/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/210715.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, July 15, 2021, Vol. 22, No. 135 Headlines B R A Z I L GENERAL MOTORS: To Suspend 250 Workers Over Parts Shortage TRANSPORTADORA ASSOCIADA: Fitch Assigns First-Time 'BB' FC IDR TUPY SA: Reaches Deal to Acquire Cast Iron Operations of Teksid C O L O M B I A EMPRESAS PUBLICAS DE MEDELLIN: Fitch Lowers IDRs to 'BB+' D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: Reviews US$3.8B Liquidity Assistance Program DOMINICAN REPUBLIC: Supplementary Budget Include RD$15.3B Subsidies E C U A D O R GUAYAQUIL MERCHANT: Fitch Affirms BB- Rating on USD175MM Notes J A M A I C A JAMAICA PUBLIC: Almost $39M Not Paid Over to Customers for Breaches M E X I C O FIBRA SOMA: Moody's Assigns First Time 'Ba1' CFR, Outlook Stable OFFSHORE DRILLING: Fitch Affirms Then Withdraws 'RD' IDR P A N A M A BAC INTERNATIONAL: Moody's Affirms 'Ba1' LongTerm Deposit Ratings P U E R T O R I C O L'OCCITANE INC: Files Plan After Closing 40 Stores NATIONAL JEWELRY: Taps Luis D. Flores Gonzales as Legal Counsel V I R G I N I S L A N D S CALC BOND 3: Fitch Rates Fixed-Rate Notes Due 2022/2024 'BB+' - - - - - =========== B R A Z I L =========== GENERAL MOTORS: To Suspend 250 Workers Over Parts Shortage ---------------------------------------------------------- Rio Times Online reports that General Motors (GM) of Brazil has proposed the suspension of the contracts of 250 workers at one of its plants in the state of Sao Paulo faced with the shortage of parts affecting the automotive sector at a global level, union sources said. According to the Metalworkers Union of the city of Sao Jose dos Campos, Sao Paulo, the automobile giant proposed to suspend the 250 workers between July 12 and August 25, based on a Provisional Measure issued by the Government, which authorizes the suspension of employment agreements, the report notes. TRANSPORTADORA ASSOCIADA: Fitch Assigns First-Time 'BB' FC IDR -------------------------------------------------------------- Fitch Ratings has assigned first-time Foreign Currency (FC) and Local Currency (LC) Issuer Default Ratings (IDRs) 'BB' and 'BBB-', respectively, and a Long-Term National Scale Rating of 'AAA(bra)' to Transportadora Associada de Gas S.A. - TAG (TAG). The Rating Outlook for the IDRs is Negative, while the Outlook for the National Scale Rating is Stable. TAG's ratings reflect its solid business model, supported by long-term contracts without volumetric risk and the low risk profile of the gas transportation industry in Brazil, which allows healthy protection of its revenues and high margins with strong and stable operating cash flows. TAG's IDRs are constrained by the Brazilian operating environment. The ratings also incorporate TAG's robust financial profile and deleveraging expectations despite significant dividends distributions. The Negative Outlook for the FC IDR follows the sovereign rating, while that for the LC IDR reflects the potential weakening of operating environment in the country. KEY RATING DRIVERS Low Industry and Business Risk: TAG's operating cash generation is sound and supported by five, inflation indexed, long-term gas transportation agreements (GTA) with Petroleo Brasileiro S.A. (Petrobras; BB-/Negative), with the closest maturity in 2025. TAG has 100% of its transportation network capacity contracted, which excludes volumetric exposure despite utilization rate of around 60% on average, with peak periods reaching approximately 90% of capacity utilization. Part of the company's tariff is also U.S. dollar linked and annually updated. As such, TAG will not present any demand exposure until the expiration of its first contract, which represents about 20% of its total revenues, resulting in high predictability of performance that supports its consistent deleveraging capacity, with net debt-to-EBITDA ratio at 2.1x by 2023 from 4.5x by the end of March 2021. Solid CFFO: TAG's EBITDA should grow to BRL5.8 billion in 2021 and to BRL7.1 billion by 2023 with average margins of 85% in the period. The base case scenario for the ratings considers annual cash flow from operations (CFFO) at BRL4.5 billion-5.8 billion in the next three years from BRL4.1 billion as of the last twelve months (LTM) ended March 2021, sufficient to support the forecasted annual average capex of BRL301 million and relevant dividends of BRL1.8 billion. Annual average FCF should be BRL3.1 billion between 2021-2023. Mitigated Revenue Concentration at Petrobras: TAG is exposed to concentration risk on Petrobras as the single counterpart to the GTAs. The guarantee structure mitigates this risk as includes the receivables from Petrobras' gas distributors and thermal power plants clients that must represent at least 120% of the monthly payment to TAG. The credit profile of the gas distributors is robust, which mitigates default and concentration risk also considering the priority of gas supply payment. The possibility of gas supply discontinuity by Petrobras to its customers (gas distributors) is reduced, since there are limited alternatives for the oil company to sell this gas to other buyers. Strategic Infrastructure Asset: TAG operates a strategic pipelines network for the country's infrastructure in the North, Northeast and Southeast regions of Brazil. Gas distributors in those regions rely on TAG's infrastructure to receive the gas molecule. The infrastructure is also important as it connects the southeast gas transportation network, which is crucial for industry operational flexibility of the gas, particularly after industry regulatory updates. Neutral Regulatory Changes: Fitch estimates a greater opening of the gas market in Brazil due to Petrobras' asset sales in the industry and recent regulatory changes that stimulate gas supply competition. The existing transportation contracts between TAG and Petrobras remain unchanged and TAG's business model continues to be solid. The potential reduction of gas prices to the final consumer should increase gas consumption and production in Brazil in the coming years and strengthen the relevance and capacity use of TAG's assets. DERIVATION SUMMARY TAG's sound business profile is similar to that of other Fitch-rated midstream companies in the Latam region, such as the Brazilian electric power transmission company Transmissora Alianca de Energia Eletrica SA (Taesa; BB/Negative), and the gas transportation companies Transportadora de Gas Internacional S.A. E.S.P.'s (TGI; BBB/Stable), based in Chile, and Transportadora de Gas del Peru S.A. (TGP; BBB+/Stable), based in Peru. All of them present low industry risk vulnerabilities, predictable revenues and robust cash flow generation, with limited demand risk exposure given revenue based on available infrastructure capacity under long term contracts. These are characteristics of both power transmission and gas transportation companies under regulated industry. These companies also present strong credit metrics. The main differentiation in the IDRs of the Brazilians TAG and Taesa and regional peers is the revenue generating country and assets' geographic location. While TGP and TGI are located in investment-grade countries, TAG's and Taesa's ratings are negatively affected by Brazil's country ceiling of 'BB' and its Operating Environment. KEY ASSUMPTIONS -- Revenues based on contracted amounts and adjusted annually by inflation, with part of tariffs linked to exchange rate variation, according to GTAs; -- Operating and maintenance costs before depreciation and amortization representing 17% of net revenue in 2021, reducing to 14% in 2023; -- Average annual investments of BRL301 million between 2021 and 2023; -- Average annual dividend distribution of BRL1.8 billion between 2021 and 2023; -- High tax depreciation until 2023, materially reducing tax payment in the period; -- Debt repayment and the company deleveraging to below 3.0x sustainably. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Positive rating actions on the LC and FC IDRs depend on positive actions on the sovereign rating; -- Upgrade on National Scale Ratings does not apply as the rating is at the top of the national scale. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Downgrade of the sovereign ratings; -- Weakening of Petrobras' receivables guarantee structure relative to clients that deposit into the collection account; -- Net leverage above 3.5x on a sustainable basis; -- Regulatory or contractual changes affecting the fundamentals of the gas transport industry and/or TAG's business model. 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 Manageable Liquidity: TAG's liquidity profile should register moderate to weak ratios as measured by cash/short term debt. This is mitigated by its sound and resilient CFFO generation, which supports its strong debt and capital markets access to various sources of financing. In March 2021, TAG's cash and marketable securities position was BRL1.6 billion, low as compared with the BRL3.1 billion of short-term debt. TAG presents manageable debt amortization schedule and has committed credit line of BRL500 million with Bradesco in order to support temporarily FX mismatch between its annual tariff adjustment and U.S.-dollar-denominated debt semi-annual amortization. By March 2021, TAG's total debt was BRL26 billion, and consisted of debentures totaling BRL13 billion and a USD Facility of BRL13 billion. The company has a natural hedge for its FX exposure as two of its GTAs include tariff adjustments linked to U.S. dollar variation. The company is subject to net debt/EBITDA financial covenants below 4.0x in 2021 and 3.5x onwards after accounting for around BRL1.5 billion-1.9 billion of parent credit guarantee which covers only six months of debt amortization. This facility has not been considered for liquidity and rating purposes given its short-term nature. ISSUER PROFILE TAG operates in the transportation of natural gas in Brazil, owning the most extensive network of gas pipelines of around 4.5 thousand kilometers (47% of the country's total gas transport network) located in the North, Northeast and Southeast regions. Its total transportation capacity of 75 million cubic meters/day is fully contracted with Petrobras through five long-term GTAs. SUMMARY OF FINANCIAL ADJUSTMENTS -- For 2020 and 2019, operating leases are not considered debt. The income statement and cash flow have been adjusted to treat interest and amortization on the right-of-use assets as an operating cost; -- "Depositos vinculados" were included as readily available cash; -- 2018 and 2019 EBITDA excludes the impact of Petrobras' penalties in the amount of BRL105 million. 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. TUPY SA: Reaches Deal to Acquire Cast Iron Operations of Teksid --------------------------------------------------------------- Tupy S.A. ("Tupy"), a Brazilian multinational company dedicated to designing and manufacturing structural components, disclosed the conclusion of a revised agreement with Stellantis NV ("Stellantis") to acquire the Brazilian and Portuguese cast iron components operations of Teksid SpA ("Teksid"), a wholly owned subsidiary of Stellantis. Tupy had announced on December 2019 an agreement to acquire the global cast iron components operations of Teksid. Based on review and input from U.S. competition authorities, Tupy and Stellantis agreed to revise the transaction. In addition, Tupy has decided that a revised perimeter for the transaction will focus on assets with higher strategic fit. Therefore, Tupy will not proceed with the acquisition of Teksid's Mexican, Chinese and Polish operations and Teksid's offices in Italy and in the United States. The Enterprise Value for the new perimeter is EUR67.5 million. "The conclusion of this negotiation is a very important step for Tupy, and we are glad about the potential synergy among the companies. The transaction is part of Tupy's global growth strategy and increases its capacity to manufacture blocks and heads geared for capital goods," proclaims Fernando Cestari de Rizzo, the CEO of Tupy. "The exchange of knowledge among people will be as important as the asset combination, taking into account that both companies have teams made up of highly skilled and seasoned professionals, who will contribute to the development of innovative technologies, as the history of Tupy and Teksid has already shown," concluded Fernando. The transaction has been approved by Tupy's Board of Directors and is expected to be completed in the fourth quarter of 2021. The transaction will comply with the conditions of the previous approval received from the Brazilian competition authority in April 2021. About Tupy Tupy is a Brazilian company specialized in developing and manufacturing highly engineered structural cast iron components applied to complex metallurgical and geometrical components extensively used in capital goods that serve freight transport, construction industry, agriculture and many others industrial applications. These solutions contribute to the improvement of life standards such as, sanitation, drinking water, health, housing and the production and distribution of food. The technological innovation involved in our production and development processes is the company's specialty that dates back more than 80 years. Tupy's manufacturing facilities are located in Brazil and Mexico. As reported in the Troubled Company Reporter-Latin America on July 8, 2021, S&P Global Ratings revised its outlook on Brazil-based auto supplier Tupy S.A. to positive from stable and affirmed its 'BB' issuer credit and issue-level ratings. S&P also affirmed its national scale rating at 'brAAA' and kept the recovery rating of '3' (65%) unchanged. =============== C O L O M B I A =============== EMPRESAS PUBLICAS DE MEDELLIN: Fitch Lowers IDRs to 'BB+' --------------------------------------------------------- Fitch Ratings has downgraded Empresas Publicas de Medellin E.S.P.'s (EPM) foreign and local currency issuer default ratings (IDRs) to 'BB+' from 'BBB-' and maintained the Negative Rating Watch. Additionally, the company's senior unsecured debt ratings have been downgraded to 'BB+' from 'BBB-' with a Negative Rating Watch. Fitch has maintained the Negative Rating Watch on the stand-alone credit profile (SCP) of 'bbb-', which assumes the company is not owned by the Municipality of Medellin and will not receive state support should the need arise. EPM's ratings reflect strong ownership and control by its owner, the City of Medellin ('BB+'/Stable), which was downgraded to 'BB+'/Stable from 'BBB-'/Negative. The company's business risk is low resulting from its diversification and characteristics as a utility service provider. The company's ratings also reflect its somewhat aggressive growth strategy and solid credit protection measures supported by moderate projected leverage, healthy interest coverage and an adequate liquidity position. EPM's Negative Watch reflects continued uncertainty regarding the closure of Ituango's blocked Auxiliary Diversion System since April 28, 2018, and final cost over-runs of its Ituango project. The possibility of major flooding downstream from the project exists until the diversion tunnel is closed. While the likelihood of this is remote, the environmental, financial and reputational damage to the company could be significant. Fitch's expectation is that 300MW of the project will be online by mid-2022. The resolution of the Rating Watch may extend longer than six months given these uncertainties. KEY RATING DRIVERS Strong Linkage with Parent: EPM consistently contributes significant cash flows in the form of dividends to its parent, the City of Medellin (BB+/Stable). These distributions comprised over 22% of the city's total revenues in 2020, and have exceeded government revenues by 20% four out of the last five years. Under Fitch's criteria, a government-related entity (GRE) that sustainably generates more than 10% of the government's revenues is considered a strong linkage factor that would lead to an equalization of the ratings. Ituango Progress: Fitch continues to maintain the Rating Watch Negative until further confirmation that the diversion and auxiliary tunnels are appropriately plugged. The tunnels are expected to be secured between December 2021 and March 2022, just prior to the entry of the first 300MW unit. As of March 2021, the company reported 92.5% progress on pre-plug 2 of the right deviation tunnel. Despite an additional delay announced in June 2020 due to the coronavirus, Fitch's base case is that two 300MW units will come online per year between 2022-2025. Fitch expects that once complete, Ituango will add over USD800 million to the company's generation revenue and become part of the country's base load installed capacity. Insurance Payments Support Capex: Fitch's base case assumes that EPM will receive insurance payments of over USD800 million between 2021-2024 for its Ituango project at a rate of roughly USD200 million per year. Insurance payments will be made in instalments as both entities review damages and costs. The payments are a credit positive and relieve pressure of EPM selling assets to offset the estimated incremental project cost of USD1.6 billion. EPM received the first payment of USD150 million from Mapfre Seguros Generales de Colombia S.A. in 2019 and USD200 million in 2020. Payments are contingent on a suspension of the arbitration process against the insurers, which was temporarily suspended in June 2021. Deleveraging Expected: Fitch estimates EPM's consolidated gross leverage, defined as total debt to EBITDA, will average 3.3x between 2021-2024. Leveraged peaked at 4.7x in 2020 as poor demand affected the company's distribution businesses, low hydrology impacted generation and Ituango incurred additional cost overruns. Fitch expects leverage to fall to 3.8x in 2021 as conditions normalize and to drop to 2.8x by 2024 due to tariff increases at the company's distribution businesses and a number of Ituango's generation units coming online, the first of which is expected in mid-2022. Moderate Regulatory Risk Exposure: Fitch believes EPM's exposure to regulatory risk is low. The bulk of EPM's consolidated revenues is generated by regulated tariffs or medium-term contracts. The latter exposes the company to potentially sustained low electricity prices. Historically, Colombian regulatory entities have ruled independently from the central government and have provided a fair and balanced framework for both companies and consumers. EPM's diversified business profile further mitigates the company's regulatory risk, as a simultaneous tariff decrease across all businesses is unlikely. Assumption of CaribeMar Assets: Fitch views EPM's assumption in September 2020 of CaribeMar, a coastal electricity distribution company renamed to Afinia, as positive for the business and credit neutral. Fitch estimates that once the Afinia business is stabilized in 2023, it will add approximately USD1.2 billion in revenue and USD165 million in EBITDA. Fitch estimates capital expenditures of COP4 trillion, or USD1 billion between 2021-2024. This investment will be necessary to lower high energy losses, which stood at an estimated 27.6% in 2020 with the goal to lower this amount to below 22% by 2024. Stable Cash Flow Profile: EPM has a stable and predictable cash flow profile supported by regulated businesses in investment grade markets. Fitch estimates 79% of EPM's 1Q21 EBITDA was derived from its energy business, where its generation segment comprised 34%; 38% was distribution; and the gas and transmission segments combined for 7%. EPM's distribution business operates in highly regulated markets, mostly concentrated in Colombia, where it is the largest distributor in the country, with a market share of 25%. Fitch estimates that 21% of the company's EBITDA comes from its water and waste management services. Interference Weakens Corporate Governance: Fitch views EPM's corporate governance as weak due to the strong influence exerted by the company's owner, the City of Medellin. This follows a lawsuit against the Ituango project insurers and contractors and the contemplated change of the company's social objective in 2020, which prompted the resignation of all eight independent board members. EPM has an ESG Relevance Score of '4', which reflects the company's recent instability in board membership and indicates that the score has a negative impact on the company's credit profile. DERIVATION SUMMARY EPM's ratings are linked to those of its owner, the Municipality of Medellin (BB+/Stable), due to the latter's strong ownership and control over the company. The company's low business-risk profile is commensurate with that of Grupo Energia Bogota S.A. E.S.P.'s (GEB, BBB/Stable), Enel Americas S.A. (A-/Stable), AES Gener (BBB-/Stable) and Promigas (BBB-/Stable). Fitch projects EPM's total leverage to average 3.3x over the rating horizon and 3.0x on a net basis. This is slightly above AES Gener's expected average gross and net leverage of 3.1x and 2.3x and below Promigas', which is expected to be 3.6x and 3.3x, respectively. In 2024, Fitch expects gross and net leverage to be 2.8x and 2.5x, respectively, reflecting advances in the Ituango project, a recovery in EPM's electricity distribution businesses and the normalization of operations at newly-acquired Afinia. KEY ASSUMPTIONS -- Ituango units come online at a rate of two per year from 2022 2025; -- Total Ituango cost of USD3.9 billion, a USD1.8 billion increase from original budget; -- Ituango's medium-term commercial obligations are covered with electricity purchases, existing hydroelectric asset base and thermal generation; -- No Dividends from UNE expected over the rating horizon; -- Dividend payout of 55% of previous year's net income; -- No divestments in 2021 or the rating horizon; -- Total Insurance payments in excess of USD800 million from 2021 through 2024; -- Capex for Electricarbe to be financed predominately through debt up to USD800 million; -- Medium-term electricity spot prices of COP155/KWh. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Although unlikely in the near term, Fitch may consider a positive rating action if there is a positive rating action on the company's owner, the City of Medellin; -- Fitch may consider a resolution of the Rating Watch Negative once the company has secured the second deviation tunnel at its Ituango project, which Fitch expects by early 2022. In such a case, the rating Outlook for the City of Medellin would likely apply. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- A negative rating action on the City of Medellin's ratings; -- The materialization of significant cost overruns and contingencies at the Ituango project that weaken the company's liquidity. 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 expects the company's USD750 million 2020 bond issuance to provide the near-term liquidity for general corporate purposes and to fund the company's capex program in 2021. Approximately 66% of the company's EBITDA is from regulated businesses with highly stable cash flow generation. EPM held approximately COP5.3 trillion of cash and equivalents as of 1Q 2021. Fitch expects the company will have COP2.3 trillion of cash on hand at the end of 2021 as it continues work on the Ituango project and makes network improvements at its newly-acquired distribution business, Afinia. Fitch estimates the company has in excess of USD500 million in available committed credit lines. Currently, the company's dividend policy is expected to remain in place despite the cash flow impact derived from Ituango's delay. Historically, EPM has transferred on average between 45% and 55% of its net income to the city of Medellin in the form of dividends. EPM's transfers to Medellin have historically represented approximately 20% to 30% of the city's investment budget. Although not likely in the near term, an increase in the company's dividend distribution policy could pressure its FCF generation, which is already expected to continue to be negative in the near term as the company continues to execute its investment plan. ISSUER PROFILE EPM is a leading electricity generator in Colombia and exhibits a diversified international portfolio of utility businesses that include electric generation, transmission and distribution, water and sewage services, natural gas distribution, and garbage collection and disposal services. ESG CONSIDERATIONS EPM has an ESG Relevance Score of '4' for Governance Structure due to the company's continued exposure to board independence risk, which has a negative impact on the credit profile, and is relevant to the ratings 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. =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: Reviews US$3.8B Liquidity Assistance Program ---------------------------------------------------------------- Dominican Today reports that Central Banker, Hector Valdez Albizu, met with the members of Dominican Republic's Association of Multiple Banks (ABA) to review the results of the measure to provide over RD$215 billion (US$3.8 billion) in liquidity, from which nearly 90,000 credit subjects have benefited through new loans, refinancing and debt restructuring at low interest rates. Likewise, measures were established for the renewal of credit lines at maturity, in order to guarantee that the different economic sectors have the resources to continue developing their productive activities normally and thus continue to contribute to the reactivation of the Dominican economy, according to Dominican Today. "We have made every possible effort so that these stimulus measures have been a decisive step in the economic recovery of the country, making resources of more than RD$215 billion available to sectors as relevant as mipymes (micro, small and medium-sized companies), commerce, households, manufacturing, construction, agriculture, tourism and export," Valdez said, the report notes. About Dominican Republic The Dominican Republic is a Caribbean nation that shares the island of Hispaniola with Haiti to the west. Capital city Santo Domingo has Spanish landmarks like the Gothic Catedral Primada de America dating back 5 centuries in its Zona Colonial district. Luis Rodolfo Abinader Corona is the current president of the nation. The Troubled Company Reporter-Latin America reported in April 2019 that the Dominican Today related that Juan Del Rosario of the UASD Economic Faculty cited a current economic slowdown for the Dominican Republic and cautioned that if the trend continues, growth would reach only 4% by 2023. Mr. Del Rosario said that if that happens, "we'll face difficulties in meeting international commitments." An ongoing concern in the Dominican Republic is the inability of participants in the electricity sector to establish financial viability for the system. Fitch Ratings on Jan. 18, 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). DOMINICAN REPUBLIC: Supplementary Budget Include RD$15.3B Subsidies ------------------------------------------------------------------- Dominican Today reports that the supplementary budget proposal that the Government gave to the National Congress for its analysis and approval contemplates the expenditure of RD$15.3 billion to subsidize the electricity deficit, fuels, and flour. In the referral letter of the Fiscal Year 2021 Budget Modification Law Project, the Government explains that as a consequence of the evolution of inflation and as a buffer mechanism, an appropriation was introduced for the chapter of the Ministry of Industry, Commerce and MSMEs, of RD$ 600 million for the flour subsidy and RD$ 6 billion for fuels, according to Dominican Today. The analysts of the Ministry of Finance, in charge of preparing the supplementary budget, point out that these amounts include the estimate until the end of the year and that depending on the future behavior of the prices of raw materials, it is possible that some of these items are not used in their entirety, the report notes. Electricity Deficit The project to modify the National Budget states that the increase in oil prices has also impacted the electricity sector deficit, which has risen above what was expected, the report relays. In response to this. The Government contemplates an increase in the subsidy granted to the Electricity Distribution Companies (EDEs) of RD$ 8.7 billion, the report discloses. Likewise, this budget includes an outlay for the natural gas price risk coverage payment, which amounts to RD$ 870 million, the report relays. The authorities point out that even with the increase in the amounts allocated to subsidies, transfers, and the assumption of debts in the electricity sector, it will be lower than that executed in 2020, the report adds. About Dominican Republic The Dominican Republic is a Caribbean nation that shares the island of Hispaniola with Haiti to the west. Capital city Santo Domingo has Spanish landmarks like the Gothic Catedral Primada de America dating back 5 centuries in its Zona Colonial district. Luis Rodolfo Abinader Corona is the current president of the nation. The Troubled Company Reporter-Latin America reported in April 2019 that the Dominican Today related that Juan Del Rosario of the UASD Economic Faculty cited a current economic slowdown for the Dominican Republic and cautioned that if the trend continues, growth would reach only 4% by 2023. Mr. Del Rosario said that if that happens, "we'll face difficulties in meeting international commitments." An ongoing concern in the Dominican Republic is the inability of participants in the electricity sector to establish financial viability for the system. Fitch Ratings on Jan. 18, 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 ============= GUAYAQUIL MERCHANT: Fitch Affirms BB- Rating on USD175MM Notes -------------------------------------------------------------- Fitch Ratings has affirmed the $175 million series 2019-1 notes issued by Guayaquil Merchant Voucher Receivables Ltd. at 'BB-'. The Rating Outlook is Negative. The Negative Outlook on the series 2019-1 notes reflects the Negative Outlook on Banco Guayaquil's (BG) rating. Guayaquil Merchant Voucher Receivables Limited DEBT RATING PRIOR ---- ------ ----- 2019-1 401539AA9 LT BB- Affirmed BB- TRANSACTION SUMMARY The transaction is backed by FFs due from American Express (AmEx), Visa International Service Association (Visa) and Mastercard International Incorporated (Mastercard) related to international merchant vouchers acquired by BG in Ecuador. Fitch's ratings reflect timely payment of interest and principal on a quarterly basis. KEY RATING DRIVERS FF Rating Driven by Originator's Credit Quality: The rating of this FF transaction is tied to the credit quality of the originator, BG. On Sept. 9, 2020, Fitch upgraded BG's Long-Term Issuer Default Rating (IDR) by two notches to 'B-' from 'CC' following the upgrade of Ecuador's Long-Term IDR on Sept. 3, 2020. The Negative Outlook assigned to BG reflects the increased downside risks from the economic implications of the coronavirus pandemic. GCA Supports Notching Differential: Fitch uses a going concern assessment (GCA) score to gauge the likelihood that the originator of a FF transaction will stay in operation throughout the transaction's life. Fitch assigned a GCA score of 'GC2' to BG based on the bank's systemic importance. The score allows for a maximum of four notches above the local currency IDR of the originator, but additional factors limit the maximum uplift. Several Factors Limit Notching Differential: The 'GC2' allows for a maximum four notch-rating uplift from the bank's Long-Term IDR pursuant to Fitch's FF methodology. However, the agency currently limits the rating uplift for the FF program to three notches from BG's IDR due to factors including Ecuador's lack of last resort lender and exposure to de-dollarization risk when it comes to flow volumes. Fitch also reserves the maximum notching uplift for originator's rated at the lower end of the rating scale. Moderate FF Debt Relative to Balance Sheet: The existing merchant voucher program represents approximately 3.5% of BG's total liabilities and approximately 30.1% of BG's non-deposit funding utilizing financials as of March 2021. Fitch will not allow the maximum uplift for an originator that has FF debt greater than 30% of the overall non-deposit funding. Coverage Levels Commensurate with Rating: Transaction flows have increased significantly over the past year and are now comparable to pre-pandemic levels. Coverage levels have remained sufficient to cover quarterly debt service payments and remain commensurate with the rating on the outstanding notes. Maximum quarterly debt service is expected to begin in January 2022 and is approximately $10.4 million. When considering rolling quarterly flows over the last five years (since June 2016), Fitch expects quarterly debt service coverage ratios to be approximately 3.9x the maximum debt service for the life of the program. No Lender of Last Resort: Ecuador is a dollarized economy without a true lender of last resort. While certain mechanisms are in place to help fend off a banking system crisis, this weakness limits the transaction rating. De-dollarization Risk: While the dollarization regime anchors macroeconomic stability, the risk of de-dollarization exists. It would only occur in an extreme scenario but would be a major shock to the Ecuadorean system. Reduced Redirection/Diversion Risk: The structure mitigates certain sovereign risks by collecting cash flows offshore until investors are paid. Fitch believes diversion risk is mitigated by notice, consent and agreements obligating AmEx, Visa, and MasterCard to remit payments to the collection accounts controlled by the trustee. RATING SENSITIVITIES Factor that could, individually or collectively, lead to positive rating action/upgrade: -- Fitch does not currently anticipate development with a high likelihood of triggering an upgrade. However, the main constraint to the program rating is the originator's rating and BG's operating environment. If a positive ration action/upgrade occurs, Fitch will consider whether the same uplift could be maintained or if it should be further tempered in accordance with criteria. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- The transaction's ratings are sensitive to changes in the credit quality of BG, S.A. A deterioration of the credit quality of BG could pose a constraint to the rating of the transaction from its current level. -- The transaction ratings are sensitive to changes to the bank's IDR; the ability of the credit card acquiring business line to continue operating, as reflected by the GCA score; and further, unforeseen changes in the sovereign environment. Changes in Fitch's view of the bank's GCA score can lead to a change in the transaction's rating. -- The transaction's ratings are sensitive to the performance of the securitized business line. Additionally, the merchant voucher programs could also be sensitive to significant changes in the credit quality of AmEx, Visa, or MasterCard to a lesser extent. -- Any changes in these variables will be analyzed in a rating committee to assess the possible impact on the transaction ratings. 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. ============= J A M A I C A ============= JAMAICA PUBLIC: Almost $39M Not Paid Over to Customers for Breaches ------------------------------------------------------------------- RJR News reports that almost $39 million has not been paid over to customers of the Jamaica Public Service Company (JPS) and the National Water Commission (NWC) for breaches of the Guaranteed Standards during the January - March 2021 period. According to the Office of Utilities Regulation (OUR), the unpaid sum is attributed to customers who have not claimed for breaches of the NWC Guaranteed Standards, the report relays. JPS customers are awaiting the outcome of the company's appeal to the Ministry of Science, Energy and Technology for force majeure relief from the Guaranteed Standards and the Overall Standards, according to RJR News. The JPS applied for force majeure relief due to the impact of the COVID-19 pandemic on its operations, the report notes. =========== M E X I C O =========== FIBRA SOMA: Moody's Assigns First Time 'Ba1' CFR, Outlook Stable ---------------------------------------------------------------- Moody's Investors Service assigned a Ba1 rating to Fideicomiso Irrevocable CIB/3332's (Fibra SOMA) proposed $600 million senior unsecured notes. At the same time, Moody's assigned a Ba1 corporate family rating to Fibra SOMA. The ratings outlook is stable. This is the first time Moody's rates Fibra SOMA. The proceeds of the issuance of the notes will be used to refinance existing debt and for general corporate purposes. The rating of the proposed notes assumes that the final transaction documents will not be materially different from draft legal documentation reviewed by Moody's to date and assume that these agreements are legally valid, binding and enforceable. RATINGS RATIONALE Fibra SOMA's Ba1 rating reflects its geographic presence in Mexico City and states that generate close to 28% of Mexico's GDP, its high quality properties portfolio with 465.5 thousand square meters (sqm) of gross leasable area (GLA) and its plan to increase GLA to 742 thousand sqm by 2024, its unencumbered asset base of $2 billion and its exceptional high quality tenant base with no concentration in a single tenant. The company benefits from reputable shareholders and co-investors such as Cadillac Fairview. Fibra SOMA's ratings are constrained by its focus in the retail segment with high exposure to the fashion & luxury industry where it leases 45% of its GLA, its relatively small size and high leverage when compared to other rated Fibras, and the size of its revolver credit facility. Fibra SOMA's short track record operating as a Fibra is also incorporated in the Ba1 rating. Fibra SOMA has a portfolio comprised by 14 high-quality assets (11 properties operating and 3 developing) located in Mexico City, Puebla, Queretaro and Veracruz. The company has a tenant base operating in several segments including fashion and luxury, entertainment and leisure, office, food and beverage, home, and sports apparel amongst others. Nonetheless, 63% of Fibra SOMA's GLA is concentrated in the fashion & luxury and the entertainment & leisure segments which exposes Fibra SOMA to cyclical industries that are heavily hurt in economic downturns. Nevertheless, Fibra SOMA's properties have shown resilience during the coronavirus outbreak in 2020-21. Still, Moody's considers that the Covid-19 pandemic still poses risks that could jeopardize normal operation of shopping malls. On a positive note, Moody's expects that economic recovery in Mexico will benefit Fibra SOMA. Moody's estimates Mexico's GDP will increase by 5.6% in 2021 and 2.9% in 2022; up from an 8.2% contraction in 2020. Pro-forma for the issuance of the notes and debt refinancing, Fibra SOMA will have a comfortable long-term debt maturity profile with no major amortizations until 2031 when the proposed notes are due. To support its liquidity Fibra SOMA is in the process to obtain a $100 million revolver credit facility. In addition, Fibra SOMA will increase its unencumbered assets to 91%, pro-forma for the transaction, up from 30% as of March 31, 2020. Typically, a high percentage of unencumbered assets allow companies to have better access to credit under stress scenarios. As a recently created Fibra, the company lacks track record of access to capital markets with 100% of its total debt secured as of March 31, 2021. Nonetheless, pro-forma for the transaction, Fibra SOMA's debt will essentially be unsecured. Fibra SOMA's strategy is to maintain its net debt/EBITDA below 5x post-property portfolio stabilization, with a Loan-to-Value of 30% or below. The stable outlook reflects Moody's expectation that Fibra SOMA will be able to successfully tap the international markets to refinance its upcoming long-term debt maturities while maintaining adequate liquidity and strong credit metrics for the rating category. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if Fibra SOMA were to increase its gross asset size while maintaining strong credit metrics with net debt/EBITDA around 5.5x and secured debt below 15%. To be considered for an upgrade, Fibra SOMA should have ample liquidity, increase the size of its revolver facility, and demonstrate track record of access to private and public capital. The ratings could be downgraded if Fibra SOMA net debt/EBITDA increases above 6.5x with secured debt above 25%. Any leasing challenges causing material decline in occupancy levels to 90% or lower could lead to a downgrade. Any liquidity pressure, access to capital challenge or failure to timely refinance upcoming long-term debt maturities could also result in a downgrade. The principal methodology used in these ratings was REITs and Other Commercial Real Estate Firms published in September 2018. Fibra SOMA owns, develops and leases mostly shopping malls in Mexico City, Puebla, Queretaro and Veracruz. SOMA focuses on the retail segment, but its strategy is to diversify towards office, hotels, and residential real-estate. The company is owned by SOMA (46%), Cadillac Fairview (19%), the Del Valle Family (12%), and the 23% balance is owned by several investors (Fernando Chico Pardo, Mexplorer Capital, Afore XXI, Grupo Gigante, and Cinepolis amongst others) with a 5% share or less each. The company reported leasable assets of 465,520 sqm as of March 31, 2021. OFFSHORE DRILLING: Fitch Affirms Then Withdraws 'RD' IDR -------------------------------------------------------- Fitch Ratings has affirmed Offshore Drilling Holding, S.A.'s (ODH) Long-Term Foreign Currency and Local Currency Issuer Default Ratings (IDRs) at 'RD'. Simultaneously, Fitch has withdrawn the ratings for commercial reasons. KEY RATING DRIVERS ODH's key rating drivers were detailed in the last rating action commentary, published on Sept. 29, 2020 (Fitch Downgrades Offshore Drilling Holding, S.A.'s IDRs to 'RD'). DERIVATION SUMMARY The derivation summary is no longer relevant for any of the ratings given the withdrawal of the ratings on July 13, 2021. KEY ASSUMPTIONS Not applicable. RATING SENSITIVITIES Factor that could, individually or collectively, lead to positive rating action/upgrade: -- Not applicable, as the ratings have been withdrawn. Factor that could, individually or collectively, lead to negative rating action/downgrade: -- Not applicable, as the ratings have been withdrawn. 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 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. ISSUER PROFILE Offshore Drilling Holding, Ltd. is a holding company incorporated in Luxembourg by Grupo R for the purposes of consolidating 100% of the group's ownership in its offshore drilling assets. Its assets include three ultra-deepwater semi-submersible drilling rigs - Centenario GR, Bicentenario and La Muralla IV, as well as five KFELS B-Class Jack-Up rigs. =========== P A N A M A =========== BAC INTERNATIONAL: Moody's Affirms 'Ba1' LongTerm Deposit Ratings ----------------------------------------------------------------- Moody's Investors Service has affirmed all ratings and assessments assigned to BAC International Bank, Inc, including its ba1 baseline credit assessment and Ba1 deposit rating. The ratings outlook remains stable. The rating action was driven by revisions to Moody's view of the equity credit for high trigger Additional Tier 1 (AT1) instruments, following the publication of Moody's updated Banks Methodology on July 9, 2021. This methodology is available at this link: https://bit.ly/3rgps6M RATINGS RATIONALE The rating action on BAC follows the revisions to the Advanced Loss Given Failure framework within Moody's updated banks methodology. Among other changes, the update of the methodology included the consideration of all AT1 securities issued by banks in Moody's Advanced LGF framework, eliminating the previous analytical distinction between those high trigger instruments that were deemed to provide equity-like absorption of losses before the point of failure and other AT1 securities. That modification also resulted in the elimination of the equity credit that Moody's previously recognized for high trigger AT1 securities within Moody's Banks methodology's capitalization metric - tangible common equity (TCE) to risk weighted assets-. Although BAC's ratings are not being subject to the advanced LGF framework, the bank's capital metrics were previously incorporating equity credit relative to the outstanding high trigger security, and this will now be eliminated from Moody's capital calculation. BAC has an outstanding AT1 instrument of $520 million, which the bank issued in May 2020, including a 7% CET1 trigger, which was included by Moody's as part of the bank's TCE. Based on March 2021 financials, the elimination of this instrument's equity credit results in a 250 basis points decline of the bank's TCE ratio to 10.0%. The change reflects Moody's revised view of the capital instruments likelihood to provide the bank with equity-like loss absorption before the point of non-viability. However, and despite the drop in the bank's capital metrics under the updated Moody's Banks Methodology, the affirmation of the ba1 BCA acknowledges BAC's consistent financial fundamentals, which also results in the affirmation of all ratings assigned to the bank. BAC's BCA continues to reflect its good track record particularly supported by a disciplined risk structure, geographical and business diversification, strong access to core deposits as well as adequate liquidity management, that helps to compensate for the relatively weak operating conditions in the countries where it operates. The bank's loan book is mainly concentrated in Costa Rica (B2 negative), where it has about 28% of gross loans, Panama (Baa2 stable) 23%, Guatemala (Ba1 negative), 20%, Honduras (B1 stable), 13% and El Salvador (B3 negative) with 12%. The pandemic-led recession resulted in a deterioration of BAC's asset quality metrics, with consolidated problem loans measured as loans classified as stage 3 under IFRS rising to 4.22% of total loans at the end of 2020 (4.29% as of March 2021), from 3.41% in 2019. The deterioration in 90-day past due loans has been milder, to 1.77% of gross loans in 2020 (1.66% in March 2021) from 1.53% in 2019. However, the latter metric is distorted by the impact of mandatory deferral programs that have been implemented by the bank throughout the region, which have been particularly important for its operations in Panama. Loans under deferral programs accounted for about 10% of the bank's total loans as of March 2021, and Moody's therefore expect asset quality metrics to further deteriorate in the second half of 2021 with the end of the programs. However, BAC has built strong provisions against future credit impairment, with total loan loss reserves accounting for 3.82% of total loans in March 2021. Following a decline in overall profitability to a 1.2% net income to tangible assets metric at the end of 2020 as a result of higher credit costs and lower business volumes, compared to 1.7% pre-pandemic level in 2019, return on tangible assets recovered to a strong 1.6% in the first quarter of 2021. However, Moody's still expect profitability to remain below historical levels as provisioning needs remain high in 2021 and margins will likely take longer to recover previous levels. BAC continues to benefit from a sound funding profile supported by its broad and steady base of customer deposits, consistent with its well-established banking franchise in the region, which significantly reduces refinancing and repricing risks. As a result, market funding needs -which were below 10% of total assets as of March 2021- will remain contained. This strong funding profile, combined with adequate liquidity buffers accounting for almost a third of the balance sheet, further supports BAC's financial flexibility. Moody's assumes a very high probability of affiliate support to BAC from Colombian Banco de Bogota S.A. (Baa2 negative, ba1). This assumption is based on BAC's relevance in Banco de Bogota's regional footprint and earnings generation, illustrated by the bank's significant contribution to the parent's profitability, close to 50% as of March 2021. However, this affiliate support has no effect on BAC's rating uplift because Banco de Bogota's ba1 BCA is at the same level of BAC's BCA. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS BAC's BCA and ratings could be upgraded if there were material and sustained improvement in the operating conditions of BAC's main countries of operation, provided that the bank sustains its solid financial performance. The bank's BCA could be downgraded if asset quality pressures proved to be larger and longer than expected and resulted in a significant decline of the bank's profitability and capitalization metrics. However, even if the bank's BCA were downgraded, its ratings could be affirmed due to Moody's assessment of support from its parent Banco de Bogota S.A.. RATING METHODOLOGY The principal methodology used in these ratings was Banks Methodology published in July 2021. LIST OF AFFECTED RATINGS The following ratings and assessments were affirmed: Issuer: BAC International Bank, Inc Baseline credit assessment and adjusted baseline credit assessment, at ba1 Long term local and foreign currency deposit ratings, at Ba1 with stable outlook Short term local and foreign currency deposit ratings, at Not Prime Long-term foreign currency counterparty risk rating, at Baa3 Short-term foreign currency counterparty risk rating, at Prime-3 Long-term counterparty risk assessment, at Baa3(cr) Short-term counterparty risk assessment, at Prime-3(cr) Outlook, remains stable ===================== P U E R T O R I C O ===================== L'OCCITANE INC: Files Plan After Closing 40 Stores -------------------------------------------------- Alex Wolf of Bloomberg Law reports that the bankrupt U.S. unit of L'Occitane International SA filed a plan to repay its creditors in full after shuttering 40 of its retail locations. L'Occitane Inc.'s plan, filed July 9, would restructure about $161 million in debt, some $21 million of which is owed to general unsecured creditors. French parent company LAEUR (TM) Occitane International is funding the plan. The body, face, fragrance, and home products retailer said it has used the Chapter 11 process to right-size its "brick and mortar footprint" in the U.S., reducing its store count from 166 to 126. 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 NATIONAL JEWELRY: Taps Luis D. Flores Gonzales as Legal Counsel --------------------------------------------------------------- National Jewelry, LLC seeks approval from the U.S. Bankruptcy Court for the District of Puerto Rico to hire the Law Offices of Luis D. Flores Gonzales to serve as legal counsel in its Chapter 11 case. The firm's hourly rates are as follows: Luis D. Flores Gonzales, Esq. $200 per hour Certified Legal assistants $60 per hour Paraprofessional persons $40 per hour The Debtor paid $5,000 to the law firm as a retainer fee. Luis D. Flores Gonzales, Esq., disclosed in a court filing that he is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Luis D. Flores Gonzales, Esq. Law Offices of Luis D. Flores Gonzales Ave. Ponce De Lleon 1225, Suite MZ-9 VIG Tower, Santurce, PR 00907 Tel.: 787-758-3606 Email: ldfglaw@yahoo.com About National Jewelry National Jewelry, LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D.P.R. Case No. 21-01742) on June 4, 2021. At the time of the filing, the Debtor reported total assets of up to $50,000 and total liabilities of up to $500,000. Judge Enrique S. Lamoutte Inclan oversees the case. The Debtor is represented by the Law Offices of Luis D. Flores Gonzales. =========================== V I R G I N I S L A N D S =========================== CALC BOND 3: Fitch Rates Fixed-Rate Notes Due 2022/2024 'BB+' ------------------------------------------------------------- Fitch Ratings has assigned a rating of 'BB+' to CALC Bond 3 Limited's senior unsecured US dollar bonds. The bonds are: -- USD300 million of 4.7% fixed-rate notes due 8 March 2022 -- USD200 million of 5.5% fixed-rate notes due 8 March 2024 CALC Bond 3 Limited, registered in British Virgin Islands, is a wholly owned SPV of China Aircraft Leasing Group Holdings Limited (CALC, BB+/Stable). The bonds were listed on the Hong Kong Stock Exchange in 2017. KEY RATING DRIVERS The rating assigned to the senior unsecured bonds issued by CALC Bond 3 Limited is in line with CALC's Long-Term Issuer Default Rating (IDR) as the bonds are unconditionally and irrevocably guaranteed by CALC, and will at all times rank at least equally with all other present and future unsecured and unsubordinated obligations of CALC and CALC Bond 3 Limited. CALC's IDR is based on a combination of its standalone credit profile of 'BB-' and two notches of rating uplift from its standalone credit profile, reflecting Fitch's expectation for modest potential support from state-owned China Everbright Group (CEG) and the affiliated entities within the group, including China Everbright Bank Company Limited (BBB/Stable). Fitch views CALC as having a limited degree of strategic importance to CEG. This reflects the limited shareholding control, the lack of common branding and complexities on legal commitments to CALC spanning CEG and CEL. This is somewhat offset by the strong linkage between CEG and CALC, the importance of CALC's operations to CEG's "Four-Three-Three" development strategy, which includes the objective of cultivating a world leading aircraft lessor, and CEG's strong operational and managerial control over CALC with a record of providing ordinary funding and liquidity support to CALC. RATING SENSITIVITIES Factors that could, individually or collectively, lead to negative rating action/downgrade: -- The rating on the notes will move in tandem with any changes to CALC's rating. CALC's rating would be downgraded if Fitch assesses a weakening in CALC's standalone credit profile. This could arise from a material deterioration in asset performance; heightened risk appetite for growth beyond our expectations; leverage in excess of 10x on a sustained basis; reduced unsecured funding below 50%; and/or reduced liquidity relative to debt maturities and order book commitments. -- CALC's rating is sensitive to its linkage with CEG and Fitch's assessment on CEG's credit profile. A weakening in the linkage between CEG and CALC, such as a dilution in ownership and/or control; or a reduction in CALC's strategic role to CEG; or reduced liquidity support from CEG and its affiliates would lead to a downgrade. -- CALC's IDR is also sensitive to materially adverse developments with respect to the coronavirus pandemic, particularly if they have an outsized impact on China, CEG, CEL, or CALC. -- The bond rating could be downgraded if there is a worsening of the structural subordination that causes the recovery on the senior unsecured debt to decline. This could arise from a high level of encumbered assets and/or a change in the mix of funding between onshore and offshore entities. Factors that could, individually or collectively, lead to positive rating action/upgrade: -- The rating on the notes is equalised with CALC's IDR. The IDR could be upgraded if Fitch's assessment of CALC's standalone credit profile improves. This could arise from a decrease in leverage to below 5.0x on a sustained basis without deterioration in its asset quality and profitability, coupled with strengthened funding and liquidity relative to its financing needs. -- Strengthened linkages between CALC and CEG could be positive for the rating, which could arise from more explicit legal ties between CALC and CEG, or a meaningful increase in CEG's shareholding and control through board representation in CALC. 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. 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. ********* 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 * * *