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/raid1/www/Hosts/bankrupt/TCRLA_Public/210916.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, September 16, 2021, Vol. 22, No. 180 Headlines B R A Z I L BANCO DO BRASIL: Commences Offer to Buy 2022/2023/2024 Senior Notes BRAZIL: About 30% of Analysts Expect Inflation BRAZIL: Ibovespa Deepens Losses & Falls 3% C A Y M A N I S L A N D S INCOME COLLECTING: Fund Ensnared in Fraud Case Files for Chapter 15 D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: Hoteliers Push Back on Workers' Tips DOMINICAN REPUBLIC: Over 30,250 Foreigners in Labor Market E L S A L V A D O R INVERSIONES CREDIQ: Fitch Affirms 'B' IDRs, Outlook Negative J A M A I C A BLUE POWER: Revenues Hit by Suspension of Exports to CARICOM P U E R T O R I C O MOVIMIENTO PENTECOSTAL: Taps Almeida & Davila as Counsel - - - - - =========== B R A Z I L =========== BANCO DO BRASIL: Commences Offer to Buy 2022/2023/2024 Senior Notes ------------------------------------------------------------------- Banco do Brasil S.A., organized as a sociedade de economia mista and accordingly a sociedade por acoes incorporated under the laws of the Federative Republic of Brazil, acting through its Grand Cayman branch, (the "Bank"), hereby announces the commencement of an offer by HSBC Securities (USA) Inc. (the "Purchaser") to purchase, up to the Aggregate Offer Limit (as defined below) of the (i) outstanding 3.875% Senior Notes due 2022 (the "2022 Notes") issued on October 10, 2012 by the Bank (the "2022 Offer"); (ii) outstanding 4.875% Senior Unsecured Notes due 2023 (the "2023 Notes") issued on April 19, 2018 by the Bank (the "2023 Offer"); and (iii) outstanding 4.750% Senior Unsecured Notes due 2024 (the "2024 Notes" and, together with the 2022 Notes and the 2023 Notes, the "Notes") issued on March 20, 2019 by the Bank (the "2024 Offer" and, together with the 2022 Offer and the 2023 Offer, the "Offers"), upon the terms and subject to the conditions described in the Offer to Purchase dated September 13, 2021 (as it may be amended or supplemented from time to time, the "Offer to Purchase") and the accompanying Letter of Transmittal dated September 13, 2021 (as it may be amended or supplemented from time to time, the "Letter of Transmittal" and, together with the Offer to Purchase, the "Offer Documents"). Description Principal Amount Purchase Early Tender Total of Notes Outstanding Price*(1) Payment Consideration (1)(2) ---------- ---------------- --------- ----------- ------------- 3.875% Senior Notes Due 2022 US$1,809,700,000 US$1,005 US$30 US$1,035.10 4.875% Senior Unsecured Notes Due 2023 US$750,000,000 US$1,029 US$30 US$1,059.30 4.759% Senior Unsecured Notes Due 2024 US$750,000,000 US$1,043 US$30 US$1,073.10 * Per US$1,000 principal amount of Notes -------------------------------------- (1) Holders tendering their Notes will also receive Accrued Interest in respect of their purchased Notes from (and including) the immediately preceding interest payment date for the relevant series of Notes up to, but excluding, the Early Settlement Date or the Final Settlement Date, as applicable. (2) The Total Consideration for the relevant series of Notes includes the relevant Early Tender Payment in respect of such series of Notes. As used herein, the "Aggregate Offer Limit" is the maximum aggregate principal amount of Notes of the relevant series that can be purchased in accordance with the terms of the Offers such that the aggregate Total Consideration (as defined below) and aggregate Purchase Price (as defined below), excluding Accrued Interest (as defined in the Offer to Purchase), payable pursuant to the terms of the Offers shall not exceed U.S.$750.0 million. The Purchaser reserves the right, but is under no obligation, to increase the Aggregate Offer Limit at any time, subject to compliance with applicable law, which could result in the Purchaser purchasing a greater aggregate principal amount of Notes in the Offers. There can be no assurance that Purchaser will increase the Aggregate Offer Limit. If the Purchaser increases the Aggregate Offer Limit, the Withdrawal Deadline is not expected to be extended, subject to applicable law. The Offers will expire at 11:59 P.M. New York City time, on October 8, 2021, unless any of the Offers is extended or earlier terminated by the Purchaser in its sole discretion (such date and time, including as extended or earlier terminated (the "Expiration Time"). The early tender deadline for the Offers will be 5:00 P.M., New York City time, on September 24, 2021 (such date and time, including as extended or earlier terminated, the "Early Tender Time"). Holders of the 2022 Notes, the 2023 Notes, and the 2024 Notes must validly tender their Notes at or before the Early Tender Time in order to be eligible to receive the relevant Early Tender Payment (as defined below) in addition to the Purchase Prices (as defined below). Notes tendered may be validly withdrawn at any time prior to 5:00 P.M., New York City Time, on September 24, 2021 (such dated and time the "Withdrawal Deadline"), but not thereafter, except as described in the Offer to Purchase or as required by applicable law. Withdrawal rights with respect to tendered 2022 Notes, 2023 Notes or 2024 Notes will terminate immediately prior to the Early Tender Time. Notes tendered prior to the Early Tender Time and not withdrawn prior to the Early Tender Time may not be withdrawn thereafter. Notes tendered after the Early Tender Time may not be withdrawn. A full text copy of the company's press release is available at: https://prn.to/3tFDj7E As reported in the Troubled Company Reporter-Latin America on June 11, 2021, Fitch Ratings has affirmed the Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) of Banco do Brasil S.A. (BdB) at 'BB-', Outlook Negative and its long-term National rating at 'AA(bra)', Outlook Stable. In addition, Fitch has affirmed BdB's Viability Rating (VR) at 'bb-', Support Rating (SR) at '3' and Support Rating Floor at 'BB-'. BRAZIL: About 30% of Analysts Expect Inflation ---------------------------------------------- Rio Times Online reports that nearly 30% of economic analysts maintain their forecasts that inflation in Brazil will be above the target of 3.25% set by the Central Bank's Monetary Policy Committee (Copom) at the beginning of 2023. The median of market expectations, released by the monetary authority, remains on target, according to Rio Times Online. But the design of the distribution of expectations is asymmetric, leaning towards higher values instead of the bell shape that would indicate a balance between those who bet on higher and lower values, the report relays. The average inflation expectation for 2023 is 3.35%, the report 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: Ibovespa Deepens Losses & Falls 3% ------------------------------------------ Rio Times Online reports that shortly after the expected statement by the president of the Chamber, Arthur Lira, about the acts and during a speech by the president of the STF, Luiz Fux, Ibovespa accentuated the losses, with a fall of 3.04%, to 114,289 points. This score is the lowest since March, according to Rio Times Online. The spot dollar, meanwhile, accentuated the highs of earlier trading, advancing 2.45% to R$ 5.263, the report notes. Operators heightened caution after a new criticism by President Jair Bolsonaro of Supreme Court Justices Alexandre de Moraes and Luís Roberto Barroso, the report 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). =========================== C A Y M A N I S L A N D S =========================== INCOME COLLECTING: Fund Ensnared in Fraud Case Files for Chapter 15 ------------------------------------------------------------------- globalinsolvency.com, citing Bloomberg News, reports that a Cayman Island mutual fund whose manager was charged in a $100 million bait-and-switch scheme filed for chapter 15 bankruptcy protection in the U.S. to protect its assets from lawsuits by disgruntled investors. Representatives of the so-called Income Collecting 1-3 Months T-Bills Mutual Fund asked a federal bankruptcy judge in New York to recognize their efforts to liquidate the company, which they said would include an attempt to pay back investors, according to globalinsolvency.com. Recognition of the foreign liquidation would put a hold on any lawsuits against the fund. The fund's manager, Ofer Abarbanel, was arrested June 24 in Los Angeles and charged with securities and wire fraud, the report notes. U.S. prosecutors said the California man told an investor group that its money would be primarily placed in short-term U.S. Treasury securities but instead put it in funds he controlled or was closely associated with, the report relays. Two days before Abarbanel's arrest, the fund was placed in liquidation in the Cayman Islands on the vote of its sole shareholder, NY Alaska ETF Management LP, according to court records, the report discloses. The fund's representatives said in court papers that the fund has "a particular need" for recognition of its liquidation efforts, given the Securities and Exchange Commission's findings of "potential significant fraud against the fund and its creditors," the report says. According to the SEC, the fund "had $106 million in liabilities against possibly only approximately $88 million in assets," the lawyers said, the report notes. "Based upon these serious allegations of fraud, it is likely that other parties may assert litigation against the fund. A stay of any pending and potential future proceedings will be important to the (representatives') investigation and efforts to collect assets and wind down the fund," the report adds. =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: Hoteliers Push Back on Workers' Tips -------------------------------------------------------- Dominican Today reports that the Association of Hotels and Tourism of the Dominican Republic (Asonahores) reported that all the restaurants integrated in that organization will comply "immediately" with the ruling of the Supreme Court -- which orders the suspension of the charge of 10% of the value of food as Tip established by the Labor Code, in the cases of services offered at home or when the client withdraws them. Asonahores points out as an important fact, "that this new criterion of the Supreme Court of Justice impacts the more than 40,000 employees of the restaurant sector" who will see "their income from tips diminished," the report notes. Asonahores explains through a statement that the sentence "changes the criterion that the Supreme Court itself had established in its sentence" of January 10, 2007, which "provided that the collection of the tip also applied to those who by telephone or any another way requested food or beverages "that will be consumed outside the establishment where they are sold," the report relays. About Dominican Republic The Dominican Republic is a Caribbean nation that shares the island of Hispaniola with Haiti to the west. Capital city Santo Domingo has Spanish landmarks like the Gothic Catedral Primada de America dating back 5 centuries in its Zona Colonial district. Luis Rodolfo Abinader Corona is the current president of the nation. The Troubled Company Reporter-Latin America reported in April 2019 that the Dominican Today related that Juan Del Rosario of the UASD Economic Faculty cited a current economic slowdown for the Dominican Republic and cautioned that if the trend continues, growth would reach only 4% by 2023. Mr. Del Rosario said that if that happens, "we'll face difficulties in meeting international commitments." An ongoing concern in the Dominican Republic is the inability of participants in the electricity sector to establish financial viability for the system. Fitch Ratings on Jan. 18, 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: Over 30,250 Foreigners in Labor Market ---------------------------------------------------------- Dominican Today reports that in the formal labor market of the Dominican Republic, 30,251 foreigners worked until last July, with Haitians representing more than half of that amount. However, in 2017, it was estimated that the employed population of foreign origin (made up of the sum of immigrants and their descendants) amounted to more than 417,000 people, according to Dominican Today. Of the formal foreign workers registered with the Dominican Social Security System (SDSS), manufacturing was responsible for employing 16.1% of foreign labor until July 2021, equivalent to 4,974 foreigners, the report notes. This activity was followed by commerce, which employed 4,580 people of other nationalities, representing 15.1% of the total, according to data from the Social Security Treasury (TSS), the report relays. Haitians represented 52% of foreigners registered in the TSS, equivalent to 15,751 people, the report notes. While Venezuelans occupy the second place, with 2,834 citizens, representing 9.3% of the total, 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 L S A L V A D O R ===================== INVERSIONES CREDIQ: Fitch Affirms 'B' IDRs, Outlook Negative ------------------------------------------------------------ Fitch Ratings has affirmed the Long-Term and Short-Term Issuer Default Ratings (IDRs) of Inversiones CrediQ Business S.A. (ICQB) at 'B'. The Rating Outlook for the Long-Term Rating is Negative. Even through some risks considered in April 2020 -- i.e., strong delinquencies leading to material deterioration of its profitability and, consequently, substantially increasing its refinancing risks -- have reduced, the agency maintained the Negative Outlook on its IDR. It reflects Fitch's opinion on the still fragile economic recovery in different countries in which ICQB operates. The agency understands that, on a consolidated basis, ICQB will face a challenging macroeconomic environment in the midterm. KEY RATING DRIVERS ICQB's ratings are highly influenced by the blended assessment of the operating environment of the countries where the company operates. Fitch's assessment considers the effect of country-specific pressures on ICQB's blended operating environment score, which remains at 'b' with a negative trend. Close to 70% of its operation are located in Costa Rica (sovereign rating of B/Negative) and El Salvador (sovereign rating of B-/Negative), whose Negative Outlook reflects the risks that the momentum of the economic recovery could face, albeit for different reasons in each country. In addition, ICQB's ratings are highly influenced by its company profile, notably the company's relatively concentrated business model. Compared to other financial entities regionally, ICQB relies significantly on the performance of car dealerships, particularly its sister company Grupo Q. Even though Fitch recognizes that ICQB holds a relevant position in its target market, its size and operations are still small relative to the banking industry. ICQB's profitability also highly influences the entity's ratings. ICQB's performance has been somewhat better than initially anticipated at the onset of the pandemic, but the risks of a reduction in the offer of vehicles (due to semiconductors limited offers) could limit its business volume and, consequently, its revenues generation -- although the agency recognizes that the niche operated by ICQB (working autos) may be lesser affected compared to passenger cars. As of June 2021, ICQB's pre-tax income on average assets (ROAA) was 3.5% modestly below ICQB's four-year average of 4.0%, favored by the improvement of its Net Interest Margin, and allowing the entity to maintain an adequate ability to absorb unexpected deteriorations of its portfolio before operating losses. In Fitch's opinion, NPL levels are expected to stabilize given the reactivation of the sector and the economies in which it operates. Asset quality deteriorated in 2020 as a result of the impact of the pandemic, showing a slight recovery as of 1H21 despite the fact that the relief measures granted are expiring. As of June 2021, the impaired loans to gross loans indicator was 2.5% and 2.7% when adjusted by write-offs (2020: 2.6% 3.2% respectively). Favorably, increased provisions led to a coverage of 146% of impaired loans when considering the equity reserves. ICQB has exhibited adequate and stable capitalization and leverage levels supported by stable income generation. Its capital ratios are generally in line with risk and keep a reasonable capacity to absorb unforeseen losses. As of June 2021, the tangible leverage ratio (debt to tangible equity) was 4.7x. Fitch believes that even with a further deterioration of the loan portfolio's asset quality, lower expected portfolio growth could relieve pressures on capital. ICQB's funding profile is primarily based on wholesale funding. The entity's unsecured funding has remained relatively steady over recent periods, but represents on a four-year average a low 31.0% of total debt, Fitch believes this structure provides less flexibility in times of stress by limiting the amount of unencumbered assets that could be pledged to generate additional liquidity. On the other hand, wholesale funding is adequately diversified in a large number of local and international entities. ICQB has an adequate level of liquidity to address its debt maturities. RATING SENSITIVITIES Factors that could, individually or collectively, lead to negative rating action/downgrade: -- A further downgrade or material deterioration of the main operating environments where ICQB holds its major exposures, in particular Costa Rica; -- ICQB's IDR could be downgraded due to a sustained deterioration in its profitability, as reflected in a pre-tax income to average assets indicator below 2.75%. Factors that could, individually or collectively, lead to positive rating action/upgrade: -- The Outlook could be revised to Stable if the operating environment trend is revised to stable; -- Ratings can be upgraded if the entity is able to diversify its revenues while maintaining its profitability levels), along with meaningful improvement in the scale of its operations without significantly altering ICQB's risk profile. 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 Prepaid expenses and other deferred assets were reclassified as intangible assets and were deducted from tangible equity due to their low loss absorption capacity. 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. ============= J A M A I C A ============= BLUE POWER: Revenues Hit by Suspension of Exports to CARICOM ------------------------------------------------------------ RJR News reports that Jamaican manufacturer Blue Power's financials have taken a hit following the suspension of its exports to CARICOM. For the three-month period, total revenue amounted to $116 million, a decrease of 23% from the $150 million realized in the previous year, according to RJR News. The main contributor to this decline was the suspension of our exports to the CARICOM region, the report notes. The Government of Jamaica has elected to discontinue the issuance of Certificates of Origin for soap manufactured in Jamaica with imported soap noodles, the report relays. As a result of this change, profits from operations for the first quarter amounted to $8 million compared to $21 million in the previous year, a decline of 62%, the report adds. ===================== P U E R T O R I C O ===================== MOVIMIENTO PENTECOSTAL: Taps Almeida & Davila as Counsel -------------------------------------------------------- Movimiento Pentecostal Apostolico Cristiano, Inc. seeks approval from the U.S. Bankruptcy Court for the District of Puerto Rico to employ Almeida & Davila, P.S.C. to handle its Chapter 11 case. Almeida & Davila will charge between $175 and $250 per hour for the services of its attorneys and $85 per hour for paralegal services. The firm will also seek reimbursement for out-of-pocket expenses incurred. The retainer fee is $4,000. Enrique Almeida, Esq., a partner at Almeida & Davila, disclosed in a court filing that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Enrique M. Almeida, Esq. Zelma B. Davila, Esq. Almeida & Davila, P.S.C. 268 Ave. Ponce de Leon San Juan, PR 00918 Tel: (787) 722-2500 Fax: (787) 777-1376 Email: enrique.almeida@almeidadavila.com zelma.davila@almeidadavila.com About Movimiento Pentecostal Apostolico Cristiano Inc. Movimiento Pentecostal Apostolico Cristiano, Incorporado filed a Chapter 11 bankruptcy petition (Bankr. D.P.R. Case No. 21-02645) on Sept. 1, 2021, listing as much as $500,000 in both assets and liabilities. The Debtor is represented by Almeida & Davila, P.S.C. ********* 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 * * *