors, the president affirmed that with the agreement mentioned above, an ambitious food security plan is launched that guarantees food at affordable prices and within all country citizens' reach. "We commit to the producers that through direct commitments they will sell to the Government, through the INESPRE, four million pounds of chicken at 50 pesos per pound; for its part, INESPRE undertakes to sell a whole chicken at 125 pesos per unit through mobile warehouses, its premises, premises of the Ministry of Agriculture and the placement of refrigerated containers in strategic places," expressed the president. The agreement also involves chicken processing plants to supply the National Institute for Price Stabilization (Inespre) with refrigerated trucks to transport the meat to where it is needed to provide in all areas of the country. "Talking with Minister Limber, all these logistics will be applied so that that it can already be bought in most of the country and gradually everything at the price we have arranged," added Abinader. Also, work will be done to establish a strategic reserve of two million pounds of chicken to guarantee supply and price stability through a pledge program whose costs will be financed by the Ministry of Agriculture, added the president. Likewise, the pact includes that the Ministry of Agriculture and the Agricultural Bank work on expanding corn production to raise the national supply and save foreign exchange. Simultaneously, the producers agree to buy the grains with zero-rate financing from the bank mentioned above. Luis Abinader also assured that this agreement is only the beginning of all that he will do with the national agricultural industry. They seek to guarantee low prices for the population through dialogue and agreements with producers. Full speech by President Luis Abinader "Friends and colleagues, On occasion, they have heard me speak that this new government is taking care of the immediately urgent but it also does not neglect what is essential in the long term for a single minute. For too long as a society, we have been aware of the country's problems, we have analyzed them, and they have been put on the table on numerous occasions. But it has not been until now that we have begun to provide real solutions to these historical problems with the arrival of this new government. And in this meeting and with this agreement, we materialize two essential things: one, we provide feasible solutions, and two, we do it hand in hand and dialogue with the sectors involved. Because friends, there is no long-term solution if it does not have the backing and support of all those involved. In the responsibility of this or any government to arbitrate the various interests presented in each sector. The government must guarantee that food is affordable for the population, but this is not achieved with a decree but by interacting with producers to eliminate inefficiencies, conjunctural speculations in intermediation and promote productivity and competitiveness. So, allow me at this point to thank all of you for your effort, generosity, and country vision. The agreement that we signed seals a pact that directly affects millions of Dominicans' quality of life. It affects their safety, their future, and their well-being. With this pact, we are launching an ambitious food safety plan that guarantees affordable chicken prices available to all citizens of our country. And we do it by touching all possible axes to guarantee the success and long-term sustainability of this action. We commit to the producers that they will sell to the government through direct commitments through INESPRE 4 million pounds of chicken at 50 pesos per pound. For its part, INESPRE is committed to executing a whole chicken sales program at 125 pesos per unit through mobile warehouses, its premises, premises of the Ministry of Agriculture, and the placement of refrigerated containers in strategic places. We also involve the chicken processing plants that undertake this broad agreement to facilitate and supply a fleet of refrigerated trucks to reach the places where INESPRE requires it so that there is supply in all the country's provinces. In addition to this, the government and producers will work to establish a strategic reserve of 2 million pounds of chicken to guarantee supply and price stability through a pledge program whose cost will be assumed by the Ministry of Agriculture. And, finally, I want to point out as an essential part of this agreement that the Ministry of Agriculture and the Agricultural Bank will also deploy an intense plan that will allow, among other things, agreements with animal feed processing companies to execute a corn planting program and sorghum to expand the supply of domestically produced inputs, while saving foreign exchange. And it should also be noted that the livestock producers undertake to buy the national production of these grains at a guaranteed price to be agreed between the parties and the Ministry of Agriculture to provide the services of preparation of land and high-quality seeds, as well as the necessary financing through Banco Agrícola. As I have indicated at the beginning of my speech, the consensual agreement that we present to you guarantees a complete plan of action in this vital sector. But this agreement is just the beginning of what we will do in all sectors of national agriculture: Guarantee affordable prices to the population by making agreements with national producers. In each case, it will be well designed and studied so that the solution to these problems that we inherit is put to an end once and for all. Food security is a fundamental element for the healthy development of a nation. With its government at the helm, the Dominican Republic is aware that nothing will make sense in our government action if the most essential things are not covered. And the feeding of the Dominican people is in the first line of responsibilities of this government. This is why this agreement is so important. Because it is urgent and because it is essential. Congratulations. Thank you all very much, and God bless the Dominican 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. Fitch Ratings on Jan. 18, assigned a 'BB-' rating to Dominican Republic's USD1.5 billion 5.3% notes due Jan. 21, 2041. Concurrently, the Dominican Republic reopened its 2030 4.5% notes for an additional USD1.0 billion, which Fitch rates 'BB-', raising the total outstanding amount of the 2030 notes to USD2.0 billion. 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 ============= NATIONAL COMMERCIAL BANK: Fitch Affirms 'B+' LongTerm IDRs ---------------------------------------------------------- Fitch Ratings has affirmed National Commercial Bank of Jamaica Limited's (NCBJ) Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) at 'B+'/Negative Outlook, and its Viability Rating (VR) at 'b+'. The Negative Outlook on NCBJ reflects that downside risks remain for NCBJ's credit profile, given the economic implications of the coronavirus pandemic, reflected in the Negative Outlook for the operating environment score. Fitch believes the deep recession of at least 10.5% in 2020, will result in asset quality deterioration and will weigh on the bank's profitability. KEY RATING DRIVERS IDRs AND VR NCBJ's IDRs are driven by its Viability Rating (VR), which reflects its stand-alone creditworthiness, highly influenced by Fitch's assessment of Jamaica's operating environment and the bank's company profile. Fitch believes the operating environment impacted by the deep economic recession set challenges on the banking system's financial performance, and consequently NCBJ's financial performance. NCBJ's company profile is a key strength due to its strong local competitive position as the largest bank in Jamaica with a consolidated market share by assets of 39% and deposits of 33% at September 2020. Fitch believes NCBJ entered the economic downturn with reasonable asset quality for its rating category. As of September 2020, the 90-day past due ratio slightly increased to 2.7% from 2.5% at FYE 2019, mainly due to the deterioration of the consumer credit segment (45% of the total portfolio). Similarly, stage 3 loans increased to 3.1% at FYE 2020 from 2.5% at FYE 2019. Asset quality ratios remained relatively stable, and benefited mainly from relief programs for the consumer segment. As of September 2020, 20% of NCBJ's loan portfolio was under the relief program. The sound impaired loan reserve coverage of 136% provides protection in the current operating environment. Fitch expects the NPLs ratio to increase in 2021 when the restructured loans season, and considering the significant exposure to sensitive sectors to the crisis such as tourism (11% of total loan portfolio). Operating profit to average total assets ratio decreased to 1.2% at FYE 2020 from 3.04% at FYE 2019 as a result of the significant increase in loan impairment charges, mostly due to expected losses estimation because of higher Stage II loans, but also from lower non-interest income related to gains on the bank's securities portfolio and the insurance business. Fitch expects that profitability will remain under pressure and lower than pre-pandemic levels in 2021, reflecting high credit costs and lower business volumes. NCBJ's capital ratio of tangible common equity to tangible assets reduced to 13.3% at FYE 2020 from 16.1% at FYE 2019, reflecting lower earnings, higher asset growth, and increased intangible assets. Nevertheless, loan loss allowances and voluntary capital reserves further supports the bank's capitalization assessment. Fitch expects bank's loss absorption capacity to remain sound in 2021, driven by sound reserves coverage and the expected re-capitalization of total results. NCBJ's liquidity position is sound and has strengthened as core deposits grew by 18% at FYE 2020. Accordingly, the loan-to-deposit ratio improved to 81% at end-September 2020 (FYE 2019: 87.6%) as deposits increased their share in the total funding mix. The bank benefits from a well-diversified and low-cost deposit base that covers more than one-half of the bank's funding needs (57% at FYE 2019), and also, NCBJ has proven access to local and global capital and debt markets. SUPPORT RATING AND SUPPORT RATING FLOOR Fitch affirmed NCBJ's Support Rating (SR) at '4' and Support Rating Floor (SRF) at 'B+'. The Support Rating Floor of 'B+' is equalized with the sovereign rating, reflecting NCBJ's systemic importance. Despite the government's record of having provided extraordinary support to the banking system during prior crises, NCBJ's Support Rating of '4' reflects uncertainties about the sovereign's ability to provide support in light of its high level of indebtedness. RATING SENSITIVITIES Factors that could, individually or collectively, lead to negative rating action/downgrade: IDRs and VR -- IDRs are sensitive to changes in the sovereign rating, or further deterioration on the local operating environment; -- IDRs and VR could be downgraded if the disruption to economic activity due to the coronavirus pandemic, results in a relevant deterioration in asset quality or profitability that leads to an erosion of capital cushions. Specifically, if the bank's tangible common equity to tangible assets ratio is consistently below 10% SUPPORT RATING -- SR could be downgraded if the support rating floor is reduced due to Jamaica's sovereign downgrade. -- NCBJ's SRF would be negatively affected by a change in Jamaica's sovereign rating, due to its systemic importance. Factors that could, individually or collectively, lead to positive rating action/upgrade: IDRs and VR -- The IDRs have limited upside potential given the Negative Rating Outlook. -- The Outlook could be revised to Stable following a revision of the operating environment to Stable along with a manageable impact of the coronavirus shock on capitalization, asset quality, and profitability metrics. -- In the long term, a rating upgrade would require improved prospects for the operating environment and an upgrade of the sovereign rating. Also, a meaningful and sustained improvement of core profitability, combined with improvements in the bank's credit quality and capitalization. SUPPORT RATING -- Fitch views the sovereign's propensity to provide timely support to NCBJ as high due to the bank's systemic importance, but the SR has limited upside potential due to the weakness of the government's creditworthiness. -- Although not likely in the near term SRF could be upgraded if Jamaica's rating is upgraded. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Financial Institutions and Covered Bond 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. SUMMARY OF FINANCIAL ADJUSTMENTS -- Fitch's analysis is at the consolidated level. As NCBJ does not calculate consolidated risk-weighted assets, Fitch estimates this figure by referring to the proportion of unconsolidated risk-weighted assets to total unconsolidated assets and multiplying this ratio to consolidated assets. -- Deferred income tax assets were reclassified as intangible and deducted from the equity and assets to estimate core capital ratios. ESG CONSIDERATIONS 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. ===================== P U E R T O R I C O ===================== ORGANIC POWER: Former COO Says Plan Disclosures Inadequate ---------------------------------------------------------- Creditor Brian Healy on Jan. 25, 2021, submitted an objection to Organic Power, LLC's Disclosure Statement and Proposed Plan as filed on Dec. 17, 2020. At the time of the Debtor's bankruptcy filing, Mr. Healy held the position of Chief Operating Officer of the Debtor under an employment contract executed on May 1, 2016. Mr. Healy said he resigned his position effective May 1, 2020, due to Organic Power's inability to comply with the employment contract, and filed a corresponding claim for his postpetition deferred compensation as an administrative claim. Mr. Healy submits that the Honorable Court should not consider the Disclosure Statement because it fails to provide "adequate information". In particular, the Disclosure Statement fails to fully disclose with specificity (1) the Investor Agreement by which certain unsecured creditors have become shareholders of the company by converting their outstanding debt into preferred shares; (2) the current status of the permit process; (3) the actual status and timeline for repairs of the generator and other equipment critical to the operation of the company; and, (4) the means by which the Debtor intends to generate the revenues necessary for making distributions to creditors under its proposed Plan of Reorganization. More so, Mr. Healy also objects to the consideration of the Proposed Plan inasmuch as it provides an unrealistic payment schedule not supported by Debtor's current operational state and fails to provide treatment to all claimants in the event that the Court grants the administrative claims filed. Mr. Healy avers the Plan is not confirmable for a variety of reasons, but its most glaring defect is that it is unfeasible because the Debtor lacks sufficient cash flow and/or a reasonable fixed income projection to fund the Plan. He says the Plan should also not be confirmed because the plan as proposed does not meet all the requirements under Section 1129 of the Bankruptcy Code, does not adequately provide for all creditor claims, and improperly classifies the Debtors' insiders as claimants entitled to vote on the Plan. Attorney for Mr. Healy: Yasmin Rocio Vazquez VAZQUEZ & ESTRELLA LAW OFFICES Ave. Esmeralda 405, Suite 2 GUAYNABO, PR 00969-4427 Tel/Fax: 787-402-7275 E-mail: yvazquez@vazquezestrellalaw.com About Organic Power Organic Power LLC -- https://prrenewables.com/ -- is a supplier of renewable energy and a provider of environmentally sustainable food waste recycling services based in Puerto Rico. It offers food processing companies, restaurants, pharmaceuticals, and retail outlets an alternative to landfill disposal. Organic Power sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D.P.R. Case No. 19-01789) on April 1, 2019. At the time of the filing, the Debtor disclosed assets of between $10 million and $50 million and liabilities of the same range. The Debtor tapped Aimee I. Lopez Pabon, Esq., at Godreau & Gonzalez LLC, as its bankruptcy counsel, and Carlos Bobonis Gonzalez, Esq., at Bobonis, Bobonis & Rodriguez Poventud, as its special counsel. ===================================== T R I N I D A D A N D T O B A G O ===================================== CL FINANCIAL: Central Bank Wanted to Exit Years Ago, Hilaire Says ----------------------------------------------------------------- Trinidad Express reports that nearly 12 years after the Central Bank took control of the operations of CLICO, Governor Dr. Alvin Hilaire is anxious for Trinidad and Tobago's regulator of financial institutions to close the book on this country's largest bailout. "As I told you before, we want to get out of this thing yesterday. Right? We are not in business of running insurance companies. Most of the conditions are no longer there in terms of the systemic issue. And in terms of the health of the financial system, so we don't have a systemic problem," said Hilaire in a interview with Express Business, according to Trinidad Express. Under Section 44D of the Central Bank Act, the Central Bank stepped in to bail out the insurance company, which was once ran by businessman Lawrence Duprey, the report notes. January 30 marks the 12th anniversary of the news conference at the Central Bank at which then Governor, Ewart Williams, and former Minister of Finance, Karen Tesheira, announced the collapse of CLICO, which was then T&T's largest and most influential insurance company, the report discloses. At the news conference, Williams cited the impact of the global financial crisis on methanol and real estate prices, but said CLICO's financial difficulties were due to excessive related-party transactions which carried significant contagion risks; an aggressive high interest rate resource mobilization strategy to finance equally high-risk investments, much of which are in illiquid assets (including real estate both in Trinidad and Tobago and abroad) and a very high leveraging of the group's assets, which constrains the potential amount of cash that could be raised from asset sales, the report relays. CLICO's 2009 audited financial statement disclosed that the insurer held a 32 per cent stake in Republic Bank, then and now the country's largest financial institution, 32 per cent of Angostura Holdings Ltd, T&T's iconic rum and bitters producer as well as 56.53 per cent of Methanol Holdings (Trinidad) Ltd, then and now the country's largest methanol producer, the report notes. Back in January 2009, CLICO also held significant shares in West Indian Tobacco Company (WITCO), Home Construction Ltd (HCL) and One Caribbean Media (OCM), the parent company of the Trinidad Express, the report discloses. The report relays that the Central Bank's decision to intervene in CLICO, as well as CLICO Investment Bank and other companies of the parent, CL Financial, aimed at staunching "the contagion risks that financial difficulties in an institution as vast as the CL Financial group could have on the entire financial system of Trinidad and Tobago and indeed in the entire Caribbean region," as Williams told the stunned news conference. While Hilaire admits that CLICO no longer presents the systemic threat it did in January 2009, he said that is not the only issue holding back the Central Bank's exit from the insurance company, the report says. "Of course, we want it to be orderly. And our main concern now is that it is in good hands, that policyholders are in good hands. "As it is now, this is the case because we have a team whose objective is to get out of this as fast as possible," it added. The Governor's reference to ensuring that CLICO's policyholders are in good hands points to the Central Bank's efforts to dispose of the traditional issuance portfolios of both CLICO and its smaller sister company, British American Trinidad (BAT), the report notes. On September 30, 2019, the Central Bank announced that after a lengthy and thorough process, which was guided by international consultants, Oliver Wyman, it had chosen Sagicor Life Inc as the preferred entity to acquire the two traditional insurance portfolios, the report discloses. "We have a path that was designed and put in place in 2015. So we are committed to that. As you know, we have we have some issues to sort out with that on the legal side. So we're going to be going through that," Hilaire added. Local life insurance company, Maritime Life, which was one of the companies shortlisted to acquire the portfolios, launched a legal challenge of the disposal process for the portfolios last year and has been granted an injunction by the High Court preventing the Central Bank from completing the sale, the report relays. Hilaire said one important aspect of the Central Bank's 2015 resolution plan - which was devised under the stewardship of his predecessor, Jwala Rambarran, who was dismissed in December 2015 - is the repayment to the Government's bailout of CLICO, the report notes. "This has gone from over $18 billion to about $2 billion. So this has been a remarkable effort, and more to come. Right. So we are moving on that front assiduously. We are working on things very precisely. But our clear objective is to get out of this thing as soon as possible," said the Governor, who received a second term, for three years, in December, the report relates. "But we have to make sure that the policyholders comfortable. If we can't do that, then it would be derelict of us to to just let them let them go. "We don't have any interest in running a company, believe me!" the Governor said, the report relays. Although CLICO was ordered, by former Finance Minister Winston Dookeran, to stop writing new business in August 2014, it declared after tax profits of $5.13 billion in 2014; $894.2 million in 2015; $447.3 million in 2016; $2.08 billion in 2017; $2.55 billion in 2018 and $123.7 billion in 2019, its most recent financials, the report notes. In 2018, the Government hived off 42,475,362 million Republic Bank shares, 15,285,917 One Caribbean Media shares, 61,677,011 Angostura shares and 4,548,712 WITCO shares recovered from CLICO and CLICO Investment Bank to form National Investment Fund, a company that issued corporate, asset-backed bonds to local individuals and companies, the report adds. About CL Financial/CLICO CL Financial was one of the largest privately held conglomerate in Trinidad and Tobago. It was originally founded as an insurance company and has since expanded to be the holding company for a diverse group of companies and subsidiaries. CL Financial is the parent company of Colonial Life Insurance Company (Trinidad) Limited (Clico). CLICO is now the Company's insurance division. CL Financial however experienced a liquidity crisis in 2009 that resulted in a "bail out" agreement by which the government of Trinidad and Tobago loaned the company funds ($7.3 billion as of December 2010) to maintain its ability to operate, and obtained a majority of seats on the company's board of directors. The companies to be bailed out were: CL Financial Ltd (CLF); Colonial Life Insurance Company Ltd (CLICO); Caribbean Money Market Brokers Ltd (CMMB); Clico Investment Bank (CIB) and British American Insurance Company (Trinidad) Ltd (BAICO). As reported in the Troubled Company Reporter-Latin America in July 2017, CL Financial Limited shareholders vowed to pay back a TT$15 billion (US$2.2 billion) debt to the Trinidad Government. TRINIDAD & TOBAGO: Must Seize Opportunities to Avoid Lost Decade ---------------------------------------------------------------- Camille Hunte at Trinidad Express reports that according to Independent Senator Hazel Thompson-Ahye, Trinidad and Tobago is a corrupt society where people believe they can bribe public officials to get whatever they want. The Covid-19 pandemic has also exposed the levels of corruption in the society. Thompson-Ahye was speaking during the launch of the 2020 Corruption Perception Index (CPI), hosted virtually by the Trinidad and Tobago Transparency Institute (TTTI), according to Trinidad Express. The index, which ranked 180 countries and territories by their perceived levels of public sector corruption, uses a scale of zero to 100, where zero is highly corrupt and 100 is very clean, the report notes. Trinidad and Tobago placed 86th with a score of 40. Thompson-Ahye lamented that T&T is perceived as a highly corrupt country. "In the past, at least two registrar generals had expressed to me their fears about the level of corruption in their departments," Thompson-Ahye said, the report discloses. "One said she was shocked that when she told a member of the public that she could not facilitate his request, that was interpreted to mean that she was not being offered enough money. He offered her more and she had to run him out of her office. People believe they can pay and get anything they want in this country." Thompson-Ahye recounted hearing of instances where people purchased fraudulent birth certificates and other documents, the report discloses. "One time my friend encountered a young man who boasted he could make any certificate, you name it, he can make it," she added. Thompson-Ahye noted that there are customs officers and police officers whose lifestyles are well beyond their pay rates, giving the impression of corrupt activities, the report relays. Thompson-Ahye added that the Covid-19 pandemic has brought further corruption to light as there had been reports of persons attempting to defraud the State in order to access Covid-19 relief grants and aid, the report notes. "Stories began to emerge about fraudulent claims for relief being made that could not be substantiated," she added. "It was not just the potential recipients whose wrongdoings were being unearthed, but also those of employers who provided false salary slips . . . " Thompson-Ahye however remained optimistic saying corruption is not an insurmountable mountain the country cannot overcome. She said this could be done by ensuring several things including the development of parliamentary processes to hold State institutions to account, the integrity and independence of the Judiciary and freedom of the media, the report relays. Also speaking during the launch, TTTI Chairman Dion Abdool noted that the Covid-19 pandemic has created new opportunities for corruption, the report notes. He said a Transparency International report indicated some US$1 billion had been lost to corruption and malfeasance related to Covid-19 expenditure, the report relays. He said to reduce Covid-19 related corruption, countries must strengthen their oversight institutions to ensure that resources reach those most in need as well as ensuring open and transparent contracting to combat wrongdoing, identify conflicts of interest and ensure fair pricing. The results Trinidad and Tobago fell one place from 85 in 2019 to 86 in 2020 with the same score of 40 out of 100. The average score was 43, the report discloses. More than two-thirds of countries scored below 50 on this year's CPI, the report says. The top countries are Denmark and New Zealand which both scored 88 out of 100, followed by Finland, Singapore, Sweden and Switzerland, with scores of 85 each, the report relays. The countries deemed to be most corrupt were South Sudan and Somalia, with scores of 12 each, followed by Syria (14), Yemen (15) and Venezuela (15), the report notes. In the Caribbean region, Barbados scored the highest with 64 out of 100, followed by St Vincent and the Grenadines (59), St Lucia (56) and Dominica (55), the report notes. T&T was the third lowest scoring country in the region with only Venezuela and Suriname (38) receiving lower scores, the report adds. ********* 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 * * *