/raid1/www/Hosts/bankrupt/TCRLA_Public/210312.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Friday, March 12, 2021, Vol. 22, No. 46
Headlines
A R G E N T I N A
AEROPUERTOS ARGENTINA: S&P Affirms 'CCC+' ICR, Off Watch Negative
B R A Z I L
BRAZIL: Currency Hits 4-Month Low After Court Annuls Convictions
FS AGRISOLUTIONS: Moody's Completes Review, Retains B1 Rating
GUARA NORTE: Moody's Completes Review, Retains Ba1 Rating
ICBC DO BRASIL: Moody's Affirms B1 BCA on Modest Profitability
ULTRAPAR PARTICIPACOES: Moody's Completes Ratings Review
C H I L E
VTR COMUNICACIONES: Fitch Assigns BB+ Rating on USD410MM Notes
VTR COMUNICACIONES: S&P Rates New $410MM Senior Secured Notes 'B+'
C O S T A R I C A
AUTOPISTAS DEL SOL: Fitch Affirms B Rating on International Notes
D O M I N I C A N R E P U B L I C
DOMINICAN REPUBLIC: Jan-Feb Passengers Entry & Tourists Fell 50%+
DOMINICAN REPUBLIC: Pandemic Affects Local Food Prices
J A M A I C A
JAMAICA: Net Int'l Reserves Rose Above US$3 Billion in February
JAMAICA: Trading Between Country Band CARICOM Declines in 2020
PALACE AMUSEMENT: Revenue Plunges in 2020 4th Quarter
P U E R T O R I C O
ALBERTO DEL RIO SOTO: $250K Sale of Camuy Property to Lopez Okayed
T R I N I D A D A N D T O B A G O
NIQUAN ENERGY: S&P Assigns Prelim. 'B' Rating on Sr. Secured Notes
U R U G U A Y
BANCO PATAGONIA: Moody's Completes Review, Retains B2 Rating
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A R G E N T I N A
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AEROPUERTOS ARGENTINA: S&P Affirms 'CCC+' ICR, Off Watch Negative
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S&P Global Ratings affirmed the 'CCC+' ratings on Aeropuertos
Argentina 2000 and removed them from CreditWatch with negative
implications.
The outlook is negative, capturing the risks stemming from the
company's heavy dependence on variables that are out of its
control, namely the timing and speed of the air traffic recovery.
Since the central bank set such restrictions on Sept. 18, 2020,
AA2000 refinanced principal amortizations of a syndicated credit
facility in the domestic market. The company had negotiated an
agreement with its relationship banks in 2020, which was
instrumental for the refinancing of the maturities due August and
November 2020. The latter were a condition precedent for the
effectiveness of the May 2020 bond exchange. S&P said, "In
addition, we believe that the recent refinancing of the principal
maturity due February 2021 was in line with the 2020 agreement with
the banks and with the central bank's FX restrictions. Also, we
didn't consider those transactions as tantamount to default because
the company offered a fee, so we didn't see enough evidence of loss
in value."
S&P said, "We perceive that AA2000's cash flows remain under
pressure, despite the resumption of flights in September 2020.
Despite the steady recovery in air traffic, we also note that it
started from extremely low levels while the company's debt
repayments will resume in 2021." AA2000 is still vulnerable and
dependent upon favorable business, financial, and economic
conditions to meet its financial commitments in 2021. Additionally,
Argentina's economy is suffering because of the pandemic-induced
deepening of the recession, the widening fiscal deficit, and the
depreciation of the Argentine peso.
Uncertainty remains high and visibility low in the intermediate to
long term--subject to the effectiveness of vaccination campaigns,
which could bolster demand for air travel, and to government
restrictions—over the government's capacity to continue providing
assistance and support to the travel industry. Uncertainty also
remains over how airlines will manage fleet capacity given that
those serving Argentina's airports are restructuring.
S&P said, "We highlight AA2000's ability to weather the pandemic,
as seen in debt refinancing, cost-cutting initiatives, and good
relationships with lenders. However, we believe that the margin of
deviation from our base-case assumptions remains slim, because the
company has already implemented many measures to reduce cash burn
during the lockdown."
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B R A Z I L
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BRAZIL: Currency Hits 4-Month Low After Court Annuls Convictions
----------------------------------------------------------------
Rio Times Online reports that Brazil's real sank around 1.5% to a
fresh four-month low through R$5.78 per dollar on March 8, after
Supreme Court Justice Edson FAchin annulled the criminal
convictions against former President Luiz Inacio Lula da Silva and
restored his political rights.
The real traded as weak as R$5.7851 per dollar, its weakest since
October 30 last year, according to Rio Times Online.
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.
FS AGRISOLUTIONS: Moody's Completes Review, Retains B1 Rating
-------------------------------------------------------------
Moody's Investors Service has completed a periodic review of the
ratings of FS Agrisolutions Industria Biocombustiveis and other
ratings that are associated with the same analytical unit. The
review was conducted through a portfolio review discussion held on
February 25, 2021 in which Moody's reassessed the appropriateness
of the ratings in the context of the relevant principal
methodology(ies), recent developments, and a comparison of the
financial and operating profile to similarly rated peers. The
review did not involve a rating committee. Since January 1, 2019,
Moody's practice has been to issue a press release following each
periodic review to announce its completion.
This publication does not announce a credit rating action and is
not an indication of whether or not a credit rating action is
likely in the near future. Credit ratings and outlook/review status
cannot be changed in a portfolio review and hence are not impacted
by this announcement.
Key rating considerations
FS Agrisolutions Industria de Biocombustiveis (FS)'s B1 rating
incorporates its scale among the six largest ethanol producers in
Brazil, being the largest on corn feedstock. FS is a low-cost
producer with favorable access to corn feedstock and located in a
region with a high demand for animal nutrition, co-product from the
ethanol production process. The company is also low-carbon
footprint producer benefiting from a sustained demand growth for
biofuels. Constraining the rating is FS's high exposure to ethanol
and corn markets dynamics and the consequent susceptibility to
sharp price volatility, event risks, weather imbalances, and global
trade flows. The exposure to corn price volatility as an input is
partially mitigated by its animal nutrition business, since the
price of the dried distillers grains (DDG) is directly correlated
to those of corn and soymeal. The ratings also incorporate the
early maturity stage of the firm, with ramp-up still underway, and
an over-leveraged capital structure from recent and ongoing
investments to reach the target production capacity by harvest-end
2020-21, March 2021. Concentration of production in two plants and
in a single region exacerbates commodity risks.
The principal methodology used for this review was Chemical
Industry published in March 2019.
GUARA NORTE: Moody's Completes Review, Retains Ba1 Rating
---------------------------------------------------------
Moody's Investors Service has completed a periodic review of the
ratings of Guara Norte S.a r.l. and other ratings that are
associated with the same analytical unit. The review was conducted
through a portfolio review discussion held on March 4, 2021 in
which Moody's reassessed the appropriateness of the ratings in the
context of the relevant principal methodology(ies), recent
developments, and a comparison of the financial and operating
profile to similarly rated peers. The review did not involve a
rating committee. Since January 1, 2019, Moody's practice has been
to issue a press release following each periodic review to announce
its completion.
This publication does not announce a credit rating action and is
not an indication of whether or not a credit rating action is
likely in the near future. Credit ratings and outlook/review status
cannot be changed in a portfolio review and hence are not impacted
by this announcement.
Key rating considerations
Guara Norte S.a r.l.'s Ba1 rating reflects its fully contracted
revenue profile, pursuant to charter and services agreements which
provide for a stable and predictable availability-based revenue
stream. It further reflects the high credit quality of its offtake
base but also the linkages with Petroleo Brasileiro S.A.
(Petrobras, Ba2) due to its important role as operator of the oil
field in which the Floating Production Storage and Offloading
(FPSO) unit Cidade de Ilhabela operates, and as principal voice
interacting with regulatory authorities. Additional considerations
include the low leverage profile, strong economics of the Sapinhoa
oil field, where the FPSO is allocated, the proven technology and
strong track record of operations of the FPSO, and the profile of
the sponsors, led by SBM Offshore N.V., a market leader with global
presence.
The principal methodology used for this review was Generic Project
Finance Methodology published in November 2019.
ICBC DO BRASIL: Moody's Affirms B1 BCA on Modest Profitability
--------------------------------------------------------------
Moody's Investors Service has affirmed all of ICBC do Brasil Banco
Multiplo S.A.'s (ICBC do Brasil) ratings, following the affirmation
of the bank's b1 baseline credit assessment (BCA). ICBC do Brasil
is rated Ba2 and Not Prime for long- and short-term local and
foreign currency deposits. The outlook on the ratings remains
stable.
RATINGS RATIONALE
The affirmation of ICBC do Brasil's BCA and all its ratings
reflects Moody's view that the bank's credit profile remains
consistent with its b1 BCA, as assessed by adequate capital and
liquidity, and modest profitability. As a subsidiary of Industrial
and Commercial Bank of China Limited (ICBC, A1, baa1), ICBC do
Brasil's specialized business model is based on conservative loan
underwriting standards and targeted lending mainly to large
Brazilian companies, including a small number of companies doing
business with China, resulting in a track record of zero loan
delinquencies since the bank's inception in 2013. However, despite
ICBC do Brasil's good asset quality history, high single borrower
loan concentrations and sizable loan growth in recent years remain
significant sources of asset risk, adding potential volatility to
asset quality and capital metrics. Even so, Moody's expect the
bank's adequate asset risk management will support its asset
quality performance during this more challenging operating
environment brought about by the coronavirus.
As of June 2020, the 10 largest borrowers represented more than
200% of ICBC do Brasil's tangible common equity (TCE). A single
problem loan in the first part of 2020 led to a worsening in asset
quality, and was promptly provisioned, resulting in ICBC do Brasil
reporting a net loss in the period. The challenging though
improving operating environment and uncertainty about business
conditions could also delay the return of deferred loans to normal
payment schedule, further weakening the future performance of ICBC
do Brasil's loan book.
Measured by Moody's preferred ratio of TCE to risk-weighted assets,
ICBC do Brasil's capitalization declined to 10% in June 2020, from
16.6% one year prior, reflecting robust loan growth and larger
holdings of government securities. However, a capital injection
planned for the middle of 2021, if completed, will raise ICBC do
Brasil's capitalization, offering additional buffer against
potential credit losses. Historically, the bank's internal capital
generation through earnings has been modest, reflecting its low
business diversification and relatively high operating and funding
costs. In addition, businesses and revenues generated with ICBC's
global clients may be booked elsewhere in the group, limiting the
local balance sheet and profitability.
Moody's views ICBC do Brasil's ample liquidity as a credit
strength, mitigating the risks of the bank's concentrated and
predominantly wholesale-based funding. Positively, ICBC do Brasil
has managed to reduce the share of funds from foreign ICBC branches
in total funding by expanding access to local investors in the form
of time deposits with large companies and credit lines from
correspondent banks overseas.
The stable outlook incorporates our expectation that ICBC do
Brasil's financial profile will remain consistent over the next
12-18 months. The bank's Ba2 global deposit ratings reflect the
bank's fundamental credit strength, as evidenced by its b1 BCA, and
incorporates two notches of uplift to reflect Moody's assessment of
very high probability of affiliate support from China-based parent
ICBC.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
ICBC do Brasil's ratings could face upward pressure if the bank
reports strong and steady origination of recurring revenue, backed
by a larger number of products and services. A decline in borrower
concentration that limits asset risk, would also be positive for
the ratings. In addition, ratings would benefit from enhanced
access to domestic funding instruments.
Ratings could move down if asset quality shows sizable and
consistent deterioration over the next outlook horizon that could
hurt the bank's capital base through loan losses. A consistent
deterioration in profitability either from modest business and
revenue generation or material credit costs could also drive
ratings down. ICBC do Brasil's global deposit ratings would fall if
its BCA is downgraded by one notch, but would not be affected by a
one notch downgrade of its parent's BCA.
METHODOLOGY USED
The principal methodology used in these ratings was Banks
Methodology published in November 2019.
ICBC do Brasil Banco Multiplo S.A. is headquartered in Sao Paulo,
Brazil, with assets of BRL2.67 billion and shareholders' equity of
BRL212.6 million as of June 30, 2020.
LIST OF AFFECTED RATINGS AND ASSESSMENTS
The following ratings and assessments of ICBC do Brasil Banco
Multiplo S.A. were affirmed:
Long-term global local currency deposit rating of Ba2, stable
outlook
Short-term global local currency deposit rating of Not Prime
Long-term global foreign currency deposit rating of Ba2, stable
outlook
Short-term global foreign currency deposit rating of Not Prime
Long-term local currency counterparty risk rating of Ba1
Short-term local currency counterparty risk rating of Not Prime
Long-term foreign currency counterparty risk rating of Ba1
Short-term foreign currency counterparty risk rating of Not Prime
Long-term Brazilian national scale counterparty risk rating of
Aaa.br
Short-term Brazilian national scale counterparty risk rating of
BR-1
Long-term Brazilian national scale deposit rating of Aa3.br
Short-term Brazilian national scale deposit rating of BR-1
Baseline credit assessment of b1
Adjusted baseline credit assessment of ba2
Long-term counterparty risk assessment of Ba1(cr)
Short-term counterparty risk assessment of Not Prime(cr)
Outlook Actions:
Outlook, Stable
ULTRAPAR PARTICIPACOES: Moody's Completes Ratings Review
--------------------------------------------------------
Moody's Investors Service has completed a periodic review of the
ratings of Ultrapar Participacoes S.A. and other ratings that are
associated with the same analytical unit. The review was conducted
through a portfolio review discussion held on February 25, 2021 in
which Moody's reassessed the appropriateness of the ratings in the
context of the relevant principal methodology(ies), recent
developments, and a comparison of the financial and operating
profile to similarly rated peers. The review did not involve a
rating committee. Since January 1, 2019, Moody's practice has been
to issue a press release following each periodic review to announce
its completion.
This publication does not announce a credit rating action and is
not an indication of whether or not a credit rating action is
likely in the near future. Credit ratings and outlook/review status
cannot be changed in a portfolio review and hence are not impacted
by this announcement.
Key rating considerations
Ultrapar's Ba1 ratings reflect the company's solid business model
with leading position in different business segments -- including
fuel and liquefied petroleum gas (LPG) distribution, specialty
chemicals and liquid bulk storage-, stable cash flow and adequate
liquidity. Conversely, the ratings are constrained by the current
high leverage, lower operating margin, dependence on a few key
suppliers for raw materials and the cyclical nature of its chemical
business, leading to high EBITDA volatility for the segment.
The principal methodology used for this review was Retail Industry
published in May 2018.
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C H I L E
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VTR COMUNICACIONES: Fitch Assigns BB+ Rating on USD410MM Notes
--------------------------------------------------------------
Fitch Ratings has assigned a rating of 'BB+'/'RR2' to VTR
Comunicaciones SpA's proposed USD410 million senior secured notes.
VTR Comunicaciones SpA is a wholly owned indirect subsidiary of VTR
Finance N.V. (VTR). VTR's Issuer Default Rating (IDR) is
'BB-'/Stable. VTR Comunicaciones SpA's new senior secured notes
benefit from above average recovery prospects, resulting in upward
notching from VTR's IDR.
Fitch expects that the proceeds of the notes will be used primarily
to repay existing debt, including the CLP174 billion Term Loan
(approximately USD240 million), and prepay USD60 million of VTR
Comunicaciones SpA's outstanding 2028 notes, also rated
'BB+'/'RR2'.
VTR's ratings reflect its strong market position in the Chilean
telecom industry, primarily through Internet and pay TV services.
The company's cash flows are relatively stable, despite an
increasingly competitive environment, and it has strong financial
flexibility, underpinned by a manageable debt amortization
schedule. The ratings are tempered by Fitch's expectation that the
company will be managed with moderately high amounts of leverage
and a lack of geographic and service diversification.
KEY RATING DRIVERS
Manageable Leverage over the Medium Term: Fitch expects Net Debt /
EBITDA of around 4.0x for VTR. The company has the lowest leverage
of the rated Liberty Latin America (LLA, not rated) entities,
despite cash upstreams to LLA to support acquisitions in Costa Rica
and elsewhere. The company's financial structure is supported by
its strong operating performance in the Chilean broadband and
Pay-TV sector, which is generally less volatile and competitive
than mobile.
LLA Linkages: VTR is a wholly owned subsidiary of LLA. LLA's
financial management involves moderately high amounts of leverage
across its operating subsidiaries, each ring-fenced from one
another. While the credit pools are legally separate, LLA has a
history of moving cash around the group for investments and
acquisitions. This approach improves financial flexibility, but it
also limits deleveraging prospects.
The high level of cash movements throughout the group does not
necessarily imply that the ratings of all three entities will be
equalized immediately. Weak performance in the other credit pools
or in the broader group could place more financial burdens on VTR,
given LLA's acquisitive nature.
Coronavirus Impact: The impact of the coronavirus and the economic
shutdowns have had a limited impact on VTR's business and financial
profile. The telecommunications industry is one of the most
defensive against the effects of the pandemic, particularly for
carriers that have a low reliance on prepaid mobile. Despite this,
cost control and the flexibility of its capex plan should limit the
impact, as should the company's subscription-like revenue base.
Strong Market Position: VTR is the leading provider of broadband
and Pay TV services in Chile, with subscriber market shares of 38%
and 34%, respectively, followed closely by its main incumbent
competitor, Telefonica Chile S.A. VTR is also the second largest
fixed-line telephony service provider, with 21% of subscriber
market share. The company has consistently increased its overall
revenue generating units (RGU) in recent years, backed by its
effective bundled product strategy based on network and service
competitiveness.
RCF's Rating and Recovery Prospects: VTR Comunicaciones SpAs new
senior secured notes benefit from above average recovery prospects,
resulting in upward notching from VTR's 'BB-' IDR. Fitch forecasts
recovery rates commensurate with an 'RR1' Recovery Rating for the
OpCo secured debt and an 'RR4' for the parent notes. Fitch's
Country-Specific Treatment of Recovery Ratings Criteria limits the
potential uplift for Chilean speculative grade issuers to two
notches, and Fitch has applied the same treatment to the OpCo
secured notes.
DERIVATION SUMMARY
VTR's competitive position and financial profile compare favorably
to other speculative-grade telecoms in the region, although the
company's relative lack of diversification and LLA's financial
management will likely limit it to the 'BB' category. VTR has the
most conservative financial profile of the LLA companies.
Compared to sister company Cable & Wireless, VTR benefits from the
Chilean operating environment and its status as the largest
broadband and pay TV operator by subscriber share. Cable & Wireless
has larger scale, better service and geographical diversification
than VTR. Following the AT&T acquisition, LCPR's scale has
comparable to VTR's, but with greater product diversification.
VTR has a similar fixed-line operating profile to Telefonica Chile
(BBB+/Stable), although Telefonica Chile benefits from leverage
metrics around 2.0x-2.5x lower than VTR's, and the scale and
diversification provided by its parent Telefonica Moviles Chile
S.A. (BBB+).
Compared to WOM Mobile S.A. (WOM, BB-/Stable), VTR has better
financial diversification and scale, as well as more stable cash
flow generation and a stronger EBITDA margin. WOM's ratings reflect
the company's short but impressive track record in Chile, taking on
much larger competitors and demonstrating a clear path to
deleveraging. WOM's ratings, like VTR's, incorporate Fitch's
expectations that the company will be managed to moderate levels of
net leverage.
LLA has a similar business profile to Millicom international
Cellular (MIC, BB+/Stable) but higher leverage. Millicom has
embarked on an acquisitive spree over the last two years, buying
Cable Onda (BBB-/Stable) and Telefonica S.A.'s (BBB/Stable)
operations in Panama.
KEY ASSUMPTIONS
-- Low- to mid-single-digit revenue growth over the medium term,
with strong growth in Internet services, offset by reduction
in fixed voice services;
-- EBITDA margin in the range of 37%-39% during 2020-2023
-- Capex-to-sales ratio to remain over 20%;
-- Neutral to positive FCF generation in 2020-2023, with excess
cash upstreamed to LLA.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Fitch does not anticipate an upgrade as likely in the near
term, given the company's and the larger group's elevated
leverage profiles.
-- Longer-term positive rating actions are possible to the extent
that Total Debt / EBITDA and Net Debt / EBITDA sustained below
4.5x and 4.25x, respectively, at both VTR and LLA.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Total Debt / EBITDA and Net Debt / EBITDA at VTR sustained
above 5.25x and 5.0x, respectively, due to a combination of
organic cash flow deterioration or M&A.
-- While the three credit pools are legally separate, LLA Net
Debt / EBITDA sustained above 5.0x could result in negative
rating actions for one or more rated entities in the group.
-- The VTR Finance N.V. notes could be downgraded to 'B+' if
consolidated leverage or prior ranking leverage continues to
rise.
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
VTR's liquidity profile is sound. This refinancing extends the
company's amortization profile by refinancing the company's CLP174
billion credit facility which begins amortizing in 2022.
The company's cash balance amounted to CLP53 billion by YE, against
short-term debt and accrued interest of CLP96 billion. Pro forma
for the transaction, Fitch expects cash of CLP110 billion. Overall,
the impact of the transaction will result in a negligible increase
in leverage.
SUMMARY OF FINANCIAL ADJUSTMENTS
-- Standard lease adjustments;
-- FX derivatives netted against debt;
-- Adjustments to opex and working capital items.
ESG CONSIDERATIONS
VTR has an ESG Relevance Score of '4' on for Group Structure and
for Financial Transparency, due to LLA's financial management
strategies and disclosure practices, which has a negative impact on
the credit profile, and is relevant to the rating in conjunction
with other factors
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
VTR COMUNICACIONES: S&P Rates New $410MM Senior Secured Notes 'B+'
------------------------------------------------------------------
S&P Global Ratings assigned its 'B+' issue-level rating to Chilean
broadband and cable operator VTR Comunicaciones SpA's proposed $410
million senior secured notes due 2029. The company will use the
proceeds to refinance its existing outstanding term loan of about
$250 million (CLP174 billion), redeem about $60 million (about
CLP45 billion) in outstanding 2028 senior secured notes, and
strengthen its cash position. The transaction is leverage neutral,
extends the maturity profile, and we don't expect it to have a
material effect on the company's interest burden. The rating on the
proposed notes is at the same level as the issuer credit ratings on
VTR Finance NV (B+/Positive/--) because we don't believe investors
in VTR Comunicaciones' existing senior secured notes face any
material legal or structural subordination. Following the
transactions, the group's capital structure will consist of:
-- $550 million (about CLP400 billion) in notes issued at the
level of holding company, VTR Finance; and
-- All other debt will be held at the level of operating
subsidiary, VTR Comunicaciones: the proposed notes due 2029 of $410
million (about CLP300 billion), the notes due 2028 of about $540
million (about CLP390 billion), and about CLP70 billion in vendor
financing.
S&P said, "Our 'B+' issuer credit rating reflects VTR's smaller
scale and narrower geographic diversification than those of its
regional peers, its aggressive leverage and narrow free cash-flow
generation, balanced by a leading market position in the cable and
broadband market in Chile and a track record of consistent
operating performance with sound top-line growth and profitability.
In 2020, the company performed slightly below our expectations due
to COVID-19. Revenue dropped about 3% for the first time in more
than five years, adjusted EBITDA margin narrowed to 38.6% from
42.3% in 2019, causing debt to EBITDA to weaken to 4.8x from 3.7x
the previous year. We expect the company's operating performance to
recover in 2021, with revenue growing at low single digits, margin
strengthening back to about 40%, and leverage trending back to
about 4.0x. The positive rating outlook on VTR Finance reflects our
expectation that the expected integration of Cabletica and
completion of Telefonica Costa Rica's acquisition will improve
slightly the company's business scale and geographic
diversification, cash flows, and leverage. However, we could revise
the outlook to stable if we believe greater competition and
challenging economic conditions could pressure operating results
and cash flows, or if the company maintains a higher-than-expected
capital intensity, pushing debt to EBITDA persistently above 4.0x,
FFO to debt below 15%, and FOCF to debt below 5%."
Ratings List
New Rating
VTR Comunicaciones SpA
Senior Secured B+
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C O S T A R I C A
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AUTOPISTAS DEL SOL: Fitch Affirms B Rating on International Notes
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Fitch Ratings has affirmed the 'B' rating on Autopistas del Sol,
S.A.'s (AdS) international notes and maintained the Negative Rating
Outlook. Fitch has downgraded the national scale rating to
'AA-(cri)' from 'AA(cri)' for AdS' local notes, removed the Rating
Watch Negative and assigned them a Negative Rating Outlook. The
international and local notes are supported by the cash flow
generation of the Costa Rican toll road known as Ruta 27 (the
project).
RATING RATIONALE
The downgrade of AdS' national rating reflects the expectation of a
slower traffic recovery after the decrease experienced in 2020 as a
consequence not only of the coronavirus pandemic, but also of a
weaker macroeconomic environment. This is anticipated to result in
liquidity shortfalls and the need to draw upon reserve accounts for
a prolonged period. This results in a financial profile that is no
longer commensurate with the former national rating relative to
other rated issuers and issuances in Costa Rica.
The Negative Outlook on the local and international ratings
reflects the potential for further financial deterioration as a
result not of a slower traffic recovery following the material
reduction in 2020 and increased competition from the San Jose-San
Ramon alternative route after the first phase of improvement
construction works are completed. On the international rating, the
Negative Outlook continues to reflect Fitch's view on Costa Rica's
sovereign credit risk and the links to the sovereign credit quality
through the minimum revenue guarantee (MRG).
The ratings reflect the asset's stable traffic and revenue profile,
supported by an adequate toll adjustment mechanism. Mostly used by
commuters, the project may face significant competition in the
short-to-medium term once the main competing road is substantially
improved and if its tariff is significantly lower than that of the
project. The coronavirus pandemic and related mobility restrictions
imposed by the local government caused a severe traffic decline in
2020. Fitch expects that it will take several years to recover
original traffic volume expectations, resulting in insufficient
toll revenues and increasing its dependence on alternative sources
of liquidity.
Toll rates are adjusted quarterly to exchange rate and annually to
reflect changes in the U.S. Consumer Price Index (CPI). The ratings
also reflect a fully amortizing senior debt with a fixed interest
rate and a net present value (NPV) cash trap mechanism that
prevents an early termination of the concession before debt is
fully repaid.
Fitch's Rating Case expects 2021 traffic to be 75% that of 2019.
After this year, Fitch projects a CAGR of 0.98% from 2022 to 2030,
which considers, among other factors, the modernization of the
competing route that is substantially cheaper. Under the
aforementioned assumptions, the minimum and average debt service
coverage ratios (DSCR) are 0.8x and 1.1x, respectively, which
remain in line with Fitch's criteria guidance for the assigned
rating. The shortfall in coverage ratios will likely be covered by
the reserve accounts available within the structure. Under this
scenario, Fitch expects the project will receive MRG payments from
2025 onward, which totals, on average, 13% of annual revenues.
KEY RATING DRIVERS
Mostly Commuter Traffic Base (Revenue Risk - Volume: Midrange):
Light vehicles account for approximately 90% of all users, which
have proved to be the most stable and resilient traffic base. The
road is used by commuters on workdays and by residents of San José
traveling to the beaches on the weekends. It could face significant
competition once major improvements to the existing and congested
San Jose-San Ramon Route are made, with the expectation that the
road does not have tolls or is materially cheaper than the project.
The concession agreement provides a MRG that compensates the issuer
if revenue is below certain thresholds, somewhat alleviating this
risk.
Adequate Rate Adjustment Mechanism (Revenue Risk - Price:
Midrange): Toll rates are adjusted quarterly to reflect changes in
the Costa Rican Colon (CRC) to USD exchange rate and annually to
reflect changes in the U.S. CPI. Tolls may be adjusted prior to the
next adjustment date if the U.S. CPI or the CRC/USD exchange rate
varies by more than 5%. Historically, tariffs have been updated
appropriately.
Suitable Capital Improvement Program (Infrastructure Development &
Renewal: Midrange): The brownfield asset is operated by an
experienced global company with a higher-than-average expense
profile due to the geographical attributes of the project. The
majority of the investments required by the concession have been
made. The concession requires lane expansions when congestion
exceeds 70% of the ideal saturation flow, which triggers the need
for further investments. However, the project would only be
required by the grantor to perform these investments to the extent
they do not represent a breach in the debt coverage ratios assumed
by the issuer in the financing documents.
Structural Protections Against Shortened Concession (Debt
Structure: Midrange): Debt is senior secured, pari passu,
fixed-rate, and fully amortizing. The debt is denominated in USD,
but no significant exchange rate risk exists due to the tariff
adjustment provisions set forth in the concession and because
CRC-denominated toll revenues will be converted to USD daily. The
structure includes an NPV cash trap mechanism to prepay debt if
revenue outperforms the base case revenue indicated in the issuer's
financial model, which largely mitigates the risk of the concession
maturing before the debt is fully repaid. Typical project finance
features include a six-month debt service reserve account (DSRA), a
six-month backward and forward-looking 1.20x distribution trigger
and limitations on investments and additional debt.
Financial Summary
Under Fitch's Revised Rating Case, the project yields a minimum and
average DSCR of 0.8x and 1.1x, respectively. The concession is
expected to expire in July 2033, matching the concession maturity.
It assumes payments under the MRG starting in 2025, which totals,
on average, 13% of annual revenues. The metrics are in line with
Fitch's applicable criteria for the assigned rating.
PEER GROUP
Comparable projects in the region include TransJamaican Highway
(TJH; B+/ROS) in Jamaica. AdS and TJH are similar projects since
they both are strong commuting assets within their respective
country's capital cities. They also share all attributes at the
midrange level, but the difference in ratings reflects AdS' lower
metrics (average DSCR of 1.1x versus 2.0x under Fitch's rating
case).
RATING SENSITIVITIES
Factor that could, individually or collectively, lead to positive
rating action/upgrade:
-- The Negative Outlook on the international rating could be
revised to Stable following a corresponding rating action on
Costa Rica's sovereign ratings along with observed traffic
levels above Fitch's expectations, reaching DSCRs above 1.0x
and the maintenance of adequate levels of liquidity.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Negative rating action on Costa Rica's sovereign ratings could
trigger a corresponding negative action on the rated notes.
-- Traffic performance below Fitch's Rating Case expectations of
70%, 75%, 75% and 80% of 2019 levels by 1Q21, 2Q21, 3Q21 and
4Q21 respectively, and/or a substantially greater than
expected traffic loss occurs due to the completion of works in
the competing route.
-- A deterioration of the liquidity available for debt service.
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.
TRANSACTION SUMMARY
The asset serves as a connection between the city of San Jose and
its metropolitan area with Puerto Caldera, along the Pacific Coast.
The asset is operated by Globalvia, one of the world leaders in
infrastructure concession management, which manages 28 concessions
in seven countries. The company was established in 2007 by FCC
Group and Bankia Group. In March 2016, Globalvia was acquired by
pension funds OPSEU Pension Plant Trust Fund (40%), PGGM N.V. (40%)
and Universities Superannuation Scheme Ltd (20%).
CREDIT UPDATE
During 2020, the weighted annual average daily traffic (WAADT) of
Ruta 27 decreased by 26% compared to 2019, in line with Fitch's
Rating Case. As per the concessionaire, the traffic declines are
attributed to the measures taken by the government of Costa Rica to
contain the coronavirus pandemic since March 2020.
Revenues in 2020 were USD59.6 million, similar to the USD59.1
million expected by Fitch in its Rating Case. As per Fitch's
expectations, the MRG was not drawn, and there were no revenues
shared with the government.
During 2020, operational expenses were USD17.1 million, close to
Fitch's expectations of USD16.9 million. Total disbursements were
15% lower than in Fitch's Rating Case, mainly due to lower Capex
figures as investments were postponed due to the pandemic.
Actual DSCR in 2020 was 0.82x, in line with Fitch's Rating Case
DSCR of 0.80x. The cash flow available for debt service (CFADS)
shortfall was covered with available liquidity to comply with debt
service payments, without the need to draw from the DSRA, which is
currently fully funded with its target balance of USD19.2 million.
Improvements to the competing route San Jose-San Ramon (Ruta Uno)
are underway. The government of Costa Rica is developing 4 projects
labeled as undelayable. This is the first phase of a total of 17
projects expected to improve and expand this road. Fitch expects
the first phase will be built in 2021 and the second phase is
expected to start construction in February 2023 and conclude in
2024. Ruta Uno announced that they will not reduce the toll tariffs
of the road; however, total tolls are still materially cheaper than
Ruta 27.
FINANCIAL ANALYSIS
At present, Fitch is not differentiating between its Base and
Rating case assumptions, given the level of uncertainty about
future traffic performance.
Fitch has revised its Rating Case assumptions to reflect Fitch's
current expectations of traffic recovery. For 2021, Fitch assumes a
recovery of 75% relative to 2019 levels based on the following
average assumptions of quarterly traffic: 1Q21 (70%); 2Q21 (75%);
3Q21 (75%); and 4Q21 (80%). For 2022, 2023 and 2024, Fitch assumes
average recoveries of 80%, 85% and 65%, relative to 2019 levels,
which considers, among other factors, the negative impact from the
competing route that will likely complete its improvements in 2021
and 2024. From 2025 until 2033, Fitch expects a compounded annual
growth rate of 3.7%.
O&M and major maintenance expenses were projected following the
issuer's budget plus 7.5% for every year U.S. inflation is forecast
at 0.7% for 2021, 1.2% for 2022 and 2.0% afterward.
This scenario resulted in a minimum and average DSCR of 0.8x and
1.1x, respectively. Available liquidity is sufficient to withstand
transitory shortfalls when CFADs cannot fully cover debt service.
Under this scenario, MRG will be received from 2025 onward.
Fitch also developed a Severe Downside Case that assumed an
extended traffic recovery compared to the Rating Case. Traffic in
2021 was assumed to be 66% relative to 2019 levels based on the
following average assumptions of quarterly traffic: 1Q21 (65%);
2Q21 (65%); 3Q21 (65%); and 4Q21 (70%). For 2022, 2023 and 2024,
Fitch assumes average recoveries of 75%, 80% and 60%, relative to
2019 levels. From 2025 until 2033, Fitch expects a compounded
annual growth rate of 3.7%. If the Severe Downside Case
materializes, credit metrics deteriorate to minimum and average
DSCR of 0.76x and 1.04x, respectively, with further use of the DSRA
until its depletion in 2025, which would lead to a downgrade of the
ratings.
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.
===================================
D O M I N I C A N R E P U B L I C
===================================
DOMINICAN REPUBLIC: Jan-Feb Passengers Entry & Tourists Fell 50%+
-----------------------------------------------------------------
Dominican Today reports that the entry of Dominican passengers and
tourists through international airports fell more than 50% in the
first two months compared to the same period of 2020 as a result of
the Covid-19 crisis in commercial aviation, tourism and the
economy.
According to Civil Aviation Board (JAC) data, in January 2020, some
640,629 passengers entered Dominican international airports and in
that same period, 705,061 travelers left, the report relays.
In February 2020, 719,550 passengers entered through Las Americas
and Gregorio Luperon, from Puerto Plata, and other airport
terminals, while 756,181 travelers departed, according to Dominican
Today.
During the same period, but this year, there has been a drastic
drop in the influx of national and foreign travelers to the
country, the report discloses.
Dominican airports manager Aerodom statistics indicate that through
international airports the number of travelers decreased 51.1% in
January compared to the same period in 2020, 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: Pandemic Affects Local Food Prices
------------------------------------------------------
Dominican Today reports that rises in the prices of raw materials
in international markets and increase in ocean freight are the
other effects that the pandemic has had on the world economy.
In the Dominican Republic, although some prices of basic goods have
fallen in recent days, the pressures remain, according to Dominican
Today. Foods like kidney beans, sweet potatoes, cucumbers,
lettuce, cauliflower, coriander, lemon and passion fruit have risen
in the past week, the report relays.
Meanwhile, banana, garlic, beets, tomatoes, carrots, broccoli and
spinach lowered their prices, the report discloses. According to
the weekly reports registered by the Ministry of Agriculture of the
New Market, foods such as chickens, eggs and rice maintained their
prices, the report says.
However, the Dominican Poultry Association (ADA) said that the
international prices of wheat, corn, flour and soybean oil,
necessary in the food production chain, have posted constant price
increases during the last year, accumulating an increase of more
than 50%, 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).
=============
J A M A I C A
=============
JAMAICA: Net Int'l Reserves Rose Above US$3 Billion in February
---------------------------------------------------------------
RJR News reports that Jamaica's Net International Reserves rose
above the US$3 billion mark in February.
The Bank of Jamaica said the reserves increased by US$33 million to
US$3.01 billion, according to RJR News.
At that level, the country will be able to purchase about 50 weeks
of imports, the report notes.
About Jamaica
Jamaica is an island country situated in the Caribbean Sea. Jamaica
is an upper-middle income country with an economy heavily dependent
on tourism. Other major sectors of the Jamaican economy include
agriculture, mining, manufacturing, petroleum refining, financial
and insurance services.
Standard & Poor's credit rating for Jamaica stands at B+ with
negative outlook (April 2020). Fitch's credit rating for Jamaica
was last reported at B+ with stable outlook (April 2020). Moody's
credit rating for Jamaica was last set at B2 with stable outlook
(December 2019).
As reported in the Troubled Company Reporter-Latin America, Fitch's
revision of Jamaica's outlook in April 2020 to Stable from Positive
reflects the shock to Jamaica from the coronavirus pandemic, which
is expected to lead to a sharp contraction in its main sources of
foreign currency revenues: tourism, remittances and alumina
exports.
JAMAICA: Trading Between Country Band CARICOM Declines in 2020
--------------------------------------------------------------
RJR News reports that there was a decline in trading between
Jamaica and CARICOM during the January to November 2020 period.
Imports from other CARICOM countries were valued at US$233.5
million, according to RJR News.
Total exports amounted to US$70.8 million, the report notes.
STATIN says regional trade accounted for 5.5 per cent of total
imports and 6.4 per cent of exports during the review period, the
report relays.
The US, Canada, the Netherlands, Russia and Iceland remained the
top five destinations for Jamaica's exports, the report adds.
About Jamaica
Jamaica is an island country situated in the Caribbean Sea. Jamaica
is an upper-middle income country with an economy heavily dependent
on tourism. Other major sectors of the Jamaican economy include
agriculture, mining, manufacturing, petroleum refining, financial
and insurance services.
Standard & Poor's credit rating for Jamaica stands at B+ with
negative outlook (April 2020). Fitch's credit rating for Jamaica
was last reported at B+ with stable outlook (April 2020). Moody's
credit rating for Jamaica was last set at B2 with stable outlook
(December 2019).
As reported in the Troubled Company Reporter-Latin America, Fitch's
revision of Jamaica's outlook in April 2020 to Stable from Positive
reflects the shock to Jamaica from the coronavirus pandemic, which
is expected to lead to a sharp contraction in its main sources of
foreign currency revenues: tourism, remittances and alumina
exports.
PALACE AMUSEMENT: Revenue Plunges in 2020 4th Quarter
-----------------------------------------------------
RJR News reports that revenue plunged and losses mounted at Palace
Amusement during the October to December quarter as the company
continued to reel from the impact of the covid-19 pandemic.
During the three months, Palace Amusement's revenue amounted to
$37.1 million compared to $299.9 million in the prior year,
according to RJR News.
The company ended the quarter with an $81.7 million dollars. This
was an increase from the $17.9 million loss it suffered during the
October to December quarter in 2019, the report relays.
Palace Amusement's cinema operations have been hard hit by COVID-19
restrictions, the report adds.
=====================
P U E R T O R I C O
=====================
ALBERTO DEL RIO SOTO: $250K Sale of Camuy Property to Lopez Okayed
------------------------------------------------------------------
Judge Enrique S. Lamoutte of the U.S. Bankruptcy Court for the
District of Puerto Rico authorized Gladys Diana Hilerio Del Rio and
the estate of Alberto Del Rio Soto to sell the property located at
Puerto Ward, Sector Cibao, SR. 456 Km. 3.7, in Camuy, Puerto Rico,
and described as Dairy Farm known as "Cibao," Composed of 120.7143
Cuerdas, to Luis Radai Romero Lopez for $250,000.
The Debtors operate a dairy farm under license #3239 as authorized
by the Oficina de Reglamentacion de Industria Lechera ("ORIL") in
367.31 cuerdas in the farm known as Aibonito, located at Rd 129,
Km. 20 in Hatillo PR. They have a bi-weekly milk production quota
of 280,204 liters.
Without limiting the foregoing, the Debtors and the Buyer are
authorized and required to, at the Closing Date, execute any and
all documents to deliver, close, transition and consummate the Sale
of the Properties to the Buyer or its designees.
The sale is free and clear of all interests of any kind or nature
whatsoever and whether known or unknown.
Any and all claims, interests (including possession), liens, and
encumbrances that may have been assessed and/or registered at the
CRIM, the Puerto Rico Treasury Department, and the Puerto Rico
Property Registry over the Properties will be cancelled.
The Executive Director of the Municipal Revenue Collection Center
will perform all operations necessary in the systems and records of
the CRIM to cancel, eliminate and/or extinguish any and all real
property taxes that appear as liens, claims, interests or
encumbrances over the Properties.
The Secretary of the Puerto Rico Treasury Department will perform
all operations necessary in the systems and records of Treasury to
cancel, eliminate and/or extinguish any and all real property taxes
that appear as liens, claims, interests or encumbrances over the
Properties.
The Puerto Rico Property Registrar will perform all registrations
and operations necessary in its systems and records of the PR
Property Registry to cancel, eliminate and/or extinguish any and
all claims, interests or encumbrances over the Properties.
A Writ of Cancellation of Liens will be issued by the Clerk of the
Court, whereby the Executive Director of the CRIM, the Secretary of
the Puerto Rico Treasury Department, and/or the Puerto Rico
Property Registrar will be instructed to cancel any liens, claims,
interests or encumbrances assessed over the Properties.
Each and every Commonwealth of Puerto Rico governmental agency or
department and state and local governmental agency or department is
directed to accept any and all documents and instruments necessary
and appropriate to consummate the transfer of title of the
Properties to the Buyer free and clear of any and all Interests,
including the registration of the Buyer as owner of any real estate
acquired from the Debtors.
The authorizing notary will be exempt from cancellation of any and
all stamp tax, internal revenue and legal aid stamps, or similar
taxes for the transactions set forth at length in the Order in the
original deeds of transfer and cancellation of mortgages, pursuant
to 11 U.S.C. Section 1146(a).
Any person or entity occupying the Properties upon the transfer of
the same to the Buyer is and forthwith ordered, directed and
commanded to immediately vacate the Properties and deliver to him
the possession, keys and any other access to the Properties.
Nothing contained in any subsequent order of the Court or any court
of competent jurisdiction in this bankruptcy case or any Chapter 11
plan confirmed in the Debtors' bankruptcy case or any order
confirming any such plan will nullify, alter, conflict with or in
any manner derogate from the provisions of the Sale Order, and the
provisions of this Sale Order will survive and remain in full force
and effect. The Sale Order will supersede any other document or
Order which related to the disposition of the Properties.
Alberto Del Rio Soto and Gladys Diana Hilerio Del Rio sought
Chapter 11 protection (Bankr. D.P.R. Case No. 17-03134) on May 2,
2017. The Debtors tapped Homel Mercado Justiniano, Esq., as
counsel.
=====================================
T R I N I D A D A N D T O B A G O
=====================================
NIQUAN ENERGY: S&P Assigns Prelim. 'B' Rating on Sr. Secured Notes
------------------------------------------------------------------
S&P Global Ratings, on March 10, 2021, assigned its preliminary 'B'
long-term rating to NiQuan Energy Trinidad Limited's (NETL or the
project) proposed notes.
NETL plans to issue $175 million senior secured, fixed-rate notes
due 2031. The notes repayment will be backed by revenues generated
from an offtake agreement between NETL and Petroleum Company of
Trinidad and Tobago, a wholly owned subsidiary of Trinidad
Petroleum Holdings (TPH,BB/Negative/--) for 100% of the Project's
output of zero sulfur diesel and naphtha.
S&P said, "The preliminary rating mainly reflects the operational
risk related to the operations of a gas-to-liquid plant, which we
view as similar to an oil & gas refinery, or a gas processor with
relatively higher complexity. In addition, the preliminary rating
reflects our view on the volatility to cash flows, which could
range 30%-50% depending on commodities prices volatility, given
that the offtake agreement only mitigates volume risk, while price
is based on realized market prices. We estimate the latter based on
the ULSD plus a $50/bbl premium over ULSD for diesel and $55/bbl
for naphtha, considering the absence of sulfur on NiQuan products,
which we view as a positive competitive advantage. These factors
translate in a minimum DSCR of 1.5x in 2025 and average DSCR of
2.0x until the notes mature, considering a 90% operational
availability of the plant in our forecast.
"We note that the ratings are solely based on the analysis of the
operations of the plant, as a condition precedent for the
disbursement of the notes is that the plants achieve commercial
operations standards (COD). The plant started commissioning phase
in January 2021 and expects to reach COD by late March.
"The notes' capital structure is back-ended, considering a 50%
balloon payment at maturity. Our base-case scenario assumes that
the project will generate enough excess cash flows from cash
accumulation starting on April 2021 to make the balloon payment
without the need to refinance.
"Finally, we view as TPH as a relevant irreplaceable counterparty
given the characteristics of its offtake agreement, which offset
volume risk. At the same time, this dependency is neutral to the
transaction, given TPH`s higher rating. We also view Trinidad and
Tobago Upstream Downstream Energy Operations Company as a relevant
counterparty given its long-term gas supply agreement, still, we
view this contract as replaceable, because we consider that the
prices follow market standards and there are alternative suppliers
available to replace feedstock.
"The rating on the notes is preliminary and the assignment of the
final rating will depend on our receipt and satisfactory review of
all final transaction documentation, while the interest rate on the
notes would need to be in line with our expectations. Accordingly,
the preliminary rating shouldn't be construed as evidence of the
final rating. If we don't receive the final documentation within a
reasonable timeframe, or if the final transaction departs from our
assumptions, we reserve the right to withdraw or change the
rating."
=============
U R U G U A Y
=============
BANCO PATAGONIA: Moody's Completes Review, Retains B2 Rating
------------------------------------------------------------
Moody's Investors Service has completed a periodic review of the
ratings of Banco Patagonia (Uruguay) S.A. I.F.E. and other ratings
that are associated with the same analytical unit. The review was
conducted through a portfolio review discussion held on March 1,
2021 in which Moody's reassessed the appropriateness of the ratings
in the context of the relevant principal methodology(ies), recent
developments, and a comparison of the financial and operating
profile to similarly rated peers. The review did not involve a
rating committee. Since January 1, 2019, Moody's practice has been
to issue a press release following each periodic review to announce
its completion.
This publication does not announce a credit rating action and is
not an indication of whether or not a credit rating action is
likely in the near future. Credit ratings and outlook/review status
cannot be changed in a portfolio review and hence are not impacted
by this announcement.
Key rating considerations
Banco Patagonia (Uruguay)'s -- (Patagonia Uruguay) -- B2 long-term
deposit ratings reflect the bank's baseline credit assessment (BCA)
of b3 and our assessment of moderate probability of affiliate
support from its controlling shareholder, Banco do Brasil (Ba2 ,
ba2), which results in an one-notch uplift from the BCA.
Patagonia Uruguay's b3 BCA incorporates the bank's recent weak
capital and profitability metrics, which reflect losses derived
from the impairment of investment in bonds from the Government of
Argentina (Ca). The b3 BCA also incorporates our view that revenues
will likely remain under pressure because of historically low
interest rates worldwide, which will dampen fees and commissions
for the bank. Patagonia Uruguay's license as a foreign financial
institution precludes the bank from raising deposits from
residents; however, core deposits from Argentine citizens account
for a predominant share of the bank's funding structure. The
limited reliance on market funds is positive for the bank's funding
profile; however, the high participation of deposits from
Argentinean nationals exposes Patagonia Uruguay's deposits to
volatility. A substantial share of revenues derives from investment
activities, in line with its focus on providing asset management
services and securities custody to Argentine clients of Banco
Patagonia S.A. (Patagonia Argentina, not rated).
The principal methodology used for this review was Banks
Methodology published in November 2019.
*********
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
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Information contained herein is obtained from sources believed to
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balance thereof are US$25 each. For subscription information,
contact Peter A. Chapman at 215-945-7000.
.
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