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/raid1/www/Hosts/bankrupt/TCRLA_Public/211004.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, October 4, 2021, Vol. 22, No. 192 Headlines A R G E N T I N A ARGENTINA: Looks to Mutual Funds for Additional Local Funding PROVINCE OF LA RIOJA: S&P Raises ICRs to 'CCC+', Outlook Stable B R A Z I L BANCO BS2: Fitch Lowers LongTerm IDRs to 'B', Outlook Negative BRAZIL: Public Debt Drops Reaching 82.7% of GDP in August SAMARCO MINERACAO: Renews Talks With Bondholders on Restructuring C A Y M A N I S L A N D S CHINA FISHERY: Unsecured Creditors to Recover 8.75% in PAIH Plan D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: Alcohol License for Sale Harmful to Economy DOMINICAN REPUBLIC: Manufacturing Sputters in August J A M A I C A JAMAICA: No-Movement Days Shouldn't Affect Economy, Minister Says M E X I C O ARMOUR SECURE: A.M. Best Keeps 'B' Fin'l. Strength Rating on Review BRASKEM IDESA: Fitch Revises Rating Watch on B+ IDRs to Positive GRUPO MINSA: Moody's Affirms 'Ba3' CFR, Outlook Negative X X X X X X X X [*] BOND PRICING: For the Week Sept. 27 to Oct. 1, 2021 - - - - - ================= A R G E N T I N A ================= ARGENTINA: Looks to Mutual Funds for Additional Local Funding ------------------------------------------------------------- Buenos Aires Times reports that Argentina took a new step to boost its local financing options in pesos as the midterm elections approach. The Treasury will offer non-transferable promissory notes that can only be acquired by mutual funds, according to a regulation published in the Official Gazette, Buenos Aires Times relays. The notes will have a 30-day maturity and their returns have not yet been announced. The move comes as the government finds it increasingly difficult to finance itself through local auctions, and after rolling over 97.8 percent of its debts in August and 104 percent in September, the two lowest levels in 2021 and below the 130 percent needed each month to meet the budget, the report notes. Investors are selling their debt in local pesos and buying dollars in markets that circumvent exchange rate restrictions amid concerns that, depending on the outcome of the parliamentary election, the government could add restrictions to prevent capital flight, the report relays. This rule, published by the securities regulator, says that mutual funds may invest up to 15 percent of their assets in non-transferable notes, the report discloses. In the case of non-monetary funds, the institution increased the portion they can invest in unlisted assets to 25 percent from 20 percent, the report says. The reports discloses that MercadoLibre SPAC has 30 Latin America tech firms in its sights Argentina's mutual fund industry has three trillion pesos (US$30.3 billion) in assets under management, of which about 1.4 trillion pesos (US$14.6 billion) are money market instruments that invest money in bank deposits. If the funds decide to invest the amounts allowed by the rule in Treasury notes, the Government could obtain financing of 450 billion pesos (US$4.6 billion) from the funds, the report relays. This measure could help the government reduce the stock of Central Bank debt, while banks invest money received from mutual funds mainly in notes from that institution, called Leliq and repos, the report notes. "This would be very useful for the government in the short term," said Javier Marcus, head of investor relations at the Buenos Aires-based asset management firm Southern Trust, 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. PROVINCE OF LA RIOJA: S&P Raises ICRs to 'CCC+', Outlook Stable --------------------------------------------------------------- S&P Global Ratings raised its long-term foreign and local currency issuer credit ratings to 'CCC+' from 'SD' on the province of La Rioja. S&P also raised its senior unsecured issue-level rating to 'CCC+' from 'D'. Outlook The stable outlook balances La Rioja's more manageable debt service profile in the next 12-18 months, with the risks stemming from the expected deficits after capex, limited access to funding, weak growth prospects, and a vulnerable debt profile, with 90% of the debt stock in foreign currency. Downside scenario S&P could downgrade the province of La Rioja if it perceives that its fiscal and liquidity profile weakens further, increasing the risk of default or a new debt exchange in the next 12 months. In addition, a downward revision of our transfer and convertibility (T&C) assessment of Argentina (currently at 'CCC+'), due to stricter foreign exchange restrictions, would also trigger a downgrade of the province. Upside scenario Given that S&P doesn't believe that Argentine local and regional governments (LRGs) meet the conditions to have ratings above its T&C assessment of Argentina, S&P could only upgrade the province of La Rioja if it revises upwards the T&C assessment in the next 12 months. This would have to be accompanied by an improvement in the province's budgetary performance and liquidity position or greater certainty about its capacity to tap debt markets. Rationale The rating action follows the completion of La Rioja's debt restructuring on September 24, following a year in default. After 98.6% of the bondholders gave the consent to amend the terms of La Rioja's only international bond, there are no longer Argentine subnational governments in default. The amended terms of the $318 million bond extend the maturity to 2024-2028 from 2022-2025, reduce a step-up average interest to 7.2% from 9.75%, and extend the amortization profile to 9 semi-annual installments from four annual ones. Fiscal gains from the debt deal will mostly occur in 2022-2023, given that annual debt payments won't exceed $20 million, compared with almost $100 million originally. The payment calendar becomes heftier in 2024-2027. Nevertheless, challenges for the province remain significant. S&P expects its debt stock to remain just below 50% of operating revenues in 2021-2022, and it's vulnerable to exchange-rate swings. Moreover, the province's high infrastructure and social needs will likely result in deficits after capex and weaken liquidity, given a very limited range of sources of borrowing. Limited budgetary flexibility and increasing spending pressure will erode fiscal surplus from the exceptional results in 2020 S&P said, "We expect La Rioja's operating surplus in 2021 to fall to 4.3% of operating revenue from 12.7% in 2020, as the sovereign withdraws the pandemic-related fiscal support and spending pressures emerge. We consider the bulk of the province's fiscal improvement in 2020 stemmed from transitory measures that would be difficult to be sustained over time, particularly as social-distancing restrictions are lifted." In 2020, La Rioja benefited from restraints on spending due to the suspension of public servants' salary increases amid the lockdown. The social-distancing policies also resulted in a significant reduction (in real terms) of capex and transfers. The suspension of La Rioja's debt payments in September also helped restrain spending. Moreover, the province benefited from extraordinary transfers from the federal level that partly compensated for revenue erosion amid the steep economic downturn. Pressure to increase La Rioja's payroll has resumed this year and has escalated over the last few months amid rising inflation. Moreover, as the public sector in the province is gradually returning to normal activity, S&P sees significant increases in all other items of spending, including on infrastructure. The province's main infrastructure priorities are related to housing and water infrastructure, which should keep capex levels at about 12% of total spending. Meanwhile, La Rioja's higher revenue compensated for the increase in spending in the first half of the year. However, S&P expects revenue growth to decelerate in the coming months. La Rioja is heavily dependent on transfers from the national government, which cover almost 90% of the province's operating revenues. This has made the province highly vulnerable to economic swings and national government's decisions on taxation. Moreover, about 15% of transfers that La Rioja receives correspond to extra-coparticipation transfers that need to be negotiated on annual basis. Improved fiscal performance in 2020 and the recent debt restructuring have strengthened the province's cash position, although liquidity coverage could be volatile amid economic uncertainty. S&P estimates accumulated free cash is sufficient to cover 40% of financing needs in next 12 months. The amended terms have reduced debt service payments for 2022-2023 to less than 5% of operating revenue from more than 13%. Nonetheless, S&P highlights that the payment schedule becomes heavier in 2024, during which debt service will jump to almost 10% of operating revenue. Absent access to capital markets, a key challenge for the province will be to strengthen its liquidity position in the next few years. Once debt service rises in 2024 and if liquidity and financing conditions don't improve, there's a possibility of the province failing to repay the bond. The province expects to complete its wind energy plant before the international bond starts amortizing in 2024, and it estimates that the plant's cash flows should be sufficient to service the international bond. Our projections don't incorporate the plant's revenue in light of past performance. The ARAUCO project includes four wind parks, which the province constructed with the international bond proceeds. However, the project ran into significant delays, and currently only one park is fully operating. The restructured bond represents 82% of the province's debt stock. Most of the remaining outstanding debt is held by the national government and some multilateral lending institutions. We expect La Rioja's borrowings next year to be limited to MLI loans or those from the national government, given that access to capital markets will remain very limited after the province's recent default. Under these assumptions, S&P expects La Rioja's debt burden to decrease to 46% of operating revenue by 2023 from 51% in 2020. Nevertheless, it highlights that the province's debt structure is vulnerable to exchange-rate swings. Ability to restrain spending amid tough economic and political conditions will remain key to improving finances following the debt restructuring. S&P said, "La Rioja has one of the lowest GDP per capita in Argentina: we estimate it at $3,780 for 2021, less than half of our estimate for the national level of $9,684. Moreover, the economic outlook for the province is weak, in line with that for the sovereign. We forecast a 7.2% growth in 2021 following the contraction in 2020, and growth of only about 2% in 2022-2023. To tackle its large economic challenges, we believe Argentina will need to establish policy consistency and reduce fiscal and monetary imbalances, including lower inflation and a more stable exchange-rate regime. "The institutional framework for Argentina's LRGs is a key rating constraint. We assess the framework as very volatile and underfunded, reflecting our perception of the sovereign's very weak institutional predictability and volatile intergovernmental system that has been subject to various modifications to fiscal regulations and lack of consistency over the years, which jeopardize the LRGs' financial planning and consequently their credit quality." Continued macroeconomic instability and lack of predictability have resulted in a very short-term planning horizon, which focuses on the balance of revenues and expenses. Amid increasingly strained financial conditions, including very limited access to financing, La Rioja decided to prioritize operating and capital spending over timely debt payment obligations last year. Nevertheless, fiscal space the province gained from the restructuring provides it the opportunity to focus on the structural strengthening of its individual profile. In that sense, the strengthening of the fiscal and liquidity profile are key areas of opportunity of the provincial administration. In accordance with S&P's relevant policies and procedures, the Rating Committee was composed of analysts that are qualified to vote in the committee, with sufficient experience to convey the appropriate level of knowledge and understanding of the methodology applicable. At the onset of the committee, the chair confirmed that the information provided to the Rating Committee by the primary analyst had been distributed in a timely manner and was sufficient for Committee members to make an informed decision. After the primary analyst gave opening remarks and explained the recommendation, the Committee discussed key rating factors and critical issues in accordance with the relevant criteria. Qualitative and quantitative risk factors were considered and discussed, looking at track-record and forecasts. The committee's assessment of the key rating factors is reflected in the Ratings Score Snapshot above. The chair ensured every voting member was given the opportunity to articulate his/her opinion. The chair or designee reviewed the draft report to ensure consistency with the Committee decision. The views and the decision of the rating committee are summarized in the above rationale and outlook. The weighting of all rating factors is described in the methodology used in this rating action. Ratings List UPGRADED; CREDITWATCH/OUTLOOK ACTION TO FROM LA RIOJA (PROVINCE OF) Issuer Credit Rating CCC+/Stable/-- SD/--/-- UPGRADED TO FROM LA RIOJA (PROVINCE OF) Senior Unsecured CCC+ D =========== B R A Z I L =========== BANCO BS2: Fitch Lowers LongTerm IDRs to 'B', Outlook Negative -------------------------------------------------------------- Fitch Ratings has downgraded Banco BS2 S.A.'s (BS2) Viability Rating (VR) to 'b' from 'b+' and its Long-Term Foreign Currency and Local Currency Issuer Default Ratings (IDRs) to 'B' from 'B+'. At the same time, BS2's Long-Term National Rating has been downgraded to 'BBB(bra)' from 'BBB+(bra)' and the Short-Term National Rating has been downgraded to 'F3(bra)' from 'F2(bra)'. The Rating Watch was removed and Fitch has assigned a Negative Outlook to IDRs and in the Long-Term National Rating. Fitch has also affirmed BS2's Short-Term IDRs, Support Rating and Support Rating Floor. The downgrade of BS2´s ratings reflects the frequent changes in its business strategy and challenges on execution. In particular, it reflects the deterioration of the entity financial profile after the implementation of its digital banking unity strategy back in 2019. In addition, BS2 has not been able to reverse the negative trend on its profitability and capitalization metrics. The ratings have been removed from Ratings Watch Negative, since Fitch doesn't expect a short-term deterioration of its credit metrics, in particular its capital adequacy ratios. However, the Negative Rating Outlook assigned reflects the bank's difficulties to reach (and sustain) an operational breakeven result. Challenges are expected to last within the ratings' time horizon from 12 to 24 months. KEY RATING DRIVERS VR, IDRs and National Ratings BS2´s ratings are highly influenced by its company profile and capitalization metrics. They mainly reflect the challenges imposed by the development of new business lines, especially on its digital bank unit, which has pressured the bank´s profitability during the last two and a half years. BS2's current strategy has been focused on growing its SME digital bank platform, sector where the bank considers less explored and where it has greater potential to offer a complete solution for clients. In addition, the bank's relatively low capitalization metrics and pressured profitability ratios represents a risk for the implementation of its long-term strategy. The ratings also factor into its stable asset quality metrics, adequate funding structure and liquidity position. After two and a half years building its digital banking platform, BS2's decided in 2021 to reposition its franchise and strategy. In Fitch´s view, executing the new strategy is challenging given not only its retail digital banking unit -- which costs now acts as a drag of its earnings -- but also by its tight capitalization metrics (Fitch`s trigger was common equity Tier [CET1] at 10%). The institution was not able to restore its capitalization metrics by generating operational results. The positive impacts on its capital ratios over the last quarters derives from recurring capital injections coupled with non-recurring results. BS2's capitalization metrics in 2021 remained tight and below peers even considering positive results in 1H21 and latest shareholders capital injection. BS2´s CET1 ratio stood at June 2021 stood at 9,4%, from 8,5% in YE 2020, while its total regulatory ratio remained relatively stable at 11,6%, versus 11,4% at 2020. After reported losses in 2020, BS2´s reported small but still positive operational profitability during the 1H21. BS2's operating profit-to-risk-weighted assets ratio stood at 0.6%, from negative 1,6% in 2020 and a four-year average of a low 0.5%, lower than peers. Fitch highlights the relevant amount of non-recurring positive results in the 1H21, and the ones expected to occur during the 2H21, which partially offsets the costs related with the bank´s digital initiative. Fitch expects BS2's results to remain under pressure in the 2H21 and also during 2022. BS2 continues to report good and better than peer's asset quality ratios. Loans classified as 'D-H' ratings went down from 5% at YE 2020 to low 1,7%, also reporting an increase on coverage, from 43% in YE 2020 to 101% at June 2021. However, the SME portfolio continues to present relatively high concentrations on top clients; the 10 largest clients account for 55,2% of the loan portfolio as of 1H21. Fitch considers that the SME portfolio, despite being relatively stable over the last years, continues to be vulnerable to operating environment conditions. The bank's funding profile has been stable since the last review. BS2 continues with the strategy on diversifying its investors base, mainly through agreements with brokerages, which distributes its funding products to retail customers through its own platforms. In addition to that, BS2´s own platform -- related with the digital banking -- corresponds now for more than 15% of the bank´s total funding. However, BS2 still shows concentrations in its top brokerages. In terms of liquidity, it remained adequate when compared with its short-term needs. Liquid assets totaled BRL 2,16 billion in June 2021, covering 73% of its funding with maturities of less than one year. Support Rating and Support Rating Floor BS2's Support Rating of '5' and its Support Rating Floor of NF' reflect the bank's low systemic importance. In Fitch's view, the bank is not likely to benefit from external support. RATING SENSITIVITIES Factors that could, individually or collectively, lead to negative rating action/downgrade: IDRs, VR and National Ratings -- Downward ratings pressure could arise if BS2 is not able to maintain a CET1 ratio above 8,5% and/or the bank is not able to maintain regulatory capital ratios comfortably above the minimum requirements; -- Further deterioration of Fitch´s assessment of the bank´s competitive and business position, resulting from difficulties of the bank to implement and escalate its current strategy; -- If the bank´s IDRs are downgraded, BS2´s long-term National Ratings could potentially be downgraded by multiple notches. Factors that could, individually or collectively, lead to positive rating action/upgrade: -- The Outlook could be revised to Stable if BS2 manages to replenish capital buffers to levels comfortably above requirements, CET1 level sustainably above 10% coupled with significant improvements in operating profitability; -- An upgrade is unlikely in the near future. 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. 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. BRAZIL: Public Debt Drops Reaching 82.7% of GDP in August --------------------------------------------------------- Richard Mann at Rio Times Online reports that even if the opposition criticizes the Brazilian economy almost daily for political reasons and says it sees black clouds gathering, there are not many countries in the world at the moment that are able to reduce their debts despite the pandemic. The public debt registered the sixth consecutive month of decline in August and reached 82.7% of GDP, according to Rio Times Online. The figure was released by the Central Bank (BC), the report notes. The trajectory is downward since the indicator reached a historical peak of 89.4% in February this year, the report relays. In April, the debt/GDP ratio was already at 85.3%, dropped to 83.2% in June and 83.1% in July, 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). SAMARCO MINERACAO: Renews Talks With Bondholders on Restructuring ----------------------------------------------------------------- Cristiane Lucchesi and Mariana Durao of Bloomberg News report, citing people familiar with the matter, that Samarco Mineracao SA and its major bondholders are back at the negotiation table as the company looks to restructure its debt. The two sides are holding the second meeting in a week, the people said, asking not to be named because the negotiations aren't public. The iron-ore company was hit by a dam disaster in 2015 that interrupted production. The talks bring renewed hope of a negotiated solution to Samarco's debt crisis, after previous discussion broke down before the company filed for bankruptcy protection from creditors in April 2021. About Samarco Mineracao SA Samarco Mineracao SA is a Brazilian mining joint venture between BHP Group and Vale SA. erves as an iron ore processing company. The company provides blast furnace, direct reduction, sinter feed, as well as low and normal silica content pellets. On April 9, 2021, the Debtor filed a voluntary petition for judicial reorganization in the 2nd Business State Court for the Belo Horizonte District of Minas Gerais in Brazil pursuant to Brazilian Federal Law No. 11,101 of February 9, 2005. Samarco Mineracao filed for Chapter 15 bankruptcy recognition (Bankr. S.D.N.Y. Case No. 21-10754) on April 19, 2021, in New York, to seek U.S. recognition of its Brazilian proceedings. The Debtor's U.S. counsel is Thomas S. Kessler of Cleary Gottlieb Steen & Hamilton LLP. =========================== C A Y M A N I S L A N D S =========================== CHINA FISHERY: Unsecured Creditors to Recover 8.75% in PAIH Plan ---------------------------------------------------------------- Pacific Andes International Holdings Limited (Bermuda) and certain affiliated Debtors submitted a Disclosure Statement in connection with the First Amended Chapter 11 Plan of Reorganization (the "PAIH Plan") dated September 27, 2021. The Plan Debtors include Pacific Andes International Holdings Limited (Bermuda) ("PAIH"), Pacific Andes International Holdings (BVI) Limited ("PAIH BVI"), Nouvelle Foods International Ltd. (BVI) ("Nouvelle"), N.S. Hong Investment (BVI) Limited ("N.S. Hong"), Clamford Holding Limited (BVI) ("Clamford"), and Pacific Andes Enterprises (Hong Kong) Limited ("PAE (HK)"). The Debtors' chapter 11 cases have been consolidated for procedural purposes only and are being administered under the caption China Fishery Group Limited (Cayman), Case No. 16-11895 (JLG). On September [27], 2021, certain members of the PAIH Group entered into those certain Sale Transactions SAs, subject to Bankruptcy Court approval. Due to the corporate structure, the business organization and the companies' operations, the restructuring of the Debtors will be implemented through three separate chapter 11 Plans - (i) the CFG Peru Plan, which was proposed by the Creditor Plan Proponents and previously confirmed by the Bankruptcy Court by the CFG Peru Confirmation Order dated June 10, 2021, through which, inter alia, the interests in CFGI were or will be distributed to holders of the Club Facility Claims and Senior Note Claims in full satisfaction and payment of the funded debt of the CFG Debtors; (ii) a Joint Debtor Plan, which addresses and satisfies the claims of the certain Debtors within the CFGL Group and PARD Group; and (iii) the PAIH Plan which addresses and satisfies the claims of the creditors within the PAIH Group. The PAIH Plan authorizes and approves the sale of certain non Debtor subsidiaries' real estate holdings and/or Interests in such entities in exchange for the Sale Transactions Proceeds pursuant to, inter alia, Bankruptcy Code Sections 1123(a)(5) and 1141. Specifically, the PAIH Plan provides for the sale of Interests in 6 Property Owning Companies, which hold Real Property in Hong Kong and Japan, and the sale of Real Property held by PAE (HK). The Sale Transactions Proceeds, along with all other residual assets inclusive of the proceeds of the release of the Maybank Share Pledge, shall be distributed (i) to satisfy and pay the Allowed Administrative Expense Claims (including those of certain related parties that advanced sums to fund operations and professional expenses during the course of the Chapter 11 cases) and other priority claims; (ii) to satisfy and pay the Maybank Secured Facility Claim through an aggregate payment of $4.0 million; (iii) to satisfy and pay allowed unsecured claims of the creditors of PAIH and PAIH (BVI) an amount equal to approximately 8.75% of their Allowed General Unsecured Claims; (vi) to satisfy and pay the Allowed PAE HK Loan Claim in an amount equal to 60% of the Allowed claim amount; and (v) to satisfy and pay allowed unsecured claims of Teh Hong Eng from any Residual Assets. All Intercompany Claims (except for Intercompany Claims that become Allowed Administrative Claims or Allowed general unsecured claims), shall be deemed satisfied and extinguished under the PAIH Plan. Further, the Qingdao Related-Plant Facilities Claims, which consist of claims arising from guarantees or expired guarantees of loans secured by property in the People's Republic of China (excluding Hong Kong SAR), shall be satisfied in full through their secured interests in the Qingdao Related-Plant and through actions previously taken by these creditors in the PRC. The PAIH Plan contemplates the appointment of a Plan Administrator to administer the wind down of the Plan Debtors and their non Debtor affiliates in the PAIH Group. Upon confirmation of the PAIH Plan, the Plan Administrator shall be authorized to take all corporate actions necessary consistent with applicable non-United States law to wind down and liquidate the Plan Debtors. The PAIH Plan intends to satisfy the claims of the creditors of the Plan Debtors through, among other things, (i) payment of cash from the Sale Transactions Proceeds and liquidation of other residual assets (including any preserved claims and causes of action), and/or (ii) distribution of property interests held to secure certain claims. Attorneys for Plan Debtors: KLESTADT WINTERS JURELLER SOUTHARD & STEVENS, LLP Tracy L. Klestadt John E. Jureller Brendan M. Scott 200 West 41st Street, 17th Floor New York, New York 10036 Telephone: (212) 972-3000 Facsimile: (212) 972-2245 About China Fishery Group China Fishery Group Limited (Cayman) and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 16-11895) on June 30, 2016. In the petition signed by CEO Ng Puay Yee, China Fishery Group was estimated to have assets at $500 million to $1 billion and debt at $10 million to $50 million. The cases are assigned to Judge James L. Garrity Jr. Weil, Gotshal & Manges LLP has been tapped to serve as lead bankruptcy counsel for China Fishery and its affiliates other than CFG Peru Investments Pte. Limited (Singapore). Weil Gotshal replaces Meyer, Suozzi, English & Klein, P.C., the law firm initially hired by the Debtors. The Debtors have also tapped Klestadt Winters Jureller Southard & Stevens, LLP, as conflict counsel; Goldin Associates, LLC, as financial advisor; RSR Consulting LLC as restructuring consultant; and Epiq Bankruptcy Solutions, LLC, as administrative agent. Kwok Yih & Chan serves as special counsel. On Nov. 10, 2016, William Brandt, Jr., was appointed as Chapter 11 trustee for CFG Peru Investments Pte. Limited (Singapore), one of the Debtors. Skadden, Arps, Slate, Meagher & Flom LLP serves as the trustee's bankruptcy counsel; Hogan Lovells US LLP serves as special counsel; and Quinn Emanuel Urquhart & Sullivan, LLP, serves as special litigation counsel. =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: Alcohol License for Sale Harmful to Economy --------------------------------------------------------------- Dominican Today reports that the Association of Industries of the Dominican Republic (AIRD) said legislation for controlling the sale, supply, and consumption of alcoholic beverages would cause a very harmful impact on economic activity and job creation. In objecting to a bill on the subject circulating in the National Congress, the AIRD indicated that such a legal framework would create confusion and dualities of institutional roles in the fight against illicit alcoholic beverages, according to Dominican Today. The guild of industrialists said that there are mechanisms for the effective control of the sale and consumption of alcoholic beverages without creating a law such as those mentioned above, the report notes. Among these legal mechanisms, the association cited Laws 17-19 for the Eradication of Illicit Trade; 63-17 on Mobility, Land Transport, Traffic and Road Safety and 136-03 on the Code for the Protection of Children's Rights and Adolescents, the report relays. Likewise, it also cited the General Law 358-05 on the Protection of consumer or User Rights and tax regulation (implemented by DGII and DGA), among other provisions, the report discloses. "The economic recovery that the country shows is nascent, and we must take care of it and strengthen it. The draft Law for the Control of Sale, Supply, and Consumption of Alcoholic Beverages are an obstacle to this recovery, especially concerning employment," the AIRD warned, the report says. It further argued that establishing limitations and restrictions on commercial activities through the imposition of compulsory licenses on micro, small and medium-sized enterprises (especially the more than 60,000 grocery stores and places of sale of alcoholic beverages) in the current situation that the country is experiencing would be counterproductive since it would increase operational costs and many businesses would be forced to close their doors, the report discloses. An Incentive to Illicit Trade The AIRD indicated that these licenses constitute an incentive to the illicit trade in alcohol, as has been the experience in other countries in the region, thus punishing those who comply with the law and giving advantages to continue the illicit trade to the detriment of the consumer, producers, importers and State collections, the report notes. "It is, therefore, an incentive that can be considered perverse, although it is necessary to clarify that this is not the intention of the legislator," the association concluded, the report says. 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: Manufacturing Sputters in August ---------------------------------------------------- Dominican Today reports that the Monthly Manufacturing Activity Index (IMAM) of Dominican Republic's Industries Association (AIRD) fell in August, in relation to July 2021, from 57.3 to 54.4, paced by sales and production. The "volume of sales" went from 55.1 in July to 48.3 in August and that of production from 54.4 to 44, according to Dominican Today. The variable of "employment" went from 54 in the seventh month of the year to 50 in August, while the "inventory of premium materials" went from 65.3 to 66.3 in the same period, the report notes. The "supplier delivery time" went from 73.3 in July to 80.9 in August, or three of the five variables considered showed a downward trend in August compared to July 2021, the report relays. "When the IMAM is below the 50-point threshold, it reflects that the economic conditions and prospects of the manufacturing sector are considered unfavorable," 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). ============= J A M A I C A ============= JAMAICA: No-Movement Days Shouldn't Affect Economy, Minister Says ----------------------------------------------------------------- RJR News reports that Jamaica Finance Minister Dr. Nigel Clarke is not expecting the recent no movement days to have a long term impact on the economy. Dr. Clarke told the Financial Report that the economy remains stable, according to RJR News. "The lockdowns began in August of 2021 and there is no doubt that the lockdowns have affected the revenues of the government but we are still able, even after the lockdown to table the supplementary estimates that proposes an extra $33-billion of expenditure because the Jamaican economy has so far, for this fiscal year registered a very strong recovery . . .. uncertainty exists and we have to balance and we have to balance what we know today with the uncertainties of tomorrow," the report notes. Meanwhile, the International Labour Organisation (ILO) says the equivalent of 255 million full time jobs were destroyed and US$ 3.7 billion in income wiped off last year due to the covid-19 pandemic, the report relays. ILO Director General Guy Ryder says the impact of the pandemic has been four times greater than the global financial crisis which occurred between 2008 and 2009, the report relates. Ryder says the human cost of the pandemic is a direct consequence of past policy failures, the report notes. "The world was unprepared and millions vulnerable because the majority of people had no social protection -- because we had failed to invest in human security . . . the questions is -- what happens next" Ryder said, the report notes. He says it is encouraging that the world has returned to a growth trajectory, the report discloses. However, he cautioned that the growth is dramatically uneven, the report relays. Ryder was speaking at the United Nations High Level event on Jobs and Social Protection for Poverty Eradication and a Sustainable Recovery, the report adds. About Jamaica Jamaica is an island country situated in the Caribbean Sea. Jamaica is an upper-middle income country with an economy heavily dependent on tourism. Other major sectors of the Jamaican economy include agriculture, mining, manufacturing, petroleum refining, financial and insurance services. Fitch Ratings affirmed in March 2021 Jamaica's Long-Term Foreign Currency Issuer Default Rating (IDR) at 'B+', with a stable outlook. Standard & Poor's credit rating for Jamaica stands at B+ with negative outlook (April 2020). Moody's credit rating for Jamaica was last set at B2 with stable outlook (December 2019). According to Fitch, Jamaica 'B+' rating is supported by World Bank Governance Indicators that are substantially stronger than the 'B' and 'BB' medians, a favorable business climate according to the World Bank Doing Business Survey, moderate inflation and moderate commodity dependence. These strengths are balanced by vulnerability to external shocks, a high public debt level and a debt composition that makes the sovereign vulnerable to exchange rate fluctuations. The Stable Outlook is supported by Fitch's expectation that the public debt level will return to a firm downward path post-pandemic, which is underpinned by political consensus to maintain a high primary surplus, the resilience of external finances, and stronger economic policy institutions. =========== M E X I C O =========== ARMOUR SECURE: A.M. Best Keeps 'B' Fin'l. Strength Rating on Review ------------------------------------------------------------------- AM Best has maintained the under review with negative implications status and affirmed the Financial Strength Rating of B (Fair), the Long-Term Issuer Credit Rating of "bb" (Fair) and the Mexico National Scale Rating of "a.MX" (Excellent) of Armour Secure Insurance S.A. de C.V. (Armour) (Mexico). The under review with negative implications status reflects AM Best's ongoing review of the financial situation at Armour's holding company following changes in its corporate structure. The ratings reflect Armour's balance sheet strength, which AM Best assesses as strong, as well as its strong operating performance, limited business profile and marginal enterprise risk management (ERM). The strong balance sheet assessment reflects Armour's capital base, consistently strengthened through the reinvestment of earnings. Armour has been able to sustain a profitable domestic operation through its underwriting results and investment income. Armour's business profile is limited due to its concentration in the niche market of title insurance in Mexico, coupled with challenges ahead for the real estate market amid Mexico's weakened economy. AM Best's view of the company's ERM is marginal due to concerns regarding governance and availability of information at its holding company, Trebuchet Group Holdings Limited. The ratings will remain under review until AM Best can fully assess the financial situation at Armour's holding company. BRASKEM IDESA: Fitch Revises Rating Watch on B+ IDRs to Positive ---------------------------------------------------------------- Fitch Ratings has maintained Braskem Idesa SAPI's (BI) Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) at 'B+', as well as the 'B+'/'RR4' rating on its 2029 secured bond. The Rating Watch for all ratings has been revised to Positive from Negative. The Rating Watch Positive (RWP) reflects the decrease in BI's business risks following the announcement that it has signed an amendment to the ethane supply agreement with Petroleos Mexicanos (PEMEX; BB-/Stable). The amendment contract terms reduce uncertainties regarding business sustainability and profitability levels, which should remain strong throughout the petrochemical cycle. It is also expected to benefit financial flexibility as it should allow the company to pursue its strategy to change its quite restrictive project finance debt for corporate debt. The RWP should be resolved within six months. Factors that will be monitored include pending shareholders and creditors' approvals, the refinancing of its project finance debt and a sustainable increase in capacity utilization to 80%-85%. KEY RATING DRIVERS Amendment to Ethane Contract Agreement: PEMEX is expected to deliver a minimum of 30kbpd of ethane, a decrease from 66kpd, per the amendment contract until the earliest of the operational startup of the ethane import terminal, scheduled for the second semester of 2024, or February 2025. There is also an agreement that establishes support measures to help the company build an ethane import terminal with the capacity to meet all of BI's feedstock requirements. Fitch's base case considers around USD360 million of capex related to the terminal, to be disbursed between 2022 and 2024. BI has expressed its interest to find operational partners to develop this project. Improved Business Risk: The amendment significantly reduces most immediate political and operational risks, as observed during 4Q20 when BI stopped its operations for 29 days due to lack of natural gas and political disputes. Pemex provides BI with ethane and Cenagas, another governmental company provides the transportation of natural gas used by BI as fuel and to generate electrical energy. Fitch's base case scenario indicates that Pemex's supply of ethane should decline to 45% of total needs in 2022 and to 38% in 2026. Until 2020, when BI implemented the fast track project to import ethane, the company was dependent solely on Pemex. As of today, the fast track has a capacity to import up to 25 kpbd, representing around 40% of Braskem Idesa's ethane needs Profitability to Remain Sound: Despite increases in feedstock costs that will result from this agreement, BI will continue to remain extremely profitable due to its large scale and modern facilities. EBITDA margins are projected to be around 35%-40% in Fitch's base case scenario that assumes PEMEX delivers about 30k bpd and that the pricing structure is revised to consider market price references plus logistics costs. These margins compare favorably with margins of peers of between 20% and 25% during high periods in the cycle. Favorable Backdrop: The combination of weather-related production disruptions, logistic constrains and strong demand for resins has resulted in strong petrochemical spreads for 2021. BI is expected to post record results despite operating rates of around 65%. Fitch's base case EBITDA is around USD610 million for 2021. For 2022 and 2023, Fitch assumes greater pressure on raw material costs and mid-cycle price assumptions leading to EBITDA of around USD475 million and USD410 million, respectively. New Terminal Capex Could Pressure FCF: On a preliminary exercise, considering the terminal being 100% owned by BI, FCF is expected to remain negative by USD60 million, USD80 million and USD17 million respectively in the next three years. Fitch incorporates around USD40 million of shareholder loans to be distributed in 2022 and 2023. BI expects to find a partner and financing for the project (60/40 debt/equity ratio), which could alleviate this pressure on FCF. Leverage to Peak in 2023: The scenario of strong petrochemical spreads during 2021 and higher production volume in 2022 are benefiting Braskem Idesa's deleveraging. Fitch expects the net leverage ratio to be around 3.0x in 2021 and 4.1x in 2022. For 2023, net leverage is around 4.9x, considering mid-cycle prices plus capex for the ethane terminal. These leverage levels compare well with 7.4x in 2020 and 6.0x in 2019. Moderate Rating Linkage: Braskem Idesa benefits from operational and commercial synergies with its controlling shareholder Braskem S.A. (75% equity interests, IDR BB+/Positive) within the production and sale of PE. Braskem Idesa is strategically important for Braskem as Braskem Idesa diversifies Braskem's feedstock sources and increases its access to other markets. Legal ties are weak, as the parent does not guarantee the debt obligations of the subsidiary. Braskem Idesa's project finance debt has a strong set of covenants that limits financial flexibility and dividends distributions. DERIVATION SUMMARY Braskem Idesa's current ratings reflects risks associated with the political risk exposure with Mexican entities, recent track record of shutdown of facilities and its ongoing disputes with PEMEX on the amendment ethane contract. Historically, Braskem Idesa benefited from access to a competitive cost feedstock, with its EBITDA margin well positioned relative to other PE producers such as Braskem S.A. (BB+/Positive Outlook) and more diversified players such as Dow Chemical Company (BBB/Stable) in terms of operating margins. Braskem Idesa compares positively with its Latin American chemical peers such as Alpek S.A (BBB-/Stable) or Orbia Advance Corporation, S.A.B de C.V. (BBB/Stable). Nevertheless, Braskem Idesa has a higher exposure to supply/contract risks compared to its peers. The company also has a weaker position in terms of exposure to a single asset and product, as well as limited geographic diversification. Braskem Idesa's net leverage ratio is expected to be above most of its peers in the region, with net leverage ratio around 3.5x-4.0x through the cycle. The average net leverage for the Latin American investment-grade chemicals peers is around 2.5x and 3.5x for solid 'BB' peers. KEY ASSUMPTIONS -- PEMEX providing 30kbpd of ethane and imported ethane around 13kbpd in 2021 and 30kbpd in 2022 and 2023; -- Industry PE-Ethane's spreads of around USD1,468/t, USD982/t and USD967/t for 2021, 2022 and 2023, respectively; -- Operating capex of around USD30million in the next three years, and terminal capex of around USD360 million to be invested in the next three years; -- Shareholder distributions around USD40 million per year in 2021-23. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Approval of the agreement by BI's shareholders and creditors; -- Successful refinancing of the project finance debt; -- Sustained capacity utilization levels of around 80%-85%. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Failure to proceed with the approval of the amendment supply agreement contract; -- Pemex's failure to deliver above 25kbpd, pressuring overall business profitability; -- Net debt/EBITDA above 5.0x on consistent basis. 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 Adequate Liquidity Including Additional Reserves: As of June 30, 2021, Braskem Idesa reported USD197 million of cash, USD145 million of short-term debt and USD2.3 billion of long-term debt obligations (USD1.4 billion of project finance debt and USD900 million of secured bonds due to 2029). The company also has a debt service reserve account of USD194 million and access to a contingent equity line of USD208 million. As of Dec. 31, 2020, Braskem Idesa reported MXN47 billion of subordinated shareholder loans, MXN35 billion with Braskem and MXN12 billion with Grupo IDESA. As of June 30, 2021, Braskem Idesa's project finance debt was classified at short-term due to the default on the physical and financial completion covenants. As occurred in the past, the company is negotiating a waiver with the project lenders and this should be reallocated to long term. In a normalized scenario, the project finance has a long-term amortization schedule with an average of USD160 million of annual payments and final maturity at 2029. As planned, Braskem Idesa's cash flow generation is expected to be sufficient to cover its project finance debt amortization schedule. ISSUER PROFILE Braskem Idesa was created in May 2010 to develop the petrochemical complex in Veracruz (Mexico) - Etileno XXI Project, which started operation in 2Q16. The complex houses an ethane gas-based ethylene cracker and three polyethylene (PE) plants - two high-density (705kton) and one low-density (300kton) - with combined annual production capacity of 1.05 million ktons of PE. ESG CONSIDERATIONS Braskem Idesa has an ESG Relevance Score of '4' for governance structure due to shareholder concentration and track record of corruption scandal of one of its parent company. This has a negative impact on the credit profile and is relevant to the rating in conjunction with other factors. Braskem Idesa has an ESG Relevance Score of '4' for financial transparency with below average financial disclosure. This has a negative impact on the credit profile and is relevant to the rating in conjunction with other factors. Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. GRUPO MINSA: Moody's Affirms 'Ba3' CFR, Outlook Negative -------------------------------------------------------- Moody's de Mexico affirmed Grupo Minsa, S.A.B. de C.V.'s corporate family ratings of Ba3/Baa1.mx and its short-term ratings of MX-2 (Not-Prime). The outlook is negative. Affirmations: Issuer: Grupo Minsa, S.A.B. de C.V. Corporate Family Rating, Affirmed Ba3/Baa1.mx Senior Unsecured Commercial Paper, Affirmed NP/MX-2 Outlook Actions: Issuer: Grupo Minsa, S.A.B. de C.V. Outlook, Remains Negative RATINGS RATIONALE Minsa's ratings reflect the company's franchise strength as Mexico's second largest corn flour producer, the high relevance of the tortilla in the Mexican diet, and favorable longer-term growth prospects for the corn flour industry in Mexico. These credit positives are partly offset by the company's limited operating scale and product diversification, along with its exposure to volatile corn prices and a seasonal cash flow pattern because of the corn purchase cycle which leads to an increase in its working capital requirements that typically is financed with short-term debt. The ratings also consider Minsa's high reliance on short term debt to cover corn purchases that could pressure liquidity if not timely refinanced. During the first half of 2021, the company's sales volumes slightly grew by 1.6% compared to the same period a year earlier. Moody's expects volumes to remain at that levels in the second half of 2021 and grow at historical pace for the next two years. Minsa is the second largest player in the Mexican packaged corn flour market, with a 16.7% share of total industry capacity. Market leader Gruma is significantly stronger, with a 68.68% share of industry capacity in Mexico. Despite the differences in scale between both companies, the competitive landscape has been historically stable. But since 2015, several small regional companies started operations in Mexico. Although competition has intensified, Minsa has been able to hold to its market share, given its national presence and track record. Also, Moody's considers that there are enough opportunities in the Mexican corn flour market that support the entrance of new players. In the upcoming years, Moody's expects the market to gradually move towards the industrialization of tortillas, benefiting larger players such as Minsa. While around half of the tortillas produced in Mexico are made with traditional non-industrial methods, the industrial method with packaged corn flour is cleaner and more efficient. The production of packaged corn flour requires only 25% of water when compared to the traditional non-industrial methods. Yield is also higher for the industrial method with one metric ton of corn producing 24% more kilograms of tortillas than the traditional non-industrial method. Another positive development is the increased penetration of supermarket chains in Mexico, as they use packaged corn flour in their in-house tortillerías. The negative outlook reflects Moody's expectation that Minsa's revenues and profitability will be pressured by higher corn prices over the next 12-18 months. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS A ratings upgrade is unlikely in the near to medium-term because of the company's limited scale and diversification makes it highly vulnerable to negative external shocks such as unanticipated commodity price increases. In the long-term, upward rating pressure could build once the company materially increases its scale. Minsa will also need to recover profitability through its recent plan aimed at increasing operating efficiency. Quantitatively, positive pressure will require Minsa's revenues to be close to $1 billion with a Moody's-adjusted EBITA margin of around 10% on a sustained basis. The rating could be downgraded if Minsa's margins remains below expectations, for example due to unexpected corn price volatility. Downgrade pressure could also emerge from an increase in debt because of an acquisition or a more aggressive capital spending plan that results in weaker credit metrics. Specifically, downward pressure could emerge if Minsa's profitability deteriorates, Moody's-adjusted debt/EBITDA exceeds 3.0x, or if Moody's adjusted EBITA/Interest expense consistently stays below 2.5 times. A significant deterioration in liquidity or delay in addressing short-term debt maturities can also result in a downgrade. Minsa's cash and marketable securities as of June 30, 2021 totaled MXN155 million (approximately $7.8 million) which can cover 27% its short-term debt. Moody's notes that Minsa's debt level is seasonal and cash needs for the second half remain low, as most of Minsa's corn needs are sourced in the second quarter when Sinaloa's white corn is harvested. In addition, the company benefits from its commercial paper program to cover its working capital requirements. Larger capital spending of MXN184 million ($9.6 million) in 2017-19 resulted in negative free cash flow. Going forward, Moody's estimates that Minsa will post positive free cash flow in 2021-22 with lower capital expenditures of around MXN100-150 million ($5 -7.5 million) per year and no-dividend payments. The principal methodology used in these ratings was Consumer Packaged Goods Methodology published in February 2020. Grupo Minsa, S.A.B. de C.V. is the second largest corn flour producer in Mexico, with MXN5.2 billion (approximately $252 million) in revenues in the twelve months ended June 30, 2021. The company owns six corn flour plants in Mexico with total capacity of 746 thousand tons per year. Key products are commercialized under the Minsa brand and include corn flour tortillas, tamales, and chips, as well as corn seeds for millers. Minsa is majority owned and controlled by the Gomez Flores family and is listed on the Mexican stock exchange since 1997 with a 17% public float. =============== X X X X X X X X =============== [*] BOND PRICING: For the Week Sept. 27 to Oct. 1, 2021 ------------------------------------------------------- Issuer Name Cpn Price Maturity Country Curr ----------- --- ----- -------- ------- --- 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 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 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 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 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 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 * * *