/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/210624.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 Thursday, June 24, 2021, Vol. 22, No. 120 Headlines B R A Z I L BRAZIL: Soybean Exports in June Slow Down Pace, Secex Says C O L O M B I A AGENCIA DISTRITAL DE INFRAESTRUCTURA: Fitch Lowers IDRs to 'BB+' D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: IDB Approves Loan to Boost Northwestern Area E C U A D O R BANCO PICHINCHA 5: Fitch Assigns B-(EXP) Rating on 4 Debt Tranches G U A T E M A L A INVESTMENT ENERGY: S&P Rates $700MM Senior Unsecured Notes 'BB-' J A M A I C A DIGICEL GROUP: Fitch Affirms 'CCC' LT Issuer Default Rating M E X I C O ALPHA HOLDING: Fitch Lowers LT Issuer Default Ratings to 'C' ALPHA HOLDING: Moody's Cuts CFR to Ca & Alters Outlook to Negative ALPHA HOLDING: S&P Lowers ICR to 'CC', Still on Watch Negative P U E R T O R I C O FARMACIA NUEVA: July 28 Plan & Disclosure Hearing Set T R I N I D A D A N D T O B A G O CARIBBEAN AIRLINES: Discloses Job Cuts, Other Cost Saving Measures CL FIN'L: CLICO's Debt to Government Down to $2.09 Billion V E N E Z U E L A VENEZUELA: U.S. Rejects Maduro's Call for Biden to Lift Sanctions - - - - - =========== B R A Z I L =========== BRAZIL: Soybean Exports in June Slow Down Pace, Secex Says ---------------------------------------------------------- Rio Times Online reports that the average daily shipment of soybeans from Brazil slowed, reaching 582,000 tons by the third week of June, a volume already below the 606,740 tons per day of the same month last year, federal government data showed. By the previous week, the world's largest producer and exporter of the oilseed shipped 637,560 tons per day, still exceeding the June 2020 average, said the Secretariat of Foreign Trade (Secex), according to Rio Times Online. 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. 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. Fitch Ratings' credit rating for Brazil stands at 'BB-' with a negative outlook (November 2020). Fitch's 'BB-' Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) has been affirmed in May 2021. Standard & Poor's credit rating for Brazil stands at BB- with stable outlook (April 2020). S&P's 'BB-/B' long-and short-term foreign and local currency sovereign credit ratings for Brazil were affirmed in December 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). =============== C O L O M B I A =============== AGENCIA DISTRITAL DE INFRAESTRUCTURA: Fitch Lowers IDRs to 'BB+' ---------------------------------------------------------------- Fitch Ratings has downgraded Agencia Distrital de Infraestructura del Distrito de Barranquilla's (ADI) Long-Term Foreign Currency (LT FC) Issuer Default Rating (IDR) and Long-Term Local Currency (LT LC) IDR to 'BB+' from 'BBB-'. The Rating Outlook was Revised to Stable from Negative. The National Long Term Rating is downgraded to 'AA(col)' from 'AAA(col)'. Outlook remains Stable. Short Term National Rating is affirmed at 'F1+(col)'. The rating actions are explained by Fitch's recent rating actions over the District of Barranquilla (the District) on June 15, 2021. Fitch classifies ADI as a Government-Related Entity (GRE) of the District. Its main mission is the structuring, contracting, management and evaluation of the public infrastructure of Barranquilla. Fitch applies its GRE Rating Criteria to evaluate ADI's strength of linkage and incentive to support from its supporting government, the District of Barranquilla. This results in a score of 45 out of 60, leading to an equalization of ADI's rating with Barranquilla's. The standalone credit profile (SCP) of ADI, which represents the credit profile of the entity assuming no exceptional support from the government in a situation of financial difficulty, cannot be derived. Fitch believes ADI cannot be de-linked from the District of Barranquilla, as it is highly dependent on the district's transfers and does not generate its own cash flow. The present review is extraordinary. RATING SENSITIVITIES Factor that could, individually or collectively, lead to positive rating action/upgrade: -- ADI's are equalised to Barranquilla's ratings, therefore any change in Barranquilla´s ratings would be directly reflected in ADI's ratings. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- A downgrade of Barranquilla's rating; -- Deterioration of ADI's linkage with Barranquilla and changes to its legal structure leading to a score lower than 42.5 could negatively impact ADI's ratings. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Sovereigns, Public Finance and Infrastructure issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of three notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: IDB Approves Loan to Boost Northwestern Area ---------------------------------------------------------------- The Inter-American Development Bank (IDB) has approved a US$100 million loan to help the Dominican Republic improve competitiveness and socioeconomic growth of its northwestern region by modernizing port logistics and infrastructure. The operation consists of the construction of a modern logistics terminal with a platform parallel to the bay coastline. The Ministerio de Obras Públicas y Comunicaciones (MOPC, Ministry of Public Works and Communications) will be in charge of the works planning and execution as well as of maintenance of the road and port infrastructure. APORDOM, the Dominican Port Authority, which is responsible for all government-owned seaport facilities, will manage the new logistics terminal and implement port policies conducive to attracting private sector investments in strategic areas in order to promote the development of the country's northwestern region. Given its natural conditions and its strategic location on the navigation route to the U.S., the Port of Manzanillo aspires to become the country's primary northwestern port. Its enhancement will allow for the berthing of larger vessels and handling of containerized cargo; it will significantly boost banana shipments; promote the development of new exports from the agroindustrial sector and northwestern free trade zones; and drive additional private investment by leveraging its geostrategic position. In addition, the port's rehabilitation and expansion will meet modern resilience and natural conservation standards for the bay. The project includes improving the main road access to the port, which will ensure adequate connectivity and accessibility for producers and businesses to new markets as well as production and consumption centers, and also help generate jobs, with a strong focus on employment of women and the inclusion of persons with disabilities. The Bank's US$100 million loan has a 5.5-year grace period, a 5-year disbursement term, and an interest rate based on Libor. 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, 2021, 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). ============= E C U A D O R ============= BANCO PICHINCHA 5: Fitch Assigns B-(EXP) Rating on 4 Debt Tranches ------------------------------------------------------------------ Fitch Ratings has assigned expected ratings to Fideicomiso Mercantil Titularizacion Hipotecaria de Banco Pichincha 5 (FIMEPCH 5). This is the first RMBS transaction rated by the agency out of Ecuador. The notes will ultimately be backed by approximately $176.2 million pool of residential mortgages in Ecuador by Banco Pichincha. Fitch's ratings address the likelihood of timely payment of interest and ultimate payment of principal for the series A notes. DEBT RATING ---- ------ Fideicomiso Mercantil Titularizacion Hipotecaria de Banco Pichincha 5 A1 LT B-(EXP)sf Expected Rating A2 LT B-(EXP)sf Expected Rating A3 LT B-(EXP)sf Expected Rating A4 LT B-(EXP)sf Expected Rating KEY RATING DRIVERS Higher Stresses Applied do to Ecuador Macroeconomic Environment: Ecuador's Issuer Default Ratings (IDRs) are 'B-'/Stable and its Country Ceiling (CC) is also 'B-'. As a result of the macroeconomic environment and potential idiosyncratic risks embedded in Latin America, stresses applied to the rated notes are higher and comparable to those Fitch would otherwise apply three rating categories above the cap level (defined at 'B+sf' for Ecuador), according to Fitch's 'Structured Finance and Covered Bonds Country Risk Rating Criteria.' Assumptions reflect portfolio with standard characteristics: Fitch has defined a weighted average foreclosure frequency (WAFF) of 17.0% and a WA recovery rate (WARR) of 85.2% for the 'B-sf' stress scenario. These assumptions consider the main characteristics of the assets, where the original loan-to-value (OLTV) average 61.5%, the original term of the assets average 206 months, the remaining term average 162 months, and 30.2% of the portfolio is concentrated in properties valued equal or less than 300 minimum wages at origin. Adequate capital structure support ratings: The series A benefit from a sequential pay structure, where their target amortization payments are senior to interest and principal payments on the series B. Series A also benefit from credit enhancement (CE) of 10% in the form of subordination and an interest reserve account equivalent to 3x their next interest payment, which allow them to pass the 'B-sf' stress. Also, although they benefit from excess spread, due to their Net WAC feature the agency has not given credit to this variable in the cash flow modelling. Ratings capped at Issuer Account Bank: The series A notes are capped at the rating of the Issuer Account Bank provider (initially Banco Pichincha ('B-'/Negative)). According to Fitch's Structured Finance and Covered Bonds Rating Criteria, at the 'Bsf' rating category the issuer account bank needs to have at least the same rating than the notes, but in this case, the eligible bank has been defined as an entity that maintain a rating equal to or maximum one notch below Ecuador's sovereign rating (currently at B-/OutS) which constrain the ratings assigned. Operational Risk Mitigated: Pursuant to the servicer agreement, Banco Pichincha will perform the role of primary servicer. Fitch has reviewed Banco Pichincha's systems and procedures and is satisfied with its servicing capabilities. Additionally, Corporacion de Desarrollo de Mercado Secundario de Hipotecas CTH S.A. (CTH), has been designated as master and back-up servicer, mitigating the exposure to operational risk. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- The ratings assigned are sensitive to the credit quality of the Ecuadorian sovereign, as well as to the credit quality of Banco Pichincha (acting as the Issuer Account Bank). An upgrade on the sovereign of Ecuador (especially on its Country Ceiling level) and an upgrade on Banco Pichincha could result in an upgrade on the series A notes. -- Stable to improved asset performance driven by stable delinquencies and defaults would lead to increasing CE levels. Fitch tested an additional rating sensitivity scenario by applying a decrease in the FF of 15% and an increase in the RR of 15%. The ratings for the series A remained at the same level, considering the rating cap in place. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- The ratings assigned are sensitive to the credit quality of the Ecuadorian sovereign, as well as to the credit quality of Banco Pichincha (acting as the Issuer Account Bank). A downgrade on the sovereign of Ecuador (especially on its Country Ceiling level) or a downgrade on Banco Pichincha would result in a downgrade on the series A notes. -- The transaction performance may also be affected by changes in market conditions and economic environment. Weakening economic performance is strongly correlated to increasing levels of delinquencies and defaults that could reduce CE available to the notes. -- Additionally, unanticipated declines in recoveries could also result in lower net proceeds, which may make certain note ratings susceptible to potential negative rating actions depending on the extent of the decline in recoveries. Fitch conducts sensitivity analyses by stressing both a transaction's base-case FF and RR assumptions, and examining the rating implications on all classes of notes. -- The transaction performance may be affected by changes in market conditions and economic environment. Weakening economic performance is strongly correlated to increasing levels of delinquencies and defaults that could reduce CE available to the notes. -- Additionally, unanticipated declines in recoveries could also result in lower net proceeds, which may make certain note ratings susceptible to negative rating actions depending on the extent of the decline in recoveries. Fitch conducts sensitivity analyses by stressing both a transaction's base case FF and Recovery Rating assumptions, and examining the rating implications on all classes of issued notes. -- Also, Fitch considers a more severe downside coronavirus scenario for sensitivity purposes. This new scenario explores how a more prolonged, draconian set of stresses could evolve. A re-emergence of infections in the major economies prolongs the confidence shock, preventing a recovery in financial markets and provoking a longer-lasting, negative wealth shock that depresses consumer demand and sparks expectations for a widespread, multi-year deflationary spiral. Following these guidelines, Fitch has established an increment of 15% to the WAFF and a decrease of 15% to the WARR. The ratings for the series A remained at the same level. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Structured Finance transactions have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of seven notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of seven notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAAsf' to 'Dsf'. Best- and worst-case scenario credit ratings are based on historical performance. USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10 Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action. DATA ADEQUACY Historical vintage data on Banco Pichincha's mortgage portfolio was provided to Fitch. Also, the agency was provided with detailed information on recovery levels, delinquency migration/transition matrices and prepayments. These historical data were prepared by Banco Pichincha. Fitch was also provided with information on a loan-by-loan basis; the data delivered were of good quality. Fitch conducted a review of a small targeted sample of Banco Pichincha's origination files and found the information contained in the reviewed files to be adequately consistent with the originator's policies and practices and the other information provided to the agency about the asset portfolio. The data used in the development of the ratings were reviewed by Fitch and are considered sufficient for the ratings to be assigned ESG CONSIDERATIONS Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. ================= G U A T E M A L A ================= INVESTMENT ENERGY: S&P Rates $700MM Senior Unsecured Notes 'BB-' ---------------------------------------------------------------- S&P Global Ratings related that Investment Energy Resources Limited (IERL), a holding company that owns 10 renewable energy projects located in Central America and the Caribbean, issued $700 million in senior unsecured notes due 2029 and secured a $300 million term loan that ranks pari pasu to the notes. IERL used the proceeds to prepay project finance debt at the subsidiaries' level, strengthening the group's financial and operating flexibility. S&P is assigning its 'BB-' long-term issuer credit rating on Investment Energy Resources Limited (IERL) and 'BB-' rating to the senior unsecured notes. S&P said, "The stable outlook reflects our expectation of solid and stable cash generation in the next 12 months, which should translate into gross debt to EBITDA of 4.5x-5.0x and funds from operations (FFO) to gross debt of 12%-15%. We expect cash flows to be sufficient to cover the company's limited capital expenditures (capex) and debt service needs, while distributing discretionary dividends." IERL's business risk profile mainly reflects the company's smaller scale than those of its peers and its exposure to high country risk in Central America, especially Guatemala (BB-/Stable/B), Honduras (BB-/Stable/B), Costa Rica (B/Negative/B), and Nicaragua (B-/Stable/B). These factors partly offset attractive terms of IERL's dollar-denominated contracts, which have an average remaining term of about 14 years. Rates are fixed through a defined rate-adjustment mechanism that S&P views as credit positive. Although there's some concentration in offtakers, which are some of the largest electricity distributors in Central America, they're required to buy almost all the energy that IERL's assets generate, while the minimum generation requirements are very low. Therefore, IERL isn't exposed to market competition. Its uncontracted position is limited, given that its hydro power plants, Renace and Santa Teresa, are 80% contracted, selling the remaining portion in the spot market in Guatemala. This acts as a hedge in case hydrological conditions worsen. In 2020, IERL added to its portfolio the Renace, Santa Teresa, Mata de Palma and Bosforo assets. As a result, the company's diversification expanded, not only geographically but also in terms of asset type, with hydro reaching 40% of total installed capacity, wind (40%), and photovoltaic (20%). S&P said, "In our view, this allows for more stable cash flows, because hydro and wind generation typically show historically negative correlation. We view these factors, along with the company's relatively new asset base, as rating strengths, because they allow IERL to post higher EBITDA margins than those of the regional peers." S&P said, "Our financial risk profile assessment reflects IERL's relatively predictable cash flows thanks to its long-term dollar denominated power purchase agreements (PPAs). That, combined with lower maintenance capex, manageable debt servicing needs, and discretionary dividends, should allow the company to maintain somewhat aggressive credit metrics. We expect IERL to maintain gross debt to EBITDA in the 4.5x-5.0x range and funds from operations (FFO) to gross debt at 12%-15% over the coming years. The ratings also reflect our view of IERL's improved financial and operating flexibility stemming from the repayment of project finance debt at the subsidiary level. It allowed IERL to enjoy a very manageable debt burden, with maturities related solely to the term loan ($15 million semi-annually) and interest expenses on the notes and term loan ($53 million - $55 million per year). Given that IERL's assets are in general new, maintenance capex needs are also relatively low. Dividend distribution would also be limited by a financial covenant that restricts it to the difference between EBITDA and 150% of interest expenses, which in our view, could compensate for unexpected lower operating cash flows or higher capex needs. "Despite our general view of limiting ratings on the electricity entities to the ones of their respective sovereigns, we tested IERL's ability to withstand a hypothetical sovereign default of Costa Rica, Nicaragua, and El Salvador, in which the company generates about 27% of total EBITDA, given their credit quality in the 'B' category and their correlation because of economy drivers and proximity. We perform this test because IERL has a 'bb-' stand-alone credit profile (SACP), while Guatemala and Honduras, where the company generates about 70% of its EBITDA, currently have a rating 'BB-' with a stable outlook; therefore, not limiting the rating on the company because the outlook on the sovereign is the same as the one on IERL. Under such a scenario, although IERL would be unable to receive cash flows from its operations in Costa Rica, Nicaragua, and El Salvador, the company would still post liquidity sources to uses above 1.0x. This is because IERL won't have meaningful debt maturities over the next few years, while lower dividend distributions could compensate for weaker cash flows." Although the notes and the term loan will be at the holding level, the subsidiaries -- Renace, S.A., Energía Eolica de Honduras, S.A., Soluciones Energeticas Renovables, S.A. de C.V., Sistemas Fotovoltaicos de Honduras, S.A., Alisios Holdings, S.A., Costa Rica Energy Holding, S.A., Vientos del Volcan, S.A., Inversiones Eolicas Campos Azules, S.A., Inversiones Eolicas Guanacaste, S.A., Inversiones Eolicas de Orosí Dos, S.A., Eolo de Nicaragua, S.A. and WCG Energy, Ltd. -- will unconditionally and irrevocably guarantee notes and the term loan on a joint and several basis, therefore mitigating subordination risks. Therefore, S&P rates the notes at the same level as the issuer credit rating. ============= J A M A I C A ============= DIGICEL GROUP: Fitch Affirms 'CCC' LT Issuer Default Rating ----------------------------------------------------------- Fitch Ratings has affirmed Digicel Group Holdings Limited's (DGHL) Long-Term (LT) Issuer Default Rating (IDR) at 'CCC'. Fitch affirmed DGHL's senior secured notes at 'CCC'/'RR4' and senior unsecured and subordinated notes at 'CC'/'RR6'. Fitch also upgraded Digicel Limited's (DL) LT IDR to 'B-'/Stable from 'CCC' and Digicel International Finance Limited's (DIFL) LT IDR to 'B-'/Stable from 'CCC+'. DGHL, DL, and DIFL are collectively referred to as Digicel. Simultaneously, Fitch upgraded DL's unsecured notes to 'B-'/'RR4' from 'CCC-'/'RR5' and DIFL's secured term loan and notes, unsecured notes and subordinated notes to 'B-'/'RR4' from 'CCC+'/'RR4'. The upgrades of DGHL's subsidiaries reflect the improvements to Digicel's financial structure and flexibility following the reorganization and restructuring of the company's debt during 2020. DGHL's consolidated credit profile is consistent with a 'CCC' category issuer, as leverage ratios remain high and economic conditions in the company's main operating environments remain challenged. Corporate governance concerns remain a constraint upon the ratings KEY RATING DRIVERS Financial Flexibility Improves: Last year's restructuring extended Digicel's amortization profile, reduced debt by USD1.5 billion, and significantly lowered annual cash interest payments to USD300 million-USD350 million per year in FY2021 and FY2022, which will increase as the PIK option on the DGHL notes falls away in 2H FY 2022. The USD187 million in litigation proceeds in 2H20 was also credit positive and should allow Digicel to maintain cash balances of around USD400 million on a consolidated level. Digicel does not face a significant maturity until the USD925 million unsecured DL notes mature in March 2023. Refinancing risk for these notes will remain high absent a return to growth in the Caribbean. Underlying Performance to Improve Somewhat: Fitch expects revenues to grow to USD2.4 billion from USD2.2 billion over the rating horizon. Rebounding tourism should benefit the economic environments in Digicel's markets. Over the last few years, Digicel's revenues have been under pressure due to currency depreciation in its markets and declining mobile voice that have outweighed gains elsewhere. As declining mobile voice accounts for a smaller proportion of revenues, the secular decline there will matter less for the company's results. The company is diversifying into higher growth B2B solutions and home entertainment (B2C broadband and TV); however, these account for only 20% of revenues at present. Financial Structure Improves: Digicel's debt restructuring cut consolidated gross debt by approximately USD1.5 billion dollars from USD7.0 billion to USD5.4 billion. As a result, total debt/EBITDA declined from >7.5x to 5.9x. Fitch forecasts that consolidated leverage will stabilize around 6.0x-6.5x. Fitch does not expect Digicel to deleverage significantly, as EBITDA generation of around USD900 million grows modestly and payment-in-kind (PIK) interest accrues for the DGHL notes due in 2024. A sale of the company's Pacific assets is not factored in the base case, but would be a positive for the company's credit profile if a successful sale enabled the company to pay down DGHL debt and reduce the associated interest expense. ESG - Aggressive Corporate Governance: Digicel's decision to restructure debt for the second time in as many years remains a constraint on the ratings. The group has a concentrated ownership and control structure along with a complex group structure that weakens both Digicel's corporate governance and the group's consolidated credit profile. While the group's financial reporting is appropriate, management's financial strategy of carrying high leverage and a history of high shareholder distributions (last in FY 2016) further weigh on the company's overall corporate governance assessment. Group Financial Structure Drives Ratings: Fitch expects net leverage of approximately 6.0x-6.5x on a consolidated basis at DGHL, 5.0x-5.5x at the DL level, and 4.0x-4.5x at DIFL, which provides a subordinated guaranteed to DL's bond. The company has twice restructured debt above the DIFL level, which sits closest to the bulk of the group's Caribbean operating assets. Digicel hired advisors to explore a sale of the DPL assets, the proceeds of which could be applied to DGHL's debt. Debt Structure Drives Recovery Ratings: Fitch forecasts Recovery Rates commensurate with 'RR1' for DIFL instruments, including the secured notes and term loan, the unsecured notes, and the subordinated notes. DIFL's instruments benefit from structural seniority as they sit closest to the Caribbean assets which generate about 80% of revenues. Fitch also forecasts recovery rates commensurate with 'RR2' for the DL unsecured notes and the DGHL secured notes. Fitch's Country-Specific Treatment of Recovery Ratings Criteria constrains the upward notching of the instruments to 'RR4', based on concerns about the rule of law, insolvency regimes and creditor protections in Digicel's jurisdictions. The DGHL secured instruments benefit from the residual value of the Pacific operations, resulting in an 'RR4' and an equalization with the IDR at 'CCC'. The unsecured and convertible DGHL notes do not have material recovery prospects and have been notched down to 'CC'/'RR6'. Weak Parent, Weak Linkages: Fitch has de-emphasized the importance of strength of the linkages within the group, due to Digicel's legal maneuvering, aggressive corporate governance, and the uncertainties surrounding cross-border insolvency in the countries of operation. While strong operational ties bind the group, the debt restructurings have caused Fitch to discount their importance. Strong Business Profile: Digicel's geographic diversification and competitive position share are strong for the rating levels. The company is active in 32 markets across the Caribbean and Pacific, with leading mobile shares in most. Many of these are duopolies, and Fitch does not believe the risk of a new entrant is high, due to the small size of each market. These dynamics support consistent EBITDA margins of around 40%. The group's USD2.3 billion in capex since FY 2015 should ensure network competitiveness. Under these circumstances, Fitch expects the company's competitive position to remain stable over the medium term ESG - Aggressive Corporate Governance: Digicel's decision to restructure debt for the second time in as many years remains a constraint on the ratings. The group has a concentrated ownership and control structure along with a complex group structure that weakens both Digicel's corporate governance and the group's consolidated credit profile. While the group's financial reporting is appropriate, management's financial strategy of carrying high leverage and a history of high shareholder distributions (last in FY2016) further weigh on the company's overall corporate governance assessment. DERIVATION SUMMARY DGHL's solid business profile, with leading mobile market shares in its well-diversified operational geographies supported by network competitiveness, is stronger than Oi S.A. (CCC+), which has restructured its debt in the last two years. Like Oi, Digicel has very limited financial flexibility and a weak financial structure, despite the recent debt restructurings. Digicel's financial profile is materially weaker than its regional diversified telecom peers in the speculative-grade rating categories, including Millicom International Cellular S.A. (BB+/Stable), and Cable & Wireless Communications Limited (BB-/Stable). Digicel's business profile is relatively less diversified on a service basis, given its reliance on mobile and a position in generally poorer countries with significant exchange rate volatility. Parent/subsidiary linkages are weak; therefore, the stronger subsidiaries have been notched up from the consolidated credit profile. The aggressive corporate governance that resulted in two debt restructurings in the last two years is a negative for the group's ratings. Under its "Country-Specific Treatment of Recovery Ratings Criteria", Fitch caps Digicel's debt instruments at 'RR4'; therefore, the instruments' ratings are capped at the issuers' IDRs. KEY ASSUMPTIONS Fitch's key assumptions within its rating case for the issuer include: -- Mobile service revenues growing from USD1.55 billion in FY 2021 to USD1.65 billion in FY 2024, equipment revenues flat around USD95 million. -- B2C home, B2B and other revenues growing to USD650 million from USD560 million. -- EBITDA margins around 40%. -- Cash balances of around USD400 million. -- Cash interest of USD350 million - USD400 million per year, cash taxes of USD150 million per year. -- Average capex of around USD350 million per year. -- Fitch does not include asset sales in Fitch's base case, due to the substantial uncertainties regarding timing and valuation. -- Refinancing and debt issuances out of DIFL. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade -- Faster than expected growth in mobile service revenues leading to EBITDA expansion. -- A sale of the Pacific assets and the application of the proceeds to DGHL debts. -- Net leverage declining toward 5.0x. -- Successful refinancing for the DL 2023 notes at any level; a refinancing of DL debt by DIFL would not negatively affect DIFL's ratings. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Deterioration of operating performance in key markets, such that leverage continues to increases toward 7.0x. -- Inability to formulate a refinancing plan for the DL 2023 notes. 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 Digicel's liquidity improved following the group's restructuring in 2020 with a reduction in cash interest burden and an extension of the debt amortization profile. The introduction of additional PIK instruments in the group's debt structure reduced cash interest by less than USD125 million. The group's liquidity position was also bolstered by the receipt of USD187 million of litigation proceeds in FY 2021, although the company has an upcoming maturity in 2023 with an unclear plan for refinancing. Of the consolidated USD5.5 billion of debt, USD2.9 billion is at the DIFL level, USD925 million at the DL level and USD1.6 billion at the DGHL level. The DIFL debt comprises USD582 million of unsecured notes, USD1.2 billion of secured notes, and UDS1.06 billion of term loans. The DL debt mainly comprises USD925 million of unsecured notes, and the DGHL debt comprises USD988 million of secured notes, USD410 million of unsecured notes, and USD193 million of subordinated convertible PIK notes. ISSUER PROFILE Digicel is a telecommunications operator, whose main business units are in the Caribbean and the South Pacific. The company provides mobile and fixed services to consumers and businesses. SUMMARY OF FINANCIAL ADJUSTMENTS Standard adjustments made; certain operating expenses and working capital items reclassified. ESG CONSIDERATIONS Digicel Group Holdings Limited has an Environmental, Social and Corporate Governance (ESG) Relevance Score (RS) of '5' for Group Structure due to its complex group structure and incorporation status in dozens of countries, which has a negative impact on the credit profile, and is highly relevant to the rating, resulting in an implicitly lower rating. Digicel Group Holdings Limited has an ESG RS of '5' for Governance Structure due to the concentrated nature of its decision and willingness to restructure debt, which has a negative impact on the credit profile, and is highly relevant to the rating, resulting in an implicitly lower rating. Digicel Group Holdings Limited has an ESG RS of '4' for Exposure to Environmental Impacts due to its presence in a hurricane prone region, which has a negative impact on the credit profile, and is relevant to the rating[s] in conjunction with other factors. Digicel Group Holdings Limited has an ESG RS of '4' for Financial Transparency due to the company's relatively opaque financial strategy and willingness to restructure debt, which has a negative impact on the credit profile, and is relevant to the rating[s] in conjunction with other factors. Unless otherwise disclosed in this section, the highest level of ESG Credit Relevance is a Score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. =========== M E X I C O =========== ALPHA HOLDING: Fitch Lowers LT Issuer Default Ratings to 'C' ------------------------------------------------------------ Fitch Ratings has downgraded Alpha Holding, S.A. de C.V. (Alpha Holding) Long-Term (LT) Local- and Foreign-Currency Issuer Default Ratings (IDRs) to 'C' from 'CC'. The senior unsecured notes were also downgraded to 'C' from 'CC'/'RR4'. Fitch has also affirmed its Short-Term (ST) Local- and Foreign-Currency IDR at 'C'. The actions follow the company's announcement that it will exercise a grace period and will not make the coupon payment scheduled on June 19, 2021. Alpha Holding's IDRs of 'C' ratings denote that a default or default-like process has begun. The downgrade of the issue rating to 'C' from 'CC'/'RR4' maintains the relativity versus the IDR and reflects the likely weak recovery prospects for the instrument. Fitch no longer maintains a Recovery Rating for the instrument reflecting that the potential recovery outcome for the instrument is highly variable. KEY RATING DRIVERS On June 17, 2021, the company announced that it will exercise a 30-day grace period with respect to the USD15 million cash interest payment due on June 19, 2021 with respect to its 10.0% Senior Notes due in 2022. This event follows the company's April 2021 announcement of the finding of relevant accounting errors in its financial information and subsequent removal of financial statements and other relevant information previously available for investors from its website, the hiring of external advisors and the failure to publish financial statements in accordance to the covenants. The company has disclosed that it has formed a special committee comprised exclusively of non-management members of its Board of Managers to conduct an investigation of the accounting errors, appointed an independent manager of the board and retained legal and accounting advisors, and that it continues in conversations with an ad hoc group of holders of over 50% of the principal amount of the 2022 notes and their legal and financial advisors. In Fitch's view these events signal that the interest payment before the 30 days grace period is unlikely. Alpha Holding's senior unsecured debt ratings are aligned with the company's IDRs, reflecting that the likelihood of default of the notes is the same as the issuer. Fitch has maintained its ESG Relevance Score for Financial Transparency at '5' due to announcement of accounting error findings and lack of provision of additional information to the market after the event. The restatement and lack of clarity on the final financial impact and a timeframe for the resolution of the issue signals weakness on the company's third-party disclosure and internal controls. Fitch has also maintained its ESG Relevance Score for the Governance Structure factor at '5' given the agency's concerns over intrinsic governance practices as well as the effectiveness of the supervisory board with regards to protection of creditor's rights. RATING SENSITIVITIES Factors that could, individually or collectively, lead to negative rating action/downgrade: -- An uncured payment default on any material financial obligation would lead to a downgrade of the IDRs to 'RD'; -- Fitch will monitor the sufficiency of information for the ongoing evaluation of the entity´s creditworthiness which could result in a rating withdrawal if the entity does not sufficiently disclose its information to the market; -- The notes' rating will be downgraded if the issuer IDR is downgraded. Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Upside potential is limited due to current uncertainties; -- In the event a debt restructuring process is initiated and sufficient disclosure of the company's plans and financial information is provided, the IDRs would be reassessed. 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. ESG CONSIDERATIONS Alpha Holding's ESG Relevance Score for Financial Transparency Issues of '5' reflects that there is no financial information available after the April 2021 announcement of accounting error findings. The restatement and lack of clarity on the final financial impact and a timeframe for the resolution of the issue signals weakness on the company's third-party disclosure and internal controls that, in conjunction with other factors, resulted in a downgrade of the company's IDRs. Alpha Holding's ESG Relevance Score for Governance Structure of '5' reflects Fitch's concerns on the company's intrinsic governance practices, effectiveness of the supervisory board with regards to perceived weakness towards the protection of creditors rights, which are relevant and negative at this moment to the company's IDRs. Alpha Holding has an ESG Relevance Score of '4' for Customer Welfare -- Fair Messaging, Privacy & Data Security due to its exposure to reputational and operational risks as its main business targets government employees and dependencies at relatively high rates, which has a negative impact on the credit profile and is relevant to the company's IDRs in conjunction with other factors. Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. ALPHA HOLDING: Moody's Cuts CFR to Ca & Alters Outlook to Negative ------------------------------------------------------------------ Moody's Investors Service has downgraded Alpha Holding, S.A. de C.V.'s ("AlphaCredit") long-term global local and foreign currency issuer ratings, its Corporate Family Rating and long-term foreign currency senior unsecured debt rating to Ca, from Caa2. This action concludes the review for downgrade initiated on April 21, 2021. At the same time, Moody's affirmed AlphaCredit's short-term global local and foreign currency issuer ratings at Not Prime. The ratings outlook was changed to negative. Subsequent to the rating action, Moody's will withdraw all of AlphaCredit's ratings. RATINGS RATIONALE The downgrade of AlphaCredit's ratings to Ca, from Caa2, and the negative outlook follow the company's announcement on June 17 that it will exercise a 30-day grace period in relation to a $15 million interest payment of its 2022 senior unsecured notes, which was due on June 19. The announcement came after the company's communication on April 20 that it will be restating prior year's financial statements related to errors in its accounting. The financials restatement is expected to have a significant negative impact on the company's reported solvency position. The downgrade captures Moody's expectation of higher losses for investors after the company announced that it would miss the coupon payment and use a 30-day grace period while it continues with conversations with an Ad Hoc group that holds more than 50% of the 2022 notes. AlphaCredit's ratings also incorporate its very weak capitalization, as the expected restatement of its financials will most likely lead to a deeply negative tangible common equity (TCE), which coupled with the reputational impact of the recent events further limits the company's access to funding. The action also incorporates AlphaCredit's governance concerns, which stem from inadequate risk management structure and reporting standards. The recently announced reinstatement and the delay in the reporting of financials follow several others accounting adjustments reported in the past year. Moody's has decided to withdraw the ratings because it believes it has insufficient or otherwise inadequate information to support the maintenance of the ratings. METHODOLOGIES The principal methodology used in these ratings was Finance Companies Methodology published in November 2019. ALPHA HOLDING: S&P Lowers ICR to 'CC', Still on Watch Negative -------------------------------------------------------------- S&P Global Ratings lowered its issuer credit and senior unsecured debt ratings on Alpha Holding S.A. de C.V. (Alpha) to 'CC' from 'CCC'. As well, S&P revised the group credit profile (GCP) to 'cc' from 'ccc'. The ratings remain on CreditWatch, where they were placed with negative implications on April 22. On June 17, 2021, Alpha Holding S.A. de C.V. (Alpha) announced the exercise of a 30-day grace period for the $15 million cash interest payment due June 19, 2021, on its $300 million senior secured notes due in December 2022. Rationale S&P believes the exercise of a grace period for the interest payment increases the probability of a distressed debt restructuring, or a non-coupon payment, within the next 30 days. Alpha recently hired lawyers and advisory consultants to complete the analysis of the accounting errors and restatement to its financial statements. In addition, the company announced that an ad hoc group of holders of more than 50% in principal amount of the notes has formed and has appointed financial and legal advisors that are engaged in dialogue with the company. S&P said, "We don't have visibility on potential outcomes at present. However, we believe that default appears to be imminent due to the potential distressed debt restructuring or nonpayment. Under our criteria, we would consider a distressed exchange as a default if the debt restructuring results in different conditions than the original, which would result in the ratings being lowered to 'SD' (selective default) or 'D' (default)." This could affect the company's derivative positions, reserve coverage, account receivables, and capital expenses amortization. S&P considers Alpha's internal controls as deficient. In addition, it believes this situation resulted in a serious reputational damage to the company. This reflects that the group is a nonregulated, nonbank financial institution and because the notes issued by the holding company are unconditionally and irrevocably guaranteed by all the operating subsidiaries. S&P believes that, at this point, the time frame for a potential default on the nonoperating holding company and debt is the same, considering their relative position within the 'CC' rating category. ===================== P U E R T O R I C O ===================== FARMACIA NUEVA: July 28 Plan & Disclosure Hearing Set ----------------------------------------------------- Debtor Farmacia Nueva Borinquen, Inc., filed with the U.S. Bankruptcy Court for the District of Puerto Rico a Disclosure Statement on June 16, 2021. Judge Mildred Caban Flores conditionally approved the Disclosure Statement on June 17 and ordered that: * July 28, 2021, at 9:00 AM, via Microsoft Teams is the hearing for the consideration of the final approval of the Disclosure Statement and the confirmation of the Plan. * That acceptances or rejections of the Plan may be filed in writing by the holders of all claims on/or before 14 days prior to the date of the hearing on confirmation of the Plan. * That any objection to the final approval of the Disclosure Statement and/or the confirmation of the Plan shall be filed on/or before 14 days prior to the date of the hearing on confirmation of the Plan. * That the debtor shall file with the Court a statement setting forth compliance with each requirement in U.S.C. Sec. 1129, the list of acceptances and rejections and the computation of the same, within 7 working days before the hearing on confirmation. A copy of the order dated June 17, 2021, is available at https://bit.ly/3zKzrVv from PacerMonitor.com at no charge. About Farmacia Nueva Borinquen Farmacia Nueva Borinquen, Inc. sought protection for relif under Chapter 11 of the Bankruptcy Code (Bankr. D.P.R. Case No. 20 03715) on Sept. 21, 2020, listing under $1 million in both assets and liabilities. Nilda Gonzalez Cordero, Esq., represents the Debtor. ===================================== T R I N I D A D A N D T O B A G O ===================================== CARIBBEAN AIRLINES: Discloses Job Cuts, Other Cost Saving Measures ------------------------------------------------------------------ RJR News reports that Caribbean Airlines Limited disclosed major job cuts and other cost cutting measures as it reported poor financial results. In terms of employees, the airline will make 25% of its workforce or about 450 positions redundant, according to RJR News. As part of the streamlining strategy, the number of jets in the fleet will be reduced over the course of 2021, the report notes. The move comes as the airline reported a loss of US$25.7 million and a 75% decline in revenue, compared to the corresponding period in 2020 for the first quarter of 2021, the report relays. The losses follow a similar downturn in 2020, which saw an operating loss of US$109.2 million compared to operating profits for 2018 and 2019, the report discloses. Since the beginning of the COVID-19 pandemic and the suspension of operations at its base in Trinidad and Tobago, the airline has seen passenger numbers plummet, and flight numbers reduced to less than 10% of normal operations, the report adds. About Caribbean Airlines Caribbean Airlines Limited - http://www.caribbean-airlines.com/- provides passenger airline services in the Caribbean, South America, and North America. The company also offers freighter services for perishables, fish and seafood, live animals, human remains, and dangerous goods. In addition, it operates a duty free store in Trinidad. Caribbean Airlines Limited was founded in 2006 and is based in Piarco, Trinidad and Tobago. Caribbean Airlines is among many airlines whose business has been greatly affected in 2020 by the slowdown of international travel caused by the COVID-19 pandemic. The government of Trinidad & Tobago guaranteed a US$65 million loan for the airline, and that funding has helped with the airlines' cash flow shortfall since May 2020. In September 2020, the airline related it will be taking cost-cutting measures to help keep it afloat. The measures, which was to affect some 1,700 employees, included salary deductions, no-pay leaves and lay-offs. CL FIN'L: CLICO's Debt to Government Down to $2.09 Billion ---------------------------------------------------------- Trinidad Express reports that Colonial Life Insurance Company (Trinidad) Ltd (CLICO) is solvent, yet it still owes the Government $2.09 billion as part of its 2009 bailout arrangement. In addition, approximately $1.66 billion provided with respect to British American Insurance Company (Trinidad) Limited (BAT) remains unpaid, according to Trinidad Express. This according to 38th quarterly report of the Central Bank, which was filed in the High Court pursuant to section 44E (7) of the Act, which reported on the period which ended March 31, 2021, the report notes. The report provides a snapshot of the progress of proposals to restructure CLICO, BAT and Clico Investment Bank (CIB), Trinidad Express relays. "In summary, of the approximately $18 billion (inclusive of preference interest due) provided by the Government in respect of CLICO, approximately $16.6 billion has been repaid by CLICO, leaving a balance of approximately $2.09 billion as at February 28, 2021," the report noted, Trinidad Express says. "Payments for interest on the preference shares due to the Government have commenced. As at February 28, 2021, the remaining interest due to the Government on these preference shares amounted to approximately $32.8 million," it noted, Trinidad Express discloses. The report noted that by January 24, 2019, approximately $5 billion in cash payments were made to the Government "in consideration for an appropriate reduction in CLICO's liabilities to GORTT," Trinidad Express relays. "A further cash payment of approximately $300 million (paid in tranches) was made to GORTT by CLICO between March 20 and 27, 2020. An additional $125 million was paid to GORTT on July 8, 2020. On September 17, 2020, pursuant to another Ministerial direction, CLICO was directed to pay GORTT $600 million, in cash, in two tranches in exchange for an appropriate reduction in liabilities owed to GORTT, Trinidad Express notes. The first tranche of approximately $300 million was paid to GORTT on September 30, 2020 and the second tranche of approximately $300.1 million was paid in two parts on October 24, 2020 and October 30, 2020, respectively," it added. CLICO's most recent audited financial statement, for the 12 months ending December 31, 2020, indicate the company had positive net worth of $3.23 billion at the end of 2020, Trinidad Express relays. That means the insurance company is in a position to pay off all of its liabilities, including the $2.09 billion it owes the Government, Trinidad Express discloses. The 2020 audit showed that CLICO's after tax profits plunged by 95 per cent for the year ending December 31, 2019, Trinidad Express says. CLICO recorded $119.23 million in after-tax profit in 2020, compared with $123.69 in 2019, Trinidad Express relays. Its total assets amounted to $13.55 billion in 2020, down from $14.90 billion at the end of 2019, while its total liabilities for 2020 were $10.31 billion, Trinidad Express notes. CLICO has been under the control of the Central Bank since 2009, in accordance with Section 44D of the Central Bank Act. In an interview earlier this year, Central Bank Governor Dr Alvin Hilaire said he is anxious for T&T's regulator of financial institutions to close the book on this country's largest bailout, Trinidad Express notes. "As I told you before, we want to get out of this thing. Right? We are not in the business of running insurance companies. Most of the conditions are no longer there in terms of the systemic issue. And in terms of the health of the financial system, so we don't have a systemic problem," he had said, Trinidad Express discloses. Ministerial Directives Despite CLICO being under the management of the Central Bank, the report noted that a number of transfers were made pursuant to ministerial directives over the course of the Central Bank's management of CLICO, Trinidad Express notes. Directives by the Minister of Finance to CLICO are allowed under section 44 F(5) of the Central Bank Act, which states: "In the performance of its functions and in the exercise of its powers under section 44D the Bank shall comply with any general or special directions of the Minister and shall act only after due consultation with the Minister," Trinidad Express relays Trinidad Express discloses that among the ministerial directives recorded in the Central Bank document are: 1. In January 2017, in light of the unanticipated delay in the sale of MHIL shares and pursuant to directions from the Minister of Finance to the Central Bank, CLICO obtained an independent valuation of CLICO's 100 per cent shareholding in Occidental Investment Limited (OIL) and Oceanic Properties Limited (OPL) in preparation for the transfer of these shareholdings to the Government, thereby appropriately reducing CLICO's liabilities to the Government. The valuation report was completed and the share sale and purchase agreement executed by the parties on March 28,2017. On May 8, 2017, the parties signed the necessary share transfer forms to facilitate the transfer of CLICO's 100 per cent shareholding in OIL and OPL to the State Enterprise, Golden Grove-Buccoo Limited. 2. In November 2017, pursuant to directions from the Minister of Finance to the Central Bank, arrangements were commenced to facilitate the purchase and cancellation of certain Government bonds held by CLICO in consideration for an appropriate reduction in liabilities owed by CLICO to the Government in order of priority. The relevant Sale and Purchase Agreement was executed on July 26, 2018 and a Variation Agreement which amended the value of binds to be transferred was executed on August 30,2019. 3. On April 11, 2018, approximately $107 million of a WASA loan facility together with a cash payment of $21 million were effectively transferred to the Government for an appropriate reduction in liabilities owed by CLICO to the Government in order of priority. 4. Pursuant to directions from the Minister of Finance, agreements were executed on March 29, 2018 for the transfer of CLICO's approximately 21 per cent shareholding in One Caribbean Media Limited (OCM) and approximately five per cent shareholding in West Indian Tobacco Company Limited to the Government based on an independent valuation, in consideration for an appropriate reduction in liabilities owed by CLICO to the Government in order of priority. These shares were transferred on April 25, 2018. 5. On April 30, 2018, CLICO received from the liquidator of CIB, the Deposit Insurance Corporation, an interim distribution of 27,619,219 Republic Bank Limited (RBL) shares and 848,564 OCM shares. Pursuant to directions from the Minister of Finance, the Central Bank directed CLICO to transfer to the Government the RBL shares and the OCM shares based on the price determined by an independent valuation in consideration for an appropriate reduction in liabilities owned to the Government in order of priority. These shares were transferred to the Government on July 4, 2018. 6. On September 7, 2018 and April 4, 2019, bonds totally approximately $502 million (now valued at approximately $500 million pursuant to a Variation Agreement dated August 30, 2019) were transferred to the Government (for cancellation) in exchange for an appropriate reduction in liabilities owed by CLICO to the Government. 7. Further to directions to the Central Bank from the Minister of Finance, CLICO was directed to transfer one of its properties located in Chaguanas and one another located in Port of Spain to the Government, based on an up-to-date independent valuation, in consideration for an appropriate reduction in liabilities owed by CLICO to the Government. Trinidad Express notes that for the property located on Chaguanas, the relevant sale and purchase agreement was executed on April 9, 2019 and the deed of assignment was registered on February 6, 2020. The purchase agreement and the deed of lease for the property located in Port of Spain were executed on August 5,2020 in exchange for an appropriate reduction in liabilities, the report relays. Stalled sale The report noted that progress on the sale of traditional insurance portfolios of CLICO and BAT has "been impacted by ongoing court proceedings in the context of a challenge by one of the bidders of the portfolio." An injunction was granted to Maritime Life (Caribbean) Ltd in July 2020, Trinidad Express relays. In the 2019 financial statement, it reclassified assets in preparation for sale to Sagicor, the report recalls. CLICO's balance sheet showed the reclassification of over $7 billion in assets, in the form of Government bonds, from investment securities to assets held for sale, the report notes. In addition, it shifted all of its $6.43 billion in insurance contracts-and all but $145.48 million of the $1.66 billion classified as investment contracts-to $7.72 billion of liabilities directly associated with assets held for sale, the report says. Note 18 of CLICO's financial statement indicates: "The sales and purchase agreement allows for the parties to exit the contract by mutual agreement as well as by either party, if the other party fails to fulfil stipulated terms as outlined in the agreement." But Note 18 adds: "CLICO remains fully committed to the sale of the portfolio and the execution of the signed agreement. "Directives to sell the asset from the Central Bank as controller of CLICO under section 44D of the Central Bank Act have not changed," the report adds. About CLICO International CLICO International Life Insurance Ltd. is a member of the CL Financial Group. CL Financial Limited is a privately held conglomerate in Trinidad and Tobago. Founded as an insurance company by Cyril Duprey, Colonial Life Insurance Company was expanded into a diversified company by his nephew, Lawrence Duprey. CL Financial is now one of the largest local conglomerates in the region, encompassing over 65 companies in 32 countries worldwide with total assets standing at roughly US$100 billion. ================= V E N E Z U E L A ================= VENEZUELA: U.S. Rejects Maduro's Call for Biden to Lift Sanctions ----------------------------------------------------------------- Nick Wadhams at Bloomberg News reports that President Joe Biden's administration rejected Nicolas Maduro's call for relief from U.S. sanctions, saying the Venezuelan leader needs to do more toward restoring democracy before penalties would be lifted. Maduro, a target of crippling U.S. sanctions under former President Donald Trump, reached out to Biden in an exclusive Bloomberg interview last week, calling on him to lift sanctions, normalize relations and end the "demonization of Venezuela," according to Bloomberg News. Responding to Maduro's comments, a State Department spokesman said a U.S. policy shift would require major changes by the Venezuelan president, Bloomberg News relays. They'd have to include engaging with opposition leader Juan Guaido to resolve the country's political crisis and pave the way for free and fair elections, as well as restoring economic and political freedoms, Bloomberg News notes. As long as "repression and corrupt practices" by Maduro and his supporters continue, the U.S. will work with its partners and allies to keep up the pressure, including sanctions against those who undermine democracy, the spokesman said by email, Bloomberg News discloses. Trump's administration recognized Guaido as Venezuela's interim president after Maduro was inaugurated for a second term in 2019 after an election that the U.S. and others said was rigged, Bloomberg News relays. In the Bloomberg interview, Maduro said his government has no dialogue with the U.S., a silence he blamed on "permanent extortion" by Venezuelan voters in Florida. The U.S. stance on Maduro's lack of legitimacy hasn't changed since Biden took office, said the State Department spokesman, who responded to question on condition of anonymity, Bloomberg News notes. The U.S. doesn't accept Maduro as Venezuela's legitimate president and instead recognizes Guaido, the leader of the National Assembly, as the interim president, according to the spokesman, Bloomberg News says. The Trump administration barred Venezuela from U.S. financial markets in 2017 and subsequently banned trading in Venezuelan debt and doing business with the state-owned oil company, Petroleos de Venezuela, or PDVSA, Bloomberg News notes. That policy, Maduro argued, is preventing Venezuela from paying down and restructuring its foreign debt. He said, "I have the plan" to repay bondholders -- an assertion rejected by the State Department spokesman, who blamed Maduro's economic mismanagement and said his claim to have a repayment plan isn't credible, Bloomberg News adds. Venezuela Venezuela, officially the Bolivarian Republic of Venezuela, is a country on the northern coast of South America, consisting of a continental landmass and a large number of small islands and islets in the Caribbean sea. The capital is the city of Caracas. Hugo Chavez was president to Venezuela from 1999 to 2013. The Chavez presidency was plagued with challenges, which included a 2002 coup d'etat, a 2002 national strike and a 2004 recall referendum. Nicolas Maduro was elected president in 2013 after the death of Chavez. Maduro won a second term at the May 2018 Venezuela elections, but this result has been challenged by countries including Argentina, Chile, Colombia, Brazil, Canada, Germany, France and the United States who deemed it fraudulent and moved to recognize Juan Guaido as president. The presidencies of Chavez and Maduro have challenged Venezuela with a socioeconomic and political crisis. It is marked by hyperinflation, climbing hunger, poverty, disease, crime and death rates, social unrest, corruption and emigration from the country. S&P Global Ratings, in May 2019, removed its long- and short-term local currency sovereign credit ratings on Venezuela from CreditWatch with negative implications and affirmed them at 'CCC-/C'. The outlook on the long-term local currency rating is negative. At the same time, S&P affirmed its 'SD/D' long- and short-term foreign currency sovereign credit ratings on Venezuela. Moody's credit rating (long term foreign and domestic issuer ratings) for Venezuela was last set at C with stable outlook in March 2018. Meanwhile, Fitch's long term issuer default rating for Venezuela was last in 2017 at RD and country ceiling was CC. Fitch,on June 27, 2019, affirmed then withdrew the ratings due to the imposition of U.S. sanctions on Venezuela. ********* 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 * * *