/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/210727.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 Tuesday, July 27, 2021, Vol. 22, No. 143 Headlines B R A Z I L BRAZIL: GPI Up 0.18% in July, Accumulates 15.52% Hike This Year BRAZIL: Tourism in Sao Paulo Up in May but Recovery Still Slow OI SA: Regulator Signals 'Complex' Path For Asset Sale Approval C H I L E CHILE: Boosts Public Integrity, Transparency System with $50MM Loan C O S T A R I C A BANCO BAC SAN JOSE: Fitch Affirms 'B+' LT IDR, Outlook Negative BANCO DAVIVIENDA: Fitch Affirms 'B+' LT Foreign Currency IDR D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: Wage Increase Compensates for Inflation M E X I C O GRUPO AEROMEXICO: Reports Consolidated Results for 2Q FY21 P U E R T O R I C O ISLA DEL CARIBE: Case Summary & 9 Unsecured Creditors T R I N I D A D A N D T O B A G O CL FINANCIAL: 3 More CLF Firms Primed for Sale TRINIDAD & TOBAGO: Losing Millions From Illicit Trade - - - - - =========== B R A Z I L =========== BRAZIL: GPI Up 0.18% in July, Accumulates 15.52% Hike This Year --------------------------------------------------------------- Rio Times Online reports that the General Price Index - 10 (IGP-10) slowed down its rise to 0.18% in July, after having increased 2.32% in June, informed the Getulio Vargas Foundation (FGV) on July 16. The result was within the estimates of financial market analysts, which expected from a drop of 0.46% to an advance of 0.28%, according to Rio Times Online. However, it was above the positive median of 0.15%, the report notes. Wholesale prices as measured by the IPA-10 dropped 0.07% in the month, the report adds. According to Rio Times Online, in the previous month, the index had risen 2.32%. The 12-month rate rose 34.61%. For comparison, inflation in Argentina reached 50.2% in 12 months, it notes. 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). BRAZIL: Tourism in Sao Paulo Up in May but Recovery Still Slow -------------------------------------------------------------- Rio Times Online reports that Tourism in Sao Paulo posted 21.8% growth in May, the first increase in 2021, the Federation of Trade in Goods, Services and Tourism of the State of Sao Paulo (FecomercioSP) said. The Sao Paulo capital's Monthly Tourism Activity Index (Imat-SP) reached 46.9 points in May, compared to 38.9 in April, a figure pointing to the sector's economic growth after continuous declines in sales, jobs and passenger flow, according to Rio Times Online. About Brazil Brazil is the fifth largest country in the world and third largest in the Americas. Jair Bolsonaro is the current president, having been sworn in on Jan. 1, 2019. 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). OI SA: Regulator Signals 'Complex' Path For Asset Sale Approval --------------------------------------------------------------- Gabriel Stargardter at Reuters reports that the superintendence of Brazil's competition regulator Cade said it viewed an asset sale by Brazilian telecom Oi SA (OIBR4.SA) as "complex," suggesting that TIM (TIMS3.SA), Telefonica Brasil and America Movil's Claro (AMXL.MX) may struggle to wrap up a quick sale. As reported in the Troubled Company Reporter - Latin America on July 22, 2021, Fitch Ratings has assigned a 'CCC+'/'RR4' debt rating to Oi S.A.'s (Oi; CCC+) senior secured debt level. In conjunction with this rating action, Fitch assigned a 'CCC+'/'RR4' rating to the new senior secured notes, of up to USD880 million, to be issued by Oi Movel S.A. These notes will be fully guaranteed by Oi S.A. on a senior secured basis. ========= C H I L E ========= CHILE: Boosts Public Integrity, Transparency System with $50MM Loan ------------------------------------------------------------------- Chile will continue to boost public integrity and transparency by strengthening and consolidating its legal framework and the institutional mechanisms for its implementation with a $50 million loan approved by the Inter-American Development Bank (IDB). This is the first of two consecutive operations under the programmatic policy-based loan modality. This first operation will promote a series of actions aimed at consolidating the right to access public information, strengthening integrity in public administration, and supporting transparency and information-sharing mechanisms associated with fiscal matters and the prevention of money laundering. The program will encourage measures aimed at simplifying and boosting the effectiveness of mechanisms dealing with the right to access public information in order to ensure it becomes available to wider audiences. To this end, it will improve the legal framework to enhance transparency in the civil service through institutional mechanisms that ensure the implementation of such legislation. These measures will be supported with regulations and policies in line with the Chilean Government's commitments under the Open Government Partnership aimed at increasing collaboration and citizen participation in public affairs. The program also contemplates a Data Policy proposal to facilitate access to and crosscutting use of government data and to raise the degree of transparency of budget execution information contained in the Open Budget portal. With regard to transparency in the use of public resources, it will provide open public access to government procurement data , a measure that is in line with the Open Contracting Data Standard (OCDS). On public integrity, the program will improve the Lobbying Act Platform dealing with public agenda registration. It is worth noting that the bill will uphold the commitments on diversity and gender contained in Chile's Fourth and Fifth Open Government National Action Plans. The program's beneficiaries will be all persons who interact with Chilean agencies, civil society organizations, public servants, oversight bodies, members of academia, and economic agents and agents subject to financial regulation. Over the past three decades Chile has developed a robust legal and institutional framework based on solid integrity and transparency principles that are in line with recognized international standards. The reforms include laws, regulations and practices that together constitute deep reforms that were incrementally implemented over time. The current program will complement this cumulative reform process. The IDB's $50 million loan is for an 18-year term, with a 5.5-year grace period and interest rate based on LIBOR. =================== C O S T A R I C A =================== BANCO BAC SAN JOSE: Fitch Affirms 'B+' LT IDR, Outlook Negative --------------------------------------------------------------- Fitch Ratings has affirmed Banco BAC San Jose, S.A.'s Long-Term (LT) Foreign Currency (FC) Issuer Default Rating (IDR) at 'B+'. Fitch also affirmed the bank's LT Local Currency (LC) IDR at 'BB-' and its National LT Rating at 'AAA(cri)', respectively. In addition, Fitch affirmed the viability rating (VR) at 'b'. Fitch also affirmed its Short Term (ST) FC and LC IDR at 'B' and its National ST Rating at 'F1+(cri)'. The Rating Outlook of the LT IDRs is Negative and the Outlook of the National LT Rating is Stable. KEY RATING DRIVERS IDR, SUPPORT RATING AND NATIONAL RATINGS BAC San Jose's IDRs and National Scale Ratings are driven by Fitch's appreciation of the potential support it would receive from its parent company, Banco de Bogota, S.A., if required. Banco de Bogota's ability to support is reflected in its LT FC IDR of 'BB+' with a Stable Outlook. BAC San Jose's IDRs are constrained by Costa Rica's (B/Negative) sovereign ratings as reflected in its Country Ceiling of 'B+', which captures transfer and convertibility risks, according to Fitch's criteria. The Country Ceiling is a factor that highly influence Fitch's support assessment, and constrains the bank's rating to a lower level than would be possible based solely on Banco de Bogota's ability and propensity to provide support. The LT LC IDR is at the maximum uplift of two notches above Costa Rica's sovereign rating. The Negative Outlooks on BAC San Jose's IDRs are in line with the Negative Outlook on Costa Rica's sovereign rating. Fitch's support opinion also considers with high influence the bank's relevant role within its parent's regional strategy. The Costa Rican bank continues as the largest operation of the BAC Credomatic brand, which has important banking and financial operations in Central America and it is owned by Banco de Bogota. In addition, BAC San Jose has a solid market franchise in the country and a diversified business profile, which sustains Fitch's opinion about its integral part in Banco de Bogota's operations. The bank's Support Rating (SR) of '4' reflects Fitch's opinion of limited probability of support because of the heightened risks in the operating environment. In turn, BAC San Jose's National Ratings are at the highest point of the National Ratings scale, according to the parent's relative credit strength when compared with other rated issuers in Costa Rica. VR BAC San Jose's Viability Rating (VR) remains highly influenced by the worsening operating environment in the financial sector, and is at the same level of the sovereign rating at 'b'. The negative trend on the operating environment score reflects the persistent downside potential as Fitch expects the uncertainty around economic recovery due to the pandemic to continue driving relative pressures in the local banks' asset quality and earnings due to lower loan growth and higher credit costs over the medium term. The bank's VR is also highly influenced by its good company profile, which is marked by a good local franchise as the third-largest bank in Costa Rica and the largest private bank in the country, and represented around 14.6% of the financial system as of March 2021. Also, the bank has a relatively diversified business model as a universal bank with a relevant orientation and strong position in retail financial services and leading position in the credit card segment. BAC San Jose's VR is moderately influenced by its reasonable financial performance. BAC San Jose's nonperforming loans (NPL) of 2.1% as of March 2021 remain similar to its last four years average but its operating profit/risk weighted assets (RWA) was 0.7% as of the same date (2017-2020 average: 1.4%). Fitch believes the bank's asset quality will continue to face pressure but will be lower than 2020 due to high levels of credit reserves and collaterals and lower past due loans of its portion of credit under relief programs. Profitability would continue at similar levels and may remain relatively lower than some similarly rated peers over the ratings horizon, reflecting higher credit provisions. Although the bank's capitalization slightly declined, it remains at reasonable levels to its size and aligned to the 'b' category. As of March 2021, Fitch Core Capital (FCC) was 12.9% (March 2020: 13.5%), relatively in line to that of similarly rated peers. Fitch believes BAC San Jose's capital levels and funding would remain favored by Banco de Bogota's ability and propensity to support. The bank's funding profile would continue benefitted by its strong deposit franchise and sound liquidity under the current operating environment. As of the same date, its loan/deposits was 84.9%, slightly better the banking system average, and liquid assets represented 47% of deposits, an improved position for liquidity requirements in the ongoing conjuncture. SENIOR DEBT NATIONAL RATINGS BAC San Jose's senior unsecured debt National Scale Ratings are at the same level of the issuer's National Ratings. In Fitch's opinion, the debt issuances' likelihood of default is the same as BAC San Jose given the debt does not have specific guarantees. RATING SENSITIVITIES Factors that could, individually or collectively, lead to negative rating action/downgrade: -- BAC San Jose's IDRs and SR remain sensitive to changes in Costa Rica's sovereign and Country Ceiling ratings. Negative changes in the bank's IDRs and SR would mirror any movement in Costa Rica's sovereign ratings and Country Ceiling; -- Any perception by Fitch of significantly reduced propensity from its parent, Banco de Bogota may trigger a downgrade of its IDRs, SR and National Ratings; -- A multi-notch downgrade of Banco de Bogota's IDRs would also entail a downgrade in BAC San Jose's IDRs and National Ratings; -- A downgrade of BAC San Jose's VR could result from a material deterioration of the bank's financial performance that drops its FCC/RWA consistently below 9% and incurs sustained operating losses; -- BAC San Jose's senior unsecured debt National Ratings would be downgraded in the case of negative rating actions on the bank's National Ratings. Factors that could, individually or collectively, lead to positive rating action/upgrade: -- The Negative Rating Outlooks on BAC San Jose's IDRs indicate positive actions in the bank's ratings are unlikely in the foreseeable future. Moreover, the Outlook would be revised to Stable if Fitch's assessments of the operating environment and the Costa Rican sovereign rating's Outlook are revised to Stable. Over the medium term, BAC San Jose's IDRs, VR and SR could be upgraded in the event of an upgrade of Costa Rica's sovereign rating and Country Ceiling; -- The VR could be upgraded only over the medium term and in the event of an improvement in the local operating environment, especially if accompanied by further and consistent improvements in its financial performance metrics; -- The National Scale Ratings of the bank and its debt issuances are at the top of the scale. Therefore, there is no room for positive actions. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Financial Institutions and Covered Bond issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. SUMMARY OF FINANCIAL ADJUSTMENTS Pre-paid expenses were reclassified as intangible assets and deducted from total equity since Fitch considers these to have a low capacity to absorb losses. Recoveries from charge-offs were reclassified to nonoperating income. PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS BAC San Jose's ratings are based on Fitch's opinion of Banco de Bogota's ability and propensity to provide timely support. Banco de Bogota's IDR is 'BB+' with a Stable Outlook. 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. BANCO DAVIVIENDA: Fitch Affirms 'B+' LT Foreign Currency IDR ------------------------------------------------------------ Fitch Ratings has affirmed Banco Davivienda (Costa Rica), S.A.'s (Davivienda CR) Long-Term (LT) Foreign Currency (FC) Issuer Default Rating (IDR) at 'B+' and LT Local Currency (LC) IDR at 'BB-'. Fitch has also affirmed the bank's Short-Term (ST) Foreign and LC IDR at 'B' and the Viability Rating (VR) at 'b'. Fitch also affirmed the National LT and ST ratings at 'AAA(cri)' and 'F1+(cri)', respectively. The Rating Outlooks of the LT IDRs are Negative, while the National LT Outlook is Stable. KEY RATING DRIVERS IDRs, SUPPORT RATING AND NATIONAL RATINGS Davivienda CR's IDRs, Support Rating (SR) and National Ratings are driven by Fitch's opinion regarding the potential support it would receive from its parent company, Banco Davivienda, S.A. (Davivienda; BB+/Stable) if required. According to Fitch's assessment of support, Davivienda CR's ratings are highly influenced by the Costa Rican country risk, which captures the transfer and convertibility risks, reflected in the Country Ceiling of 'B+' and constrains Fitch's assessment of the ability of the shareholder to support its subsidiary. Therefore, Davivienda CR's LT FC IDR is limited at 'B+', three notches below its parent's company LT FC IDR; while the LT LC IDR of 'BB-' is constrained at the maximum uplift of two notches above the sovereign, according to Fitch's criteria. Rating Outlooks for both IDRs are negative and aligned with the sovereign Rating Outlook. Fitch also considers, with high influence, in its support assessment, the huge reputational risk that would constitute the default of the subsidiary, on any of its obligations, to its parent company, and how this would damage the latter's franchise and future business expectations, as they share the same brand. Furthermore, Davivienda CR is considered a key part of the regional diversification strategy of its parent; therefore, benefited by the sharing of knowledge, best practices and operational support among the group. Fitch also considers the financial impact on its parent's financial profile caused by the pandemic. However, its relatively manageable seize would facilitate support, if necessary. Fitch will closely monitor the shareholders' propensity to support its subsidiary. As per Fitch's criteria Davivienda CR's IDR corresponds to a SR of '4' which reflects Davivienda's ability and propensity to provide support but is restricted by the Country Ceiling. Davivienda CR's National Ratings are at the highest point of the National Ratings Scale, according to the parent's relative credit strength when compared with other rated issuers in Costa Rica. The senior unsecured debt ratings are equalized to Davivienda CR's National Rating as the likelihood of default of such issuances is the same as the bank. VR Davivienda CR's VR is highly influenced by the challenging operating environment, which maintains a negative trend as it will continue to add pressures on bank performance, particularly on asset quality, due to a slow recovery and still high unemployment. The bank's VR is also highly influenced by its company profile marked by a mid-sized local franchise with market shares of around 7% and 6% in assets and deposits respectively, as of June 2021. Fitch believes that Davivienda CR's asset quality deterioration will be lower than 2020 due to the bank's lower share of credit under relief measures, high levels of credit reserves and collaterals. As of March 2021, the past due loans over 90 days represented 2.1% of the total loan portfolio (average 2018-2020: 1.7%), while the coverage ratio stood at around 164%. As of 1Q21, the proportion of loans with forbearance measures was 1.5% of the total loan portfolio. Operating profit has been buoyed by efficiency, consistent net interest margin (NIM) and manageable deterioration in the loan portfolio, even with the stock of loan loss allowances made in 2020. As of March 2021, operating profit/risk weighted assets (RWA) was 1.6%. At the same date, loan impairment charges consumed around 44% of operating profit (average 2018-2020: 67.1%), nonetheless a positive trend on profitability continuity will depend on asset quality control as the modified portfolio reaches its seasoning. Fitch considers that Davivienda CR's capitalization benefits from the potential support that it would receive from its parent, in case needed. As of March 2021, the Fitch Core Capital (FCC)/RWA was 11.4% (average 2018-2020: 10.7%), which compares slightly lower than its Costa Rican peers. Moreover, Fitch anticipates that capital metrics will remain similar in the short term, due to slow growth and no planned dividend payments. Fitch considers that the funding and liquidity profiles also benefit from its parent support. As of March 2021, the loans/deposits ratio fell to 138%, since deposits grew almost 5% from December 2020 (average 2018-2020: 131%). Nevertheless, concentrations in its 20 largest depositors are still high, 32% of total deposits as of 1Q21. Davivienda CR's funding is well diversified, and comprised mostly by deposits (nearly 74% of funding). Liquidity has been high since the beginning of the pandemic, and liquid assets accounted for almost 30% of assets and 45% of deposits. RATING SENSITIVITIES Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Davivienda CR's IDRs and SR remain sensitive to changes in Costa Rica's sovereign and Country Ceiling ratings. Negative changes in the bank's IDRs and SR would mirror any movement in Costa Rica's sovereign ratings and Country Ceiling. -- Any perception by Fitch of reduced strategic importance of Davivienda CR to its parent company may trigger a downgrade of its IDRs, SR and National Ratings. -- Davivienda CR's IDRs could be downgraded by a multi-notch downgrade of Davivienda's IDRs. -- A downgrade of Davivienda CR's VR could result from a material deterioration of the bank's financial performance that drops the bank's FCC/RWA ratio consistently below 9% and sustained operating losses. -- Davivienda CR's senior unsecured debt National Ratings would be downgraded in case of negative rating actions on the bank's National Ratings. Factors that could, individually or collectively, lead to positive rating action/upgrade: -- The Negative Rating Outlooks on Davivienda CR's IDRs indicate positive actions in the bank's ratings are unlikely in the foreseeable future. Moreover, the Outlook would be revised to stable if Fitch's assessments of the operating environment and the Costa Rican sovereign rating change its Outlook to Stable. Over the medium term, Davivienda CR's IDRs, VR and SR could be upgraded in the event of an upgrade of Costa Rica's sovereign rating and Country Ceiling. -- The VR could be upgraded only over the medium term and in the event of an improvement in the local operating environment, especially if accompanied by further and consistent improvements in its financial performance metrics and relevant improvement in franchise position. -- The National Scale Ratings of the bank and its debt issuances are at the top of the scale. Therefore, there is no room for positive actions. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Financial Institutions and Covered Bond issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. SUMMARY OF FINANCIAL ADJUSTMENTS Pre-paid expenses were reclassified as intangibles and deducted from equity to reflect their lower loss absorption capacity. PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS Banco Davivienda (Costa Rica) ratings are based on the support of its Colombian parent Banco Davivienda (BB+/Stable). ESG CONSIDERATIONS Unless otherwise disclosed in this section, the highest level of ESG Credit Relevance is a Score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: Wage Increase Compensates for Inflation ----------------------------------------------------------- Dominican Today reports that the National Council of Private Enterprise (CONEP) welcomed the non-sectorized minimum wage adjustment, the result of a dialogue between the government sector, the employer sector, and workers' representatives while stressing the business sector's commitment to the development stability of the country. After a meeting of the National Wages Committee with the presence of its member sectors, the wage adjustment for the non-sectorized minimum wage was announced, according to Dominican Today. "With much sacrifice, the adjustment disclosed compensates for the effects of inflation for 3 years and significantly exceeds the inflation accumulated since the last revision," emphasized conep president Pedro Brache, the report notes. The President of conep expressed himself in these terms amid the adjustment at a press conference held at the Labor Ministry, the report relays. "I want to vindicate the role of the employer sector. We act responsibly and according to the circumstances. We have gone, perhaps beyond what is possible, but we have done what was necessary under the current circumstances," said Pedro Brache, the report notes. CONEP stressed that this adjustment responds to the historical demand of thousands of micro and small entrepreneurs, who constitute an essential part of our business fabric, the report discloses. He also acknowledged the spirit of dialogue that workers' representatives have maintained and the harmony in the state of our current relationship, the report relays. "In particular, I want to recognize the leadership of the President of the Republic, the Minister of Labor, and all his team to create a favorable environment for the agreement," he added. He stressed that the employer sector presented a proposal based on specific criteria. "We take inflation into account, with projections beyond the current situation. We reiterate the need to avoid by all means the increase in unemployment and informality. We have also once again seen the effect of high labour loads on employment and the economy," the report relays. In his speech, Mr. Brache, representing the employer sector, said: ‘Our aspiration is to contribute not only to the regular increase in nominal wages, but also to the constant improvement of real wages,' the report says. Finally, he expressed confidence in "being able to continue advancing together in the generation of more and better jobs in the country. With optimism we will all continue together to build the Dominican Republic of the future, so that, on the basis of development and stability, it remains a benchmark throughout the region," 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). =========== M E X I C O =========== GRUPO AEROMEXICO: Reports Consolidated Results for 2Q FY21 ---------------------------------------------------------- Grupo Aeromexico S.A.B. de C.V. ("Aeromexico") (BMV: AEROMEX), reported its unaudited consolidated results for the second quarter 2021. Key Financial Highlights For The Second Quarter 2021 -- On June 30, 2020, Aeromexico announced that it and certain of its affiliates had filed voluntary Chapter 11 petitions in the United States ("Chapter 11") to implement a financial restructuring, while continuing to serve customers. The Company intends to use the Chapter 11 process to strengthen its financial position and liquidity, protect and preserve its operations and assets, and implement necessary operational changes to address the impact of the ongoing COVID-19 pandemic. -- Grupo Aeromexico's second quarter capacity, measured in available seat kilometers (ASKs), increased by 9.0% compared to first quarter 2021, primarily driven by a sequential recovery in domestic and international markets. Total ASKs for the second quarter decreased by 39.2% compared to the same period of 2019 due to the impact of the COVID-19 pandemic. -- Grupo Aeromexico's second quarter 2021 revenue reached $10.0 billion pesos, a 46.2% increase compared to the first quarter of 2021 and a 40.5% decrease versus 2019. During the quarter, revenue per ASK (RASK) in pesos increased by 34.0% compared to first quarter 2021 and decreased by 2.2% compared to the same period of 2019. -- EBITDAR for the period amounted to positive $1.9 billion pesos, an improvement of $2.3 billion pesos versus first quarter of 2021 and a decrease of $1.2 billion pesos compared to the second quarter of 2019. Second quarter 2021 operating loss amounted to $1.2 billion pesos. Operating loss excluding restructuring costs reached $609 million pesos, an improvement of $2.2 billion pesos compared to first quarter 2021 and a decrease of $728 million pesos compared to the same period of 2019, despite a 39.2% reduction in capacity. -- CASK excluding fuel in pesos was $1.113 pesos, a 2.6% decrease compared to first quarter 2021 and a 19.4% increase versus the second quarter 2019. CASK excluding fuel in dollars reached $0.055, a 2.4% decrease compared to the previous quarter and a 12.2% increase versus 2019, despite a 39.2% reduction in capacity. CASK in pesos was $1.467. CASK in dollars reached $0.073. -- Aeromexico's cash position as of June 30, 2021, amounted to $19.1 billion pesos, equivalent to approximately $963 million dollars. Excluding restricted cash, Aeromexico's cash balance amounted to $17.6 billion pesos, equivalent to $888 million dollars, $84 million dollars above the total cash registered at the end of the first quarter. During the quarter, operating cash flow was positive $2.5 billion pesos. As at June 30th, 2021, Grupo Aeromexico's operating fleet comprised 118 aircraft, a 11.3% increase compared to the first quarter of 2019. Grupo Aeromexico confirms that its voluntary process of financial restructuring under Chapter 11 of the legislation of the United States of America, will be carried out in an orderly manner while it continues operating and offering services to its customers with the same quality that characterizes it, contracting from its suppliers the goods and services required for its operation. About Grupo Aeromexico Grupo Aeromexico, S.A.B. de C.V. (BMV: AEROMEX) -- https://www.aeromexico.com/ -- is a holding company whose subsidiaries are engaged in commercial aviation in Mexico and the promotion of passenger loyalty programs. Aeromexico, Mexico's global airline, has its main hub at Terminal 2 at the Mexico City International Airport. Its destinations network features the United States, Canada, Central America, South America, Asia and Europe. Grupo Aeromexico and three of its subsidiaries sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 20-11563 ) on June 30, 2020. In the petitions signed by CFO Ricardo Javier Sanchez Baker, the Debtors reported consolidated assets and liabilities of $1 billion to $10 billion. Timothy Graulich, Esq., of Davis Polk and Wardell LLP, serves as counsel to the Debtors. ===================== P U E R T O R I C O ===================== ISLA DEL CARIBE: Case Summary & 9 Unsecured Creditors ----------------------------------------------------- Debtor: Isla Del Caribe Development Inc. Calle Antonio Rios 37 Naguabo, PR 00718 Business Description: The Debtor has two real properties in Puerto Rico valued at $1.3 million. Chapter 11 Petition Date: July 19, 2021 Court: United States Bankruptcy Court District of Puerto Rico Case No.: 21-02191 Judge: Hon. Enrique S. Lamoutte Inclan Debtor's Counsel: Carmen D. Conde Torres, Esq. C. CONDE & ASSOC. 254 San Jose Street 5th Floor San Juan, PR 00901-1523 Tel: 787-729-2900 Fax: 787-729-2203 E-mail: condecarmen@condelaw.com Debtor's Accountant: JOSE A DIAZ CRESPO Total Assets: $1,335,000 Total Liabilities: $660,493 The petition was signed by Joe Santana Maldonado as president. A full-text copy of the petition containing, among other items, a list of the Debtor's nine unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/GULBV7Y/ISLA_DEL_CARIBE_DEVELOPMENT_INC__prbke-21-02191__0001.0.pdf?mcid=tGE4TAMA ===================================== T R I N I D A D A N D T O B A G O ===================================== CL FINANCIAL: 3 More CLF Firms Primed for Sale ---------------------------------------------- Trinidad Express reports that three other assets of CL Financial (CLF) are awaiting the consent of the court before they are put on the market. According to the seventh report to the court, dated December 18, 2020, and signed by joint liquidator David Holukoff, those assets are: the insurance company Colfire, manufacturing company Caribbean Petrochemical Manufacturing Ltd (CPML) and Safeguard Services Ltd, Trinidad Express notes. The report noted that a divesture strategy for Colfire was finalised in the last year, according to Trinidad Express. "The proposed strategy was outlined in an application seeking the Court's consent to the divesture which was initially heard on 8 December 2020 and adjourned to 6 January 2021. The divesture of this asset and release of value to CLF will proceed in 2021 subject to the consent of the Court," the report said, Trinidad Express relays. Industry sources told Express Business that the sale of Colfire is in process as the joint liquidators petitioned the High Court to appoint Miami-based investment bank, Broadspan, to value the company and arrange its sale. As for CPML, the report said: "The company's successful progress through the pandemic, together with completion of necessary pre-divestment steps, means it is well placed to be divested by CLF in the coming period in the interest of releasing value directly to the liquidation estate. The JLs submitted an application to the Court seeking consent to the divesture strategy which has been adjourned to 6 January 2021. The divesture of this asset and release of value to CLF will proceed in 2021 subject to the consent of the Court," Trinidad Express discloses The same applies to Safeguard Services Limited. "The JLs and their staff, in capacity as representatives of the corporate directors and subcommittee members, overseen preparation of a divesture strategy for HCL's 100 per cent indirect interest in Safeguard Services Limited in the period, Trinidad Express notes. "Preparations included completion of audits together with review and renegotiating of key customer contracts which will secure value in the sale process. An application seeking consent to the proposed divesture strategy was heard by the Court on 8 December 2020 and adjourned until January 6, 2021. The indirect subsidiaries will be brought to market in early 2021, subject to the consent of the Court," Trinidad Express relays. The report noted that divestment strategies of two other assets have also progressed but did not identify them, Trinidad Express discloses. "The JLs and their team together with management of the subsidiaries have significantly advanced divesture strategies for two indirectly owned trading assets. It is anticipated that an application seeking the consent of the Court to advance the divesture strategies for two indirectly owned trading assets will be submitted in the next period," the report said, Trinidad Express notes. The assets are among several in the CLF empire which remain to be put on the market since the liquidation began in 2017. According to the report, CLF, the conglomerate in liquidation, had $237 million in cash by October 31, 2020, Trinidad Express says. The report noted that a substantial value was received by CLF on the week of preparing the report, which will take its cash in hand to $374 million, of which $88 million will remain ringfenced within the company on the determination of an outstanding trust deed, Trinidad Express notes. The joint liquidators sold assets directly and indirectly owned by CLF to the sum of $140 million for the reporting period, Trinidad Express relays. CLF received $152 million in dividends for the six-month period—$142 million from CL World Brands (CLWB) and $10 million from Caribbean Petrochemical Manufacturing Limited, Trinidad Express discloses. In July 2017, the Government petitioned to have the High Court wind up CLF. A conglomerate that was chaired by Lawrence Duprey before the group's collapse in January 2009, CLF was once the most powerful company in T&T, a billion dollar enterprise with subsidiary companies around the world. The bailout of CLF, which was being born out of an insurance company, Colonial Life Insurance Company (CLICO), has cost T&T taxpayers billions of dollars, Trinidad Express notes. According to the company's 2017 management accounts, CLF's liabilities exceed its assets by $3.4 billion, Trinidad Express relays. In the past 12 years, under Government management, CLF has sold a number of assets which include Primera Energy Group, Lawrenceburg Distillers Ltd, Laselles des Mercado Limited, Burn Stewart Distillers Limited, Thomas Hine and Company Limited, Societe Dugas Limited SA, Valpark Shopping Plaza Limited and Atlantic Plaza and CL Marine, Trinidad Express says. When Duprey went cap-in-hand to the Government in January 2009 for liquidity support for CLICO and CIB, the Central Bank intervened because of the systemic effect the collapse of Duprey's empire would have had on the country's economy, Trinidad Express relays. CLICO had a customer base of 260,000, which approximates to 20 per cent of the population and included 15,000 pensioners and around 100 credit and trade unions, Trinidad Express discloses. CLICO and its parent, CLF, also owned 51 per cent of Republic Bank, then and now this country's largest commercial bank. Taxpayers spent $100 million to fund a Commission of Enquiry into the collapse of CLICO. Prime Minister Dr Keith Rowley had said Queen's Counsel Sir Anthony Colman's report into the collapse of CLICO "contains serious allegations of criminal misconduct on the part of a handful of individuals who were associated with the CLICO/CLF group of companies," Trinidad Express adds. About CL Financial/CLICO CL Financial was one of the largest privately held conglomerate in Trinidad and Tobago. It was originally founded as an insurance company and has since expanded to be the holding company for a diverse group of companies and subsidiaries. CL Financial is the parent company of Colonial Life Insurance Company (Trinidad) Limited (Clico). CLICO is now the Company's insurance division. CL Financial however experienced a liquidity crisis in 2009 that resulted in a "bail out" agreement by which the government of Trinidad and Tobago loaned the company funds ($7.3 billion as of December 2010) to maintain its ability to operate, and obtained a majority of seats on the company's board of directors. The companies to be bailed out were: CL Financial Ltd (CLF); Colonial Life Insurance Company Ltd (CLICO); Caribbean Money Market Brokers Ltd (CMMB); Clico Investment Bank (CIB) and British American Insurance Company (Trinidad) Ltd (BAICO). As reported in the Troubled Company Reporter-Latin America in July 2017, CL Financial Limited shareholders vowed to pay back a TT$15 billion (US$2.2 billion) debt to the Trinidad Government. TRINIDAD & TOBAGO: Losing Millions From Illicit Trade ----------------------------------------------------- Geisha Kowlessar-Alonzo at Trinidad and Tobago reports that Trinidad and Tobago continues to lose millions annually due to illicit trade, and despite Government's efforts to tackle this scourge, there still remains lack of enforcement and porous borders which facilitate the nefarious activity. Further, it distorts competition in the marketplace, as compliant business are rendered impotent to compete, according to Trinidad and Tobago. This from chief executive officer (CEO) of the T&T Chamber of Industry and Commerce, Gabriel Faria, who was among several speakers at a webinar titled– Tackling Illicit Trade in T&T– hosted by the British High Commission, the report notes. "One of the things I consider up to now, is a low political will to intervene," Faria said, adding that illicit trade is also easy to conduct due to "low barriers to entry as anyone can do it," the report relays. Penalties, he added, is another major issue which must be effectively and efficiently addressed, the report says. Noting that profit is the main driver of illicit trade, Faria referenced alcoholic beverages, the report notes. "Imagine one container of product has duties and excise of a million dollars. "Imagine someone taking one container of product and being able to save a million dollars. That's because of our very high duties on product," Faria said, advising that it is critical for the current level of taxation applied on spirits be reviewed, the report discloses. According to Faria, about 22 per cent of spirits are illegally imported but in some products it's as much as 50 per cent, mainly because it's not across every brand, the report relays. There are certain brands, he said, which are more susceptible to trade the report relays. "And what this does is it impacts the legal or compliant importer because they are now faced with people bringing in these products and under selling them because they are not paying the full duties," Faria explained, the report notes. Illicit trade also breeds corruption and Faria emphasized that it's important T&T has stronger laws and implement more punitive measures, the report discloses. "We have to make sure that when someone is caught we take action. "We must have stronger investigations and we must pursue the wrongdoers," he added. Further, illicit pharmaceuticals, Faria identified, are also worrying, the report relays. He said when these counterfeit drugs are brought in, proper standards of distribution are not followed, leaving the consumer at great risk which can in some instances result in loss of life, the report notes. "They are not following proper protocols in terms of transportation, they are not storing the products properly and that's a major issue," Faria added. It was only recently that two pharmacists had been jailed in England for illegally supplying prescription sleeping pill Zolpidem valued at GBP600,000 to a mystery buyer in this country, the report says. British media reported that Dean Dookhan, 40, and Narvinder Nandra, 48, used their businesses as a cover to wholesale more than 20,000 packets of Zolpidem to a mystery figure in T&T for a profit, the report notes. Undoubtedly, the treat of illicit trade continues to cripple compliant business in T&T. According to Faria, this has often resulted in a reduction of staff and market share, while at the same time, creating a sector of errant traders, the report relays. "The noncompliant business do not pay NIS, the employees do not pay PAYE, so this has a rippling effect across the system. "It also means there may be reputational damage to a brand, the importer and strained relationships with the ,regulatory authorities," Faria said, adding that these issues in turn, penalise compliant businesses, the report notes. He, however, commended the Government and the Trade Ministry for taking steps in the right direction to combat illicit trade, most recently with the setting up of an Anti-Illicit Trade Task Force, the report discloses. At a press conference in March this year, Trade Minister Paula Gopee-Scoon said figures submitted to the Ministry of Trade estimate that losses due to tax evasion from illicit trade may be as high as $91 million for tobacco and alcohol alone for 2019 and 2020, the report notes. She referred to figures given to the ministry by the Chamber of Industry and Commerce and the West Indian Tobacco Company (Witco), the report relays. Witco estimated $30 million lost to tax evasion from illicit trade for tobacco in 2020, the report notes. This included excise duties, value added tax (VAT), corporate tax, and Green Fund tax, none of which would have been applied to illicit goods, the report says. The T&T Chamber also estimated $61 million in losses due to illegal imports in 2019, the report adds. ********* 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. 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