/raid1/www/Hosts/bankrupt/TCRLA_Public/210407.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
Wednesday, April 7, 2021, Vol. 22, No. 64
Headlines
B R A Z I L
BANCO NACIONAL: Launches Framework for Sustainable Bonds
BRAZIL: Expected to Set Record for Public-Private Partnerships
BRAZIL: Government Debt Reaches 90% of GDP for the First Time
C A Y M A N I S L A N D S
VANDEVCO LIMITED: Plan Depends on Outcome of State Court Action
C H I L E
CHILE: Hits 1 Million COVID Cases, Slams Doors
D O M I N I C A N R E P U B L I C
DOMINICAN REPUBLIC: Hotel Occupancy at 58.5% Last Easter
G U A T E M A L A
COMCEL TRUST: Moody's Withdraws Ba1 CFR Following Debt Redemption
J A M A I C A
JAMAICA: BOJ Says Inflation Rate in Line With Projections
M E X I C O
SIXSIGMA NETWORKS: S&P Cuts Issuer Rating to 'B' on Cash Shortfall
P A N A M A
GLOBAL BANK: Moody's Affirms Ba1 LT Deposit Rating, Outlook Stable
P U E R T O R I C O
ASOCIACION DE PROPIETARIOS: Court Confirms 100% Plan
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B R A Z I L
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BANCO NACIONAL: Launches Framework for Sustainable Bonds
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The Brazilian National Bank for Economic and Social Development
(BNDES) is launching its Sustainability Bond Framework (SBF),
produced through a partnership with the Inter-American Development
Bank (IDB). The document aims to enable the issuance of green,
social, and sustainable bonds in Brazil and abroad. With a
favorable opinion (Second Party Opinion - SPO) from Sustainalytics,
a verification company specialized in sustainable projects, the
structure reinforces the importance attributed to the
Environmental, Social, and Governance (ESG) topic.
The initiative expands the fundraising possibilities provided for
in the Green Bond Framework launched in 2017, which enabled the
BNDES to be the first Brazilian bank to issue this type of bond in
the international capitals market, and the first financial
institution to issue green financial bills in 2020 in the local
market.
The SBF was developed within the scope of a technical cooperation
signed with the IDB, an institution involved in about 30 percent of
the issues of thematic bonds in Latin America and the Caribbean.
The document also counted on the technical consultancy provided by
the specialized company Sitawi and was structured according to the
best market practices.
The resources to be raised in future operations based on the SBF
will be used to finance and refinance eligible new or existing
projects in BNDES's portfolio. The eligible categories for
allocating resources include six green categories and three social
categories.
Among the green categories are: renewable energy; energy
efficiency; sustainable management of water, waste water, and
sanitation; pollution prevention and control; clean transportation;
and environmentally sustainable management of living natural
resources and land use.
The social categories include, in turn, health; education; and
support for micro, small, and medium-sized enterprises (MSMEs) and
micro-credit. Investments in health and education in municipalities
with Human Development Index (HDI) below the national average will
be prioritized, and for MSMEs, in addition to the HDI criterion,
companies led by women or gender minorities will be prioritized.
"This is an important step not only for the BNDES to consolidate
its alignment with the best international ESG practices, but also
to capture the willingness of a growing share of investors to
contribute to a more resilient and sustainable world. For the IDB,
it is extremely strategic to assist a position with the size and
capacity of the BNDES in this movement," said Morgan Doyle, the IDB
Group's representative in Brazil.
About BNDES
As reported in the Troubled Company Reporter-Latin America on
February 18, 2021, Moody's Investors Service said its Ba2 deposit
rating on Banco Nacional de Desenvolvimento Economico e Social
(BNDES) derives from its ba2 baseline credit assessment (BCA). The
rating incorporates Moody's assessment of very high probability of
support from the government of Brazil (Ba2), its sole shareholder.
However, the bank's rating does not benefit from support uplift
because its ba2 BCA is positioned at the same level as Brazil's
sovereign rating.
Fitch Ratings' Long-term issuer default rating for BNDES was last
set at BB- on April 17, 2018. S&P Global Ratings' long-term global
scale ratings for BNDES was last reported on March 15, 2018, at
BB-.
BRAZIL: Expected to Set Record for Public-Private Partnerships
--------------------------------------------------------------
Rio Times Online reports that Brazil should set a record for
public-private partnerships (PPP) in 2021.
The projection is from Radar PPP consultancy based on the number of
projects planned for this year, particularly in social
infrastructure, according to Rio Times Online.
Last year alone, 340 tenders were published, of which 17 were from
the Federal Government, 46 from states and the Federal District,
and 277 from municipalities, the report notes. These are the
highest numbers since the consultancy was founded in 2015, the
report adds.
For 2021, the largest number of projects and bids in the history of
PPPs and concessions for prisons, schools, health units, and parks,
is expected, notes the report.
About Brazil
Brazil is the fifth largest country in the world and third largest
in the Americas. Jair Bolsonaro is the current president, having
been sworn in on Jan. 1, 2019.
S&P Global Ratings affirmed on December 14, 2020, its 'BB-/B'
long-and short-term foreign and local currency sovereign credit
ratings on Brazil. The outlook on the long-term ratings remains
stable.
Fitch Ratings' credit rating for Brazil stands at 'BB-' with a
negative outlook (November 2020). Moody's credit rating for Brazil
was last set at Ba2 with stable outlook (April 2018). DBRS's credit
rating for Brazil is BB (low) with stable outlook (March 2018).
As reported in the Troubled Company Reporter-Latin America, S&P
Global Ratings' stable outlook assumes that timely implementation
of fiscal adjustment and modest economic recovery will help
preserve market confidence and adequate funding conditions for the
government in local markets in the next two years, despite a
sustained increase in the debt burden.
BRAZIL: Government Debt Reaches 90% of GDP for the First Time
-------------------------------------------------------------
Richard Mann at Rio Times Online reports the gross government debt
in Brazil rose from R$6.670 trillion in January to R$6.744 trillion
in February, according to data from the Central Bank (BC). In
relation to the Gross Domestic Product (GDP), the debt rose from
89.4% to 90%, according to Rio Times Online.
It was the first time in the entire historical series of the
Central Bank that the indicator reached 90% of the GDP, the report
notes. The current methodology started in 2008.
The increase in public spending to mitigate the effects of the new
coronavirus pandemic has set off a warning in the market, the
report relays. Concerns about the rapid growth of public debt have
become even greater, the report adds.
About Brazil
Brazil is the fifth largest country in the world and third largest
in the Americas. Jair Bolsonaro is the current president, having
been sworn in on Jan. 1, 2019.
S&P Global Ratings affirmed on December 14, 2020, its 'BB-/B'
long-and short-term foreign and local currency sovereign credit
ratings on Brazil. The outlook on the long-term ratings remains
stable.
Fitch Ratings' credit rating for Brazil stands at 'BB-' with a
negative outlook (November 2020). Moody's credit rating for Brazil
was last set at Ba2 with stable outlook (April 2018). DBRS's credit
rating for Brazil is BB (low) with stable outlook (March 2018).
As reported in the Troubled Company Reporter-Latin America, S&P
Global Ratings' stable outlook assumes that timely implementation
of fiscal adjustment and modest economic recovery will help
preserve market confidence and adequate funding conditions for the
government in local markets in the next two years, despite a
sustained increase in the debt burden.
===========================
C A Y M A N I S L A N D S
===========================
VANDEVCO LIMITED: Plan Depends on Outcome of State Court Action
---------------------------------------------------------------
Vandevco Limited and Orland, Ltd., filed with the U.S. Bankruptcy
Court for the Western District of Washington a Disclosure Statement
for the Joint Chapter 11 Plan of Reorganization.
The sole owner of the Debtors is Willamette Enterprises, Ltd., a
Cayman Islands limited liability company ("Willamette").
Willamette's 99% owner is Belbadi Engineering, Ltd., an United Arab
Republic ("UAE") entity with approximately 1150 employees and $250
million in annual revenue. Ziad Elhindi owns the other 1% of
Willamette.
In 2016, Cayman Islands company Cerner Middle East Limited filed a
Washington state court lawsuit against Vandevco and Belbadi, and an
Oregon state court lawsuit against Orland and Belbadi. After four
years of scrambling for cash to pay defense costs, the Debtors
sought bankruptcy relief to obtain breathing room in a single forum
for orderly adjudication of Cerner Middle East's multiforum
litigation against them.
The Debtors believe they can add value to their creditors and to
Cerner Middle East in chapter 11, by efficiently and finally
resolving Cerner Middle East's crippling litigation in a court that
has jurisdiction. Should the Court sustain the Debtors' objections
to Cerner Middle East's proofs of claim, the Debtors will emerge
solvent from Chapter 11, and fully pay their creditors with
interest on the Effective Date under their bifurcated Plan's
Reorganization Plan A ("Plan A").
Should the Court allow Cerner Middle East's claims, this will
trigger the Plan's Liquidation Plan B ("Plan B"). Under Plan B, the
Debtors will spare Cerner Middle East, other creditors, the Court,
and themselves the expense and delays of what will inevitably be
extremely time consuming and expensive multiparty litigation, and a
much more arduous path to the same destination as Plan B. Under
Plan B, on the Effective Date, the Debtors' assets (including
retained claims and avoidance actions), will vest in a creditors
trust (the Creditors Trust), for liquidation and prompt
distribution of the proceeds to creditors with allowed claims.
As far as the Debtors can ascertain, the only reason that Cerner
Middle East sued the Debtors is to try to gain jurisdictional in an
American court to litigate against its Mid-Eastern guarantor
Belbadi, the Debtors' upstream great-grandparent entity. The
Debtors believe that Cerner Middle East is litigating because the
UAE courts criminally convicted Cerner Middle East of fraud and
forgery in relation to its dealings with the Debtors' upstream
great grandparent's owner Mr. Albadi's I Capital company.
Class 2 consists of Trade Creditors of Vandevco and of Orland.
Payment to creditors with approved claims as soon as possible after
Effective Date. There will be no interest due on these claims and
they will be paid in one lump sum, and in full under Plan A, and in
two pro rata payments under Plan B, with the first payment upon
availability of funds as soon as possible after the Effective Date
and the second payment upon receipt of proceeds from real property
sales.
Class 3 consists of Orland's general unsecured creditors with
claims under $500. For convenience, under Restructure Plan A,
Orland will pay these claims in full on the Effective Date with the
contract rate of interest, or , if no contract rate is specified,
with the federal post-judgment interest rate. Under Plan B, Orland
will pay these claims at 25% of face value on the Effective Date of
the Plan with no interst. This class is impaired and entitled to
vote. There are four class members in Orland with $598.30 of
claims.
Class 4 consists of unsecured claims of Ziad Elhindi, Nawzad Othman
and Willamette. Under Plan A, Class 4 creditors Ziad Elhindi and
Othman Group, Ltd. will be paid in full, while Willamette will
accept a note. Under Plan B, the Trust Administrator will pay
insider creditors pari passu with allowed claims from Class 5. The
claims of insider creditors total $11,537,159.29 for Vandevco and
$92,449 for Orland. Vandevco has two insider claims and Orland has
one insider claim.
Class 5 consists of Unsecured Creditors with contingent claims that
arise from either guarantees of debts of upstream owners of the
Debtors or litigation claims against upstream owners of the
Debtors. Under Plan A, Guarantees will be assumed by Vandevco.
Under Plan B, allowed claims will be paid pari passu with allowed
insider debts.
Willamette is the only equity interest holder. It owns 100% of the
shares of each of the Debtors. Under Plan A, Willamette
Enterprises, Ltd. retains its equity in the Debtors and retains its
$11 million account receivable from the reorganized Vandevco, for
which Vandevco will deliver a note to Willamette. Under Plan B,
where the assets of the Debtors vest in the Creditors Trust for
liquidation by the Trust administrator, equity will be wiped out
and will not retain or receive anything.
Under Plan A, payments and distributions for the Plan will be
funded from the Debtors' available cash. Under Plan B, payments and
distributions for the plan will be funded from the Debtors'
available cash and accounts, from the net proceeds the Trust
Administrator generates from his sale of the Debtors' assets, and
from any litigation recoveries.
The hearing at which the Court will determine whether to approve
the Disclosure Statement will take place on May 4, 2021 at 9 am by
telephonic hearing. The Plan Confirmation Hearing will take place
on June 29, 2021 at 9 am by telephonic hearing.
June 22, 2021 is the voting deadline, while April 27, 2021 is the
last day to file objections to the Disclosure Statement.
A full-text copy of the Disclosure Statement dated March 31, 2021,
is available at https://bit.ly/3rQoJrz from PacerMonitor.com at no
charge.
Attorney for the Debtors:
Joseph A. Field, WSB # 24705
Field Jerger LLP
621 SW Morrison St., Suite 510
Portland, OR 97205
Tel. (503) 515-3310
Email: joe@fieldjerger.com
About Vandevco Ltd. and Orland Ltd.
Vandevco Ltd. and Orland Ltd. sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. W.D. Wash. Lead Case No. 20-42710) on
Dec. 6, 2020. At the time of the filing, Vandevco disclosed
$31,601,920 in assets and $74,827,369 in liabilities. Orland
disclosed total assets of $5,171,583 and total liabilities of
$62,193,017. Judge Mary Jo Heston oversees the cases. Joseph A.
Field, Esq., at Field Jerger, LLP, is the Debtors' counsel.
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C H I L E
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CHILE: Hits 1 Million COVID Cases, Slams Doors
----------------------------------------------
Dave Sherwood and Aislinn Laing at Reuters report that Chile closed
its borders and tightened an already strict lockdown further to
slow the spread of the coronavirus and stop the influx of
contagious new variants as cases climbed past 1 million despite one
of the world's fastest vaccination rates.
The dramatic move came as hospitals warned they were close to
saturation with middle-aged and younger victims of the disease as
cases have spiked in recent weeks following the Southern Hemisphere
summer holidays, according to Reuters.
Chile struck early deals with vaccine makers Pfizer and Sinovac,
and has already vaccinated more than 35% of its population, ranking
it third in the world for inoculations per capita, according to a
Reuters tally, the report notes.
But a second wave hit before the country could reach a goal of herd
immunity by July.
The country reported 7,830 cases of the virus, its highest
single-day tally, adding up to a total of 1,003,406 infections,
since the pandemic began in March 2020, the report discloses.
The report relays that the caseload has prompted Chile to delay
elections due on April 11 and resulted in accusations by health
experts that the government allowed the triumph of its vaccination
program to muddy its message, resulting in citizens dropping their
guard -- a claim angrily rejected by Health Minister Enrique
Paris.
Movement restrictions have been swiftly ramped up, with more than
80% of the country of 19 million people now in lockdown to ease
pressure on near-saturated urgent care wards, the report notes.
Officials said they would close the South American country's border
for a month beginning to both Chileans and foreign residents, with
exceptions only in emergencies, the report relays. No foreign
tourists will be allowed to enter -- the first time it has taken
the extreme measure since the early days of the pandemic in March
2020, the report notes.
Authorities also ratcheted up restrictions on movement inside
Chile, banning purchase or delivery of non-essential goods like
toys, clothes or electronics, including from supermarkets, limiting
circulation permits to a small group of essential workers --
primarily supermarket and medical staff -- and restricting
authorizations for people to leave their homes, the report
discloses.
Previous measures which granted a large number of companies
"essential work" status and their staff permission to move around,
and permits allowing citizens to take a trip during the summer
holidays, have been blamed by medical experts for contributing to
the spike in cases, the report relays.
Locals also trade anecdotes and the media carries stories about
people misusing permits to variously attend parties, go to beach
houses and on fishing trips, the report notes.
Government spokesman Jaime Bellolio implored all Chileans to take
the rules seriously, the report relays.
"It is now when we can save lives, when we need to take extreme
care," he said. "This is a national mission, each of us has a duty
within our family group and those close to us to stress the urgency
of being responsible now. Tomorrow may be too late," he added.
The vaccination program has resulted in a tailing off of hospital
admissions among people in their 60s and 70s, but they have been
replaced by a growing number of people in their 40s and 50s, health
ministry figures show, the report relays.
To date, just over 100 of the more contagious variants of the virus
such as P1, which originated in Brazil, have been detected in
Chile, but intensive care unit doctors say they could be behind the
changing face of their patients, the report discloses.
Carlos Romero, head of the intensive care unit at the University of
Chile's clinical hospital in Santiago, told Reuters he was seeing
patients in their 30s without pre-existing conditions die of
COVID-19.
He said restricting movement was critical until more was known
about the variants and the power of vaccines to quell them, the
report relays.
"If young people are more active, they are also more exposed," he
added.
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D O M I N I C A N R E P U B L I C
===================================
DOMINICAN REPUBLIC: Hotel Occupancy at 58.5% Last Easter
--------------------------------------------------------
Dominican Today reports that hotel occupancy last Easter was 58.5%
of all the rooms, which number 92,000 with an operating
authorization of 80%.
This was stated by the executive vice president of the Association
of Hotels and Tourism of the Dominican Republic (Asonahores),
Andres Marranzini, who added that seeing the sector's development
has been taking, there will probably be a high season the entire
year, according to Dominican Today.
"We will probably break the peak of high seasons and low seasons,
and we will have a full year high season," he added.
In detailing the occupation for the Easter holiday, Marranzini
indicated that there are 271 hotels reporting operations, the
report relays.
He said that when looking at it by area, it is found that Puerto
Plata has 3,309 rooms operating, of which 2,299 are reserved and La
Romana-Bayahibe, with 1,157 rooms, has 920 reserved, the report
discloses.
Likewise, Samana with 1,414 has 750 reserved rooms, and
Bavaro-Punta Cana with 30,000 rooms has about 20,000 reserved, the
report notes.
"Boca Chica-Juan Dolio with about 1,130 has about 667 reserved.
Sosua-Cabarete, with 900 rooms, has 500 reserved, and Greater Santo
Domingo, with 2,900 rooms, has 1,000 reserved, the report relays.
He added that the province of Santiago has 188 reserved rooms out
of 786, the report says. The rest, which is in the south, small
hotels and some Constanza, have 400 reserved rooms, the report
relays.
Recovery
On the recovery of tourism, Marranzini reiterated that as
vaccination advances in the United States, its tourism sector would
improve, the report notes.
"I think that as they reach herd immunity, we will have an
improvement," he added.
According to information from authorities and real estate agents
from different tourist destinations, the villas are 100% reserved
in the northern and eastern areas of the country, the report
relays.
In the case of Samana and Cabrera, a large number of the villas
have been reserved since November of last year and are fully
occupied, the report notes.
The demand for villas and residences is so high in the Cabrera area
that families have decided to spend Easter with relatives to rent
theirs and generate extra income, said Elvyn Arnaud, KW/Premium
Real Estate Advisor, the report relates.
The Minister of Tourism assured that March would end with some
230,000 tourists, the highest number of visits the country will
have received after the start of the pandemic, the report says.
According to David Collado, this increase in the arrival of
non-resident passengers to the country is due to how the Dominican
Republic has handled the pandemic in the sector, which according to
international organizations, has served as an example for the
world, the report relays.
Growth
"The projections for tourism in the DR is of frank growth, sales
and reservations put the DR with numbers equal to those of January
2018, which was the best tourism month in the history of our
country," David Collado expressed, the report discloses.
During the Easter holiday, some 38,000 police and military
personnel were to be deployed to protect the population. There will
be about 25,582 policemen and more than 12,000 military personnel,
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).
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G U A T E M A L A
=================
COMCEL TRUST: Moody's Withdraws Ba1 CFR Following Debt Redemption
-----------------------------------------------------------------
Moody's Investors Service has withdrawn all ratings for Comcel
Trust including the company's Ba1 Corporate Family Rating.
The following ratings are affected by the action:
Ratings Withdrawn:
Issuer: Comcel Trust
Corporate Family Rating, Withdrawn , previously rated Ba1
Outlook Actions:
Issuer: Comcel Trust
Outlook, Changed to Rating Withdrawn from Stable
RATINGS RATIONALE
Moody's has withdrawn all of Comcel Trust's ratings following the
company's complete redemption of all its outstanding 6.875% senior
unsecured notes due 2024.
Comcel Trust (Comcel) is Guatemala's leading telecommunications
service provider. In addition to mobile services, the company
offers cable TV, fixed broadband, and triple-play data and voice
services to homes, and corporate solutions. Operating under the
Tigo brand, Comcel has 10.8 million mobile subscribers,
representing a market share of more than 60% in December 2019. For
the 12 months ended September 2019, the company's revenue and
adjusted EBITDA were $1.41 billion and $767.3 million,
respectively.
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J A M A I C A
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JAMAICA: BOJ Says Inflation Rate in Line With Projections
---------------------------------------------------------
RJR News reports that although the inflation rate for February fell
below the lower limit of the Bank of Jamaica's target of four to
six per cent, the central bank says its current assessment remains
broadly in line with projections.
The BOJ maintains that inflation will average around five per cent
over the next two years, according to RJR News.
The central bank says the forecast anticipated that, while domestic
food price inflation would fall, oil price inflation would
accelerate, 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.
As reported in the Troubled Company Reporter-Latin America on March
23, 2021, Fitch Ratings affirmed Jamaica's Long-Term Foreign
Currency Issuer Default Rating (IDR) at 'B+', with a stable
outlook. Standard & Poor's credit rating for Jamaica stands at B+
with negative outlook (April 2020). Moody's credit rating for
Jamaica was last set at B2 with stable outlook (December 2019).
According to Fitch, Jamaica 'B+' rating is supported by World Bank
Governance Indicators that are substantially stronger than the 'B'
and 'BB' medians, a favorable business climate according to the
World Bank Doing Business Survey, moderate inflation and moderate
commodity dependence. These strengths are balanced by vulnerability
to external shocks, a high public debt level and a debt composition
that makes the sovereign vulnerable to exchange rate fluctuations.
The Stable Outlook is supported by Fitch's expectation that the
public debt level will return to a firm downward path
post-pandemic, which is underpinned by political consensus to
maintain a high primary surplus, the resilience of external
finances, and stronger economic policy institutions.
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M E X I C O
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SIXSIGMA NETWORKS: S&P Cuts Issuer Rating to 'B' on Cash Shortfall
------------------------------------------------------------------
S&P Global Ratings lowered its global scale issuer and issue-level
ratings on Mexico-based IT managed and data services provider
Sixsixgma Networks Mexico S.A. de C.V. (KIO Networks) to 'B' from
'B+'.
The negative outlook on KIO reflects its scant protection against
cash shortfalls. This is primarily due to the company' low cash
balance as of Sept. 30, 2020, working capital outflows, and high
short-term debt maturities, which could translate into a weak
liquidity position in the near term.
Rating Action Rationale
S&P said, "Despite cutting operating expenses, delaying capital
investments, pausing dividend distribution, and exploring asset
divestments, we don't believe these actions have allowed KIO
Networks to reduce its dependence on short-term financing, as
short-term debt increased 9.4%, on a yoy basis, while the company
experienced significant working capital outflows. This hasn't been
compensated by higher cash flows.
"Furthermore, we don't expect this situation to improve
considerably in the upcoming months, while the shortfall won't be
fully offset in the long run by rolling over short-term maturities,
which represent around 28% of total debt.
"We continue to view the company's liquidity as less than adequate,
in line with our expectation that its cash sources provide scant
protection against unexpected shortfalls, given its higher
short-term maturities and our expectations of working capital
outflows for 2020 and 2021. These factors, coupled with the lower
IT spending among clients in the company's core Mexican market
because of the COVID-19 crisis, heighten risk to its liquidity
position in 2021. KIO Networks has rolled over its short-term bank
loan maturities over the past few years. However, we believe it
remains vulnerable to any further delays in cash collections from
its clients or to any obstacles in refinancing its short-term debt.
As a result, the negative outlook reflects the risks of a possible
further deterioration of the company's liquidity in the next six
months.
"Our base-case scenario for KIO Networks assumes a high
single-digit revenue decrease for 2020 because of delays in
payments from its clients. Moreover, the pandemic-induced economic
shock could continue to pressure cash collections from the
company's private- and public-sector clients, although revenue
recovered somewhat during the third quarter of 2020. As of Sept.
30, 2020, KIO Networks posted a yoy quarterly revenue growth of
7.8%, but revenue for the past 12 months remained 10% below the
same period in 2019, mostly because of a lower income from
contracts with Mexico's federal government and other Mexican
public-sector entities during the first half of the year.
"As a result, we expect KIO Networks' adjusted debt to EBITDA to be
about 5.0x at the end of fiscal 2020, but to fall after fiscal 2021
thanks to higher revenue and EBITDA, as Mexico's economy improves,
and demand for data center and cloud services recovers.
Nevertheless, the pandemic's harsh effect on KIO Networks' growth
prospects remains a considerable downside risk, as reflected in the
negative outlook."
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P A N A M A
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GLOBAL BANK: Moody's Affirms Ba1 LT Deposit Rating, Outlook Stable
------------------------------------------------------------------
Moody's Investors Service has affirmed all the ratings and
assessments of Panama's Global Bank Corporation and Subsidiaries,
following the affirmation of its ba1 baseline credit assessment.
Global Banks is rated Ba1/Not-Prime for long- and short-term
foreign currency deposit ratings. The outlook on the ratings
remains stable.
The following ratings and assessments have been affirmed:
Baseline credit assessment, ba1
Adjusted baseline credit assessment, ba1
Long term foreign currency deposit rating, Ba1 stable outlook
Short term foreign currency deposit rating, Not Prime
Long and short-term counterparty risk ratings, Baa3 and Prime-3
Long and short-term counterparty risk assessments, Baa3(cr) and
Prime-3(cr)
Outlook, Remains Stable
RATINGS RATIONALE
The affirmation of Global Bank's ratings and assessments reflects
the bank's adequate asset quality and its relatively good
capitalization level, which protects bondholders against unexpected
losses. These credit strengths are balanced by Global Bank's modest
profitability amid challenging operating conditions in Panama, its
relatively high reliance on confidence-sensitive market funds, and
its moderate levels of liquid assets.
As a result of the coronavirus pandemic, the Panamanian economy
registered a significant GDP contraction of 17.9% in 2020, causing
banks' asset quality to weaken. Global Bank's non-performing loan
ratio (NPL) deteriorated to 3.2% of total loans by year-end 2020,
from 2.0% in June 2020, still better than many regional and local
peers'. In part, the bank's asset quality benefited from a more
diversified loan book and the higher share of residential
mortgages, owing to Global Bank's acquisition of Banvivienda.
Historically, Global Bank has had low charge-offs reflecting high
recovery levels in its loan portfolio. The most likely scenario is
that Global Bank's asset quality will continue to deteriorate as
loan payment deferrals, which have been extended several times,
expire in June 2021 amid still-weak operating conditions and
challenging borrowers' repayment capacity. In the medium-term, the
gradual economic recovery expected in Panama will tend to stabilize
non-performing loans.
Global Bank's capital position is adequate at 12.4% as of December
2020, measured as Moody's adjusted tangible common equity (TCE)
relative to risk-weighted assets (RWA). Following Banvivienda's
acquisition, Global Bank's capital was replenished by a capital
injection and recent profitable years. Also, the contraction of its
loan book has benefited the bank's capitalization. We expect the
modest loan growth and prudent dividend policy to support Global
Bank's capitalization going forward. The bank's reported total
regulatory capital ratio was 15.6% as of December 2020.
The bank's profitability has been affected by lower business
volumes, lower interest rates, higher provisioning cost as well as
larger share of liquid assets. As of December 2020, the bank's
Return on Assets (ROA) declined to 0.2%, from 0.5% as of June 2020,
when the bank's fiscal year concludes. These metrics are below
regional and local peers' and lower than Global Bank's
pre-Banvivienda's acquisition, when its ROA was 1.2% for the period
2016-2018 . Global Bank's profitability will continue to be
affected by higher provisioning costs to the extent asset quality
remains weak, and by limited business prospects in the short term.
Despite Global Bank's good access to deposits, the bank maintains a
relatively high reliance of market funds, which tend to be more
expensive and less stable than retail deposits. However, as a
result of Banvivienda's incorporation into Global Bank, the bank's
market funds/tangible banking assets declined materially to 26.0%
as of December 2020, from 36.0% as of June 2017 before the
acquisition. Another positive credit consideration is the fact that
approximately 60% of Global Bank's market funds expire in more than
a year, adding stability to the funding base. Furthermore, Global
Bank maintains moderate levels of liquid assets, and a large share
of its investment portfolio is composed of corporate bonds, which
tend to be less liquid under situations of market stress.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Global Bank's BCA could be upgraded if its asset quality,
profitability and capitalization ratios are strengthened.
Conversely, downward pressure on the ratings and assessments could
come from a deterioration in the bank's asset quality as loan
deferrals expire, or if its profitability is weakened by additional
provisioning costs. Also, a worsening in the banks capitalization
metrics could lead to additional pressure on Global Bank's
ratings.
The principal methodology used in these ratings was Banks
Methodology published in March 2021.
=====================
P U E R T O R I C O
=====================
ASOCIACION DE PROPIETARIOS: Court Confirms 100% Plan
----------------------------------------------------
Judge Edward A. Godoy of the U.S. Bankruptcy Court for the District
of Puerto Rico has entered an order confirming the plan filed by
Asociacion De Propietarios Condominio Radio Centro dated December
11, 2019, as supplemented on May 13, 2020, and Oct. 23, 2020.
According to the most recent amendment, the Oct. 23 amendment, the
treatment of general unsecured creditors will be as follows:
The total unsecured claims subject to distribution is $209,087.
Creditors in this class will receive a total repayment of 100% of
their claimed or listed debt plus 2.50% annual interest. The
Debtor will comply with 113 equal monthly installments of 1,250
each up to the date all unsecured creditors are paid in full.
The prior iteration of the Plan as provided for the in May 13
amendment provided for a 35% recovery for unsecured creditors. The
original plan provided for a recovery of 1.72% for the class.
About Asociacion De Propietarios
Condominio Radio Centro
Asociacion De Propietarios Condominio Radio Centro sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. D.P.R.
Case No. 19-02202) on April 23, 2019. At the time of the filing,
the Debtor was estimated to have assets of less than $100,000 and
liabilities of less than $500,000. Gloria Justiniano Irizarry,
Esq., at Justiniano's Law Office, is the Debtor's counsel.
*********
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