/raid1/www/Hosts/bankrupt/TCRLA_Public/210927.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, September 27, 2021, Vol. 22, No. 187
Headlines
A R G E N T I N A
ARGENTINA: Unemployment Dropped to 9.6% in Second Quarter
B A H A M A S
BAHAMAS: Moody's Expects Consolidation to Continue Under New Gov't.
B E R M U D A
SIGNET JEWELERS: Fitch Raises LT IDR to 'B', Outlook Stable
C O L O M B I A
MONOMEROS: Files for Bankruptcy Amid Regulatory Intervention
D O M I N I C A N R E P U B L I C
DOMINICAN REPUBLIC: Abinader Unveils Competitiveness Plan
DOMINICAN REPUBLIC: Electricity Subsidy to Reach US$900MM
M E X I C O
MEXICO: Economy Expands 6.8% Year-on-Year in August, Estimate Shows
P U E R T O R I C O
CB REAL ESTATE: Unsecureds to Get 100% With Interest in 83 Months
MIGO IQ: Seeks Approval to Tap Tamarez CPA as Accountant
U R U G U A Y
BANQUE HERITAGE: S&P Raises ICR to 'BB-', Outlook Stable
V E N E Z U E L A
PDVSA: ConocoPhillips Steps Up Global Push to Collect Firm Debt
X X X X X X X X
[*] BOND PRICING: For the Week Sept. 20 to Sept. 24, 2021
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A R G E N T I N A
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ARGENTINA: Unemployment Dropped to 9.6% in Second Quarter
---------------------------------------------------------
Buenos Aires Times reports that Argentina's unemployment rate fell
to 9.6 percent in the second quarter of the year, the INDEC
national statistics bureau said.
The figure is 3.5 points lower than the same period in 2020 (13.1
percent) and a drop of 0.6 points compared to the first quarter of
this year (10.2 percent), according to Buenos Aires Times.
Among men, unemployment affected nine percent of the economically
active population in the second quarter, with the figure rising to
10.4 percent for women, the report notes.
However, the data showed that underemployment (working less than 35
hours, seeking more) reached 12.4 percent in the second quarter,
compared to 11.9 percent in the January-March period, the report
relays.
INDEC's study is based on the country's 31 most populated urban
centres, where almost 29 million people live, the report discloses.
Argentina's population is around 45 million inhabitants.
The bureau found that the economically active population in the
second quarter was 13.3 million people, with 8.7 million classified
as salaried workers, teh report says.
Analysts for Noticias Argentinas said that INDEC's figures showed
that 1.3 million people were without any form of work, which
projected out to the whole country would put the figure closer to
two million individuals, the report notes.
Additional data published by the bureau, however, indicated that
Argentina's incipient economic recovery is being felt in key areas
such as construction and industry, translating into more
employment, the report notes.
Economic activity grew 10.3 percent year-on-year in the first half
of 2021, in most part due to differences in Covid-19 restrictions,
the report discloses. In seasonally adjusted terms, compared to
the previous quarter, activity actually dropped 1.4 percent, the
report says.
Argentina has been in recession since 2018. The country registered
a severe slump of 9.9 percent of GDP in 2020, in large part due to
limitations on the movement of people, goods and services due to
the coronavirus pandemic, the report notes.
The Organisation for Cooperation and Development (OECD) estimates
that the country will see a rebound in activity of 7.6 percent this
year, the report adds.
About Argentina
Argentina is a country located mostly in the southern half of South
America. It's capital is Buenos Aires. Alberto Angel Fernandez is
the current president of Argentina after winning the October 2019
general election. He succeeded Mauricio Macri in the position.
Argentina has the third largest economy in Latin America. The
country's economy is an upper middle-income economy for fiscal year
2019, according to the World Bank. Historically, however, its
economic performance has been very uneven, with high economic
growth alternating with severe recessions, income maldistribution
and in the recent decades, increasing poverty.
Standard & Poor's credit rating for Argentina stands at CCC+ with
stable outlook, which was a rating upgrade issued on Sept. 8, 2020.
Moody's credit rating for Argentina was last set at Ca on Sept. 28,
2020. Fitch's credit rating for Argentina was last reported on
Sept. 11, 2020 at CCC, which was a rating upgrade from CC. DBRS'
credit rating for Argentina is CCC, given on Sept. 11, 2020.
As reported by The Troubled Company Reporter - Latin American, DBRS
noted that the recent upgrade in Argentina's ratings (September
2020) follows the closing of two debt restructuring agreements
between the Argentine government and private creditors. The first
restructuring involved $65 billion in foreign-law bonds. The deal
achieved the requisite participation necessary to trigger the
collective action clauses and finalize the restructuring on 99% on
the aggregate principal outstanding of eligible bonds. DBRS added
that the debt restructurings conclude a prolonged default and
provide the government with substantial principal and interest
payment relief over the next four years.
DBRS further relayed that Argentina is also seeking a new agreement
with the International Monetary Fund (IMF) to replace the canceled
2018 Stand-by Agreement. Formal negotiations on the new financing
began in November 2020. Obligations to the IMF amount to $44
billion, with major repayments coming due in 2022 and 2023.
=============
B A H A M A S
=============
BAHAMAS: Moody's Expects Consolidation to Continue Under New Gov't.
-------------------------------------------------------------------
RJR News reports that sovereign credit rating agency Moody's said
it does not expect the outcome of the general election in the
Bahamas, which ushered in a new government led by the Progressive
Liberal Party (PLP), to cause any material shift in fiscal
consolidation.
The agency, a day after the September 16 general election,
downgraded The Bahamas to Ba3 negative from Ba2, according to RJR
News. However, it predicted an eight per cent growth in gross
domestic product (GDP) this year, with continued growth by seven
per cent in 2022, the report notes.
Pointing to the nation's debt burden rising to as high as 87 per
cent of GDP, Moody's said it expects the PLP-led government to
continue to prioritise fiscal consolidation and reduce the
government's debt burden over time, the report adds.
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B E R M U D A
=============
SIGNET JEWELERS: Fitch Raises LT IDR to 'B', Outlook Stable
-----------------------------------------------------------
Fitch Ratings has upgraded Signet Jewelers Limited's and Signet
Group Limited's ratings, including their Long-Term Issuer Default
Ratings from 'B' to 'BB'. The Outlook is Stable.
The upgrade reflects Signet's improving operating trajectory
through topline and expense management initiatives. Fitch expects
stable revenue and EBITDA beginning 2022 of around mid-$6 billion
and mid-$500 million, respectively, relative to pre-pandemic levels
of $6.1 billion and $504 million. These expectations, alongside
management's evolving financial policy favoring debt reduction, has
improved Fitch's confidence in the company's ability to sustain
adjusted leverage below 4.5x.
Signet's ratings continue to reflect its leading market position as
a U.S. specialty jeweler with approximately 6% share of a highly
fragmented industry.
KEY RATING DRIVERS
Revenue Stabilization Initiatives: The company implemented a number
of initiatives to improve same store sales (SSS) recently,
including increasing the pace of product innovation, developing
product extensions and investing in its omnichannel platform.
During 2020, the company intensified its focus on key strategies
including investments in its digital shopping platform and using
consumer data to guide decision making in merchandising and to
allow greater personalization in service.
While the volatile 2020/1H21 operating environment complicates an
analysis of results, recent trends have been encouraging, including
15% and 7% SSS (which include digital sales) results in 3Q20 and
4Q20, respectively as stores reopened following mandated closures
and 107% and 97% in 1Q21 and 2Q21, respectively. Digital sales
growth was 71% in both 3Q20 and 4Q20, 100% in 1Q21, and 25% in
2Q21, representing 23% of sales presently.
Beginning 2022, Fitch projects Signet's initiatives could yield
revenue stabilizing close to $6.5 billion. This range is modestly
above pre-pandemic levels, despite store closures, supported by
accelerated digital. This would represent a material decline from
the LTM July 2021 revenue of $7.0 billion, which Fitch believes
benefited from pent up demand and redeployment of savings from
reduced spending on consumer services like travel and entertainment
and stimulus checks. Fitch recognizes a number of near-term
unknowns continue to exist, including the levels of pent-up and
pull-forward demand which may have benefitted 1H21 jewelry sales,
and the potential impact of rising delta variant cases on consumer
behavior.
EBITDA Rebound: Signet's focus on structural cost reductions,
including consolidation of distribution centers and sourcing
optimization, is expected to be somewhat offset by industry wide
cost inflation, yielding EBITDA margins stabilizing around
pre-pandemic levels of low-8% beginning in 2022. During 2018-2020,
the company achieved over $300 million in annualized net savings
across a number of functions, ahead of its goal of $200 million to
$225 million in cost reductions announced in March 2018. In March
2021, the company announced another three-year goal to reduce costs
by $175 million to $200 million. Fitch expects the company to
redeploy a significant level of these savings into topline
investments as it has over the past three years.
Demonstrated Financial Conservatism and Flexibility: Signet's good
credit profile is underscored by its actions and financial
flexibility since the beginning of the pandemic. The company
maximized near term cash flow through payables negotiations, lower
inventory buys and material reductions to discretionary operating
and capital expenditures. Signet accelerated the closure of less
productive stores (2,833 stores as of 2020 compared with 3,208 at
the end of 2019) effectively reducing its longer-term rent burden,
favorably impacting adjusted debt. Signet paid down approximately
$440 million of debt in 2020 (by repaying all outstanding
borrowings under its $1.5 billion asset-based revolver (ABL)
facility and $100 million FILO term loan). Total debt is currently
at $790 million with LTM Fitch-adjusted leverage at 3.5x, in line
with the company's revised financial target of below 3.0x adjusted
leverage versus a previous 3.5x (using operating lease liabilities;
Fitch-adjusted equivalent is at or below 4.5x).
With $1.2 billion of cash at YE 2020, and positive free cash flow
expected over the rating horizon, Signet has solid liquidity and
financial flexibility. Management has guided to debt reduction
being its priority, following reinvestment in business. The
extension of its ABL facility through July 2026 provides Signet
additional flexibility to address its $148 million senior notes due
July 2024 and $657 million of preferred share obligations, which
Signet has the option to redeem in 2024.
Leading Jeweler Position: Signet is the leading U.S. specialty
jeweler with approximately 6% share of a fragmented $90 billion
market. The company's $356 million in 2020 Canada/U.K. revenue also
give it leading positions in these markets. The company ended 2020
with 2,833 stores across well-known brands like Kay, Jared, Zales
and Piercing Pagoda in the U.S.; Peoples in Canada; and H.Samuel
and Ernest Jones in the U.K.
Signet benefits from its scale and ability to invest in its
omnichannel platform. The company plans to invest between $175
million and $200 million in 2021 capex, much of which is expected
to support Signet's omnichannel expansion. These investments are in
addition to Signet's operating investments, including partial
redeployment of the cost reductions expected over the next three
years. If executed effectively, these investments could provide
Signet competitive advantages against smaller and independent
jewelers with limited capacity to invest. Longer term, Signet's
ability to grow its share of the fragmented mid-tier jewelry market
will depend on execution against its omnichannel and other growth
initiatives.
DERIVATION SUMMARY
Signet's 'BB'/Stable rating reflects the company's improving
operating trajectory through topline and expense management
initiatives. Fitch expects stable revenue and EBITDA beginning 2022
around mid-$6 billion and mid-$500 million, respectively, relative
to pre-pandemic levels of $6.1 billion and $504 million. These
expectations, alongside management's evolving financial policy
favoring debt reduction, has improved Fitch's confidence in the
company's ability to sustain adjusted leverage below 4.5x.
Signet's ratings continue to reflect its leading market position as
a U.S. specialty jeweler with approximately 6% share of a highly
fragmented industry.
Tapestry, Inc.'s (BBB-/Stable) rating reflects its improving
topline trajectory and sustainable cost reductions, which led to
fiscal 2021 (ending July 3, 2021) EBITDA of approximately $1.4
billion, similar to pre-pandemic levels. EBITDA improvement
alongside Tapestry's recently announced intention to repay $400
million of unsecured notes upon maturity in June 2022, have
improved Fitch's confidence in Tapestry's ability to sustain
adjusted leverage in the low-3x, as appropriate for the 'BBB-'
rating.
Tapestry's ratings continue to reflect its strong brand positioning
at Coach (around 90% of segment EBITDA), and its leading market
share within the U.S. premium handbag and small leather goods
market. The rating also considers the fashion risk inherent in the
accessories and apparel space.
Capri Holdings Limited's (BBB-/Stable) rating reflects its
improving topline trajectory and sustainable cost reductions, which
led to LTM June 2021 EBITDA of approximately $1.1 billion, similar
to pre-pandemic levels. EBITDA improvement alongside continued debt
reduction, including approximately $870 million of paydown in the
fiscal year ended March 2021, have improved Fitch's confidence in
Capri's ability to sustain adjusted leverage in the low-3x, as
appropriate for the 'BBB-' rating.
Capri's rating continues to reflect its strong positioning in the
U.S. handbag market, historical growth at its various brands and
its commitment to debt reduction. The rating also considers the
fashion risk inherent in the accessories and apparel space.
Levi Strauss & Co. (BB+/Stable) competes in a space (clothing) that
is susceptible to fashion risk. Based on EBITDA declines, adjusted
leverage increased to approximately 6.0x in fiscal 2020 (ended
November 2020) from 3.1x in fiscal 2019. Fitch expects that EBITDA
will approach pre-pandemic levels in fiscal 2021 (ending November
2021) based on a rebound in revenue, good cost control, and channel
shifts toward the more profitable direct-to-consumer channel. As
such, Fitch expects adjusted debt/EBITDAR (capitalizing leases at
8.0x) to improve below 3.5x in fiscal 2021.
Mattel, Inc.'s (BB/Stable) ratings reflects the company's
meaningfully improved operating trajectory, which has increased
Fitch's confidence in the company's longer-term prospects and
financial flexibility. EBITDA in 2020 reached approximately $710
million, up from the 2017/2018 trough of approximately $270
million, largely on cost reductions. EBITDA improvement caused FCF
to turn positive in 2019/2020 after four years of outflows; gross
debt/EBITDA improved from the 11.0x peak in 2017/2018 to 4.1x in
2019. Revenue has stabilized in the $4.5 billion range with many of
Mattel's key brands demonstrating good consumer trends at retail.
Fitch projects low single digit revenue growth beginning 2021,
which could drive similar to slightly higher growth in EBITDA
assuming some benefits from Mattel's recently announced $250
million cost reduction program.
KEY ASSUMPTIONS
Fitch's key assumptions within its rating case for the issuer
include:
-- Signet's revenue, which declined approximately $900 million to
$5.2 billion in 2020 from 2019, is expected to rebound to $6.8
billion in 2021, around $660 million above 2019 revenue. Given
the trajectory of 2020 operations, Fitch assumes revenue
declines in the second half of 2021, as the company laps a
strong 2H20. In 2022, Fitch expects top line to decline,
albeit around 5.5%, above pre-pandemic levels given typical
annual market growth of 1%-2%, as well as the company's
accelerating digital penetration. Beginning 2023, revenue
could grow around 1%, supported by company's topline
initiatives including its omnichannel focus.
-- EBITDA in 2021 is expected to be $787 million, relative to
2019 and 2020 levels of $504 million and $347 million,
respectively. EBITDA in 2022 of $537 million could be around
7% above 2019 levels given topline growth, with margins close
to pre-pandemic levels, as cost restructuring efforts are
partly offset by investments in its business.
-- 2021 FCF is expected to be $438 million due to strong EBITDA,
while FCF in 2022 could be closer to $50 million, assuming
lower EBITDA and some reversal in recent working capital
benefits. FCF could be in the $100 to $150 million range
annually beginning 2023. Signet reinstated dividends beginning
2H21 and Fitch assumes around $40 million in cash dividends in
2021 and $80 million annually beginning 2022.
-- Signet could use its strong cash balances of $1.6 billion as
of July 2021 and good FCF to reinvest in its business, resume
share buybacks, and reduce debt over the next two to three
years.
-- Total adjusted debt/EBITDAR (capitalizing leases at 8.0x)
could be around 4x in 2021 given strong EBITDA performance and
mid-4x beginning 2022, lower than the 5.4x level from 2019 on
debt reduction (including lower rent expense).
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- An upgrade could occur if Signet demonstrates better than
expected operating performance, with sustained positive
topline growth and EBITDA above $650 million, yielding
adjusted debt/EBITDAR (capitalizing leases at 8.0x) sustained
below 4.0x;
-- An indication of its intention to use cash to repay its debt
obligations could also lead to a positive rating action.
Factor that could, individually or collectively, lead to negative
rating action/downgrade:
-- A downgrade could occur if operating performance is below
expectations, yielding EBITDA declines toward $500 million and
adjusted debt/EBITDAR (capitalizing leases at 8.0x) above
4.5x.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.
LIQUIDITY AND DEBT STRUCTURE
Solid Liquidity and Limited Near-Term Maturities: As of July 31,
2021, Signet had $1.57 billion in cash and cash equivalents and no
borrowings on its $1.5 billion ABL facility, with $1.2 billion in
available borrowing capacity. On July 28, 2021, the company
extended the maturity of the ABL facility from Sept. 27, 2024 to
July 28, 2026 and amended the terms to allow Signet to increase the
size of the facility by up to $600 million.
During 2020, the company reduced net debt by $440 million,
including paying down its entire $100 million FILO term loan, the
$270 million of ABL borrowings it had as of the beginning of the
year, and $96 million of other loans and overdrafts.
As of July 31, 2021, the company's capital structure consists of
$147.6 million in unsecured notes due July 2024 and $651.3 million
of preferred equity, which receive 0% equity credit. Permanence in
the capital structure -- in this case permanence of the convertible
preferred -- is necessary for equity credit recognition. Fitch
views these securities as not conducive to being maintained as a
permanent part of the capital structure, with the main purpose
being to support the company's stock price. Give current cash
balances and cash flow generation, the company could pay-off
outstanding debt maturities when they come due using cash.
In March 2021, the company announced a target of adjusted leverage
below 3.0x. The target capitalizes leases at 5.0x and thus equates
to a target of approximately 4.5x on Fitch's leverage calculation
which capitalizes rent at 8.0x.
RECOVERY CONSIDERATIONS
Fitch does not employ a waterfall recovery analysis for issuers'
assigned ratings in the 'BB' category. The further up the
speculative-grade continuum a rating moves, the more compressed the
notching between the specific classes of issuances becomes. Fitch
has upgraded Signet's secured ABL Facility to 'BBB-'/'RR1' from
'BB'/'RR1' indicating outstanding recovery prospects (91% to 100%).
Fitch has upgraded the unsecured notes to 'BB'/'RR4' from
'BB-'/'RR2' indicating average recovery prospects (31% to 50%).
Fitch has upgraded the preferred equity to 'BB-'/'RR5' from
'B+'/'RR3', indicating below average recovery prospects (11% to
30%).
ISSUER PROFILE
Signet, incorporated in Bermuda, is the world's largest diamond
jewelry retailer, with 2,833 stores and kiosks (as of the end of
2020) in the U.S., U.K. and Canada operating under a variety of
national and regional brands. Signet's largest brands include Kay
(38% of 2020 sales), Zales (22%), and Jared (18%), all of which
operate in North America.
SUMMARY OF FINANCIAL ADJUSTMENTS
Historical and projected EBITDA is adjusted to add back non-cash
stock-based compensation expense and exclude non-recurring charges.
For the year ending Jan. 30, 2021, Fitch added back $14.5 million
in stock-based compensation expense. Fitch has adjusted the
historical and projected debt by adding 8.0x annual gross rent
expense.
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C O L O M B I A
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MONOMEROS: Files for Bankruptcy Amid Regulatory Intervention
------------------------------------------------------------
Diana Delgado at Argus Media reports that distressed fertilizers
producer Monomeros Colombo-Venezolanos, the Colombian subsidiary of
Venezuelan state-owned Pequiven, has filed for bankruptcy
protection on the heels of a regulatory intervention.
Colombian corporate regulator SuperSociedades is expected to accept
the company into the reorganization process that would lead to an
"expedited rescue plan," according to Argus Media. The strategic
company supplies about 40pc of the Colombian market, the report
notes.
Under Colombia's emergency decree 560 of 2020, Monomeros would have
three months to come up with a plan to allow it to continue
operating and meet obligations with creditors and suppliers, the
report relays.
"The administration of Monomeros Colombo-Venezolanos has decided to
use the transitory measures of decree 560 of 2020 to design along
with suppliers, workers and creditors a rescue plan that will
ensure the continued operation of the company, preserving jobs in
Barranquilla and Buenaventura and protecting food security in
Colombia," the company said, the report discloses.
Last year, Colombia streamlined bankruptcy proceedings to cope with
the economic blow of the Covid-19 pandemic, the report says.
Barranquilla-based Monomeros has come under severe financial
strain, mainly because of a lack of access to credit from Colombian
and foreign banks wary of breaching US sanctions on Venezuela,
despite a license from the US Treasury's Office of Foreign Assets
Control (Ofac) that administers the sanctions, the report relays.
The bankruptcy protection is considered essential to keeping
operations afloat, beyond the recent intervention that sparked
upheaval among the company's Venezuelan managers, the report notes.
"Unlike emergency decree 560, the control (of the company) can
only aggravate the financial situation," Monomeros said, noting
that several suppliers suspended commercial relations with the
company after the regulatory intervention, the report discloses.
Wary of political fallout, Monomeros warned of an outside campaign
of disorganization and misinformation to bankrupt the company,
putting hundreds of jobs at risk, the report relays.
The firm came under the control of Venezuela's political opposition
in 2019, when Colombia's government joined the US is recognizing an
interim government led by former National Assembly president Juan
Guaido in place of President Nicolas Maduro, the report notes.
The bankruptcy is another blow to the fading Guaido-led
administration, which has repeatedly vowed to protect Venezuela's
overseas assets, the report discloses. The most important of these
is state-owned PdV's US refining subsidiary Citgo, which could fall
into the hands of creditors in 2022. Maduro is pressing to get the
assets back under his control, the report says.
Monomeros concluded that sales have improved "significantly" in
response to Colombia's recovery from the pandemic. The company said
it has invested around 29bn Colombian pesos ($8mn) so far this
year, the report adds.
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D O M I N I C A N R E P U B L I C
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DOMINICAN REPUBLIC: Abinader Unveils Competitiveness Plan
---------------------------------------------------------
Dominican Today reports that the Dominican Republic government
launched the National Competitiveness Strategy, with which it
identifies the vulnerabilities of investment and with which it
intends to position the country as one of the most developed in the
region in the short term.
To that end, Congress passed Law 167-21, on Regulatory Improvement
and Simplification of Procedures, which consists in streamlining
bureaucratic procedures when launching a project, according to
Dominican Today.
President Luis Abinader stated that in the Strategy 1,873
procedures were reviewed in 53 institutions, which cost RD$264
billion, equivalent to 5.5% of GDP (gross domestic product), thew
report notes.
Of these, the simplification of 274 procedures has been
prioritized, such as the rest of 2021 and 2022, the following
processes will be streamlined: opening of companies in 24 hours,
creation of a one-stop investment window, with priority in tourism
and construction; the request for birth certificates, late
declaration and identity cards will be digital; application for
passports in 24 hours, and fast delivery of the exequatur, 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: Electricity Subsidy to Reach US$900MM
---------------------------------------------------------
Dominican Today reports that the electricity subsidy that the
Dominican Government had estimated for 2021 will end up being
higher, due to the international rise in the prices of generation
fuels (coal and natural gas).
For this year, the authorities project to pay between US$895
million and US$900 million, a figure that exceeds the US$747
million calculated for 2021, according to Dominican Today.
The vice president of the Unified Council of electricity
distribution companies (EDE), Andres Astacio, indicated that they
still do not have the estimates of the expenditure that the State
will have to make for next year for that reason, 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
===========
MEXICO: Economy Expands 6.8% Year-on-Year in August, Estimate Shows
-------------------------------------------------------------------
Dave Graham at Reuters reports that Mexico's economy expanded by
6.8% in August compared to the same month last year, as the country
continued a recovery from a slump induced by the coronavirus
pandemic, a preliminary estimate from national statistics agency
INEGI showed.
A breakdown of the agency's initial figures showed that secondary
activities, which include manufacturing, increased by 4.1% from
August 2020, while tertiary activities, which encompass the service
sector, were up by 8.3%, according to Reuters.
In July, Latin America's no. 2 economy grew by some 9.9%
year-on-year, according to a preliminary estimate, the report
notes. A more detailed breakdown of economic activity in July is
due to be published on Sept. 27, and for August, on Oct. 25, the
report relays.
=====================
P U E R T O R I C O
=====================
CB REAL ESTATE: Unsecureds to Get 100% With Interest in 83 Months
-----------------------------------------------------------------
CB Real Estate, LLC, has submitted a Plan and a Disclosure
Statement.
The Debtor has three real properties; two of which are of a
commercial nature at Bayaman and Carolina, Puerto Rico,
respectively and one residential property, at New York, New York,
which is not currently under any lease contract. The Debtor's sole
shareholder is Mr. Horacio Campolieto.
Under the Plan, Class 2 Holders of Allowed General Unsecured Claims
totaling $2,363,602. Holders of Allowed General Unsecured Claims
will be paid in full satisfaction of their claims 100% thereof
through 84 equal consecutive monthly installments, with interest at
3.25% per annum, commencing on the 30th day of the month following
the Effective Date and continuing on the 30th day of the following
83 months. Holders of Allowed General Unsecured Claims that
voluntarily elect to reduce their claims to 50% thereof, shall
receive payment of this reduced amount in full satisfaction of
their claims on the Effective Date. Class 2 is impaired.
Except as otherwise provided in the Plan, Debtor will effect
payment of Administrative Expense Claims, Allowed Secured and
General Unsecured Claims from the cash flows generated from its
leasing operations and the cash accumulated during the pendency of
the Chapter 11 case.
Attorney for the Debtor:
CHARLES A. CUPRILL
P.S.C. LAW OFFICES
356 Fortaleza Street
Second Floor
San Juan, PR 00901
Tel.: 787-977-0515
Fax: 787-977-0518
E-mail: ccuprill@cuprill.com
A copy of the Disclosure Statement dated September 15, 2021, is
available at https://bit.ly/3EpPpa6 from PacerMonitor.com.
About CB Real Estate
San Juan, P.R.-based CB Real Estate, LLC, is a fee simple owner of
two commercial buildings located in Puerto Rico and a residential
property in New York, valued at $8.9 million in the aggregate.
CB Real Estate sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. D.P.R. Case No. 21-01849) on June 16, 2021, listing
total assets of $10,147,500 and total liabilities of $3,407,130.
Horacio Campolieto Bielicki, president of CB Real Estate, signed
the petition.
Judge Mildred Caban Flores oversees the case.
The Debtor tapped Charles A. Cuprill, PSC Law Offices as bankruptcy
counsel and Correa Acevedo & Abesada Law Offices, P.S.C. as special
counsel. Luis R. Carrasquillo & Co. P.S.C. and Vicente Garcia CPA
& Co., P.S.C. serve as the Debtor's financial consultant and
accountant, respectively.
MIGO IQ: Seeks Approval to Tap Tamarez CPA as Accountant
--------------------------------------------------------
Migo IQ, Inc. seeks approval from the U.S. Bankruptcy Court for the
District of Puerto Rico to employ Tamarez CPA, LLC to provide
general accounting, tax and financial advisory services in
connection with its Chapter 11 case.
The firm's hourly rates are as follows:
Albert Tamarez-Vasquez, CPA CIRA $150 per hour
CPA Supervisor $100 per hour
Senior Accountant $85 per hour
Staff Accountant $65 per hour
The firm will receive a retainer in the amount of $10,000.
Albert Tamarez-Vasquez of Tamarez disclosed in a court filing that
his firm is a disinterested person as defined by Section 101(14) of
the Bankruptcy Code.
The firm can be reached through:
Albert Tamarez Vasquez, CPA CIRA
Tamarez CPA, LLC
1519 PR-25 #412
San Juan, 00909, Puerto Rico
Tel: (787) 795-2855
Fax: (787) 200-7912
Email: atamarez@tamarezcpa.com
About Migo IQ
Migo IQ Inc. -- https://migoiq.app -- is a recommendation engine
that brings the power of machine learning to physical products and
experiences.
Migo IQ filed a voluntary petition for Chapter 11 protection
(Bankr. D.P.R. Case No. 21-02246) on July 23, 2021, disclosing as
much as $10 million in assets and as much as $50 million in
liabilities. Judge Enrique S. Lamoutte Inclan oversees the case.
Lugo Mender Group, LLC and Tamarez CPA, LLC serve as the Debtor's
legal counsel and accountant, respectively.
=============
U R U G U A Y
=============
BANQUE HERITAGE: S&P Raises ICR to 'BB-', Outlook Stable
--------------------------------------------------------
S&P Global Ratings upgraded Banque Heritage (Uruguay) SA to 'BB-'
from 'B+' on the global scale and to 'uyA-' from 'uyBBB+' on the
national scale following its upward revision of its stand-alone
credit profile (SACP) to 'bb-' from 'b+'. The outlook remains
stable. At the same time, S&P affirmed its 'BBB/A-2' and 'uyAAA'
ratings on Banco Bilbao Vizcaya Argentaria Uruguay (BBVA Uruguay).
S&P also revised upward its SACP to 'bbb' from 'bbb-'. The outlook
remains stable. Finally, S&P revised its outlook on Cooperativa de
Ahorro y Credito Fucerep (Fucerep) to stable from negative, and
affirmed its 'B' and 'uyBB+' ratings. In addition, S&P affirmed the
rating on Fucerep's 'uyB +' hybrid notes.
These rating actions follow S&P's revision of its BICRA on Uruguay
to group '5' from group '6' and of its anchor to 'bbb-' from
'bb+'.
Non-resident deposits dropped to less than 10% of total deposits as
of December 2020 from 15% in 2016 and 42% in 2002. (Most of such
deposits are from Argentines, given that country's financial
turmoil.) This allowed the system to remain resilient to events
such as the tax amnesty in Argentina, which expired in March 2017,
the approval of Uruguay's fiscal transparency law in 2016, and
exchange-rate movements. The Uruguayan banking system's funding
profile mainly consists of corporate and wholesale deposits, which
have been stable for the past 20 years and haven't experienced
erosion in confidence since the 2002 financial crisis. These
factors, together with improvements in the central bank's
supervision and regulation, reduced the banking system's funding
risk.
In this sense, sight deposits represent about 83% of total
deposits, and S&P estimates that around 70% of deposits are
wholesale, and foreign currency deposits account for almost 76%.
=================
V E N E Z U E L A
=================
PDVSA: ConocoPhillips Steps Up Global Push to Collect Firm Debt
---------------------------------------------------------------
Patricia Garip and Stephen Cunningham at Argus Media reports that
ConocoPhillips stands out in Venezuela's vast universe of jilted
creditors and claimants as a potential future commercial partner
for state-owned Petroleos de Venezuela, S.A. (PdV), a distinction
that is driving aggressive international enforcement actions and
quiet overtures for Caracas to resume payments of the company's
arbitration debt.
The US independent's $10 billion outstanding claims against
Venezuela are the most significant among several now in flux behind
the scenes as the Venezuelan government and US-backed opposition
prepare to resume fragile political negotiations in Mexico,
according to Argus Media.
ConocoPhillips is Venezuela's largest individual creditor, tied to
two main international arbitration awards stemming from the 2007
seizure of its PetroZuata and Hamaca heavy crude joint venture
interests and its participation in the offshore Corocoro field: $2
billion from the Paris-based International Chamber of Commerce and
$8.5 billion from the World Bank's International Centre for
Settlement of Investment Disputes (Icsid), the report notes.
In a landmark 2018 agreement, PdV agreed to honor the ICC award
with quarterly payments in cash or in kind, the report relays. PdV
paid around $754 million but defaulted in the fourth quarter 2019,
blaming US sanctions that blocked access to its funds in Portugal's
Novobanco, according to sources close to the parties, the report
discloses.
The default prompted ConocoPhillips to resume enforcement actions
that it had successfully deployed in the Dutch Caribbean, where it
had relentlessly attached liens to PdV oil cargoes, storage and
other assets to force the Venezuelan company into a payment deal,
even though the value of the assets paled in comparison to the
debt, the report notes.
This year, the Houston, Texas-based company is moving to attach
shares of PdV's Dutch subsidiary Propernyn, which controls 15pc in
European specialty refinery Nynas, the report relays. A hearing in
a Dutch court is expected to take place by year's end, the report
discloses.
In reference to the remaining $1.25 billion in the ICC debt,
ConocoPhillips chief executive Ryan Lance told Argus that PdV has
"an outstanding balance that they owe us so we are in discussions
with them to repay that," the report relays.
Caracas is seeking to annul the Icsid award altogether, a long-shot
outcome that nonetheless buys time for the parties to hammer out a
deal, the report notes.
ConocoPhillips has a license from the US Treasury's Office of
Foreign Assets Control (OFAC) to engage with PdV on the debt
repayment, the report discloses.
The actions undertaken by ConocoPhillips in the Caribbean and the
Netherlands come on top of its US litigation to claim the shares of
Delaware-based PdV Holding in PdV's US refiner Citgo, the report
notes. The main plaintiff, Tenor Capital Management-controlled
Crystallex, has steadfastly pursued its case that would lead to a
sale of the Citgo shares once US protection is lifted, a watershed
event that could take place early next year, the report discloses.
A court-appointed special master has already issued a Citgo sale
plan, but acknowledges that a superior pledge of Citgo shares held
by PdV 2020 bondholders would likely impede the process, the report
relays.
Partner Potential
For Venezuela's main political opposition represented by a
crumbling interim government that controls Citgo, ConocoPhillips is
seen as the most appealing creditor in a sea of mostly short-term
interests, including defaulted bondholders and dealmakers looking
to arrange debt-for-equity swaps, the report relays.
ConocoPhillips, in contrast, had a long history in Venezuela before
the 2007 nationalizations, and would be well-placed to participate
in a rebuilding, all sides agree, the report discloses. The
interim government is believed to have an "understanding" with the
US company to honor the debt agreement, but it denied that it has
any separate payment agreement with the US company, the report
relates. The interim government has no real authority in Venezuela
and even its US patron views its mandate as expiring in January
2022, the report adds.
About PDVSA
Founded in 1976, Petroleos de Venezuela, S.A. (PDVSA) is the
Venezuelan state-owned oil and natural gas company, which engages
in exploration, production, refining and exporting oil as well as
exploration and production of natural gas. It employs around
70,000 people and reported $48 billion in revenues in 2016.
In May 2019, Moody's Investors Service withdrew all the ratings of
Petroleos de Venezuela, S.A. including the senior unsecured and
senior secured ratings due to insufficient information. At the
time of withdrawal, the ratings were C and the outlook was stable.
Citgo Petroleum Corporation (CITGO) is Venezuela's main foreign
asset. CITGO is majority-owned by PDVSA. CITGO is a United
States-based refiner, transporter and marketer of transportation
fuels, lubricants, petrochemicals and other industrial products.
However, CITGO formally cut ties with PDVSA at about February 2019
after U.S. sanctions were imposed on PDVSA. The sanctions are
designed to curb oil revenues to the administration of President
Nicolas Maduro and support for the Juan Guaido-headed party.
===============
X X X X X X X X
===============
[*] BOND PRICING: For the Week Sept. 20 to Sept. 24, 2021
---------------------------------------------------------
Issuer Name Cpn Price Maturity Country Curr
----------- --- ----- -------- ------- ---
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
Noble Holding Internat 6.2 62.2 8/1/2040 KY 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
Odebrecht Finance Ltd 6.0 16.4 4/5/2023 KY USD
Sylph Ltd 2.4 65.1 9/25/2036 KY USD
Automotores Gildemeist 8.3 54.2 5/24/2021 CL 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
Province of Santa Fe 6.9 74.7 11/1/2027 AR USD
Polarcus Ltd 5.6 71.8 7/1/2022 AE 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
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
Avadel Finance Cayman 4.5 55.0 2/1/2023 US USD
Cia Latinoamericana de 9.5 74.3 7/20/2023 AR 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
Argentine Republic Gov 8.3 74.5 12/31/2033 AR USD
Fospar S/A 6.5 1.2 5/15/2026 BR BRL
YPF SA 16.5 67.3 5/9/2022 AR ARS
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
Provincia de Rio Negro 7.8 70.3 12/7/2025 AR USD
Empresa Electrica de l 2.5 63.8 5/15/2021 CL CLP
Province of Santa Fe 6.9 75.2 11/1/2027 AR USD
KrisEnergy Ltd 4.0 40.4 6/9/2022 SG SGD
Argentine Republic Gov 8.3 72.9 12/31/2033 AR USD
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
Cia Latinoamericana de 9.5 73.9 7/20/2023 AR USD
Noble Holding Internat 6.1 62.0 3/1/2041 KY USD
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
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
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
*********
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
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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.
.
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