/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/210421.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 21, 2021, Vol. 22, No. 74 Headlines A R G E N T I N A PAN AMERICAN: Fitch Assigns BB- Rating to Proposed USD300MM Notes B E R M U D A ALTERA INFRASTRUCTURE: Moody's Affirms Caa1 CFR, Outlook Now Neg. B R A Z I L ANDRADE GUTIERREZ: Fitch Lowers Long-Term IDRs to 'RD' COMPANHIA SIDERURGICA: Moody's Upgrades CFR to Ba3, Outlook Stable CSN INOVA: Moody's Hikes USD1.3BB Sr. Unsec. Notes Rating to Ba3 D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: Assumes More Than RD$2BB to Avoid Fuel Hikes DOMINICAN REPUBLIC: Gasoline Price Increases & Regular Diesel Drops DOMINICAN REPUBLIC: Public Debt Per Capita Up 20% at Close of 2020 P A N A M A BANCO INTERNACIONAL: Fitch Affirms 'BB-' LT IDR, Outlook Negative P U E R T O R I C O L'OCCITANE INC: Proofs of Claim Due May 7 S T . V I N C E N T A N D T H E G R E N A D I N E S ST. VINCENT AND THE GRENADINES: Digicel Gives US$500K Worth of Help - - - - - ================= A R G E N T I N A ================= PAN AMERICAN: Fitch Assigns BB- Rating to Proposed USD300MM Notes ----------------------------------------------------------------- Fitch Ratings has assigned a long-term rating of 'BB-' to Pan American Energy S.L., Argentine Branch's (PAE Arg) proposed senior secured notes of up to $300 million. The notes are guaranteed by Pan American Energy, S.L. (PAE). Fitch currently rates Pan American Energy, Argentine Branch Long-Term Foreign Currency Issuer Default Rating (IDR) at 'BB-' and Long-Term Local Currency IDR at 'BB'. The Rating Outlook for the Foreign Currency IDR is Positive and for the Local Currency IDR is Stable. Fitch rates the company's senior unsecured notes 'BB-'. The proposed senior secured notes are secured by a security interest in a Debt Service Reserve Account, where PAE will fund the reserve account with future export proceeds in a minimum amount that will cover 100% of the following six months of the interest and/or principal payment. The proposed notes are expected to mature in six years and will amortize in six equal payments paid semi-annually starting in the 2H2024 and maturing by 1H2028. KEY RATING DRIVERS Diversified Geographic Footprint: The Positive Outlook reflects the expectation that PAE's Mexican asset, Hokchi, will generate enough cash flow to either cover hard currency gross interest expense alone or with Bolivia. In the latter case, the company will generate enough cash flow outside of Argentina from both its Mexican and Bolivia operations to apply a higher country ceiling, as Fitch estimates the EBITDA of both Mexico and Bolivia will adequately cover one full year of the company's consolidated hard-currency (HC) interest expense, all things being equal. The company's Foreign Currency IDR will not be limited by the country ceiling of Argentina at 'B-' but rather the country ceiling of Bolivia (B) or Mexico (BBB+). In the event, Mexico's country ceiling applies PAE rating will no longer be capped by the country ceiling of Argentina. Stable Production Profile: Under Fitch's rating case, PAE is expected to increase daily average production to above 250,000boe/d by 2023. PAE's consolidated production has decreased by 10% in 2020 due to the coronavirus. This decrease is mostly from its Argentine production, where oil decreased by 2.6% and gas by 21%. Overall production will remain flat in 2021 compared to 2020, but the company will increase production to 235,000 in 2022 and surpass 250,00 by 2023. Fitch believes the company has extraordinary flexibility given its significantly strong reserve base, allowing it to adjust accordingly to assure profitability. Strong Hydrocarbon Reserves: PAE has a strong 1P reserve life of 19.0 years, providing ample flexibility to adjust capex investment. As of YE 2020, PAE reported 1,596 million of boe in 1P reserves, 67% of which is oil with the remaining in natural gas. PAE has an oil 1P reserve life of 27 years and gas 1P reserve life of 14 years. PAE's strong reserve base is supported by a strong concession life. The company's Golfo San Jorge basin, Cerro Dragon, accounted for 83% of its total oil production, 22% of gas production and 67% of reserves. Operating concessions expire in 2046 - 2047, and the company's Hokchi asset has a concession life of 25 years, ending in 2041 with the right to extend the term for two 5-year additional periods. Solid Leverage Metrics: PAE's capital structure remains strong; gross leverage, defined as total debt to EBITDA in 2020 was 2.4x, and the company had a total debt to 1P of reserves of USD1.34 per barrel of equivalent. Gross leverage will average 1.1x between 2020-2024 mostly explained by the company's modestly increasing indebtedness to execute on its expansion plans and refinance current debt. PAE has strong and competitive access to capital and will likely refinance its debt at competitive rates, especially after its Mexican assets are in full operation. Capital Controls: PAE has maintained a strong liquidity profile even with the capital controls. The Argentine capital control measures that require entities with assets abroad to first use those resources to service international obligations before turning to Argentina's official currency markets poses significant risks to corporates in Argentina including PAE, as they will have more of their cash flow deposited in Argentina rather than abroad. The Argentine's central bank's (BCRA) recent communication (A7106) imposed a mandatory refinancing scheme that applies through year-end 2021. PAE recently announced a tender of its outstanding $500 million senior unsecured note due May 2021, of which USD166.5 million remain outstanding. The proceeds of the senior secured bond deal will be used to finance the 2021 capital expenditures in accordance with A7123 from the BCRA. Flexible Business Model: PAE's integrated energy model in Argentina gives the company greater flexibility to optimize profitability. In 2020, PAE's downstream entity (Axion) was the third largest refiner in Argentina with a 15% market share with 95 thousand barrels a day of refining capacity located in Campana. The refinery in Campana is in the process of a major expansion, which improved the refinery production conversion capacity. The project was completed and commissioned in 2020. The facility is the only facility in Argentina that can process PAE's heavy crude production, which is generally exported. Upon the completion of the expansion, PAE will have greater flexibility to meet domestic demand for diesel product, with the ability to adjust its operations in line with domestic and international demand. Strong Ownership: PAE is a 50/50 strategic alliance between BP plc (A/Stable) and BC Energy Investments Corp. (BC) formerly known as Bridas Corporation. BC is also a 50/50 joint venture between Argentine BC Energy and China National Offshore Oil Corporation International Ltd, a wholly owned subsidiary of CNOOC Limited (CNOOC; Long-Term IDR A+/Stable). Prior to the merger, Bridas owned 100% of Axion Energy. PAE's strong ownership does not have direct impact on its credit rating, but given both companies' strong track records and scale Fitch expects its shareholders would support the company if needed. DERIVATION SUMMARY PAE's Foreign Currency IDR continues to be constrained by the Argentine Country Ceiling at 'B-'; however, its medium production size of 208.7 thousand of boed and strong reserve life of 19 years compares favorably with other 'BB' rated oil and gas E&P producers. These peers include Tecpetrol Internacional (BB/Stable) with production of 180 thousand of boed, Murphy Oil Corporation (BB+/Negative) with 150 thousand of boed and YPF SA (CCC) with 480 thousand of boed. Further, PAE reported 1,617 million boe of 1P reserves at the end of 2019 equating to a reserve life of 21 years, higher than Murphy Oil's at 14 years and Tecpetrol's with 10 years. The company will be able to maintain its strong reserve life. PAE's capital structure remained strong in 2020. PAE's 2020 gross leverage measured by total debt to EBITDA will be 1.5x, slightly up from 1.4x in year-end 2020, in line with Tecpetrol (0.9x) and better than Murphy Oil (2.5x) and YPF (3.6x). On debt to 1P reserve basis, PAE's debt as of 2020 to 1P reserves as USD1.34 boe compared with Tecpetrol (USD1.62boe), Murphy Oil (USD3.4boe) and YPF (USD7.70boe). PAE operates in a lower operating environment, which is a constraining factor for its ratings but receives a one-notch uplift from the country ceiling due to its cash flows from export revenues and cash flows from abroad. KEY ASSUMPTIONS Fitch's key assumptions within its rating case for the issuer include: -- Domestic crude prices trend to $53bbl in the LT; -- Reserve replacement ratio of 102% per annum; -- Domestic gas price of USD2.70MMBTU in 2020; -- Average gross production of 250,000-280,000 boe/d from 2020 2023; -- Production cost of $10boe between 2020-2023; -- Royalties of $5boe between 2020-2023; -- Transportation cost of $1.5boe between 2020-2023; -- Exploration of $1.5boe between 2020-2023; -- SG&A of $2.7boe between 2020-2023; -- Mexico operations started in 2Q20; -- Improved refinery production capacity at La Campana project with expansion project completed in 2020; -- Downstream volumes down 10% in 2020 compared to 2019 and volume growth linked to Fitch's real GDP projections between 2021-2023; -- An average Refinery utilization capacity rate of 75% in 2020 and 63% between 2021-2023; -- Annual consolidated capex averaging of USD1.5 billion per year from 2020-2022; -- Dividends to average of UD124 million per year from 2021 through 2023. RATING SENSITIVITIES Factor that could, individually or collectively, lead to positive rating action/upgrade: -- Cash flows from operations outside of Argentina (Bolivia and Mexico) adequately covering hard currency gross interest expense for 12 months, resulting in a higher applied country ceiling than Argentina (CCC). Factors that could, individually or collectively, lead to negative rating action/downgrade: -- PAE's ratings could be negatively affected if liquidity is weakened by capital controls. -- An increase in leverage above 3.5x coupled with a decrease in interest coverage below 4.5x could also negatively affect ratings. 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 Strong Liquidity: Fitch believes PAE can comfortably service debt with cash on hand and cash flows through the rating horizon in the event the company faces a challenging financing environment due to the Argentina's capital controls. PAE also has a strong and conservative track record of tapping local and international markets and accessing capital at competitive rates. Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. ============= B E R M U D A ============= ALTERA INFRASTRUCTURE: Moody's Affirms Caa1 CFR, Outlook Now Neg. ----------------------------------------------------------------- Moody's Investors Service affirmed Altera Infrastructure L.P.'s Caa1 corporate family rating and its Caa1-PD probability of default rating. Concurrently, Moody's downgraded to Caa3 from Caa2 the senior unsecured rating of the $700 million notes maturing in 2023. The outlook was changed to negative from stable. RATINGS RATIONALE The outlook change to negative reflects Altera Infrastructure's weak financial performance with falling EBITDA generation in 2020, Moody's expectation of further falling EBITDA generation in 2021-22, as well as the company's continuing challenging liquidity position. Altera Infrastructure's financial performance continued to weaken in 2020 with reported adjusted EBITDA falling to $599 million from $673 million in 2019. The EBITDA decline was driven mainly by a material deterioration at the FSO segment but the company's larger and more stable Shuttle Tanker and FPSO segments also reported falling earnings. The company was immediately impacted by the pandemic-induced oil demand and oil production decline. In addition, Altera Infrastructure booked impairment charges of $269 million on its assets which, although non-cash in nature, indicate that future earnings and cash flows are likely to be lower than previously expected. The company's Moody's adjusted debt went up notably to $3,541 million at the end of 2020 from $3,295 million in 2019 due to debt-financed new vessel deliveries. As a result of lower EBITDA generation and higher Moody's adjusted total debt, the company's Moody's adjusted debt to EBITDA ratio deteriorated to 7.5x at the end of 2020 compared with 5.5x in 2019. For 2021-22 Moody's expects a further decline of revenues and EBITDA generation mainly driven by lower FPSO earnings. Moody's assumes that the Knarr FPSO will remain in operation at a lower contracted fixed rate but with a variable element related to oil prices between March 2021 and March 2022 but that it will cease to operate thereafter, while other FPSOs are also being put on lay-up. The rating agency expects Altera's Moody's adjusted EBITDA to fall to around $450 million in 2021 and to below $400 million in 2022 compared with $473 million in 2020. Despite much reduced capital expenditures of around $200 million in 2021 and around $100 million in 2022 compared with around $500 million in 2020, Moody's forecasts only small positive Free Cash Flow generation of under $50 million in 2021 and under $100 million in 2022. With the debt level falling at a slower pace than EBITDA, the rating agency projects credit metrics to deteriorate further with Moody's adjusted debt to EBITDA rising towards 8x in 2021 and potentially exceeding 9x in 2022. In addition to Moody's expectations of falling profitability in 2021-22 and weakening credit metrics, Altera Infrastructure's credit profile remains constrained by significant amortization payments and debt maturities that will need to be funded either with the refinancing of loans for vessel or the sale of vessels at the end of their life cycle. The company also faces contract renewal risk for the FPSO and FSO segments in the next few years, and in particular for the Knarr FPSO. Altera Infrastructure's credit profile is supported by relatively stable and contracted nature of its cash flow; high barriers-to-entry for competing FPSOs in long-lived fields; and its strong shuttle tanker market position in the North Sea. Moody's also notes positively the material financial investments by the owner Brookfield Business Partners L.P. which now fully owns the company. LIQUIDITY Altera Infrastructure's liquidity is weak. At the end of 2020, the company had $369 million of cash (including $133 million of restricted cash), and a $225 million committed revolving credit facility provided by the company's owner Brookfield Business Partners L.P., which was fully drawn. In February 2021, the company received two additional RCFs with a total amount of $100 million from Brookfield Business Partners L.P. which mature in February 2022. In addition, Moody's believes that Altera Infrastructure's ability to comply with its liquidity covenant, that states the company must maintain liquidity of at least $75 million or 5% of total debt (roughly $175 million), is uncertain. At the end of 2020, the company had material debt maturities of $376 million in 2021, $567 million in 2022 and $1,188 million in 2023. As Moody's expects only very modest positive free cash flow generation in 2021-22, Altera Infrastructure will need to continue to have full access to the capital markets and its relationship banks in order to fund the liquidity shortfall. The company has a track record of selling end of life cycle vessels and refinancing loans on its existing vessels, which however is less certain in the current weak market environment. STRUCTURAL CONSIDERATIONS The Caa3 rating assigned to the $700 million senior unsecured notes (currently $687 million outstanding), two notches below the Caa1 Corporate Family Rating, reflects material structural subordination to prior ranking secured debt which amounts to more than $2.0 billion. Moody's has downgraded the senior unsecured notes to Caa3 from Caa2 to reflect that the CFR is now more weakly positioned in the Caa1 rating category, which could affect recovery prospects should the capital structure become unsustainable. RATING OUTLOOK The negative outlook reflects Moody's forecasts of further falling EBITDA and cash flow generation in 2021-22 and the uncertainties related to the company's future strategy as it currently explores a number of strategic initiatives which could lead to certain asset sales. Further weakening operating performance could also hamper Altera Infrastructure's ability to fund its liquidity needs through refinancing. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if the company's liquidity resources are sufficient to cover all liquidity needs for at least 12 months without the need to rely on new financing and if Moody's adjusted debt to EBITDA falls to 6.5x or less. The ratings could be downgraded if the company's liquidity weakens or if Moody's adjusted debt to EBITDA increases to 8x or more on a sustained basis. PRINCIPAL METHODOLOGY The principal methodology used in these ratings was Midstream Energy published in December 2018. Altera Infrastructure L.P. is a Marshall Islands limited partnership with headquarters in Scotland and executive offices in Stavanger, Norway. Altera Infrastructure is an international provider of marine transportation, oil production, storage, long-distance towing and offshore installation and maintenance and safety services to the offshore oil industry. =========== B R A Z I L =========== ANDRADE GUTIERREZ: Fitch Lowers Long-Term IDRs to 'RD' ------------------------------------------------------ Fitch Ratings has downgraded Andrade Gutierrez Engenharia S.A.'s (AGE) Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) to 'RD' from 'C', and Long-Term National Scale Rating to 'RD(bra)' from 'C(bra)'. In addition, Fitch has affirmed Andrade Gutierrez International S.A.'s (AGI) senior secured notes due 2024 at 'C'/'RR4', and senior unsecured notes due 2021 at 'C', and has revised the Recovery Rating to 'RR6' from 'RR4'. The notes are fully guaranteed by AGE. The downgrade to 'RD' follows a missed USD23 million coupon payment by AGI on its USD480 million bond due December 2024. The cure period expired on April 15, 2021 after extension of 105 days from original due date in Dec. 30, 2020, as agreed with bondholders. AGE opted not to pay the second consent fee to further extend the cure period, despite a previously granted 45 days extension. KEY RATING DRIVERS Debt Restructure: Moelis & Co was hired as advisor to restructure AGI's USD43 million bond due 2021 and USD480 million bond due 2024, and may work for the sister-company, Andrade Gutierrez Participações S.A.'s (AGPar) BRL1.9 billion debentures. It is uncertain if AGEs' and AGPar's other debts will be restructured. In September 2020, AGE's and AGPar's total debt was BRL3.4 billion and BRL2.2 billion, respectively, including AGI's debt guaranteed by AGE. AGE has maturities of around BRL450 million in principal, BRL445 million in coupons, and BRL115 million in fines as a result of a plea bargain agreement in 2021. AGPar has BRL403 million in principal and BRL82 million in coupons due this year. Andrade Gutierrez Group's total secured debt totaled BRL4.7 billion in September 2020, of which 83% was guaranteed by the 14.9% stake in CCR S.A. (AA+[bra]/Stable) owned by AGPar, with market value of BRL3.9 billion. CCR shares guarantee on AGPar's first lien debentures and part of AGI's notes. The guarantee of 109.6 million CCR shares covers about 50% of AGI's 2024 bond. High Business Challenges: The operating environment for the Engineering and Construction (E&C) companies in Brazil has substantially deteriorated, and AGE's cash flow generation was negatively affected by the pandemic. Uncertainties are high for AGE's EBITDA recovery and capacity to turnaround its operations and replenish the backlog on a sustainable basis. During the LTM ended Sept. 30, 2020, EBITDA was BRL214 million. AGE's backlog was BRL7.9 billion in September 2020, and the company won BRL3 billion in new contracts in the last six months. AGE is also exposed to foreign exchange risk, as about 87% of total debt, including AGI's bonds, are denominated in foreign currency. DERIVATION SUMMARY AGE's 'RD' rating reflects the end of the extended grace period and the missed coupon payment of AGI's senior secured notes due December 2024, which are fully and irrevocably guaranteed by the company. KEY ASSUMPTIONS Fitch's key assumptions within the rating case for the issuer include: -- Backlog of about BRL8.5 billion in 2021 and 2022; -- EBITDA of BRL195 million in 2021 and BRL224 million in 2022, yielding margins of 6.2% and 7.2%, respectively; -- Capex of BRL63 million in 2021 and BRL93 million in 2022; -- Dividends of BRL115 million in 2021 to service the fines of the plea bargain agreement. KEY RECOVERY RATING ASSUMPTIONS The recovery analysis assumes that AGE would be reorganized as a going-concern in bankruptcy rather than liquidated. Fitch has assumed a 10% administrative claim. Going-Concern (GC) Approach -- AGE's GC EBITDA of BRL174 million considering 2021 revenue forecast, although at a more pressured margin than in the rating case: 5.0% compared with 6.2%, plus dividends received from unconsolidated investments (BRL18 million). -- The EBITDA forecast reflects the deceleration due to pandemic related restrictions. -- Fitch has not considered gains from the potential collection of past due receivables and legal claims, as they would distort the recurring EBITDA. -- A 5x enterprise value (EV) multiple is used to calculate a post-reorganization valuation, and in line with the industry's historical multiples. -- Considers AGI 2024's bonds 1st lien guarantee of 109.6 million CCR shares at an average price of BRL12.36, leading to a guarantee of BRL1.4 billion. -- For the 2024 senior secured bond, the Recovery Rating is capped at 'RR4', as Brazil is classified as a Group D country by Fitch and represents a recovery prospect between 31% and 50%. -- For the 2021 senior unsecured bond, the Recovery Rating is 'RR6' and represents a recovery prospect between 0% and 10%. Liquidation Value Approach Fitch excluded the liquidation value (LV) approach because Brazilian bankruptcy legislation tends to favor the maintenance of the business to preserve direct and indirect jobs. Moreover, in extreme cases where LV was necessary, the recovery of the assets has proved very difficult for creditors. RATING SENSITIVITIES Factor that could, individually or collectively, lead to positive rating action/upgrade: -- Amortization of past due coupons or the successful conclusion of the debt restructuring. Factor that could, individually or collectively, lead to negative rating action/downgrade: -- Filing for bankruptcy protection, liquidation, or any other formal winding-up procedure would lead to a downgrade of corporate ratings to 'D'. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Non-Financial Corporate issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. LIQUIDITY AND DEBT STRUCTURE Weak Liquidity: AGE's liquidity is weak, and was negatively impacted by the delay in the company's turnaround of operations, pressured by the pandemic. On Sept. 30, 2020, AGE's BRL218 million cash position covered only 0.4x of the BRL587 million short-term debt, including the USD43 million senior unsecured notes due August 2021. In addition, AGE has about BRL494 million in coupons and BRL115 million in fines as a result of a plea bargain agreement scheduled for the next 12 months. In Sept. 30, 2020, AGE's total adjusted debt of BRL3.4 billion was mainly composed of AGI's 2021 and 2024 bonds, totaling BRL3 billion (87%), working capital lines of BRL318 million (9%), and permanent asset loans of BRL52 million (1%). AGPar total debt of BRL2.2 billion is mainly composed by the 1st, 4th, 5th and 6th debenture issuances. SUMMARY OF FINANCIAL ADJUSTMENTS Fitch considers the coupon payments of the off-balance sheet debt as operational cash flow. At the same time, the fines of the leniency agreement are considered dividends. COMPANHIA SIDERURGICA: Moody's Upgrades CFR to Ba3, Outlook Stable ------------------------------------------------------------------ Moody's America Latina Ltda. has upgraded Companhia Siderurgica Nacional (CSN)'s global scale ratings to Ba3 from B2 and the National Scale Ratings to A1.br from Ba1.br. The outlook for the ratings is stable. Ratings upgraded: Issuer: Companhia Siderurgica Nacional (CSN) Corporate Family Rating: to Ba3 from B2 (global scale) and to A1.br from Ba1.br (national scale) BRL1.95 billion Senior Unsecured Debentures due 2023: to Ba3 from B2 (global scale) and to A1.br from Ba1.br (national scale) The outlook for the ratings is stable. RATINGS RATIONALE The upgrade of CSN's ratings to Ba3 from B2 reflects the material improvement in the company's liquidity and debt profile following the completion of the IPO of its mining subsidiary, the reduction of about BRL4 billion in gross debt announced by the company since the beginning of 2021 and outlook for continued strong operations during 2021. On February 17, CSN raised BRL4.5 billion with the IPO of its mining subsidiary and will use the proceeds to reduce debt, increase its consolidated cash position and fund investments. The company is also working on the refinancing of BRL3.4 billion in debt with Banco do Brasil S.A. (Ba2/(P)Ba2 stable, ba2) and Caixa Economica Federal (Caixa) (Caixa, Ba2/(P)Ba2 stable, ba3) that come due in 2021-22. Finally, Moody's expects CSN to refinance its notes due in 2023. Pro forma to all transactions, CSN's cash position of BRL14.5 billion will cover debt maturities through 2025, and the company's debt amortization schedule will be comfortable, with only BRL3.5 billion in debt coming due in 2021-22 (compared to BRL9.2 billion prior to the transactions). Furthermore, CSN's total debt will likely decline further with the prepayments carried-out by the company and the excess cash generated during the year. CSN's Ba3/A1.br ratings reflect the company's position as a leading manufacturer of flat-rolled steel in Brazil (Ba2 stable), with a favorable product mix that is focused on value-added products, and as a major producer of iron ore (second-largest exporter in Brazil). Historically, the company has reported a strong Moody's-adjusted EBITDA margin of 20%-35% (33.5% in 2020), supported by its solid domestic market position, wide range of products across different segments and globally competitive production costs for both steel and iron ore. The ratings also incorporate the improvement in the company's leverage and liquidity after several measures taken over the past two years and the improved operating performance related to a favorable environment for both iron ore and steel. The ratings are constrained by CSN's recent track record of aggressive financial policies, including a highly leveraged capital structure, appetite for growth and dividend requirements to cover debt service at the parent level, although Moody's recognizes that the current actions taken by the company evidences a change in the management's approach to financial management. Additional credit concerns include the company's exposure to the volatility of the steel business in Brazil and to iron ore prices, its concentration in a single production site in the mining segment and potential overhangs related to judicial disputes regarding Transnordestina project, interruptions at Terminal de Carvao -- TECAR and to a recent arbitrage process. CSN's operating performance and credit metrics have improved materially since 2019, backed by the strong performance of the iron ore export business and a better than expected performance for steel in 2020. The company's iron ore operations will remain strong based on current high prices, relatively stable sales volumes and a favorable exchange rate for exports, while the steel business will benefit from better sales volumes in Brazil and improved profitability after investments made by CSN in a blast-furnace to improve efficiency. CSN's adjusted EBITDA increased to BRL10.1 billion in 2020 from BRL6.3 billion in 2019 and adjusted leverage declined to 3.6x from 4.8x. Moody's expects CSN's adjusted leverage ratios to decline to around 1-2x in the next 12-18 months and to remain within the 3.0 -- 4.5x range overtime based on a range of price scenarios for iron ore 62% Fe of $70-$100 per ton and normalized steel operations. Net leverage assuming a recurring BRL10 billion cash position will fall to below 1x in 2021 and would stand at 2-3x overtime. Leverage ratios could strengthen further depending on how much debt reduction the company pursues during 2021. The strong operating performance combined with cash preservation measures during the pandemic supported a material free cash flow generation of BRL7.5 billion in 2020, and led to an increase in the company's cash position to BRL10.4 billion at the end of 2020 (BRL13.7 billion including Usiminas' shares) from BRL1.6 billion at the end of 2019 (BRL3.7 billion with Usiminas' shares). Going forward, Moody's expects CSN to maintain a strong free cash flow generation with credit metrics and liquidity stronger than historical levels. RATING OUTLOOK The stable outlook reflects Moody's expectation that the company's operations will continue to perform well in the next 12-18 months, and that CSN will continue to pursue stronger balance sheet and liquidity either through additional external events or using its own cash generation to reinforce its cash position or reduce debt. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if CSN proves to have a conservative financial management for an extended period time, or if the company is able to increase its financial flexibility further, either through a strengthened cash position or lower debt balance. An upgrade would also require total leverage (measured by total adjusted debt to EBITDA) below 3.5x (3.6x in 2020) and interest coverage ratios (measured by EBIT to Interest expenses) above 3x (2.6x in 2020) on a sustainable basis. The ratings could be downgraded if performance over the next 12 to 18 months deteriorates such that leverage remains above 4.5x and EBIT/interest below 2x on a sustained basis. Evidences of more aggressive financial policies or a deterioration in the company's liquidity profile would also trigger a downgrade or stabilization of the rating outlook. The principal methodology used in these ratings was Steel Industry published in September 2017. CSN INOVA: Moody's Hikes USD1.3BB Sr. Unsec. Notes Rating to Ba3 ---------------------------------------------------------------- Moody's Investors Service upgraded to Ba3 from B2 the ratings assigned to the senior unsecured notes of CSN Inova Ventures, CSN Islands XII Corporation and CSN Resources S.A. that are guaranteed by Companhia Siderurgica Nacional. At the same time, Moody's America Latina upgraded CSN's global scale ratings to Ba3 from B2 and the National Scale Ratings to A1.br from Ba1.br. The outlook for the ratings is stable. Ratings upgraded: Issuer : CSN Inova Ventures USD1.3 billion 6.75% BACKED Gtd Senior Unsecured Notes Due 2028: Upgrade to Ba3 from B2 Issuer: CSN Islands XII Corporation USD1 billion 7.0% BACKED Gtd Senior Unsecured Perpetual Notes: Upgrade to Ba3 from B2 Issuer: CSN Resources S.A. USD600 million 7.625% BACKED Gtd Senior Unsecured Notes 2026: Upgrade to Ba3 from B2 USD925 million 7.625% BACKED Gtd Senior Unsecured Notes 2023: Upgrade to Ba3 from B2 Outlook Actions: Issuers: CSN Inova Ventures, CSN Islands XII Corporation, & CSN Resources S.A. The outlook for the ratings is stable. RATINGS RATIONALE The upgrade of CSN's ratings to Ba3 from B2 reflects the material improvement in the company's liquidity and debt profile following the completion of the IPO of its mining subsidiary, the reduction of about BRL4 billion in gross debt announced by the company since the beginning of 2021 and outlook for continued strong operations during 2021. On February 17, CSN raised BRL4.5 billion with the IPO of its mining subsidiary and will use the proceeds to reduce debt, increase its consolidated cash position and fund investments. The company is also working on the refinancing of BRL3.4 billion in debt with Banco do Brasil S.A. (Ba2/(P)Ba2 stable, ba2) and Caixa Economica Federal (Caixa) (Caixa, Ba2/(P)Ba2 stable, ba3) that come due in 2021-22. Finally, Moody's expects CSN to refinance its notes due in 2023. Pro forma to all transactions, CSN's cash position of BRL14.5 billion will cover debt maturities through 2025, and the company's debt amortization schedule will be comfortable, with only BRL3.5 billion in debt coming due in 2021-22 (compared to BRL9.2 billion prior to the transactions). Furthermore, CSN's total debt will likely decline further with the prepayments carried-out by the company and the excess cash generated during the year. CSN's Ba3/A1.br ratings reflect the company's position as a leading manufacturer of flat-rolled steel in Brazil (Ba2 stable), with a favorable product mix that is focused on value-added products, and as a major producer of iron ore (second-largest exporter in Brazil). Historically, the company has reported a strong Moody's-adjusted EBITDA margin of 20%-35% (33.5% in 2020), supported by its solid domestic market position, wide range of products across different segments and globally competitive production costs for both steel and iron ore. The ratings also incorporate the improvement in the company's leverage and liquidity after several measures taken over the past two years and the improved operating performance related to a favorable environment for both iron ore and steel. The ratings are constrained by CSN's recent track record of aggressive financial policies, including a highly leveraged capital structure, appetite for growth and dividend requirements to cover debt service at the parent level, although Moody's recognizes that the current actions taken by the company evidences a change in the management's approach to financial management. Additional credit concerns include the company's exposure to the volatility of the steel business in Brazil and to iron ore prices, its concentration in a single production site in the mining segment and potential overhangs related to judicial disputes regarding Transnordestina project, interruptions at Terminal de Carvao -- TECAR and to a recent arbitrage process. CSN's operating performance and credit metrics have improved materially since 2019, backed by the strong performance of the iron ore export business and a better than expected performance for steel in 2020. The company's iron ore operations will remain strong based on current high prices, relatively stable sales volumes and a favorable exchange rate for exports, while the steel business will benefit from better sales volumes in Brazil and improved profitability after investments made by CSN in a blast-furnace to improve efficiency. CSN's adjusted EBITDA increased to BRL10.1 billion in 2020 from BRL6.3 billion in 2019 and adjusted leverage declined to 3.6x from 4.8x. Moody's expects CSN's adjusted leverage ratios to decline to around 1-2x in the next 12-18 months and to remain within the 3.0 -- 4.5x range overtime based on a range of price scenarios for iron ore 62% Fe of $70-$100 per ton and normalized steel operations. Net leverage assuming a recurring BRL10 billion cash position will fall to below 1x in 2021 and would stand at 2-3x overtime. Leverage ratios could strengthen further depending on how much debt reduction the company pursues during 2021. The strong operating performance combined with cash preservation measures during the pandemic supported a material free cash flow generation of BRL7.5 billion in 2020, and led to an increase in the company's cash position to BRL10.4 billion at the end of 2020 (BRL13.7 billion including Usiminas' shares) from BRL1.6 billion at the end of 2019 (BRL3.7 billion with Usiminas' shares). Going forward, Moody's expects CSN to maintain a strong free cash flow generation with credit metrics and liquidity stronger than historical levels. RATING OUTLOOK The stable outlook reflects Moody's expectation that the company's operations will continue to perform well in the next 12-18 months, and that CSN will continue to pursue stronger balance sheet and liquidity either through additional external events or using its own cash generation to reinforce its cash position or reduce debt. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if CSN proves to have a conservative financial management for an extended period time, or if the company is able to increase its financial flexibility further, either through a strengthened cash position or lower debt balance. An upgrade would also require total leverage (measured by total adjusted debt to EBITDA) below 3.5x (3.6x in 2020) and interest coverage ratios (measured by EBIT to Interest expenses) above 3x (2.6x in 2020) on a sustainable basis. The ratings could be downgraded if performance over the next 12 to 18 months deteriorates such that leverage remains above 4.5x and EBIT/interest below 2x on a sustained basis. Evidences of more aggressive financial policies or a deterioration in the company's liquidity profile would also trigger a downgrade or stabilization of the rating outlook. The principal methodology used in these ratings was Steel Industry published in September 2017. With an annual capacity of 5.9 million tons of crude steel, Companhia Siderurgica Nacional (CSN) is a vertically integrated, low cost producer of flat-rolled steel, including slabs, hot and cold rolled steel, and a wide range of value-added steel products, such as galvanized sheet and tinplate. In addition, the company has downstream operations to produce customized products, pre-painted steel and steel packaging. CSN sells its products to a broad array of industries, including the automotive, capital goods, packaging, construction and home appliance sectors. CSN owns and operates cold rolling and galvanizing facilities in Portugal, along with long steel assets in Germany through its subsidiary Stahlwerk Thuringen GmbH (SWT). The company also has a long steel line (500,000 tons capacity) in the Volta Redonda plant. CSN is a major producer of iron ore (the second-largest exporter in Brazil), with a sales volume of 31.2 million tons in 2020. The company has operations in other segments, such as cement, logistics, port terminals and power generation. CSN reported revenues of BRL30.1 billion ($5.8 billion) in 2020 with an adjusted EBITDA margin of 33.5%. =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: Assumes More Than RD$2BB to Avoid Fuel Hikes ---------------------------------------------------------------- Dominican Today reports that the Dominican Government has assumed, from January of this year until the week of Saturday, April 10 to 17, more than RD$1,978.6 million of the cost of fuels to avoid increases in prices to consumers. According to Dominican Today, from March 13 to 19, the Government assumed RD$322 million; it is the highest figure this year. The Ministry of Industry, Commerce, and Mipymes (MICM) has reported weekly on the government's costs not to incur local increases, the report relays. For this week, the fiscal price is RD$140.1 million, which he explains translates into an economic commitment with importers to mitigate the effect of this increase in citizens' pocket, the report relates. The price of a WTI barrel is US$59.25. But this cost has fluctuated with different figures in the last three months, the report relates. For example, from March 13 to 19, the Government assumed RD$322 million, which is the highest figure in this period, the report notes. On that date, a barrel of West Texas Intermediate (WTI), used as a reference to calculate local prices, climbed US$66, the report adds. The second-highest amount was in the week of March 20 to 26, where the Government absorbed an increase that was to be transferred to the consumer of more than RD $ 316 million, with a WTI barrel price US$65, the report notes. Meanwhile, the lowest amount that the government has had to assume has been during the week 9 to 15 January 2021, of RD$63 million, with prices above US$50 for the first time since February 2020, the report says. In the weekly fuel prices bulletin, the MICM reported on 12 March that it managed to settle 50% of the total debt with fuel importers that the government had assumed, which meant a disbursement of more than RD$377 million, the report relays. The current status of the debt is unknown, the report discloses. "On the contrary, the current management of the Ministry of Industry, Commerce, and MSMEs has faced all the commitments with private importing companies" in terms of management, which in their opinion "contributes to the stability of the local market and reflecting our commitment to responsible, ethical and transparent management," said Perez Fermin, the report relates. The current government received the transfer of command on August 16, 2020, with a barrel of oil at US$42.34, and this week from April 10 to 16, it was around US$59.25 a barrel of WTI; that is, it has increased by 40%, the report discloses. While in the first week of January 2021, the price was US$48 a barrel, and for this week, US$59.25, that is, so far this year, the WTI has had a rise of 23.4%, according to MICM data, the report notes. In the first week of January 2021, the price was US$48 a barrel, and for this week, it was US$59.25, an increase of 23.4%, the report says. Local Impact The Minister of Industry and Commerce, Victor Bisono (Ito), explained that the constant rise in the prices of a barrel of oil, as well as that of refined products derived from it, have had a significant impact on the parity price import and consequently, in the price of sale to the public of all fuels in the Dominican Republic, the report notes. He explained that the Government does not have in its immediate plans to raise the price of Liquefied Petroleum Gas (LPG) due to its impact on households, 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: Gasoline Price Increases & Regular Diesel Drops ------------------------------------------------------------------- Dominican Today reports that for the week April 17 to 23, regular gasoline will be sold at RD$231.50 and premium gasoline at RD$245.10 pesos, increasing by three pesos per gallon, respectively. A gallon of regular diesel will be sold at RD$181.10 pesos, for a drop of RD$0.50 cents this week, according to Dominican Today. The price of LPG to continue its sale is maintained at RD$128.10, the same as natural gas that continues to be sold at 28.97 per cubic meter, among other products that keep their prices, the report notes. The report relays that the prices set by the Ministry of Industry, Commerce, and MSMEs are the following: -- Premium Gasoline will be sold at RD$245.10 per gallon, up by RD$3.00. -- Regular Gasoline will be sold at RD$231.50 per gallon, also up RD$3.00. -- Regular diesel will be sold at RD$181.10 per gallon, dropping by RD$0.50. -- Optimal diesel will be sold at RD$197.50 per gallon, maintaining its price. -- Avtur will be sold at RD$142.70 per gallon, maintaining its price. -- Kerosene will be sold at RD$168.90 per gallon, maintaining its price. -- Fuel Oil # 6 will be sold at RD$125.10 per gallon, maintaining its price. -- Fuel Oil 1% S will be sold at RD$142.80 per gallon, maintaining its price. -- Liquefied Petroleum Gas (LPG) will be sold at RD$128.10 / gl: it maintains its price. -- Natural Gas RD$28.97 per cubic meter, maintains its price. The average exchange rate is RD$57.11, according to the weekly average rate of the Central Bank's daily publications. The ministry pointed out that the decision to maintain the prices entails debts with importers of approximately RD $ 81.1 million this week, which are added to those already accumulated in previous weeks, as a measure to avoid transferring the fuel increases to the consumer caused by international markets, 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: Public Debt Per Capita Up 20% at Close of 2020 ------------------------------------------------------------------ Dominican Today reports that consolidated public debt per capita increased 20% at the close of last year, when the effects of COVID-19 on the economy forced the Dominican government to contract more loans to compensate for the sharp drop in revenue, according to Dominican Today. The report says the increase in the public debt means that each citizen owes US$5,213 (RD$302,979), according to official numbers. In 2019, each Dominican owed about US$4,337, an amount that had already been registering a sustained increase in recent years, according to official data compiled by Diario Libre, the report relays. 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). =========== P A N A M A =========== BANCO INTERNACIONAL: Fitch Affirms 'BB-' LT IDR, Outlook Negative ----------------------------------------------------------------- Fitch Ratings has affirmed Banco Internacional de Costa Rica, S.A.'s (BICSA) Long-Term Issuer Default Rating (IDR) of 'BB-' and Viability Rating (VR) of 'bb-'. The Rating Outlook is Negative. The bank's Short-Term IDR of 'B' is also affirmed. KEY RATING DRIVERS IDRs, VR, NATIONAL-SCALE RATINGS AND SENIOR DEBT IN PANAMA BICSA's IDRs are driven by its VR, reflecting with a high level of importance Fitch's blended operating environment assessment, which considers the bank's earning assets allocated in 29 countries. However, the operating environments of Costa Rica and Panama have the most influence, as 68% of the bank's earning assets are located in these countries. BICSA's blended operating environment remains unchanged at 'bb-' with a negative trend. Therefore, the Rating Outlook remains Negative, since it is aligned to those operating environments, which in turn reflects Fitch's expectations that will continue to challenge BICSA's financial profile in the medium term. The bank's company profile also has a high influence on the ratings supported by its geographic diversification, which is wider than that of its similarly rated peers, its reasonable competitive position in the regional trade finance with a stable base of regional clients and small market shares. The bank continues to focus its new business generation in less sensitive economic sectors and resumed business on others albeit with very focused customer segmentation while also emphasizing factoring and leasing services. Fitch believes BICSA's asset quality ratios are manageable. As of 2020, while the 90+ days overdue loans ratio remains reasonable, given the current conditions at 2.25%, the proportion of "modified" loans amount to 12% of total gross loans, which compares favorably with the 34% registered by the banking industry. Fitch believes the risk of deterioration of the portfolio under alleviation measures is low for the vast majority of these loans, which are fulfilling obligations under the new conditions and diminishing the risk of a material deterioration once the grace periods expire. However, Fitch believes BICSA's asset quality is not exempt from further pressures given its borrower concentration and exposure in sensitive industries. BICSA's corporate-oriented business model has historically yielded structurally low profitability and during 2020 its metrics further deteriorated as Fitch expected. They were affected by high operating costs and increasing loan impairment charges. As of 2020, the operating return of risk-weighted assets (RWA) is a low 0.31% (2016-2019 average of 0.70%). Fitch believes BICSA will continue registering a low operating return in 2021 since its currently prioritizing liquidity and solvency over profitability. BICSA's funding mainly is from wholesale funding at around 54% of total funding, which remains with higher proportion of available funds in relation to total funds granted as the bank has repaid lines and demanded less funds, hence increasing total funds available in case of need. Liquidity indicators are considered sufficient to cover the bank's needs, as liquidity coverage was 165% as of 2020. The loans/deposits ratio is still high at 203% but improved in relation to its recent history benefited by greater loan contraction than in deposits. Customer deposits remain with a high concentration by depositor rate of around 44% but this is partially offset by long-standing relational business focus. BICSA's capitalization is adequate and CET1 was 12.8%, as of December 2020, above the 12.1% registered in 2019, supported by a full retention policy that offsets lower profitability. Fitch does not expect significant deteriorations in this indicator over the rating horizon despite low profitability and expected moderate credit growth would alleviate these pressures. SUPPORT RATING BICSA's Support Rating reflects Fitch's opinion of the entity's shareholders, Banco de Costa Rica (BCR) and Banco Nacional de Costa Rica (BNCR), and their ability and propensity to support BICSA should the need arise. The Support Rating of '4' reflects a limited probability of support from the shareholders given their capacity, as demonstrated by their IDRs. Fitch's support assessment places a high importance on the support track record and the implication of subsidiary default. Fitch also recognizes BICSA's role in its parent companies' strategies. NATIONAL SENIOR DEBT RATINGS IN EL SALVADOR The National Rating of BICSA's senior unsecured debt issuances in El Salvador, rated 'AAA(slv)' with a Stable Outlook, reflects the relative strength of the Panamanian bank compared with other issuers in El Salvador. BICSA's IDR is three notches above El Salvador's 'B-' Sovereign Rating. RATING SENSITIVITIES IDRs, VR AND NATIONAL SCALE RATINGS Factors that could, individually or collectively, lead to negative rating action/downgrade: -- A further downgrade or material deterioration of the main operating environments where BICSA holds its major exposures, namely in Costa Rica and Panama; -- A deterioration of the bank's financial profile reflected in a material and sustained increase of its impaired loans, and a further reduction of its operating return of RWAs that reduces its CET1 ratio below 12%; -- A downgrade of BICSA's VR could likely affect its IDRs and National Ratings but the resulting levels of these ratings would be determined by the implicit floor derived from its shareholders' IDRs, as the ratings could return to being driven by parental support. Factors that could, individually or collectively, lead to positive rating action/upgrade: -- The ratings could be affirmed and the Rating Outlook revised to Stable if the bank's profitability and asset quality ratios return to their pre-pandemic levels on a consistent basis; -- An improvement in the bank's operating environments, particularly in Panama and Costa Rica, could lead to a rating upgrade over the medium term. SUPPORT RATING Factor that could, individually or collectively, lead to negative rating action/downgrade: -- The Support Rating is sensitive to negative changes in BCR's and BNCR's capacity or propensity to provide timely support to the bank. Factor that could, individually or collectively, lead to positive rating action/upgrade: -- Although not expected within the foreseeable future, the Support Rating is sensitive to significant positive changes in BCR's and BNCR's capacity or propensity to provide timely support to the bank. DEBT RATINGS IN PANAMA The debt ratings would mirror any potential movements on their respective IDRs. The senior unsecured debt ratings would continue to be aligned with the bank's IDR. NATIONAL SENIOR DEBT RATINGS IN EL SALVADOR The National Ratings could be downgraded in response to a material reduction in BICSA's IDR. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Financial Institutions and Covered Bond issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. SUMMARY OF FINANCIAL ADJUSTMENTS Pre-paid expenses and other deferred assets were reclassified as intangible in order to calculate a consistent tangible common equity/tangible assets in relation to previous periods. ESG CONSIDERATIONS Unless otherwise disclosed in this section, the highest level of Environmental, Social and Corporate Governance (ESG) Credit Relevance is a Score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. ===================== P U E R T O R I C O ===================== L'OCCITANE INC: Proofs of Claim Due May 7 ----------------------------------------- The Hon. Michael B. Kaplan of the U.S. Bankruptcy Court for the District of New Jersey set May 7, 2021, at 5:00 p.m. (Prevailing Eastern Time) as the deadline for all persons and entities holding a claim against L'Occitane Inc. The Court also set July 26, 2021, at 5:00 p.m. (Prevailing Eastern Time) as the deadline of governmental units to file their claims against the Debtor. Each claim form, including supporting documentation, must be submitted on or before the deadline: (i) by completing the applicable form, copies of which can be accessed at the claims agent's website at https://cases.stretto.com/LOccitane/file-a-claim/ and using the electronic interface on the claims agent website; or (ii) by regular mail, courier service, overnight mail or other hand delivery to: L'Occitane Inc. Claims Processing c/o Stretto 410 Exchange, Suite 100 Irvine, CA 9260 About L'Occitane Inc. New York-based L'Occitane, Inc. -- http://www.loccitane.com/-- is a national retail chain that sells and promotes the internationally renowned "L'OCCITANE en Provence" beauty and well-being products brand in the United States through boutiques in 36 states and its website. After opening its first boutique in the U.S. in 1996, the Company presently operates 166 boutiques in 36 states and Puerto Rico. Founded by Olivier Baussan more than 40 years ago, Switzerland-based L'OCCITANE en Provence captures the true art de vivre of Provence, offering a sensorial immersion in the natural beauty and lifestyle of the South of France. From the texture of L'OCCITANE products to the scent, each skincare, body care, and fragrance formula promises pleasure through beauty and well-being -- a moment rich in enjoyment and discovery that goes beyond tangible benefits to create a different experience of Provence. On Jan. 26, 2021, L'Occitane, Inc., filed a Chapter 11 petition (Bankr. D.N.J. Case No. 21-10632). The Debtor estimated $100 million to $500 million in assets and liabilities as of the bankruptcy filing. International operations are not part of the Chapter 11 filing. The Hon. Michael B. Kaplan is the case judge. Fox Rothschild LLP is serving as the Company's legal counsel, RK Consultants LLC is serving as financial advisor, and Hilco Real Estate, LLC is serving as real estate advisor to the Company. Stretto is the claims agent, maintaining the page https://cases.stretto.com/LOccitane =========================================================== S T . V I N C E N T A N D T H E G R E N A D I N E S =========================================================== ST. VINCENT AND THE GRENADINES: Digicel Gives US$500K Worth of Help ------------------------------------------------------------------- RJR News reports that the Digicel Group is gifting St. Vincent & the Grenadines US$500,000 worth of much-needed items to support the country's urgent relief efforts arising from the eruption of La Soufriere volcano. With thousands of people evacuated from the red zone and housed in shelters and significant ash fall affecting the island, the situation is developing and deteriorating, according to RJR News. Digicel says it will work with the Government to identify immediate needs as well as procuring and shipping items identified as urgently needed in these early stages by the National Emergency Management Organisation, the report notes. About Digicel Group Digicel Group is a mobile phone network provider operating in 33 markets across the Caribbean, Central America, and Oceania regions. The company is owned by the Irish billionaire Denis O'Brien, is incorporated in Bermuda, and based in Jamaica. As reported in the Troubled Company Reporter-Latin America in April 2020, Moody's Investors Service downgraded Digicel Group Limited's probability of default rating to Caa3-PD from Caa2-PD. At the same time, Moody's downgraded the senior secured rating of Digicel International Finance Limited to Caa1 from B3. All other ratings within the group remain unchanged. The outlook is negative. On April 10, 2020, the TCR-LA reported that Fitch Ratings has downgraded Digicel Limited to 'C' from 'CCC', and its outstanding debt instruments, including the 2021 and 2023 notes to 'C'/'RR4' from 'CCC'/'RR4'. Fitch has also downgraded Digicel International Finance Limited to 'CCC+' from 'B-'/Negative, and its outstanding debt instruments, including the 2024 notes and the 2025 credit facility, to 'CCC+'/'RR4' from 'B-'/'RR4'. Fitch has removed the Negative Rating Outlook from DIFL. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Latin America is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA, Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A. Chapman, Editors. Copyright 2021. All rights reserved. ISSN 1529-2746. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Latin America subscription rate is US$775 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Peter A. Chapman at 215-945-7000. . * * * End of Transmission * * *