/raid1/www/Hosts/bankrupt/TCRLA_Public/210215.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
Monday, February 15, 2021, Vol. 22, No. 27
Headlines
B E R M U D A
SEADRILL LTD: Case Summary & 30 Largest Unsecured Creditors
SEADRILL PARTNERS: U.S. Trustee Appoints Creditors' Committee
C A Y M A N I S L A N D S
ECAF I LTD: Fitch Affirms BB Rating on Class B-1 Notes
SHELF DRILLING: Moody's Lowers CFR to Caa2, Outlook Negative
D O M I N I C A N R E P U B L I C
DOMINICAN REPUBLIC: Government Spending Down by 25% to US$862MM
DOMINICAN REPUBLIC: Lack of Fairness Hinders Mining Projects
DOMINICAN REPUBLIC: Works to Mitigate Price Increase
M E X I C O
TV AZTECA: Fitch Lowers LongTerm IDRs to 'C'
P A N A M A
BANCO LA HIPOTECARIA: Fitch Affirms 'BB+' LongTerm IDR
PROMERICA FINANCIAL: Fitch Affirms 'B' LT IDR, Outlook Negative
T R I N I D A D A N D T O B A G O
TRINIDAD & TOBAGO: Made $2 Billion Less Than Expected in January
X X X X X X X X
[*] BOND PRICING: For the Week Feb. 8 to Feb. 12, 2021
- - - - -
=============
B E R M U D A
=============
SEADRILL LTD: Case Summary & 30 Largest Unsecured Creditors
-----------------------------------------------------------
Lead Debtor: Seadrill Limited
Par-La-Ville Place
Hamilton, Bermuda
Business Description: Seadrill -- http://www.seadrill.com/--
provides offshore drilling services
required for exploration and production
of oil and gas resources.
Chapter 11 Petition Date: February 10, 2021
Court: United States Bankruptcy Court
Southern District of Texas
One hundred fifteen affiliates that concurrently filed voluntary
petitions for relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
Seadrill Limited (Lead Case) 21-30427
Seadrill Americas, Inc. 21-30425
Eastern Drilling AS 21-30437
North Atlantic Alpha Ltd. 21-30443
North Atlantic Elara Ltd. 21-30445
North Atlantic Epsilon Ltd. 21-30434
North Atlantic Linus Charterer Ltd. 21-30449
North Atlantic Navigator Ltd. 21-30453
North Atlantic Phoenix Ltd. 21-30429
North Atlantic Venture Ltd. 21-30457
Scorpion Courageous Ltd. 21-30431
Scorpion Deepwater B.V. 21-30438
Scorpion Deepwater Ltd. 21-30492
Scorpion Drilling Ltd. 21-30480
Scorpion Freedom Ltd. 21-30450
Scorpion International Ltd. 21-03463
Scorpion Nederlandse B.V. 21-30503
Scorpion Offshore Inc. 21-30518
Scorpion Resolute Ltd. 21-30528
Scorpion Rigs Ltd. 21-30534
Scorpion USA Expats, Inc. 21-30461
Scorpion Vigilant Ltd. 21-30469
SDS Drilling Ltd. 21-30476
Sea Dragon de Mexico S de R.L. de CV 21-30485
Seadrill Abu Dhabi Operations Limited 21-30493
Seadrill Angola LDA 21-30500
Seadrill Ariel Ltd. 21-30502
Seadrill Australia Pte Ltd. 21-30510
Seadrill Brunei Ltd. 21-30477
Seadrill Callisto Ltd. 21-30481
Seadrill Carina Ltd. 21-30487
Seadrill Castor Ltd. 21-30497
Seadrill Castor Pte Ltd. 21-30505
Seadrill Common Holdings Ltd. 21-30509
Seadrill Cressida Ltd. 21-30513
Seadrill Deepwater Charterer Ltd. 21-30517
Seadrill Deepwater Contracting Ltd. 21-30525
Seadrill Deepwater Crewing Ltd. 21-30464
Seadrill Deepwater Holdings Ltd. 21-30486
Seadrill Deepwater Units Pte Ltd 21-30498
Seadrill Eclipse Ltd. 21-30514
Seadrill Eminence Ltd. 21-30526
Seadrill Equatorial Guinea Ltd. 21-30530
Seadrill Europe Management AS 21-30536
Seadrill Far East Ltd. 21-30538
Seadrill Freedom Ltd. 21-30432
Seadrill GCC Operations Ltd 21-30391
Seadrill Gemini Ltd. 21-30436
Seadrill Global Services Ltd. 21-30442
Seadrill Gulf Operations Neptune LLC 21-30444
Seadrill Holdings Singapore Pte Ltd. 21-30447
Seadrill Indonesia Ltd. 21-30452
Seadrill Insurance Ltd. 21-30455
Seadrill International Resourcing DMCC 21-30462
Seadrill Investment Holding Company Limited 21-30439
Seadrill Jack Up Holding Ltd. 21-30458
Seadrill Jack Up I BV 21-30474
Seadrill Jack Up II BV 21-30489
Seadrill Jack-Ups Contracting Ltd. 21-30501
Seadrill Jupiter Ltd. 21-30515
Seadrill Labuan Ltd. 21-30529
Seadrill Management (S) Pte Ltd. 21-30537
Seadrill Management AME Ltd. 21-30539
Seadrill Management Ltd. 21-30433
Seadrill Mira Hungary Kft. 21-30441
Seadrill Mira Ltd. 21-30446
Seadrill Neptune Hungary Kft. 21-30451
Seadrill Newfoundland Operations Ltd. 21-30507
Seadrill Nigeria Operations Ltd. 21-30512
Seadrill North Atlantic Holdings Limited 21-30520
Seadrill North Sea Crewing Ltd. 21-30523
Seadrill Norway Crew AS 21-30430
Seadrill Norway Operations Ltd. 21-30435
Seadrill Offshore AS 21-30440
Seadrill Offshore Nigeria Ltd. 21-30454
Seadrill Operations de Mexico S de RL de CV 21-30460
Seadrill Orion Ltd. 21-30467
Seadrill Pegasus (S) Pte Ltd. 21-30484
Seadrill Prospero Ltd. 21-30494
Seadrill Rig Holding Company Limited 21-30478
Seadrill Saturn Ltd. 21-30491
Seadrill Saudi I BV 21-30499
Seadrill Saudi II BV 21-30504
Seadrill Servicos de Petroleos Ltda. 21-30521
Seadrill Sevan Holdings Limited 21-30527
Seadrill Telesto Ltd. 21-30531
Seadrill Tellus Ltd. 21-30470
Seadrill Titania SarI 21-30524
Seadrill Treasury UK Limited 21-30532
Seadrill Triton Ltd. 21-30535
Seadrill Tucana Ltd. 21-30540
Seadrill UK Ltd. 21-30541
Seadrill UK Operations Ltd. 21-30542
Seadrill UK Support Services Ltd. 21-30466
Sevan Brasil Ltd. 21-30479
Sevan Developer Ltd 21-30483
Sevan Driller Ltd. 21-30488
Sevan Drilling Limited 21-30495
Sevan Drilling North America LLC 21-30508
Sevan Drilling Pte Ltd. 21-30519
Sevan Drilling Rig II AS 21-30522
Sevan Drilling Rig II Pte Ltd. 21-30465
Sevan Drilling Rig IX Pte Ltd. 21-30472
Sevan Drilling Rig V Pte Ltd. 21-30475
Sevan Louisiana Hungary Kft. 21-30482
Sevan Marine Servicos de Perfuracao Ltda 21-30490
Scorpion Servicos Offshore Ltda. 21-30456
Seadrill Dione Ltd. 21-30506
Seadrill Hyperion Ltd. 21-30468
Seadrill Mimas Ltd. 21-30533
Seadrill Offshore Malaysia Sdn. Bhd. 21-30448
Seadrill Proteus Ltd. 21-30459
Seadrill Rhea Ltd. 21-30471
Seadrill Tethys Ltd. 21-30496
Seadrill Titan Ltd. 21-30511
Seadrill Umbriel Ltd. 21-30473
Judge: Hon. David R. Jones
Debtors'
General
Bankruptcy
Counsel: Anup Sathy, P.C.
Ross M. Kwasteniet, P.C.
Brad Weiland, Esq.
Spencer Winters, Esq.
KIRKLAND & ELLIS LLP
KIRKLAND & ELLIS INTERNATIONAL LLP
300 North LaSalle Street
Chicago, Illinois 60654
Tel: (312) 862-2000
Fax: (312) 862-2200
Email: asathy@kirkland.com
rkwasteniet@kirkland.com
bweiland@kirkland.com
spencer.winters@kirkland.com
- and -
Christopher Marcus, P.C.
KIRKLAND & ELLIS LLP
KIRKLAND & ELLIS INTERNATIONAL LLP
601 Lexington Avenue
New York, New York 10022
Tel: (212) 446-4800
Fax: (212) 446-4900
Email: cmarcus@kirkland.com
Debtors'
Co-Bankruptcy
Counsel: Matthew D. Cavenaugh, Esq.
Jennifer F. Wertz, Esq.
Vienna F. Anaya, Esq.
Victoria Argeroplos, Esq.
JACKSON WALKER L.L.P.
1401 McKinney Street, Suite 1900
Houston, TX 77010
Tel: (713) 752-4200
Fax: (713) 752-4221
Email: mcavenaugh@jw.com
jwertz@jw.com
vanaya@jw.com
vargeroplos@jw.com
Debtors'
Co-Corporate
Counsel: SLAUGHTER AND MAY
Debtors'
Co-Corporate
Counsel: CONYERS DILL & PEARMAN LIMITED
Debtors'
Co-Corporate
Counsel: ADVOKATFIRMAET THOMMESSEN AS
Debtors'
Financial
Advisor: HOULIHAN LOKEY, INC.
Debtors'
Restructuring
Advisor: ALVAREZ & MARSAL NORTH AMERICA, LLC
Debtors'
Claims &
Noticing Agent: PRIME CLERK LLC
https://cases.primeclerk.com/seadrilllimited
Total Assets as of June 30, 2020: $7,291,000,000
Total Debts as of June 30, 2020: $7,193,000,000
The petitions were signed by Grant Cree, authorized signatory.
A copy of Seadrill Limited's petition is available for free at
PacerMonitor.com at:
https://bit.ly/37fDFrJ
List of Debtors' 30 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
1. National Oilwell Varco L.P. Trade Payable $2,376,655
Attn: Frode Jensen
Senior VP-Marketing and Sales
Lagerveien 16
Stavanger, N-4033
Norway
Tel: 713-320-3744
Email: frode.jensen@nov.com
2. Sodexo Mobile Units AS Trade Payable $1,426,916
Attn: Ed Morrow
Vice President - Global Energy
Account
Sodexo Group Head Quarter
255 Quai de La Bataille De St Alingard
Issy-Les-Moulineaux, 92130
France
Tel: + 33 1 30 85 75 00
Email: ed.morrow@sodexo.com
3. Cameron International Trade Payable $1,402,784
Corporation
Attn: Gokhon Yarim
Director of Sales and Commercial
Mekjarvik 1
Randaberg, 4070
Norway
Email: gyarim@slb.com
4. SR Group AS Trade Payable $728,276
Attn: Gustav Sanne Gundersen
Head of Sales
Energiveien 9
Tananger, 4056
Norway
Tel: 63 94 04 10
Fax: +47 51 71 53 50
Email: bjorn.rostad@sr-group.no
5. MHwirth AS Trade Payable $605,186
Attn: Dan Gudall
Senior Sales Manager (Capital)
Nedrevei 8
Horten, 3183
Norway
Tel: +47 38 05 70 00
Email: dan.gudall@mhwirth.com
6. RTC Offshore AS Trade Payable $545,795
Attn: Mette Solvik
Business Development Manager
Rikard Nordraaksgate 14 Nord
Skien, Telemark 3724
Norway
Tel: 47 35 59 40 00
Email: mette.solvik@rtcoffshore.no
7. Jansen OG Willumsen Services AS Trade Payable $448,451
Attn: Kenneth Jansen
Chief Executive Officer
Hammeren 15
Stavanger, 4056
Norway
Tel: +47 51 64 05 80
Email: kenneth.jansen@jws.no
8. 3C Metal Trade Payable $396,649
Attn: Dejan Zigic
Group Managing Director
Plot No. Mo 0629
Jebel Ali Free Zone (JAFZA)
Dubai, 261998
United Arab Emirates
Tel: +33 5 59 67 64 67
Email: dzigic@3cmetalme.com
9. Storebrand Helseforsikring AS Trade Payable $388,109
Attn: Odd Arild Grefstad
Chief Executive Officer
Professor Kohts VE19
Lysaker, 1327
Norway
Tel: 47 915 08880
Email: odd.arild.grefstad@storebrand.no
10. SEMCO Maritime Trade Payable $372,926
Attn: Simon Wall
Vice President - Global Sales
Esbjerg Brygge 30
Esbjerg, 6700
Denmark
Tel: +45 7916 6666
Email: swa@semcomaritime.com
11. Caprock UK Ltd Trade Payable $301,146
Attn: James Trevelyan
Senior Vice President of
Global Sales
Denmore Road
Bridge of Don, Grampian
Alberdeen, AB 23 8JW
Aberdeen, A B23 8JW
United Kingdom
Tel: 44 1224 707377
Email: james.trevelyan@speedcast.com
12. Softcat PLC Trade Payable $275,517
Attn: Edward G Watkin
Senior Account Manager
One Creechurch Lane
5th Floor
London, EC3A 5AY
United Kingdom
Email: edwardgw@softcat.com
13. Copastur Viagens E Trade Payable $268,658
Turismo Ltda.
Attn: Pippa Ganderton
Director of Global Accounts
Ru a Bela Cintra
986
6 Andar
Sao Paulo, SP 141500
Brazil
Tel: 55 11 3218 7300
Email: pippa.ganderton@atpi.com
14. Smedvig Eiendom Trade Payable $268,419
Attn: Geir Osterhus
Site Director
Lokkeveien 103
Stavanger, 4004
Norway
Tel: 47 51 50 96 00
Email: geir.osterhus@smedvig.no
15. Swift Technical Trade Payable $261,137
Servicos Tecnicos
Especializados Ltda
Attn: Janette Marx
Chief Executive Officer
Av Almirante Barroso
63
Centro
Rio De Janeiro, RJ 20031-003
Brazil
Tel: 925-937-1000
Email: janette.marx@ajilonoffice.com
16. Kongsberg Maritime Trade Payable $241,394
Attn: Randall Nunmaker
Vice President of Sales
Pirsenteret
Trondheim, 7462
Norway
Tel: 832-540-4286
Email: randall.nunmaker@km.kongsberg.com
17. Express Services (PTY) Ltd. Trade Payable $241,024
Attn: President or General Counsel
CNR 3rd Street & 14th Road
Walvis Bay, 13013
Namibia
Tel: +264 64 205859/60
Email: louis@expserv.net
18. Vinje Industri AS Trade Payable $205,313
Attn: Leif Jarle Johansen
Project Manager
Skibasen 10A
Kristiansand, 4636
Norway
Tel: (+47) 38 03 88 00
Email: leifen@vinjeindustri.no
19. Bauer Compressors, Inc. Trade Payable $197,256
Attn: Michael Mayer
Director of Customer Support
1328 Azalea Garden Road
Norfolk, VA 23510
United States
Tel: (757) 855-6006
Fax: (757) 857-1041
Email: michael.mayer@bauercomp.com
20. Agile Rig & Modules AS Trade Payable $193,227
Attn: Morten Solland
Chief Operating Officer
Moseidveien 17
Postboks 422
Stavanger, 4067
Norway
Email: morten.solland@agilerig.no
21. Axess AS Trade Payable $191,693
Attn: Knut Stefanussen
Chief Technology Officer/
Senior Vice President
Gronora N Eringspark
Orkanger, 7300
Norway
Tel: +47 982 43 600
Email: knut.stefanussen@axessgroup.com
22. IPT Global Trade Payable $187,628
Attn: Alan Sansovich
Chief Executive Officer
16200 Park Row Suite 350
Houston, TX 77084
United States
Tel: 281-204-2912
Email: alan.sansovich@3ipt.com
23. World Wide Technology, LLC Trade Payable $178,887
Attn: Carrie Drake
Client Manager
1 World Wide Way
St. Louis, MO 63146
United States
Email: carrie.drake@wwt.com
24. Ancona Overseas, Inc. Trade Payable $178,224
Attn: President or General Counsel
Palm Grove House
PO Box 438, S/N
Road Town
Tortola
British Virgin Islands
25. VMS Group A/S Trade Payable $177,649
Attn: Peter Krogh-Nymand
Chief Executive Officer
Havnepladsen 12, Building 14
Frederikshavn, DK-9900
Denmark
Tel: +45 9622 1100
Email: pkn@vms.dk
26. Lider Taxi Aero S.A. Trade Payable $175,343
Air Brasil
Attn: President or General Counsel
Av. Ayrton Senna
2541-Hangar 8
Aeroporto de Jacarepagua
Rio De Janeiro, RJ 22775-002
Brazil
Tel: +55 31 3490 4769
Email: central@lideraviacao.com.br
27. Ochsner Clinic Foundation Trade Payable $173,530
Attn: Gina Mmahat
Director of Clinical Operations
1514 Jefferson Hwy
New Orleans, LA 70121
United States
Tel: 866-624-7637
Email: gina.mmahat@ochsner.org
28. AFG-Inspecao E Reparo Trade Payable $158,875
Em Risers S.A.
Attn: Billy Walker
Vice President
Av. Mem De SA
1299
Centro
Macae, RJ 27925-545
Brazil
Email: wwalker@afglobalcorp.com
29. Garden Tour Agencia Trade Payable $157,032
De Viagem E Turismo Ltda-ME
Attn: President or General Counsel
Ru A Motorista Louis Abreu
811
Casa 53
Rio De Janeiro, RJ 21645-420
Brazil
Tel: (21) 3414-9946
Fax: (21) 3385-4225
Email: garden@gardenturismo.com.br
30. International SOS Pte Ltd Trade Payable $153,312
Attn: Vickei Rose
Global Account Director
8 Changi Business Park Avenue 1
UE Biszhub East
486018
Singapore
Tel: 215-942-8226
Email: victoria.rose@internationalsos.com
SEADRILL PARTNERS: U.S. Trustee Appoints Creditors' Committee
-------------------------------------------------------------
The U.S. Trustee for Region 7 on Feb. 10 appointed an official
committee to represent unsecured creditors in the Chapter 11 cases
of Seadrill Partners LLC and its affiliates.
The committee members are:
1. Transocean Inc.
Attn: Brady K. Long
1414 Enclave Parkway
Houston, TX 77077
Tel: 713-232-7842
E-mail: brady.long@deepwater.com
Counsel:
Jim Prince, Esq.
Baker Botts LLP
2001 Ross Avenue, Suite 900
Dallas, TX 75201
Tel: 214-953-6612
Fax: 214-661-4612
E-mail: jim.prince@bakerbotts.com
2. National Oilwell Varco, LP
Attn: Bobbi Ingram
7909 Parkwood Circle Drive
Houston, TX 77036
Tel: 832-267-2829
E-mail: bobbi.ingram@nov.com
Official creditors' committees serve as fiduciaries to the general
population of creditors they represent. They may investigate the
debtor's business and financial affairs. Committees have the right
to employ legal counsel, accountants and financial advisors at a
debtor's expense.
About Seadrill Ltd.
Seadrill Limited (OSE:SDRL, OTCQX:SDRLF) --
http://www.seapdrill.com/-- is a deepwater drilling contractor
providing drilling services to the oil and gas industry. As of
March 31, 2018, it had a fleet of over 35 offshore drilling units
that include 12 semi-submersible rigs, 7 drillships, and 16 jack-up
rigs.
On Sept. 12, 2017, Seadrill Limited sought Chapter 11 protection
after reaching terms of a reorganization plan that would
restructure $8 billion of funded debt. It emerged from bankruptcy
in July 2018.
Demand for exploration and drilling has fallen further during the
COVID-19 pandemic as oil firms seek to preserve cash, idling more
rigs and leading to additional overcapacity among companies serving
the industry.
In June 2020, Seadrill wrote down the value of its rigs by $1.2
billion and said it planned to scrap 10 rigs. Seadrill said it is
in talks with lenders on a restructuring of its $5.7 billion bank
debt.
Seadrill Partners LLC, a limited liability company formed by
deep-water drilling contractor Seadrill Ltd. to own, operate and
acquire offshore drilling rigs, along with its affiliates, sought
Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 20-35740) on
Dec. 1, 2020, after its parent company swept one of its bank
accounts to pay disputed management fees. Mohsin Y. Meghji,
managing partner at M3 Partners, acting as the Company's Chief
Restructuring Officer, signed the petitions.
On Feb. 7, 2021, Seadrill GCC Operations Ltd., Asia Offshore
Drilling Limited, Asia Offshore Rig 1 Limited, Asia Offshore Rig 2
Limited, and Asia Offshore Rig 3 Limited sought Chapter 11
protection. Seadrill GCC estimated $100 million to $500 million in
assets and liabilities as of the bankruptcy filing.
Additionally, on February 10, 2021, Seadrill Limited and 114
affiliated debtors each filed a voluntary petition for relief under
Chapter 11 of the United States Bankruptcy Code with the Court.
The lead case is In re Seadrill Limited (Bankr. S.D. Tex. Case No.
21-30427).
Seadrill Limited disclosed $7.291 billion in assets against $7.193
billion in liabilities as of the bankruptcy filing.
In the new Chapter 11 cases, Kirkland & Ellis LLP is counsel for
the Debtors. Houlihan Lokey, Inc., is the financial advisor.
Alvarez & Marsal North America, LLC, is the restructuring advisor.
The law firm of Jackson Walker L.L.P. is co-bankruptcy counsel.
The law firm of Slaughter and May is co-corporate counsel.
Advokatfirmaet Thommessen AS is serving as Norwegian counsel.
Conyers Dill & Pearman is serving as Bermuda counsel. Prime Clerk
LLC is the claims agent.
===========================
C A Y M A N I S L A N D S
===========================
ECAF I LTD: Fitch Affirms BB Rating on Class B-1 Notes
------------------------------------------------------
Fitch Ratings has affirmed the class A-1, A-2 and B-1 asset backed
notes issued by ECAF I Ltd. (ECAF I). The Rating Outlooks for all
classes remain Negative.
DEBT RATING PRIOR
---- ------ -----
ECAF I Ltd.
A-1 26827EAA3 LT BBBsf Affirmed BBBsf
A-2 26827EAC9 LT BBBsf Affirmed BBBsf
B-1 26827EAE5 LT BBsf Affirmed BBsf
TRANSACTION SUMMARY
The rating actions reflect ongoing deterioration of all airline
lessee credits backing the leases in the transaction, downward
pressure on certain aircraft values, Fitch's updated assumptions
and stresses, and resulting impairments to modeled cash flows and
coverage levels.
The Negative Outlooks on all classes reflects Fitch's base case
expectation for the structure to withstand immediate and near-term
stresses at the updated assumptions and stressed scenarios
commensurate with their respective ratings. Furthermore, additional
global travel restrictions and recent regional spikes in
coronavirus cases, as currently seen in European countries, across
many U.S. states and regions globally, could result in additional
delays in recovery of the airline industry.
This is a further credit negative for aircraft ABS and will only
place greater pressure on airlines globally, and may lead to
additional near-term lease deferrals, airline defaults, lower
aircraft demand and value impairments. Ultimately, these negative
factors could manifest in the transaction, resulting in lower cash
flows and pressure on ratings.
Fitch updated rating assumptions for both rated and non-rated
airlines with a vast majority of ratings moving lower. This was
driven by the current global recessionary environment, ongoing
sector stress with a slow recovery and resulting impact on airline
lessees in the pool. Recessionary timing was assumed to start
immediately. This scenario stresses airline credits, asset values
and lease rates while incurring remarketing and repossession costs
and downtime at each relevant rating stress level.
Entities managed by affiliates of BBAM Limited Partnership acted as
initial sellers to ECAF I. BBAM Aviation Services Limited (BBAM;
not rated by Fitch) is the servicer, and Seraph Aviation Group is
the administrator for ECAF I following their rebranding from
Stellwagen Capital in October 2020.
KEY RATING DRIVERS
Deteriorating Airline Lessee Credit:
The credit profiles of airline lessees in the pool remain under
stress or have deteriorated further due to the coronavirus-related
impact on all global airlines, resulting in lower rating
assumptions for lessees utilized for this review. The proportion of
the ECAF I pool assumed at 'CCC' Issuer Default Rating (IDR) and
below has increased to 68.3% from 44.6% in the prior review.
The assumptions are reflective of these airlines' ongoing credit
profiles and fleets in the current operating environment, due to
the continued coronavirus-related impact on the sector. Any
publicly rated airlines in the pool whose ratings have shifted have
been updated.
Asset Quality and Appraised Pool Value:
The current pool includes three A330-300s, one B777-200ER and one
B777-300ER, totaling 40.3%. There is ongoing uncertainty around
aircraft market values (MVs) and how the current environment will
impact values in the near term. Aviation Specialists Group, Inc.
(ASG), AVITAS, INC. (AVITAS) and Ascend Flightglobal Consultancy
(Ascend) are the three transaction appraisers.
The latest reported transaction value is $718.4 million as of
January 2021. Consistent with the prior review, Fitch utilized the
average excluding highest method to value the portfolio at $709.6
million.
Transaction Performance:
Lease collections have fluctuated since 1Q 2020, with monthly
rental collections reaching a low of $2.8 million in the June 2020
reporting period. Amounts in recent months have recovered somewhat,
but is still below pre-pandemic levels. The A-1 notes continue to
receive partial principal payments each month, and the transaction
has an untapped liquidity facility.
Fitch Modeling Assumptions:
Nearly all servicer-driven assumptions are consistent with the
prior review. These include costs and downtime assumptions relating
to aircraft repossessions and remarketing terms of new leases and
extension terms.
For any leases whose maturities end within two years, or whose
lessee credit rating assumption is below 'CCC', Fitch assumed an
additional three- or six-month downtime at lease end for narrowbody
and widebody aircraft, respectively. This is on top of
lessor-specific remarketing downtime assumptions, to account for
potential remarketing challenges in placing assets with a new
lessee in the current distressed environment.
With the grounding of global fleets and significant reduction in
air travel, maintenance revenue and costs will be affected and are
expected to decline due to airline lessee credit issues and
grounded aircraft. Maintenance revenues were reduced by 50% over
the next immediate 12 months, and such missed payments were assumed
to be recouped in the following 12 months thereafter.
Maintenance costs over the immediate next five months were assumed
to be incurred as reported. Costs in the following month were
reduced by 50% and assumed to increase straight line to 100% over a
12-month period. Any deferred costs were incurred in the following
12 months.
The transaction anticipated repayment date (ARD) is on the near
horizon in June 2022. At that point, principal payment allocation
will flip from sequential to pro rata between A-1 and A-2,
resulting in extended payment profile for A-1 in modeling
scenarios.
RATING SENSITIVITIES
The Negative Outlooks on the notes reflect potential for further
negative rating actions due to concerns surrounding the ongoing
impact of the coronavirus pandemic and resulting performance
concerns associated with airlines, aircraft values and other
assumptions across the aviation industry with the severe decline in
travel and grounding of airlines.
At close of the transaction, Fitch conducted multiple rating
sensitivities to evaluate the impact of changes to a number of the
variables in the analysis. The performance of aircraft operating
lease securitizations is affected by various factors, which in turn
could have an impact on the assigned ratings. Due to the
correlation between global economic conditions and the airline
industry, the ratings can be affected by the strength of the
macroeconomic environment over the remaining term of the
transaction.
In the initial analysis, Fitch found the transaction exhibited
sensitivity to the timing or severity of assumed recessions. There
is also greater default probability of the leases that will have a
material impact on the ratings. The timing or degree of
technological advancement in the commercial aviation space and the
impacts these changes would have on values, lease rates, and
utilization would have a moderate impact on the ratings.
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Up: Base Assumptions with Stronger Values than Appraised
-- The aircraft ABS sector has a rating cap of 'Asf'. All
subordinate tranches carry one category of ratings lower than
the senior tranche. If the transaction experiences stronger
asset values than currently appraised or if it experiences
stronger lease collection inflow than Fitch's stressed
scenarios, the transaction could perform better than expected
and result in upgrades but remains limited by the 'Asf'
rating. Future upgrades beyond 'Asf' would not be considered
due to the rating cap in the sector, the industry cyclicality,
weaker current lessee mix in ABS pools and uncertainty around
future lessee mix.
-- Since the transaction offers additional appraisals, Fitch ran
a scenario utilizing the average MABV of IBA and mba values,
utilizing appraisals from these two additional sources
provided by the servicer. A 10% downward MV adjustment was
applied to the A330-300s and the B777-200ER in the pool, and a
5% downward MV adjustment was applied to the B777-300ER in the
pool, resulting in a modeled value of $728.1 million compared
to $718.4 million the January 2021 servicer report. Under this
scenario, classes A-1, A-2 and B-1 notes are marginally short
of their respective 'A-sf', 'A-s' and 'BBBsf' prior rating
categories despite stronger modeled lease cash flows and
residual sales proceeds.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Down: Base Assumptions with Weaker Widebody Values
-- With 40.3% WB concentration in the current pool, any further
softening in WB values could lead to further negative rating
actions. Using Fitch's primary modeled pool value of $709.6
million as a starting point and applying the same downward MV
adjustment as described in the Up scenario, Fitch ran a
downside sensitivity using $685.9 million for the pool.
Classes A-1 and A-2 fall short of 'BBBsf' rating stress level
but is able to pay in full under the 'BBsf' scenario, and
class B-1 falls short of the 'BBsf' rating stress level. As a
result, each class could be considered for further negative
action.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Structured Finance
transactions have a best-case rating upgrade scenario (defined as
the 99th percentile of rating transitions, measured in a positive
direction) of seven 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 seven notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAAsf' to 'Dsf'. Best- and worst-case scenario credit ratings
are based on historical performance.
USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10
Form ABS Due Diligence-15E was not provided to, or reviewed by,
Fitch in relation to this rating action.
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.
SHELF DRILLING: Moody's Lowers CFR to Caa2, Outlook Negative
------------------------------------------------------------
Moody's Investors Service has downgraded Shelf Drilling, Ltd.'s
corporate family rating to Caa2 from Caa1 and its probability of
default rating to Caa2-PD from Caa1-PD. The rating on the $900
million senior unsecured bond due 2025 issued by Shelf Drilling
Holdings, Ltd. has been downgraded to Caa3 from Caa2. The outlook
is negative.
RATINGS RATIONALE
The rating action reflects Moody's view that Shelf Drilling's
ability to build additional cash buffers ahead of its $900 million
bond maturity in February 2025 has been further pushed out given
the weak and uncertain market outlook over the next 12-18 months.
Contract cancellations and suspensions announced in 2020 as well as
lower average dayrates will lead to weak financial performance this
year and under Moody's forecast could result in negative free cash
flow. While Shelf Drilling's liquidity is currently adequate, the
company is burdened with high financial leverage. The downgrade of
the CFR to Caa2 therefore reflects the increased risk of a debt
restructuring or distressed exchange in advance of scheduled debt
maturities, particularly since the company has a high interest cost
burden and its liquidity could deteriorate faster than anticipated
given the market uncertainties.
The progressive increase in oil prices since late 2020, while
positive for the industry, has been at the expense of output cuts
by OPEC+ member countries, several of which are key markets for
Shelf Drilling. Contracting activity in these countries is
therefore likely to be muted for a longer period. Overall, Moody's
anticipates any market improvement to be slow, with oil and gas
producers remaining cautious about increasing offshore development
activity and capital investment given the fragility of oil prices.
Dim prospects for improving cash flows led to many rated offshore
drilling companies filing for bankruptcy or engaging in some form
of debt restructuring in 2020 despite generally adequate
liquidity.
Shelf Drilling's earnings are significantly exposed to
re-contracting risk and are sensitive to volatility in dayrates. At
the same time, the company does have a good track record of signing
and renewing contracts in a competitive environment and has
long-standing relationships with blue-chip customers. Curtailing
costs has been a key focus area for the company over the past
several quarters, but this has not been able to offset revenue
declines. Moody's-adjusted debt/EBITDA is forecasted to be 6.9x for
2020 and increasing to 10.4x in 2021.
LIQUIDITY
Shelf Drilling's liquidity is currently adequate in the absence of
any debt maturities until April 2023 and incorporates cash proceeds
from the sale of its Journey rig in December 2020 for $78 million.
As at September 30, 2020, the company had unrestricted cash
balances of $69 million and had access to $154 million in undrawn
liquidity as part of its $225 million revolving credit facility
(RCF). Moody's anticipates on-going pressure on liquidity this year
given the lower amount of contracted work for the company.
The company under its RCF received a nine-month waiver on its 4.0x
net leverage ratio covenant which provides relief up until 29
September 2021. Covenant compliance is likely to be challenging for
the Q3 test date, but Moody's assumes RCF lenders will remain
supportive given that they have a first lien claim over the
company's rigs. Annual interest expense of about $90 million is a
significant amount relative to operational cash flows.
STRUCTURAL CONSIDERATIONS
The $900 million senior unsecured bond due in February 2025 is
rated one notch below the company's CFR. This is because the
unsecured bond ranks behind both the company's $225 million 1st
lien senior secured RCF due in April 2023 and $80 million 2nd lien
senior secured bond due in November 2024.
RATIONALE FOR THE NEGATIVE OUTLOOK
The negative outlook reflects Moody's view that the company over
the next 12-18 months will continue to face a challenging
environment with cash flows unable to support balance sheet
deleveraging.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
An upgrade is unlikely in the near-term and would require a
sustainable improvement in liquidity such that free cash flow
generation and cash balances can meaningfully reduce the company's
net debt position.
Conversely, the ratings could be downgraded if liquidity weakens
materially and gross debt increases. A capital restructuring that
leads to recovery rates for creditors lower than those assumed in
the Caa2 CFR and Caa3 bond rating could also lead to a downgrade.
PRINCIPAL METHODOLOGY
The principal methodology used in these ratings was Global Oilfield
Services Industry Rating Methodology published in May 2017.
CORPORATE PROFILE
Shelf Drilling, Ltd. is a Cayman Islands incorporated holding
company that as of year-end 2020 owned 36 jackup rigs. The company
conducts drilling operations through various subsidiaries in the
Southeast Asian, Middle Eastern, Indian, West African and North
African/Mediterranean markets. Shelf Drilling generated revenues of
$624 million for the last 12 months ended September 30, 2020. The
company is listed on the Oslo Stock Exchange since June 2018 and
key shareholders include affiliates of China Merchants Group
(19.7%), Castle Harlan Inc. (14.5%) and Lime Rock Partners
(12.6%).
===================================
D O M I N I C A N R E P U B L I C
===================================
DOMINICAN REPUBLIC: Government Spending Down by 25% to US$862MM
---------------------------------------------------------------
Dominican Today reports that the level of public spending in the
Dominican Republic was reduced by 25% in January compared to the
same month last year, after the resources directed to the
construction of public works in process and to gross capital
formation were reduced to a minimum.
Data from the General Budget Directorate (Digepres) indicate that
government spending stood at RD$49.9 billion (US$862 million) at
the end of last month, a sum that contrasts with the 67.3 billion
pesos that were spent in the first month of the year, according to
Dominican Today.
And although even the expenses in salaries have been reduced, the
biggest cut has focused on the public money that is injected into
construction in progress -- to public works -- which amounted to
just two million pesos in January, the report notes.
A year earlier, just before the fury of the presidential election
campaign, the amount of public spending on public infrastructure
stood at 1.5 billion pesos, 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.
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: Lack of Fairness Hinders Mining Projects
------------------------------------------------------------
Dominican Today reports that Energy and Mines Minister, Antonio
Almonte, revealed that the main challenge for the Dominican
Government is to continue with mining exploitation and that the
communities surrounding these companies receive the benefits that
those activities produce.
Almonte assured that in moments of economic crisis generated by the
pandemic, mining activity has been a fundamental axis for the entry
of foreign currency to the country, according to Dominican Today.
He recognized that there is a problem in the matter of mining and
it's that many communities surrounding the exploitation areas
haven't been paid enough directly, 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: Works to Mitigate Price Increase
----------------------------------------------------
Dominican Today reports that the Dominican Republic's Luis Abinader
assured that the Dominican government is working to mitigate
nationwide food prices.
Abinader attributed the increase to the rise in the prices of raw
materials in the international market, "which have nothing to do
with the local economy," according to Dominican Today.
"We are mitigating that part as well, through various measures, I
repeat, as we did with bread; we have also assumed the rise in
fuels to a certain extent," he replied to journalists during his
visit to the Plaza de la Cultura, the report notes.
The head of state affirmed that they are following up "every day,
every product" to mitigate the international increases that are
being reflected, the report relays.
In the last weeks, the prices of several main products of the basic
food basket have increased, making the population worried, 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.
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).
===========
M E X I C O
===========
TV AZTECA: Fitch Lowers LongTerm IDRs to 'C'
--------------------------------------------
Fitch Ratings has downgraded TV Azteca S.A.B. de C.V. (TV Azteca)
Long-Term Local and Foreign Issuer Default Ratings (IDRs) to 'C'
from 'B'. Fitch has also downgraded the company's USD400 million
Senior Notes due 2024 to 'C'/'RR4' from 'B'/'RR4'.
The downgrade follows TV Azteca's announcement that it will not
make the scheduled coupon payment of USD16.5 million on its senior
unsecured notes USD 16.5 million due Feb. 9, 2021. The company also
announced that it is contemplating a larger restructuring of its
USD debt, which in conjunction with the hiring of external
advisors, indicates that the company is unlikely to make this
coupon payment before the 30-day grace period expires. The
company's IDR rating will be downgraded to 'RD' if the interest
payment goes uncured. The 'C'/'RR4' Recovery Rating assigned to the
senior note's issuance indicates average recovery prospects given
default.
TV Azteca's EBITDA declined by 56% to MXN935 million during the LTM
ended Sept. 30, 2020 from MXN2.1 billion in 2019. The coronavirus'
disruption of the industry, as well as the sharp depreciation of
the Mexican peso versus the U.S. dollar, has reduced the company's
financial flexibility. Fitch does not anticipate a meaningful
recovery in the company´s revenue during 4Q20 and believes that
weakness in the Mexican economy during 2021, in addition to
declining secular trends faced by the company, will limit its
ability to increase its revenues and halt its cash burn.
KEY RATING DRIVERS
Weak Operating Performance: Fitch expects the company revenues to
have contracted during 4Q20 and projects that they will continue to
remain weak in 2021. Advertising revenues contracted 26%, 33% and
16% respectively in 1Q20, 2Q20 and 3Q20 versus the similar quarter
in 2019. Fitch does not anticipate a material improvement in the
company´s revenue during 2021 due to weak macroeconomic
conditions, and cost-cutting initiatives will not be sufficient to
bolster EBITDA.
Negative Free Cash Flow: TV Azteca reported a negative FCF
generation (Fitch calculated) of MXN1.3 billion after capex of
MXN49million and MXN17 millions of dividend payments during the LTM
ended Sept. 30, 2020. The challenging operating environment has
limiting its ability to increase advertising revenue. Even if the
company maintains an aggressive cost-cutting strategy and manage to
generate a neutral EBITDA, a prolonged recession will continue
adding more pressure to its already limited liquidity.
High Leverage: TV Azteca's leverage as measured by total
debt/EBITDA (Pre-IFRS16) was 15.4x as of Sept. 30, 2020; elevated
leverage is a result of a sharp drop in the company's EBITDA due to
the coronavirus and a spike in its debt in MXN due to a
depreciation of the currency versus the U.S. dollar. Currency
weakness could also continue to be a problem, as TV Azteca's
cashflow generation is mainly MXN denominated while 61% of its debt
is USD denominated.
Expected Debt Restructuring: TV Azteca announced the deferment of
the payment of the coupon corresponding to Feb. 9, 2021
indefinitely. In conjunction with this announcement, the company
signaled its intent to pursue a broader restructuring of its U.S.
dollar-denominated debt. This debt primarily consists of its USD400
million senior note due 2024.
Low Operational Diversification: Azteca's business is heavily
concentrated in broadcast advertising and its low diversification
into other platforms or industry segments limits any significant
room for further scale growth in the short term. As of September
2020, around 91% of the company's revenues came from its
advertising segment, which is highly cyclical and has been
negatively affected by the coronavirus pandemic. This makes the
company more vulnerable to withstand a negative pressure in the
broadcast business, which is affected by a lack of special events
or by a change of trends toward other platforms among many
factors.
Governance Structure: TV Azteca has an ESG Relevance Score of 5 for
governance structure due to aggressive financial tactics, which has
a negative impact on the credit profile, and is relevant to the
ratings in conjunction with other factors. Also, the company has an
ESG Relevance Score of 4 for financial transparency due to the
level of detail and transparency and timing of financial
disclosure, which has a negative impact on the credit profile, and
is relevant to the ratings in conjunction with other factors.
DERIVATION SUMMARY
TV Azteca's rating of 'C' indicates has entered a default or
default-like process. The company's financial flexibility has
diminished since the coronavirus crisis started, and its liquidity
position continues to deteriorate. TV Azteca's rating reflects the
company's announced decision not to pay the coupon payment due Feb.
9, 2021.
KEY ASSUMPTIONS
-- A decrease of 24.5% in revenues during 2020 due to low
advertising revenues;
-- EBITDA Margins lower than previously estimated;
-- Capex reflect expected recurring maintenance capex;
-- Neutral to Negative FCF during 2020 and 2021.
RATING SENSITIVITIES
Factor that could, individually or collectively, lead to positive
rating action/upgrade:
-- After a debt restructuring process is completed, the IDRs
would be reassessed to reflect the new capital structure and
credit profile of the issuer.
Factor that could, individually or collectively, lead to negative
rating action/downgrade:
-- An uncured payment default on any material financial
obligation would lead to a downgrade of the 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
Weak Liquidity: TV Azteca's financial flexibility has gradually
diminished as the company has been using cash to maintain its
operations. The company had MXN1.8 billion of cash at the end of
September 2020, which is a decrease from MXN2.3 billion at YE19.
Fitch estimates that at least MXN800 million of its cash is needed
for working capital purposes. In addition to making around USD33
million of annual coupon payments on its bonds, TV Azteca has about
MXN320 million of interest payment on its local bonds.
ESG CONSIDERATIONS
TV Azteca, S.A.B. de C.V.: Governance Structure: 5, Financial
Transparency: 4
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 A N A M A
===========
BANCO LA HIPOTECARIA: Fitch Affirms 'BB+' LongTerm IDR
------------------------------------------------------
Fitch Ratings has affirmed Banco La Hipotecaria, S.A.'s (BLH)
Long-Term Issuer Default Rating (IDR) and Short-Term IDR at 'BB+'
and 'B', respectively. Fitch also affirmed the bank's Viability
Rating (VR) at 'bb-'. The Rating Outlook remains Negative, which
reflects the Outlook of its parent Grupo ASSA, S.A. The affirmation
follows the downgrade of Panama's sovereign rating.
KEY RATING DRIVERS
IDRs
Banco La Hipotecaria, S.A.'s (BLH) IDRs are based on Fitch's
appreciation of the potential support it would receive from its
parent company Grupo ASSA, S.A., if required. Grupo Assa 's
Long-Term Foreign Currency IDR of 'BBB-' with a Negative Outlook
shows its ability to provide support.
Fitch considers that the propensity for support is reflected in the
key role for Grupo Assa as this subsidiary operates in core market
for the group and in complementary market segments. Fitch's
assessment of Grupo Assa's propensity to support its subsidiary
also considers that the implication of default would be very
material to its business given the synergies among the entities.
VR
BLH's VR is highly influenced by its limited franchise in the
Panamanian banking sector. The bank has market shares of total
assets, loans and deposits below 1% and a business model weighted
towards domestic mortgages, having lower revenue diversification
relative to its higher rated peers. BLH is the only Panamanian bank
that has securitized its mortgage loan portfolio in international
markets.
Fitch has also revised the Panamanian operating environment for
financial institutions (OE) to 'bb+' from 'bbb-' with a negative
trend. The downward revision of the OE in Panama reflects the
estimated economic contraction of 17.7% and high unemployment rate
of 18.5% in 2020 as a result from the stringent lockdown measures
due to the pandemic.
Fitch estimates that the bank's performance will remain under
pressure linked to the pandemic-related economic downturn. Limited
mortgage loan yields and net fees, as well as an increase of
provisioning levels for nonperforming loans (NPLs) could limited
revenue generation. As of 3Q20, BLH's operating profit/
risk-weighted assets ratio was 0.9%, a low level compared to
regional peers and the system's average. This reflects the bank's
lower risk business model, which results in a narrow net interest
margin, and its high non-interest expenses.
In Fitch's opinion, the current operating environment will drive
lower loan book growth than in previous years, which will pressure
asset quality levels. However, the bank's defined underwriting
policies and its controlled risk appetite should enable the bank to
maintain controlled levels of delinquency, bellow other domestic
banks. Its non-performing loan (NPL) ratio remained low at 0.9% as
of September 2020, which is lower than the banking system's
average.
Fitch believes refinancing risk has been adequately handled during
the crisis, and risks have been partially mitigated by its growing
liquidity levels based on cash, deposits in banks and an investment
portfolio offering coverage of 49.4% of total deposits as of
September 2020. BLH's funding structure is well diversified
allowing to reduce volatility. The bank's growing deposits along
with by credit lines and debt issuances have results in a Loans/
Customer Deposits ratio at around 200%, above that of its peers.
BLH's Common Equity Tier 1 Ratio was 11.6% (12.2% in 2019) at
September 2020, maintaining a slightly lower level than the
previous year as a result of retained earnings and lower portfolio
growth compared to prior years. Regulatory levels are above the
required level (Dec 2020: 12.6%), providing adequate capacity to
absorb unexpected losses. Fitch expects capital levels to remain
stable even when losses generated by variations in foreign currency
(Colombian peso) have pressured capitalization, limiting the bank's
capacity to deal with unexpected losses.
SUPPORT RATING
The bank's Support Rating reflects Fitch's opinion on Grupo ASSA's
ability and propensity to support BLH if required. According to
Fitch's criteria, BLH's IDR of 'BB+' corresponds to a support
rating of'3'.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Changes in Banco La Hipotecaria's IDR and senior issuances
would reflect any changes in its shareholder's risk profile or
changes on Fitch's assessment of its ability, or willingness,
to provide support to its subsidiary, which Fitch does not
expect in the foreseeable future.
-- Negative pressure could be placed on BLH's VR if there were
evidence of outsized deterioration in the bank's financial
profile reflected in a material deterioration of its asset
quality and a significant reduction of its profitability
metrics relative to peers.
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- The IDR and National Ratings could be affirmed and the
Negative Outlook revised to Stable to reflect an upgrade in
its shareholder's risk profile or changes on Fitch's
assessment of its ability, or willingness, to provide support
-- Upward potential of the rating is limited in the short term
given the Negative Outlook on its shareholder's ratings. The
IDR and National Ratings could be affirmed and the Negative
Outlook revised to Stable to reflect an upgrade in its
shareholder's risk profile or changes on Fitch's assessment of
its ability, or willingness, to provide support
-- An upward potential of the rating is limited in the short term
given the Negative Outlook on its shareholder's ratings.
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.
PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS
BLH's ratings are related to those of its parent company, Grupo
ASSA.
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.
PROMERICA FINANCIAL: Fitch Affirms 'B' LT IDR, Outlook Negative
---------------------------------------------------------------
Fitch Ratings has affirmed Promerica Financial Corporation (PFC)'s
Long-Term Issuer Default Rating (IDR) at 'B' following the
downgrade of the country's sovereign rating to 'BBB-' from 'BBB'.
The Rating Outlook is Negative. Fitch has also affirmed PFC
Viability Rating (VR) at 'b' following the revision of the
Panamanian operating environment (OE) to 'bb+' from 'bbb-' with a
negative trend.
KEY RATING DRIVERS
PFC's VR driven IDR is based on the consolidated risk profile of
the bank holding company that comprises nine banking operations
across Latin America. PFC's operating environment is a high
influence factor for the VR which is currently established at 'b-',
five notches below the new Panamanian OE for Financial
Institutions. Fitch's assessment of PFC's operating environment
reflects a more relevant footprint in lower-rated operating
environments such as Ecuador, Guatemala, Nicaragua and Costa Rica.
Therefore, PFC's OE is unaffected by the downward revision in
Panama, which means that financial metrics remain consistent with
the 'b' category.
The downward revision of the OE in Panama reflects the estimated
economic contraction of 17.7% and high unemployment rate of 18.5%
in 2020 as a result from the stringent lockdown measures due to the
pandemic. Despite the negative adjustment on the Panamanian OE,
Fitch considers this does not affect materially PFC's
creditworthiness due to the low contribution of Panama to PFC's
overall risks and businesses. As of September 2020, Panama's
operations represented around 8% of consolidated risk weighted
assets.
The VR is also highly influenced by its diversified business
profile and strong franchise across its largest subsidiaries, which
makes it one the largest credit cards in the region. Nevertheless,
benefits from diversification are constrained by challenging
operating environments and higher sovereign risks.
The relatively lower capitalization at the consolidated level is
also a significant rating factor. In Fitch's view, a prolonged
effect by coronavirus crisis could pressure PFC's already tight
capital ratios. As of June 2020, the group's a CET1 ratio improved
slightly to 9.8%, although additional loss absorption capacity is
also provided by adequate loan loss reserves coverage.
Support Rating and Support Rating Floor
PFC's Support Rating (SR) of '5' and Support Rating Floor (SRF) of
'NF' reflect Fitch's view that external support for the bank,
though possible, cannot be relied upon given Panama's long-standing
dollarized economy and lack of a lender of last resort.
Senior Secured Debt
The rating assigned to PFC's senior notes is at the same level as
PFC's Long-Term IDR, as the likelihood of default on the notes is
the same as PFC's. Despite the notes being senior secured and
unsubordinated obligations, Fitch believes the collateral mechanism
would not have a significant impact on recovery rates. In
accordance with Fitch's rating criteria, recovery prospects for the
notes are average and are reflected in their Recovery Rating of
'RR4'.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- The Rating Outlook could be revised to Stable if PFC is able
to sustain its current financial performance despite operating
environment challenges;
-- As Panama is a dollarized country with no lender of last
resort, a change in PFC's SR or SRF is unlikely;
-- Senior secured debt rating would mirror any change to PFC's
IDRs.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- The Rating Outlook is Negative. A rating downgrade could occur
in a weaker operating environment if there is a material
deterioration of the subsidiaries' financial performance,
pressuring PFC's Fitch Core Capital ratio or liquidity.
Specifically, this could happen if PFC's Fitch Core Capital
to-RWA ratio is consistently lower than 8% and/or the
subsidiaries' dividends upstream to PFC pressures its debt
servicing.
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 Core Capital: Prepaid expenses were classified as Other
Intangibles and deducted from Equity.
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.
=====================================
T R I N I D A D A N D T O B A G O
=====================================
TRINIDAD & TOBAGO: Made $2 Billion Less Than Expected in January
----------------------------------------------------------------
RJR News reports that Trinidad and Tobago's Finance Minister Colm
Imbert said the government made $2 billion less than expected at
the end of January.
Mr. Imbert said if the trend continues, up to $5 billion in revenue
may be lost this year, according to RJR News.
This figure does not include the expected $5 billion shortfall
already predicted for the year, the report notes.
Mr. Imbert told a virtual press conference the shortfall in revenue
occurred in several areas including taxes on Income and Profits
which was down by $436 million compared with estimates, the report
adds.
===============
X X X X X X X X
===============
[*] BOND PRICING: For the Week Feb. 8 to Feb. 12, 2021
------------------------------------------------------
Issuer Name Cpn Price Maturity Country Curr
----------- --- ----- -------- ------- ---
Odebrecht Finance Ltd 6.0 16.4 4/5/2023 KY USD
Cia Latinoamericana de 9.5 73.9 7/20/2023 AR USD
Argentina Bonar Bonds 7.6 74.4 4/18/2037 AR USD
Argentine Republic Gov 8.3 74.5 12/31/2033 AR USD
Argentine Republic Gov 8.3 72.9 12/31/2033 AR USD
Provincia del Chaco Ar 4.0 0.0 12/4/2026 AR USD
Provincia de Buenos Ai 7.9 75.3 6/15/2027 AR USD
Provincia de Rio Negro 7.8 70.4 12/7/2025 AR USD
Province of Santa Fe 6.9 75.2 11/1/2027 AR USD
Sylph Ltd 2.4 65.1 9/25/2036 KY USD
Provincia de Cordoba 7.1 74.7 8/1/2027 AR USD
City of Cordoba Argent 7.9 73.1 9/29/2024 AR USD
Odebrecht Finance Ltd 6.0 16.4 4/5/2023 KY USD
Noble Holding Internat 6.1 62.0 3/1/2041 KY USD
Argentine Republic Gov 6.3 74.1 11/9/2047 AR EUR
Provincia de Cordoba 7.1 72.7 8/1/2027 AR USD
Province of Santa Fe 6.9 74.7 11/1/2027 AR USD
Banco Macro SA 17.5 65.2 5/8/2022 AR ARS
Esval SA 3.5 49.9 2/15/2026 CL CLP
Provincia del Chaco Ar 9.4 74.8 8/18/2024 AR USD
AES Tiete Energia SA 6.8 1.2 4/15/2024 BR BRL
YPF SA 16.5 67.3 5/9/2022 AR ARS
Automotores Gildemeist 8.3 54.2 5/24/2021 CL USD
Cia Energetica de Pern 6.2 1.1 1/15/2022 BR BRL
SACI Falabella 2.3 50.6 7/15/2020 CL CLP
Odebrecht Finance Ltd 7.0 16.5 4/21/2020 KY USD
MIE Holdings Corp 7.5 56.2 4/25/2019 HK USD
Enel Americas SA 5.8 32.7 6/15/2022 CL CLP
Metrogas SA/Chile 6.0 41.6 8/1/2024 CL CLP
Empresa Provincial de 12.5 0.0 1/29/2020 AR USD
Corp Universidad de Co 5.9 64.2 11/10/2021 CL CLP
Argentine Republic Gov 0.5 27.6 12/31/2038 AR JPY
Noble Holding Internat 5.3 60.5 3/15/2042 KY USD
Argentine Republic Gov 8.3 74.5 12/31/2033 AR USD
Argentine Republic Gov 6.9 75.2 1/11/2048 AR USD
Argentina Bonar Bonds 5.8 75.2 4/18/2025 AR USD
Argentine Republic Gov 4.3 70.0 12/31/2033 AR JPY
Automotores Gildemeist 6.8 54.9 1/15/2023 CL USD
Cia Latinoamericana de 9.5 74.3 7/20/2023 AR USD
Polarcus Ltd 5.6 71.8 7/1/2022 AE USD
Argentine Republic Gov 8.3 72.9 12/31/2033 AR USD
Automotores Gildemeist 6.8 54.9 1/15/2023 CL USD
Argentine Republic Gov 8.3 72.9 12/31/2033 AR USD
Odebrecht Finance Ltd 6.0 16.4 4/5/2023 KY USD
Noble Holding Internat 6.2 62.2 8/1/2040 KY USD
Province of Santa Fe 6.9 74.7 11/1/2027 AR USD
KrisEnergy Ltd 4.0 40.4 6/9/2022 SG SGD
Odebrecht Finance Ltd 7.0 17.0 4/21/2020 KY USD
USJ Acucar e Alcool SA 9.9 74.0 11/9/2019 BR USD
China Huiyuan Juice Gr 6.5 46.6 8/16/2020 CN USD
Empresa Electrica de l 2.5 63.8 5/15/2021 CL CLP
Sociedad Austral de El 3.0 17.0 9/20/2019 CL CLP
Argentine Republic Gov 7.1 75.7 6/28/2117 AR USD
Plaza SA 3.5 38.3 8/15/2020 CL CLP
Embotelladora Andina S 3.5 37.9 8/16/2020 CL CLP
USJ Acucar e Alcool SA 9.9 74.0 11/9/2019 BR USD
Banco Security SA 3.0 27.4 6/1/2021 CL CLP
Embotelladora Andina S 3.5 37.9 8/16/2020 CL CLP
Banco Security SA 3.0 5.6 7/1/2019 CL CLP
MIE Holdings Corp 7.5 56.2 4/25/2019 HK USD
Fospar S/A 6.5 1.2 5/15/2026 BR BRL
China Huiyuan Juice Gr 6.5 46.6 8/16/2020 CN USD
YPF SA 16.5 67.3 5/9/2022 AR ARS
MIE Holdings Corp 7.5 56.4 4/25/2019 HK USD
Provincia de Rio Negro 7.8 70.3 12/7/2025 AR USD
Banco Macro SA 17.5 65.2 5/8/2022 AR ARS
Provincia de Rio Negro 7.8 70.3 12/7/2025 AR USD
MIE Holdings Corp 7.5 56.2 4/25/2019 HK USD
Empresa de Transporte 4.3 30.9 7/15/2020 CL CLP
Automotores Gildemeist 8.3 54.2 5/24/2021 CL USD
Province of Santa Fe 6.9 75.2 11/1/2027 AR USD
Odebrecht Finance Ltd 7.0 16.5 4/21/2020 KY USD
Yida China Holdings Lt 7.0 74.3 4/19/2020 CN USD
USJ Acucar e Alcool SA 9.9 74.0 11/9/2019 BR USD
YPF SA 16.5 67.3 5/9/2022 AR ARS
Provincia del Chubut A 4.5 2208 3/30/2021 AR USD
Avadel Finance Cayman 4.5 55.0 2/1/2023 US USD
*********
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 * * *