/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/210809.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 Monday, August 9, 2021, Vol. 22, No. 152 Headlines B R A Z I L BRAZIL: Sao Paulo Industrial Sales Down 0.2% between May-June BRAZIL: Unemployment Rate Stands at 14.6% in Quarter Ended May 2021 C O L O M B I A BANCO DE BOGOTA: Moody's Affirms Ba2 Long-Term FC Sub. Debt Rating D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: Japan Lends US$200M to Boost Budget E L S A L V A D O R SALVADORENO DPR: Fitch Affirms BB Rating on Series 2015 Loans P A N A M A PANAMA: Continues to Meet PLL Arrangement Qualifications, IMF Says P E R U PESQUERA EXALMAR: S&P Alters Outlook to Stable, Affirms 'CCC+' ICR P U E R T O R I C O EVERTEC GROUP: Moody's Hikes CFR to B1 & Credit Facilities to B1 S U R I N A M E SURINAME: IMF Directors Briefed on Extended Fund Facility Deal Bid V I R G I N I S L A N D S LIMETREE BAY: Scheduled to Shut Down St. Croix Refinery X X X X X X X X [*] BOND PRICING: For the Week Aug. 2 to Aug. 6, 2021 - - - - - =========== B R A Z I L =========== BRAZIL: Sao Paulo Industrial Sales Down 0.2% between May-June ------------------------------------------------------------- Richard Mann at Rio Times Online reports that real sales of the industry sector in the state of Sao Paulo fell by 0.2% between May and June, according to the Economic Survey released by the Federation of Industries of the State of Sao Paulo and the Industrial Center of the State of Sao Paulo (Fiesp/Ciesp). According to the report, production increased by 0.4%, and capacity utilization increased by 0.5 percentage points, reaching 80.5%, which is higher than the average historical series for Sao Paulo industries (79.4%), Rio Times Online discloses. According to Fiesp, the recovery of industrial production and sales in the country is expected to accelerate in the second half of the year, Rio Times Online adds. About Brazil Brazil is the fifth largest country in the world and third largest in the Americas. Jair Bolsonaro is the current president, having been sworn in on Jan. 1, 2019. 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: Unemployment Rate Stands at 14.6% in Quarter Ended May 2021 ------------------------------------------------------------------- Richard Mann at Rio Times Online reports that the unemployment rate was 14.6% in the quarter ended in May (March, April, and May), virtually unchanged from the quarter ended in February (14.4%). In practice, 14.8 million Brazilians are looking for a job in the country, according to Rio Times Online. The data come from the Continuous National Household Sample Survey (Pnad), released by the Brazilian Institute of Geography and Statistics (IBGE), the report notes. The rate recorded in the quarter ending in May is the second-highest in the historical series started by IBGE in 2012, the report relays. About Brazil Brazil is the fifth largest country in the world and third largest in the Americas. Jair Bolsonaro is the current president, having been sworn in on Jan. 1, 2019. Fitch Ratings' credit rating for Brazil stands at 'BB-' with a negative outlook (November 2020). Fitch's 'BB-' Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) has been affirmed in May 2021. Standard & Poor's credit rating for Brazil stands at BB- with stable outlook (April 2020). S&P's 'BB-/B' long-and short-term foreign and local currency sovereign credit ratings for Brazil were affirmed in December 2020. Moody's credit rating for Brazil was last set at Ba2 with stable outlook (April 2018). DBRS's credit rating for Brazil is BB (low) with stable outlook (March 2018). =============== C O L O M B I A =============== BANCO DE BOGOTA: Moody's Affirms Ba2 Long-Term FC Sub. Debt Rating ------------------------------------------------------------------- Moody's Investors Service has affirmed all ratings and assessments assigned to Banco de Bogota S.A. (Banco de Bogota), including its ba1 baseline credit assessment, Baa2 long-term local and foreign currency deposit ratings, Baa2 long-term foreign currency senior unsecured debt rating as well as the Ba2 long-term foreign currency subordinated debt rating. The outlook on Banco de Bogota's ratings remains negative. In the same action, Moody's affirmed the ratings assigned to Grupo Aval Acciones y Valores S.A. (Grupo Aval) and Grupo Aval Limited, including its Ba2 long-term ratings. The outlook on Grupo Aval's ratings was changed to stable, from negative. RATINGS RATIONALE BANCO DE BOGOTA The affirmation of Banco de Bogota's BCA acknowledges the bank's strong and resilient earnings generation, which was sustained during 2020, and its steady access to low-cost retail deposits that benefits liquidity and margins. These strengths are counterbalanced by the bank's relatively low capital buffers, with a tangible common equity (TCE)/risk-weighted assets (RWA) ratio of 8.4% as of March 2021, and its exposures to riskier operating environments in Central America. Banco de Bogota's asset quality metrics remain relatively contained since 2020 with Stage 3 loans accounting for 5.9% of gross loans in March 2021, 70 basis points above the level at the end of 2019. Loans that still benefit from relief measures accounted for almost 15% of total loans in March 2021 -a portfolio that could continue to strain asset risks in the second half of 2021- although half of those loans already include an active payment schedule and are subject to debtor classification. Loan loss reserves stood at 5.2% of gross loans as of March 2021, which will help mitigate the impact of future impairments that could arise from its operations in Central American countries that have weaker operating environments. The affirmation captures Moody's view that, even if further pressure on the bank's asset quality materializes in the following quarters, its fundamentals will likely remain consistent with a ba1 BCA. The bank's profitability is a strong key driver and remained higher than peers in 2020 and Q1 2021, despite still below pre-pandemic levels. In 2020 full-year and March 2021, Banco de Bogota's annualized net income to tangible assets was 1.2% and 1.5%, respectively, while the average for the rated peers in Colombia stood at 0.4% and 0.7% in the same periods. Similarly to peers, the bank's bottom line was hit in 2020 due to higher credit costs and margin compression, although from previously strong levels and partially compensated by contained expenses growth, with operating expenses falling to 3.3% of total assets as of March 2021 annualized and 3.6% in 2020, from 4.1% in 2019. Banco de Bogota's Baa2 deposit and senior unsecured debt ratings continue to incorporate the assessment of a very high likelihood of government support, if needed, resulting in a two-notch uplift from its ba1 BCA. Therefore, the bank's ratings outlook continues to be negative, in line with the outlook of the Government of Colombia (Baa2 negative). GRUPO AVAL ACCIONES Y VALORES S.A. AND GRUPO AVAL LIMITED Grupo Aval's ratings incorporate the structural subordination of the holding company's liabilities to the liabilities of Banco de Bogota and its other subsidiaries, and are notched off Banco de Bogota's BCA, considering the importance of the latter as Grupo Aval's main subsidiary holding close to 68% of the gross loans of the consolidated group as of March 2021. Grupo Aval Limited's debt ratings are in turn based on Grupo Aval's irrevocable and unconditional guarantee of Grupo Aval Limited's liabilities under the indentures. Therefore, the affirmation of Grupo Aval and Grupo Aval Limited's ratings follows the affirmation of Banco de Bogota's BCA. In turn, the change of the ratings outlook on Grupo Aval and Grupo Aval Limited to stable from negative captures Moody's view of Banco de Bogota's strong financial fundamentals that remain consistent with a ba1 BCA, with manageable potential asset risk and capital pressures. Moody's does not incorporate governmental support in the holding company's ratings. Grupo Aval's Ba2 ratings also acknowledge the group's stable double leverage ratio (119% in March 2021), which is measured by investments in subsidiaries divided by shareholders' equity and reflects the extent to which the holding company relies upon debt to finance its investments in subsidiaries. The metric increased since 2020 due to the issuance of a $520 million additional tier 1 instrument at its Panamanian subsidiary BAC International Bank, Inc (Ba1 stable, ba1), which was fully subscribed by Grupo Aval Limited. However, Grupo Aval has maintained stable and high interest coverage underpinned by a strong dividend income from its banking subsidiaries in Colombia, with core earnings amounting to 4.9 times interest expenses in 2020. In addition, Grupo Aval's adequate liquidity buffers also support the coverage of its upcoming debt obligations, limiting its reliance on dividend inflows. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS BANCO DE BOGOTA Banco de Bogota's deposit and senior debt ratings have negative outlooks and are positioned at the same level of Colombia's sovereign bond rating. Therefore, the downgrade of the sovereign rating would also have a direct impact on the bank's supported ratings. Intrinsic downward pressure to the bank's BCA could arise from a deterioration in the operating environment of Colombia and Central America, that could increase delinquencies and credit costs and ultimately hit the bank's capital buffers. Banco de Bogota's ratings are unlikely to face upward pressures at this juncture, due to the negative outlook. However, the outlook could be stabilized provided that the Colombian sovereign rating outlook were stabilized, coupled with stable operating conditions in Colombia and Central America and the resilient credit fundamentals of the bank. GRUPO AVAL Upward/downward pressures on Grupo Aval and Grupo Aval Limited's ratings would be associated with upward/downward pressures on Banco do Bogota's BCA, because the group's Ba2 issuer rating is anchored to the bank's BCA. In addition, the ratings could also face downward pressures if the group's double leverage exceeded 115% by a meaningful amount on a sustained basis and/or the interest coverage ratio and the group's liquidity buffers decreased significantly. ISSUERS AND RATINGS AFFECTED The following Banco de Bogota S.A.'s ratings and assessments were affirmed: Long term local currency deposit rating of Baa2, Negative Long term foreign currency deposit rating of Baa2, Negative Long term foreign currency senior unsecured debt rating of Baa2, Negative Short term local currency deposit rating of Prime-2 Short term foreign currency deposit rating of Prime-2 Long-term foreign currency subordinated debt rating of Ba2 Long term local currency counterparty risk rating of Baa2 Long term foreign currency counterparty risk rating of Baa2 Short term local currency counterparty risk rating of Prime-2 Short term foreign currency counterparty risk rating of Prime-2 Adjusted Baseline Credit Assessment of ba1 Baseline Credit Assessment of ba1 Long-term counterparty risk assessment of Baa2(cr) Short-term counterparty risk assessment of Prime-2(cr) Outlook, Remains Negative The following Grupo Aval Acciones y Valores S.A.'s ratings were affirmed: Long term local currency issuer rating of Ba2, outlook changed to Stable from Negative Long term foreign currency issuer rating of Ba2, outlook changed to Stable from Negative Short term local currency issuer rating of Not Prime Short term foreign currency issuer rating of Not Prime Outlook, Changed to Stable from Negative The following Grupo Aval Limited's rating was affirmed: Long term foreign currency backed senior unsecured debt rating of Ba2, outlook changed to Stable from Negative Outlook, Changed to Stable from Negative RATING METHODOLOGY The principal methodology used in these ratings was Banks Methodology published in July 2021. =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: Japan Lends US$200M to Boost Budget ------------------------------------------------------- Dominican Today reports the Ministry of Finance signed a budget support contract with the Japanese International Cooperation Agency (JICA), in recognition of compliance with the measures implemented by the Dominican Government to curb the health, social and economic impact caused by COVID -19. Through the agreement, the country will receive US$200 million freely available to cover part of the expenses already incurred by the State in health matters and the execution of social support programs, according to Dominican Today. The agreement was signed by the Minister of Finance, Jochi Vicente, and the resident representative of JICA in the country, Kondo Takayuki, 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). ===================== E L S A L V A D O R ===================== SALVADORENO DPR: Fitch Affirms BB Rating on Series 2015 Loans ------------------------------------------------------------- Fitch Ratings has affirmed Salvadoreno DPR Funding Ltd's Series 2015 loans at 'BB'. The Rating Outlook is Negative. The Negative Rating Outlook reflects Banco Davivienda Salvadoreno, S.A.'s (Davivienda Sal) Negative Outlook. DEBT RATING PRIOR ---- ------ ----- Salvadoreno DPR Funding, Ltd. 2015-1 LT BB Affirmed BB 2015-2 LT BB Affirmed BB 2015-3 LT BB Affirmed BB TRANSACTION SUMMARY The future flow program is backed by existing and future U.S. dollar-denominated Diversified Payment Rights (DPR) originated by Davivienda Sal. The majority of DPRs are processed by designated depositary banks (DDBs) that have signed acknowledgement agreements (AAs) irrevocably obligating the DDBs to send DPRs to an offshore account controlled by the trustee. Fitch's ratings address timely payment of interest and principal on a quarterly basis. KEY RATING DRIVERS Future Flow (FF) Rating Driven by Originator's Credit Quality: The rating of this future flow transaction is tied to the credit quality of the originator, Davivienda Sal. In April 2021, Fitch affirmed Davivienda Sal's Long-Term Issuer Default Rating (IDR) at 'B'/Negative, and Viability Rating (VR) at 'b-'. Davivienda Sal's Long-Term IDR reflects the potential support from its shareholder, Banco Davivienda, S.A. (Davivienda; BB+/Stable). Going Concern Assessment (GCA) Score Supports Notching Differential: Fitch uses a GCA score to gauge the likelihood that the originator of a future flow transaction will stay in operation through the transaction's life. Fitch assigned Davivienda Sal a going concern assessment (GCA) score of 'GC2' based on the bank's moderate systemic importance and the strong likelihood of parent support. The score allows for a maximum of four notches above the originator's Local-Currency IDR; however, additional factors limit the maximum uplift. Factors Limit Notching Differential: The 'GC2' GCA score allows for a maximum uplift of four notches from the originator's IDR. However, the uplift is tempered to three notches as the bank's IDR is driven by parent support. Additionally, the maximum uplift is only applied to transactions with originators that are rated in the lower end of the rating scale and El Salvador's lack of last resort lender. Low FF Debt Relative to Balance Sheet: Davivienda Sal's total outstanding future flow debt (FF) balance as of June 2021 represents 1.8% of the bank's total funding and 10.1% of non-deposit funding based on financials as of December 2020. Fitch considers these ratios small enough to allow the financial future flow ratings up to the maximum uplift indicated by the GCA score, but is tempered to three notches in this case for the reasons described. Coverage Levels Commensurate with Assigned Rating: Debt Service Coverage remains strong amidst the current operating environment as transaction flows have increased over the past year. Considering average rolling quarterly cash flows between July 2016 and June 2021, Fitch expects quarterly debt service coverage ratios (DSCRs) to be approximately 47.2x the maximum quarterly debt service for the life of the program. Structure Reduces Sovereign/Diversion Risks: The structure mitigates certain sovereign risks by collecting cash flows offshore until periodic debt service requirements are met, allowing the transaction to be rated over the sovereign country ceiling. Fitch believes payment diversion risk is partially mitigated by the AAs signed by the three correspondent banks processing the vast majority of USD DPR flows. RATING SENSITIVITIES Factor that could, individually or collectively, lead to positive rating action/upgrade: -- Fitch does not anticipate developments with a high likelihood of triggering an upgrade. However, the main constraint to the program rating is the originator's rating and bank's operating environment. If upgraded, 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 ratings are sensitive to changes in the credit quality of the originating bank. A deterioration of the credit quality of the sovereign and/or respective bank by one notch is likely to pose a constraint to the rating of the transaction from its current level. -- The transaction ratings are sensitive to the ability of the DPR business line to continue operating, as reflected by the GCA score. Additionally, the transaction rating is sensitive to the performance of the securitized business line. The quarterly DSCRs are expected to be greater than 40x and should therefore be able to withstand a significant decline in cash flows in the absence of other issues. However, significant further declines in flows could lead to a negative rating action. Any changes in these variables will be analyzed in a rating committee to assess the possible impact on the transaction ratings. -- No company is immune to the economic and political conditions of its home country. Political risks and the potential for sovereign interference may increase as a sovereign's rating is downgraded. However, the underlying structure and transaction enhancements mitigate these risks to a level consistent with the assigned rating. 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. PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS The future flow ratings are driven by the credit risk of Banco Davivienda Salvadoreno, S.A. as measured by its Long-Term IDR. =========== P A N A M A =========== PANAMA: Continues to Meet PLL Arrangement Qualifications, IMF Says ------------------------------------------------------------------ The IMF Executive Board completed the first review under the two-year Precautionary and Liquidity Line (PLL) arrangement for Panama which was approved on January 19, 2021 in the amount equivalent to US$2.7 billion (SDR 1.884 billion). The PLL serves as insurance against extreme external shocks stemming from the COVID-19 pandemic, with access in the first program year equivalent to about US$1.35 billion (0.942 billion SDR). The authorities intend to continue treating the arrangement as precautionary. Washington, DC: The Executive Board of the International Monetary Fund (IMF) completed the first review under the Precautionary and Liquidity Line (PLL) Arrangement for Panama for SDR 1.884 billion (500 percent of Panama's quota, equivalent to about US$2.7 billion) (See press release No. 21/19). The Panamanian authorities have not drawn on the arrangement and intend to continue treating as precautionary. The PLL serves as insurance against extreme external shocks stemming from the COVID-19 pandemic. Panama's economy suffered a severe shock amid the global pandemic in 2020 as containment measures significantly reduced economic activity, especially tourism, while hurricane Eta and tropical storm Iota curtailed a large part of the country's agricultural production. As a result, output contracted by 17.9 percent, with the fiscal position deteriorating significantly amid revenue shortfalls and expenditure pressures. While Panama is able to cover its external financing needs under present conditions, the PLL arrangement provides insurance against externally driven downside risks. Policy priorities under the PLL include supporting an adequate level of spending on health and social needs while boosting the post-pandemic recovery and further strengthening institutional policy frameworks, including financial integrity and data adequacy. Panama has adopted the policies envisaged under the PLL arrangement and have adhered to the amended fiscal rule. The authorities continue to strengthen Panama's institutional frameworks, including its AML/CFT regime in accordance with the FATF action plan, its statistics reporting, multiannual budgeting and financial regulation and supervision. Following the Executive Board discussion, Mr. Mitsuhiro Furusawa, Deputy Managing Director and Chair, made the following statement:" "Panama's economy contracted sharply in 2020 amidst stringent containment measures and mobility restrictions to tackle the COVID-19 pandemic, reversing over two decades of unprecedented economic expansion. The outlook for 2021 is optimistic as the country is well positioned for a considerable recovery, underpinned by a rebound in the global economy, steadfast COVID-19 vaccination program, and supportive macroeconomic policies. However, important challenges continue to persist, including a possible resurgence of the COVID-19 pandemic which would disrupt global trade and capital flows, thus adversely affecting the activity of Panama's canal and logistics sectors. In addition, the country faces important downside risks emanating from a possible lack of progress on exiting rapidly the FATF grey list. "The two-year arrangement under the Precautionary and Liquidity Line (PLL), approved by the Executive Board on January 19, 2021 for 500 percent of quota (SDR 1.884 billion), is helping address outstanding vulnerabilities, reinforce the authorities' economic recovery efforts, and boost market confidence. The performance under the program has been strong and Panama continues to meet the PLL qualification criteria. The authorities remain resolute in implementing the strong policies under the PLL and intend to treat the arrangement as precautionary. "The authorities are committed to recalibrating policy responses to safeguard macroeconomic and financial stability and addressing FATF's concerns to successfully exit the grey list. These include adhering to the fiscal rule to ensure debt sustainability in the medium-term, enhancing fiscal transparency, maintaining tight supervisory oversight to safeguard financial stability, and improving the financial integrity framework by expediently addressing the remaining deficiencies in the AML/CFT regulatory framework. "The policy agenda during the PLL will focus on facilitating prompt exit from the FATF grey list, strengthening data adequacy, and preparing the economy for the post-pandemic recovery. For information on COVID-related financing requests approved by the IMF Executive Board, please see a link to the IMF Financial Assistance Tracker: https://www.imf.org/en/Topics/imf-and-covid19/COVID-Lending-Tracker. For the list of upcoming discussions, please see a link to the calendar of the IMF Executive Board meetings: https://www.imf.org/external/NP/SEC/bc/eng/index.aspx. ======= P E R U ======= PESQUERA EXALMAR: S&P Alters Outlook to Stable, Affirms 'CCC+' ICR ------------------------------------------------------------------ On Aug. 5, 2021, S&P Global Ratings revised its outlook on Peru-based fishing company Pesquera Exalmar S.A.A. (Exalmar) to stable from negative. S&P also affirmed its 'CCC+' issuer credit and issue-level ratings on the company. The stable outlook on Exalmar reflects S&P's view that it will deliver solid operating and financial performance and cash flows in the next 12 months thanks to favorable fishing and pricing conditions. This should allow the company to continue to roll over its sizeable short-term debt maturities. During the last 12 months ended June 2021, Exalmar reported record-high sales and EBITDA of $415 million and $119 million, respectively. This was mostly due to higher fishing quotas and effective catch during the second fishing season of 2020 (a 89.5% catch of the approved quota) and the first season of 2021 (about 98.1%), which allowed for higher processing volumes. The company also benefits from a stable market demand, allowing to maintain stable fishmeal and fish oil prices, despite the high quotas. We have revised our 2021 forecast upward, reflecting healthy fishing conditions, solid demand for fishing products, and favorable prices conditions. Therefore, S&P expects Exalmar's revenue and EBITDA to be slightly above $400 million and $100 million, respectively, sharply up from 2020 levels of $272 million and $67.5 million, respectively. This will allow the company to deleverage rapidly with gross debt to EBITDA dropping to slightly below 3.0x by the end of 2021 from 4.1x in 2020. In the past 12 months, Exalmar rolled over and increased its short-term credit facilities for working capital purposes, pointing to ongoing support from banks. In addition, the company recently signed a new syndicated loan for $148 million, proceeds of which Exalmar used to refinance its outstanding 2019 syndicated loan ($86 million) and to repay 97% of its outstanding 2025 senior unsecured notes ($60.2 million). As a result, the company has improved its debt maturity profile, and reduced its syndicated loan amortizations for the next few years and financing costs. Although Exalmar has a long track record of sound relationships with local banks and healthy access to working capital funding, our liquidity assessment of the company's cash sources doesn't incorporate refinancing assumptions, per our criteria. Instead, S&P only considers monetary flows that provide a liquidity cushion with a high degree of certainty, including existing cash reserves and cash flow streams in our base-case scenario. In S&P's view, Exalmar still faces an important liquidity shortfall relative to its short-term needs, which include sizeable debt maturities, working capital requirements and capital expenditure. As of June 30, 2021, Exalmar posted about $147.3 million in short-term debt, which includes bank debt secured by fishmeal inventory (72%), unsecured bank loans, and about $15 million of amortization related to its new syndicated loan. This figure is significantly larger than the company's cash balance of $20.7 million at the end of June, and S&P's expected funds from operations (FFO) of about $85 million in the next 12 months. Moreover, Exalmar doesn't have any committed revolving credit facility available (as it used to have in recent years) to provide a liquidity cushion. As a result, this significant amount of short-term debt continues to constrain the company's ratings and expose Exalmar to constant refinancing risks. As seen in recent years, the company's results remain vulnerable to the inherent cyclicality of the Peruvian fishing industry, given volatile fishing quotas and catches. Therefore, Exalmar has become increasingly dependent on external funding to refinance its short-term debt maturities. As a result, S&P believes Exalmar depends on favorable business and financial conditions, as well as on debt refinancing to meet its financial obligations. ===================== P U E R T O R I C O ===================== EVERTEC GROUP: Moody's Hikes CFR to B1 & Credit Facilities to B1 ---------------------------------------------------------------- Moody's Investors Service upgraded EVERTEC Group, LLC's Corporate Family Rating to B1 from B2 and Probability of Default Rating to B2-PD from B3-PD. Moody's also upgraded the ratings on Evertec's senior secured bank credit facilities to B1 from B2. The SGL-1 speculative grade liquidity rating is unchanged, and the outlook remains stable. The upgrades reflect Moody's expectation that Evertec will continue to grow revenues in at least the mid to high single digit percent range over the next 12-18 months while also maintaining very good liquidity and moderate leverage and further diversifying its business. Upgrades: Issuer: EVERTEC Group, LLC Probability of Default Rating, Upgraded to B2-PD from B3-PD Corporate Family Rating Upgraded to B1 from B2 Senior Secured Bank Credit Facility Upgraded to B1 (LGD3) from B2 (LGD3) Outlook Actions: Issuer: EVERTEC Group, LLC Outlook, Remains Stable RATINGS RATIONALE The B1 CFR reflects Evertec's limited operating scale and elevated risk related to economic and fiscal uncertainty in Puerto Rico, a region which accounted for about 80% of the company's revenues. Evertec also has substantial revenue concentration with Banco Popular de Puerto Rico. These risks are offset by moderate debt leverage, solid free cash flow generation and the Evertec's very strong position within the company's largest market. Evertec's business risks are further mitigated by the critical role it plays in Puerto Rico's economy as the dominant payment processor with the leading ATM and PIN debit network. The company's payment processing and merchant acquiring services continue to benefit from a secular shift to electronic payments and generate recurring transaction processing revenues. These services have high operating leverage and drive strong adjusted EBITDA margins and free cash flow generation. Evertec is publicly traded and widely held with a largely independent board of directors. The company is expected to have moderate leverage over time and maintain a financial strategy that balances the interests of both shareholders and creditors. The stable outlook reflects Evertec's very good liquidity position and Moody's expectation that the company will continue to generate relatively stable revenue and EBITDA growth in its main market, Puerto Rico. In addition, Evertec will continue to grow in Latin America both organically and through acquisition. The Speculative Grade Liquidity (SGL) rating of SGL-1 reflects Moody's expectation that Evertec will maintain very good liquidity over the next 12 months. Liquidity is supported by an unrestricted cash balance of $200 million as of June 30, 2021, expectations for strong annual free cash flow generation of over at least $80 million, and an undrawn $125 million revolving credit facility. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Evertec's ratings could be downgraded if operating challenges and/or aggressive financial policies causing total debt to EBITDA to be sustained above 4x on other than a temporary basis could put downward pressure on the ratings. Ratings could also be downgraded if liquidity deteriorates meaningfully. The ratings could be upgraded if Puerto Rico's economic outlook improves or if Evertec continues to diversify its business geographically while maintaining a healthy growth profile and relatively conservative credit metrics. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. EVERTEC Group, LLC is the main operating subsidiary of EVERTEC, Inc. (taken together "Evertec", NYSE: EVTC). Evertec provides transaction and payment processing, merchant acquiring and processing, and other business process information technology services to financial institutions, government agencies and merchants in Puerto Rico, the Caribbean and Latin America. The company generated revenue of $511 million in 2020. =============== S U R I N A M E =============== SURINAME: IMF Directors Briefed on Extended Fund Facility Deal Bid ------------------------------------------------------------------ At an Executive Board meeting, staff updated Executive Directors on recent developments in Suriname and the authorities' request for an arrangement under the Extended Fund Facility (EFF). Ms. Kristalina Georgieva, Managing Director of the IMF, issued the following statement following the meeting: "Today, Executive Directors were briefed on Suriname's request for an arrangement under the Extended Fund Facility. "President Chan Santokhi's administration inherited a very difficult economic situation. To restore macroeconomic stability, it has undertaken a broad range of policy actions, including delivering on most of the prior actions that were agreed in the staff-level agreement reached in April. "Over the past several weeks, the Surinamese authorities have made important progress in implementing their home-grown policy plan. They passed a budget in the legislature, with accompanying revenue measures, that will help restore fiscal sustainability; increased spending on social protection programs for the most vulnerable; unified the official and parallel exchange rate; put in place a new monetary policy framework that will help bring down inflation; put an end to monetary financing of the budget; and took steps to significantly improve the targeting of electricity subsidies. Official and private creditors also have an essential role to play in supporting Suriname's efforts to put its economy on a better path, tackle its high debt burden, and restore debt sustainability. Hence, financing assurances from Suriname's various creditors are crucial before the IMF can provide financial support to Suriname. I welcome the continued discussions between the Surinamese authorities and creditors to get these assurances speedily. "We are committed to working diligently in the coming weeks to ensure that the authorities' request for an arrangement can be expeditiously presented to the IMF's Executive Board for its consideration." Background: IMF staff and the Surinamese authorities reached an agreement on April 29 for a 36-month Extended Fund Facility with access equivalent to SDR 472.8 million (about US$ 690 million). See Press Release No. 21/116. The Staff-Level Agreement is subject to Executive Board review, which is pending the completion of the full set of prior actions, the provision of financing assurances on debts owed to official bilateral creditors, and having a credible process in place toward debt restructuring from private creditors. As reported in the Troubled Company Reporter-Latin America on June 8, 2021, S&P Global Ratings lowered its long- and short-term local currency sovereign credit ratings on the Republic of Suriname to 'SD' from 'CC' and 'C', respectively. At the same time, S&P Global Ratings affirmed its 'SD/SD' (selective default) long- and short-term foreign currency sovereign credit ratings on the country and its 'D' (default) ratings on Suriname's foreign currency debt. Finally, S&P Global Ratings affirmed its 'CCC' transfer and convertibility assessment on the country. =========================== V I R G I N I S L A N D S =========================== LIMETREE BAY: Scheduled to Shut Down St. Croix Refinery ------------------------------------------------------- Law360 reports that Limetree Bay Refining LLC told a Texas bankruptcy judge that it had repaired a damaged section of its St. Croix refinery and was preparing a plan to decommission and shutter it -- maybe permanently -- after environmental incidents caused it to stop production in May 2021. During a virtual hearing, debtor attorney Elizabeth A. Green of BakerHostetler said a flaring stack that was damaged in a fire and led to a "rainout" of oil in the residential areas adjacent to the refinery has been repaired, allowing Limetree Bay to commence the removal of the oil and gas trapped in the facility. About Limetree Bay Limetree Bay Energy is a large-scale energy complex strategically located in St. Croix, U.S. Virgin Islands. The complex consists of Limetree Bay Refining, a refinery with peak processing capacity of 650 thousand barrels of petroleum feedstock per day, and Limetree Bay Terminal, a 34-million-barrel crude and petroleum products storage and marine terminal facility serving the refinery and third-party customers. Limetree Bay Refining, LLC, restarted operations in February 2021, and is capable of processing around 200,000 barrels per day. Key restart work at the site began in 2018, including the 62,000 barrels per day modern, delayed Coker unit, extensive desulfurization capacity, and a reformer unit to produce clean, low-sulfur transportation fuels. The restart project provided much needed economic development in the U.S.V.I. and created more than 4,000 construction jobs at its peak. Limetree Bay Refining, LLC and its affiliates sought Chapter 11 protection on July 12, 2021. The lead case is In re Limetree Bay Services, LLC (Bankr. S.D. Tex. Case No. 21-32351). Limetree Bay refining listed at least $1 billion in assets and at least $500 million in liabilities as of the bankruptcy filing. Baker Hostetler is acting as legal counsel for the Company and B. Riley Financial Inc. has been retained as restructuring advisor. =============== X X X X X X X X =============== [*] BOND PRICING: For the Week Aug. 2 to Aug. 6, 2021 ----------------------------------------------------- Issuer Name Cpn Price Maturity Country Curr ----------- --- ----- -------- ------- --- Polarcus Ltd 5.6 71.8 7/1/2022 AE USD AES Tiete Energia SA 6.8 1.2 4/15/2024 BR BRL Enel Americas SA 5.8 32.7 6/15/2022 CL CLP Argentine Republic Gov 8.3 72.9 12/31/2033 AR USD City of Cordoba Argent 7.9 73.1 9/29/2024 AR USD Odebrecht Finance Ltd 6.0 16.4 4/5/2023 KY USD Esval SA 3.5 49.9 2/15/2026 CL CLP Provincia de Rio Negro 7.8 70.4 12/7/2025 AR USD Noble Holding Internat 5.3 60.5 3/15/2042 KY USD Provincia de Cordoba 7.1 72.7 8/1/2027 AR USD Provincia de Rio Negro 7.8 70.3 12/7/2025 AR USD Province of Santa Fe 6.9 74.7 11/1/2027 AR USD Provincia de Rio Negro 7.8 70.3 12/7/2025 AR USD Cia Energetica de Pern 6.2 1.1 1/15/2022 BR BRL Banco Macro SA 17.5 65.2 5/8/2022 AR ARS Argentina Bonar Bonds 7.6 74.4 4/18/2037 AR USD Empresa Electrica de l 2.5 63.8 5/15/2021 CL CLP Argentine Republic Gov 7.1 75.7 6/28/2117 AR USD Provincia del Chaco Ar 9.4 74.8 8/18/2024 AR USD Argentine Republic Gov 0.5 27.6 12/31/2038 AR JPY Banco Macro SA 17.5 65.2 5/8/2022 AR ARS Automotores Gildemeist 6.8 54.9 1/15/2023 CL USD Argentine Republic Gov 8.3 72.9 12/31/2033 AR USD YPF SA 16.5 67.3 5/9/2022 AR ARS Provincia del Chubut A 4.5 2208 3/30/2021 AR USD Avadel Finance Cayman 4.5 55.0 2/1/2023 US USD Odebrecht Finance Ltd 6.0 16.4 4/5/2023 KY USD Sylph Ltd 2.4 65.1 9/25/2036 KY USD Argentine Republic Gov 8.3 74.5 12/31/2033 AR USD KrisEnergy Ltd 4.0 40.4 6/9/2022 SG SGD Metrogas SA/Chile 6.0 41.6 8/1/2024 CL CLP Corp Universidad de Co 5.9 64.2 11/10/2021 CL CLP Odebrecht Finance Ltd 6.0 16.4 4/5/2023 KY USD Cia Latinoamericana de 9.5 73.9 7/20/2023 AR USD Cia Latinoamericana de 9.5 74.3 7/20/2023 AR USD Noble Holding Internat 6.1 62.0 3/1/2041 KY USD Provincia del Chaco Ar 4.0 0.0 12/4/2026 AR USD Provincia de Buenos Ai 7.9 75.3 6/15/2027 AR USD Noble Holding Internat 6.2 62.2 8/1/2040 KY USD Argentine Republic Gov 8.3 72.9 12/31/2033 AR USD Provincia de Cordoba 7.1 74.7 8/1/2027 AR USD YPF SA 16.5 67.3 5/9/2022 AR ARS Province of Santa Fe 6.9 74.7 11/1/2027 AR USD Argentine Republic Gov 8.3 74.5 12/31/2033 AR USD Argentine Republic Gov 6.9 75.2 1/11/2048 AR USD Argentina Bonar Bonds 5.8 75.2 4/18/2025 AR USD Argentine Republic Gov 4.3 70.0 12/31/2033 AR JPY Automotores Gildemeist 6.8 54.9 1/15/2023 CL USD Province of Santa Fe 6.9 75.2 11/1/2027 AR USD Argentine Republic Gov 6.3 74.1 11/9/2047 AR EUR Fospar S/A 6.5 1.2 5/15/2026 BR BRL YPF SA 16.5 67.3 5/9/2022 AR ARS Automotores Gildemeist 8.3 54.2 5/24/2021 CL USD Province of Santa Fe 6.9 75.2 11/1/2027 AR USD ********* 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 * * *