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/raid1/www/Hosts/bankrupt/TCRLA_Public/211011.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 11, 2021, Vol. 22, No. 197 Headlines A R G E N T I N A AEROPUERTOS ARGENTINA 2000: Moody's Rates New $400MM Notes 'Caa3' AEROPUERTOS ARGENTINA: Early Participation Deadline Set for Oct. 12 ARGENTINA: Agrees to Support 10% Mercosur Tariff Cut COMPANIA GENERAL DE COMBUSTIBLES: S&P Hikes ICR to 'CCC+ B R A Z I L BRAZIL: Brazil Will Face Supply Problems, Bolsonaro Says BRAZIL: Production Drops in 7 of 15 Locations Surveyed in August C H I L E CHILE: To Draw Down Pensions Would Hurt Business Climate J A M A I C A JAMAICA: Chamber of Commerce Disappointed With BOJ's Decision P U E R T O R I C O FIRSTBANK PUERTO RICO: Moody's Hikes LongTerm Deposit Rating to Ba1 T R I N I D A D A N D T O B A G O TRINIDAD & TOBAGO: Spent $13.74BB More Than it Collected in 2021 X X X X X X X X [*] BOND PRICING: For the Week Oct. 4 to Oct. 8, 2021 - - - - - ================= A R G E N T I N A ================= AEROPUERTOS ARGENTINA 2000: Moody's Rates New $400MM Notes 'Caa3' ----------------------------------------------------------------- Moody's Investors Service assigned a Caa3 rating to Aeropuertos Argentina 2000 S.A. (AA2000) new $400 million senior secured notes due 2031, affirms outstanding ratings and changes the outlook to stable from negative. AA2000 offered to exchange the outstanding balance of its existing Series 2017 notes and Series 2020 notes for the newly issued 8.500% Class I Series 2021 senior secured notes due 2031. Affirmations: Issuer: Aeropuertos Argentina 2000 S.A. Corporate Family Rating, Affirmed Caa3 Senior Secured Notes Series 2017 and Series 2020, Affirmed Caa3 Assignments: Issuer: Aeropuertos Argentina 2000 S.A. Senior Secured Notes Series 2021, Assigned Caa3 Outlook Actions: Issuer: Aeropuertos Argentina 2000 S.A. Outlook, Changed to Stable from Negative RATINGS RATIONALE The Caa3 rating reflects AA2000 improved liquidity and debt maturity profile as a result of its indicative debt structure, proposed in response to the capital expenditure needs originated by the amendment to the concession agreement that extends the concession term by 10 years. AA2000 is currently offering to exchange its outstanding cross border notes of approximately $ 335 million and raise additional debt to have a maturity schedule better aligned with the extended concession term and to finance the capital expenditures program. Moody's acknowledges that the indicative debt structure would provide AA2000 a liquidity relief as debt service payments would be significantly reduced in 2022. Yet, Moody's notes that AA2000 will enter incremental debt and still faces an ambitious investment plan amid the uncertainties related to traffic recovery. Under the new terms of the concession, the investment program entails capital expenditures for approximately $400 million preferably between 2022 and 2023 and $200 million between 2024 and 2027. The capital expenditures for the 2022-2023 period may be deferred if international traffic is below 80% of 2019 levels. Despite the flexibilities allowed by the airport regulator ORSNA on the timing for the execution of the capital expenditures, Moody's still foresees credit metrics weaker than pre-pandemic levels until 2025 when traffic and cash flows fully recover and the company starts to deleverage. Moody's expects AA2000 to report Cash Interest Coverage of around 2 times and Funds From Operations to debt of approximately 8.5% in 2022, on the premise that traffic levels will be at approximately 50% of 2019 levels. The Caa3 rating acknowledges AA2000's strong asset fundamentals as the leading airport network in Argentina. AA2000 benefits from a dominant market position in a large and diversified service area, control of key assets under a long-term concession agreement that supports US Dollar denominated tariffs, a very high share of origin and destination passengers and the ability to accommodate future growth, balanced against the challenging local operating environment for Argentine issuers. While Moody's considers that the company's ability to generate cash flows linked to the US Dollar and produce revenue detached from the local economic conditions help de-link the issuer's credit quality from the credit quality of the Government of Argentina (Ca stable), Moody's views that the company is still subject to the local operating environment, local regulations and policy shifts. RATING OUTLOOK The stable outlook reflects Moody's expectation of a more comfortable debt maturity profile following the completion of the exchange and enhanced liquidity in light of the still ongoing recovery from the severe decline in traffic. Despite the evolving nature of the pandemic, Moody's views that AA2000 asset fundamentals and cash generation capacity support Moody's expectation that risk to the bondholders of potential losses remains consistent with the 20%-35% range associated with AA2000 Caa3 rating. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS An upgrade of AA2000's ratings will require an upgrade of the sovereign. Nevertheless, structural credit enhancements that result on the isolation of government interference or that in Moody's view limit foreign-currency transfer risks, could lead to positive rating pressure. At the same time, any upgrade of AA2000's ratings would require verification of better-than-expected traffic growth after the lift of travel restrictions that results in a sustained improvement in credit metrics such as a Cash Interest Coverage above 4.5x and Funds From Operations to debt above 14%, as measured by Moody's. A downgrade of the sovereign rating, or evidence of a significant negative shift in policies or regulations will likely result in downward pressure on AA2000's ratings. In addition, a significant reduction of anticipated cash flows due to lower-than-expected traffic levels or higher-than-expected indebtedness, which causes credit metrics to deteriorate on a consistent basis, could exert downward pressure on the rating. Quantitatively, a Cash Interest Coverage below 1.5x and Funds From Operations to debt below 3%, as measured by Moody's, could lead to a rating downgrade. Moreover, a more aggressive than expected financial policy that tempers current liquidity levels could exert negative pressure as well. The principal methodology used in these ratings was Privately Managed Airports and Related Issuers published in September 2017. AEROPUERTOS ARGENTINA: Early Participation Deadline Set for Oct. 12 ------------------------------------------------------------------- Aeropuertos Argentina 2000 S.A. (the "Company" or "AA2000") disclosed the commencement of an offer (the "Exchange Offer") to exchange any and all of its outstanding 6.875% Senior Secured Notes due 2027 issued on February 6, 2017 (the "Series 2017 Notes") and its outstanding 6.875% Cash/9.375% PIK Class I Series 2020 Additional Senior Secured Notes due 2027 issued on May 20, 2020 (the "Series 2020 Notes" and, together with the Series 2017 Notes, the "Existing Notes") for newly issued 8.500% Class I Series 2021 Additional Senior Secured Notes due 2031 (the "Series 2021 Notes"). The Exchange Offer is being made only to Eligible Holders (as defined below) who will be eligible to receive and review the Company's exchange offer memorandum and consent solicitation statement dated September 28, 2021 in respect of the Exchange Offer (the "Exchange Offer Memorandum"), which contains all of the terms of the Exchange Offer. Any capitalized terms used in this press release without definition have the respective meanings assigned to such terms in the Exchange Offer Memorandum. The Company is offering the Series 2021 Notes as additional notes pursuant to a second amended and restated indenture that will amend and restate the first amended and restated indenture, dated as of May 20, 2020, under which the Existing Notes were issued (the "Existing Indenture"). The Series 2021 Notes and the Existing Notes not exchanged in the Exchange Offer will be secured by the same collateral currently securing the Existing Notes on a pro rata and pari passu basis. In addition, to secure its obligations under the Series 2021 Notes, the Company, together with the relevant parties thereto, will amend, on or before the Settlement Date (as defined below), the cargo trust agreement governed by Argentine law, dated August 9, 2019, entered into by the Company and the trustee thereto (as amended, the "Cargo Trust") in order to grant the holders of the Series 2021 Notes, a security interest, subordinated to (i) the rights of creditors under certain existing loans of the Company, and (ii) any debt permitted to be incurred to finance or refinance any capital expenditures made or to be made pursuant to the concession agreement entered into by the Company with the Argentine National Government (as amended form time to time, the "Concession Agreement") for the operation of our airports in Argentina. Once the Existing Notes not exchanged in the Exchange Offer are mature or cancelled in full, the Company is required to amend and restate the Cargo Trust and the current trust related to the tariffs, governed by Argentine law, dated January 19, 2017, entered into by the Company and the trustee thereto (the "Tariffs Trust"), so that the Series 2021 Notes become secured by the Cargo Trust on a pro rata and pari passu basis with the existing beneficiaries of the Cargo Trust, and these other beneficiaries become secured by the Tariffs Trust on a pro rata and pari passu basis with the Series 2021 Notes. In accordance with the Concession Agreement, the collateral assignment of revenue must be authorized by the National Airports Regulatory Organization (Organismo Regulador del Sistema Nacional de Aeropuertos) (the "ORSNA"). It is expected that the ORSNA will approve, on or prior to the Settlement Date, the extension of the Tariffs Trust and of the Cargo Trust to include the Series 2021 Notes as beneficiaries thereto (including their future amendment and restatement, once the Existing Notes are cancelled in full). Furthermore, to the extent it becomes permitted by applicable law, the Company will establish a non-interest bearing U.S. dollar trust account with Citibank, N.A., as collateral agent, located in New York, New York, United States to secure the Series 2021 (the "Series 2021 Offshore Reserve Account"). Provided there is no default, funds will be transferred from the U.S. dollar collection account on a weekly basis until the funds on deposit in the Series 2021 Offshore Reserve Account during the third month, second month and month prior to the immediately following payment date are equal to 125% of one third (1/3), two thirds (2/3) and the full amount, respectively, necessary to pay all interest and principal payable on the Class I Series 2021 Additional Notes on the immediately following payment date. If established, the Series 2021 Offshore Reserve Account and all amounts from time to time therein will be maintained in the name of the Company and pledged in favor of Citibank, N.A., as collateral agent, for the sole and exclusive benefit of the Series 2021 Notes and Citibank, N.A. as indenture trustee and New York collateral agent. Simultaneously with the Exchange Offer, the Company is soliciting consents (the "Consent Solicitation") to effect certain amendments and obtain certain waivers (the "Proposed Amendments") to, and in connection with, the Existing Indenture. The Proposed Amendments will, among other things, eliminate substantially all of the restrictive covenants and Events of Default and related provisions under the Existing Indenture with respect to the Series 2020 Notes. Eligible Holders who validly tender Existing Notes and deliver the required proxy documents under the Consent Solicitation, and do not validly revoke such tenders and proxies, on or prior to 5:00 p.m. (New York City time) on October 12, 2021, unless extended or earlier terminated by the Company in its sole discretion (the "Early Participation Deadline"), and whose Existing Notes are accepted for exchange by the Company, will receive U.S.$1,000 principal amount of Series 2021 Notes per U.S.$1,000 Outstanding Principal Amount (as defined below) of Existing Notes tendered plus accrued and unpaid interest in cash (the "Accrued Interest") on such Existing Notes from, and including, the most recent date on which interest was paid on such Eligible Holder's Existing Notes to, but not including, the settlement date, which is expected to be October 28, 2021 (the "Settlement Date"). As of a given date, the "Outstanding Principal Amount" of Existing Notes equals the original principal amount of such Existing Notes multiplied by the Applicable Amortization Factor as of such date. The amortization factor is determined in accordance with market convention to convert from the Original Principal Amount of the Existing Notes to the Outstanding Principal Amount of the Existing Notes after each principal amortization payment date. The Applicable Amortization Factor for the Series 2017 Notes and the Series 2020 Notes is 0.6875 and 0.91666, respectively. Eligible Holders who validly tender Existing Notes and deliver proxies after the Early Participation Deadline and before 11:59 p.m. (New York City time) on October 26, 2021 (the "Expiration Deadline"), unless extended or terminated earlier by the Company, and whose Existing Notes are accepted for exchange by the Company will receive U.S.$900 principal amount of Series 2021 Additional Notes per U.S.$1,000 Outstanding Principal Amount of Existing Notes tendered, plus Accrued Interest paid in cash, on the Settlement Date. It is a condition to the Exchange Offer, among others, that at least 75% of the Outstanding Principal Amount of the Existing Notes is validly tendered for exchange and not withdrawn. Subject to applicable law, the Company reserves the right to waive any and all conditions to the Exchange Offer. The Exchange Offer and the Consent Solicitation are part of the Company's plan to (i) increase the efficiency of its capital structure and refinance a material portion of its outstanding indebtedness in order to create a more defensive credit profile that better aligns the debt maturities with the AA2000 Concession Agreement, which was extended in December 2020 for a ten-year period (from February 2028 to February 2038), and (ii) improve its liquidity and cash flow in light of the impact that the COVID-19 pandemic continues to exert in the air transportation industry. The Exchange Offer is made, and the Series 2021 Notes will be offered and issued, only (a) in the United States to holders of Existing Notes who are "qualified institutional buyers" (as defined in Rule 144A under the Securities Act of 1933, as amended (the "Securities Act")) in reliance upon an exemption from the registration requirements of the Securities Act, and (b) outside the United States to holders of Existing Notes who are persons other than "U.S. persons" (as defined in Rule 902 under the Securities Act) in reliance upon Regulation S under the Securities Act and who are non-U.S. qualified offerees. Holders who have returned a duly completed eligibility letter certifying that they are within one of the categories described in the immediately preceding sentence are authorized to receive and review the Exchange Offer Memorandum and to participate in the Exchange Offer and the Solicitation (such Holders, "Eligible Holders"), provided that Eligible Holders who qualify as Argentine Entity Offerees or Non-Cooperating Jurisdiction Offerees may not participate in the Exchange Offer and the Solicitation unless they also complete, sign and submit a letter of transmittal in the form attached as Appendix A to the Exchange Offer Memorandum to the Exchange and Information Agent. Holders who desire to obtain and complete an eligibility letter, proxy materials and letter of transmittal should visit the website for this purpose at https://bonds.morrowsodali.com/AA2000Eligibility. Citigroup Global Markets Inc., Goldman Sachs & Co. LLC and Santander Investment Securities Inc. are acting as joint dealer managers for the Exchange Offer and Solicitation. Argentine Entity Offerees and Non-Cooperating Jurisdiction Offerees are subject to certain tax withholdings in respect of interest collected on, and gains or losses resulting from the tendering of the Existing Notes. See "Certain Tax Considerations -Certain Argentine Tax Considerations" in the Exchange Offer Memorandum. This press release does not constitute an offer to buy or the solicitation of an offer to sell the Existing Notes in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction. This press release does not constitute an offer to sell or the solicitation of an offer to buy the Series 2021 Notes, nor shall there be any sale of the Series 2021 Notes, in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction. The Series 2021 Notes will not be registered under the Securities Act or the securities laws of any state and may not be offered or sold in the United States absent registration or an exemption from the registration requirements of the Securities Act and applicable state securities laws. The public offering of the Series 2021 Notes was authorized by the Comisión Nacional de Valores ("CNV") in accordance with the Argentine Capital Markets Law No. 26,831 (as amended), the Negotiable Obligations Law No. 23,576 (as amended) and the regulations of the CNV. None of the Company, the dealer managers, the trustee or any affiliate of any of them makes any recommendation as to whether Eligible Holders should tender or refrain from tendering all or any portion of the principal amount of such Eligible Holder's Existing Notes for Series 2021 Notes in the Exchange Offer or deliver proxies in respect of any of the proposed amendments to the Existing Indenture in the Consent Solicitation. Eligible Holders will need to make their own decision as to whether to tender Existing Notes in the Exchange Offer and participate in the Consent Solicitation and, if so, the principal amount of Existing Notes to tender. About Aeropuertos Argentina Aeropuertos Argentina 2000 was founded in 1998 in order to develop and operate the airports throughout the Argentine territory, becoming one of the largest private sector airport operators in the world, with 35 airports under management. Over the last 20 years, AA2000 developed and modernized infrastructure in the main airports in the country, incorporating cutting-edge technology in relation with safety and services. It also contributes to the social, economic and cultural development of the country, thus becoming a regional and international example in the aviation industry. AA2000's mission is to enable the connection of people, goods and cultures, to contribute to a better world. For more information, visit www.aa2000.com.ar. As reported in the Troubled Company Reporter-Latin America on Oct. 8, 2021, S&P Global Ratings affirmed its issuer credit and issue-level ratings on Argentine airport operator Aeropuertos Argentina 2000 (AA2000) at 'CCC+'. On Sept. 28, AA2000 announced an exchange offer on all of its outstanding senior secured notes (Series 2017 and Series 2020) due 2027. The company expects to issue new, 8.5% senior secured notes due 2031 for an amount equal to the outstanding amount of the current ones. S&P's ratings outlook remains negative, reflecting the probability of a downgrade in the next six months if the exchange doesn't materialize under the currently analyzed terms and conditions. The outlook also captures the downside risks, given that the company still heavily depends on variables that are out of its control, namely the timing and speed of the air traffic recovery amid difficult economic and business conditions in Argentina. ARGENTINA: Agrees to Support 10% Mercosur Tariff Cut ---------------------------------------------------- Rio Times Online reports that Brazilian economy minister, Paulo Guedes, said that Argentina agreed to support a 10% reduction in the Mercosur Common External Tariff (TEC), a longstanding plea of Brazil that the minister sees as a way to provide relief from inflation. After meeting with the Argentine chancellor, Santiago Andres Cafiero, Guedes said that Paraguay and Uruguay will now consider the tariff reduction, according to Rio Times Online. According to him, there was also an "important decision" that Brazil and Argentina will move toward a "cheap energy shock" by seeking infrastructure financing to bring Argentine gas from the Vaca Muerta reserve into the country, the report relays. 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. COMPANIA GENERAL DE COMBUSTIBLES: S&P Hikes ICR to 'CCC+ -------------------------------------------------------- S&P Global Ratings revised upwards Argentine oil and gas company Compania General de Combustibles S.A.'s (CGC) stand-alone credit profile (SACP) to 'b-' from 'ccc'. At the same time, S&P raised its ratings on the company to 'CCC+' from 'CCC'. S&P also removed the ratings from CreditWatch with positive implications, where it placed them on Sept. 18, 2020, and assigned a stable outlook. The ratings and outlook on CGC remain capped by its 'CCC+' assessment of Argentina's transfer and convertibility (T&C) risks and incorporate its view of the company's greater financial flexibility, stronger cash flows, and balanced capital structure. The higher SACP reflect S&P's view of CGC's stronger cash position, which rose to $270 million as of June 2021 from $72 million in March 2021, even after acquiring 100% shares of Sinopec Argentina Exploration and Production Inc. (Sinopec Argentina). In addition, the company obtained a $115 million syndicated loan in August 2021, issued around $120 million in bonds in the domestic market in August 2021, and is currently offering to exchange up to $40 million of the outstanding $93.4 million senior unsecured notes due November 2021 for its senior unsecured amortizing notes due 2025 ($8 million already tendered during the early bird period). These actions strengthened CGC's capital structure by extending its debt maturity profile. The merger of acquired assets significantly increases CGC's business size and scale, reaching production of 50,000 barrels of oil equivalent per day (boe/d) and raising reserves by 50% to 90 million boe. S&P said, "We believe that the stronger business position and the additional cash flows from Sinopec Argentina's operations will support the payment of CGC's short-term obligations, gradually improving its liquidity position. We may revise our assessment of CGC's business profile to a stronger category once the company fully integrates Sinopec's assets and reaches synergies." S&P said, "Our ratings continue to incorporate CGC's exposure to high volatility and country-related risks. Although CGC exports most of its oil production, it sells its natural gas output in the domestic market, which represent about 65% of total production (on a pro forma basis including Sinopec Argentina). Therefore, our 'CCC+' rating on CGC continues to reflect its high exposure to Argentina (CCC+/Stable/C) and to central bank's restrictions on accessing foreign currency and/or transferring funds abroad." =========== B R A Z I L =========== BRAZIL: Brazil Will Face Supply Problems, Bolsonaro Says -------------------------------------------------------- The Rio Times reports that the situation in China should impact Brazil, and the first effects are already being felt. Agribusiness is facing more difficulty buying pesticides and fertilizers, and the mining sector is seeing international prices fall, the report notes. The energy sector, in turn, is affected by record natural gas prices. President Jair Bolsonaro said that Brazil should face "supply problems" next year, Rio Times relays. According to the president, the scenario of a possible shortage of products in 2022 is related to the energy crisis in China. About Brazil Brazil is the fifth largest country in the world and third largest in the Americas. Jair Bolsonaro is the current president, having been sworn in on Jan. 1, 2019. Fitch Ratings' credit rating for Brazil stands at 'BB-' with a negative outlook (November 2020). Fitch's 'BB-' Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) has been affirmed in May 2021. Standard & Poor's credit rating for Brazil stands at BB- with stable outlook (April 2020). S&P's 'BB-/B' long-and short-term foreign and local currency sovereign credit ratings for Brazil were affirmed in December 2020. Moody's credit rating for Brazil was last set at Ba2 with stable outlook (April 2018). DBRS's credit rating for Brazil is BB (low) with stable outlook (March 2018). BRAZIL: Production Drops in 7 of 15 Locations Surveyed in August ---------------------------------------------------------------- Rio Times Online reports that the production of Brazilian industry fell in seven of 15 locations surveyed in August, compared to July, according to data from the Regional Monthly Industrial Survey (PIM Regional), by the Brazilian Institute of Geography and Statistics (IBGE). In relation to August 2020, there was a decline in nine of the 15 locations surveyed, the report notes. The national production fell 0.7% in August, compared to July, as released by IBGE, the report relays. About Brazil Brazil is the fifth largest country in the world and third largest in the Americas. Jair Bolsonaro is the current president, having been sworn in on Jan. 1, 2019. Fitch Ratings' credit rating for Brazil stands at 'BB-' with a negative outlook (November 2020). Fitch's 'BB-' Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) has been affirmed in May 2021. Standard & Poor's credit rating for Brazil stands at BB- with stable outlook (April 2020). S&P's 'BB-/B' long-and short-term foreign and local currency sovereign credit ratings for Brazil were affirmed in December 2020. Moody's credit rating for Brazil was last set at Ba2 with stable outlook (April 2018). DBRS's credit rating for Brazil is BB (low) with stable outlook (March 2018). ========= C H I L E ========= CHILE: To Draw Down Pensions Would Hurt Business Climate -------------------------------------------------------- globalinsolvency.com, citing Reuters, reports that an association of U.S. businesses in Chile warned that a proposal to allow Chileans to draw money from their pension funds for the fourth time since the coronavirus pandemic began could seriously harm the country's business climate. Chile's lower chamber of Congress approved the bill late last month, but it faces more resistance in the Senate, where right-leaning lawmakers allied with the administration of President Sebastian Pinera have opposed it, according to globalinsolvency.com. "This new withdrawal of pensions, and particularly of life annuities, . . . causes severe damage to Chile's image as an attractive destination for foreign investment," the Chilean-North American Chamber of Commerce said in a statement, the report relays. Chile's government and central bank have also warned a fourth withdrawal would harm the pension system, hitting the poor the hardest in the long term, the report discloses. Opposition lawmakers, however, say the cash is a lifeline for many Chileans suffering from the economic impacts of the coronavirus pandemic, the report relays. Before the pandemic, Chileans were largely prohibited from tapping into their pension funds until reaching retirement age, the report notes. But the economic effects of the pandemic since March 2020 led Congress to approve three withdrawals, each allowing citizens to cash in 10% of their pension fund, the report discloses. This fourth withdrawal would allow for an additional 10%, the report adds. ============= J A M A I C A ============= JAMAICA: Chamber of Commerce Disappointed With BOJ's Decision ------------------------------------------------------------- RJR News reports that another private sector group has expressed disagreement with the Bank of Jamaica's decision to raise the policy interest rate to 1.5 per cent. The Jamaica Chamber of Commerce holds this position as it sees the current spike in inflation as temporary due to supply chain issues caused by the pandemic, according to RJR News. Dr. Adrian Stokes, a member of the Private Sector Organization of Jamaica's Economic Policy Committee, said the move was unwarranted as long term inflation analysis suggests the price rise will be short lived, the report notes. 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. ===================== P U E R T O R I C O ===================== FIRSTBANK PUERTO RICO: Moody's Hikes LongTerm Deposit Rating to Ba1 ------------------------------------------------------------------- Moody's Investors Service has upgraded the ratings and assessments of FirstBank Puerto Rico including the bank's long-term deposit rating to Ba1 from Ba2, its long-term issuer rating to B1 from B2 and the long-term Counterparty Risk Rating to Ba3 from B1, following the upgrade of the standalone Baseline Credit Assessment (BCA) to ba3 from b1. The short-term bank deposit rating and short-term Counterparty Risk Rating were affirmed at Not Prime (NP) and its short-term Counterparty Risk Assessment was affirmed at Not Prime(cr). The rating outlook is stable following the ratings upgrade. The ratings upgrade reflects Moody's assessment of the bank's increased resiliency to still uncertain operating conditions in Puerto Rico. The stable outlook indicates that Moody's expects the bank's profitability, asset quality and capital to remain stable, against the backdrop of challenging operating conditions over the next 12-18 months. Upgrades: Issuer: FirstBank Puerto Rico Adjusted Baseline Credit Assessment, Upgraded to ba3 from b1 Baseline Credit Assessment, Upgraded to ba3 from b1 LT Counterparty Risk Assessment, Upgraded to Ba2(cr) from Ba3(cr) LT Counterparty Risk Rating (Foreign Currency), Upgraded to Ba3 from B1 LT Counterparty Risk Rating (Local Currency), Upgraded to Ba3 from B1 LT Issuer Rating, Upgraded to B1 from B2, outlook Stable LT Bank Deposits (Local Currency), Upgraded to Ba1 from Ba2, outlook Stable Affirmations: Issuer: FirstBank Puerto Rico ST Counterparty Risk Assessment, Affirmed NP(cr) ST Counterparty Risk Rating (Foreign Currency), Affirmed NP ST Counterparty Risk Rating (Local Currency), Affirmed NP ST Bank Deposits (Local Currency), Affirmed NP Outlook Actions: Issuer: FirstBank Puerto Rico Outlook, Remains Stable RATINGS RATIONALE The upgrades of FirstBank's BCA and long-term ratings reflect Moody's view that the bank's current strong capitalization and liquidity provide it with the resiliency to weather Puerto Rico's economic challenges. These challenges include continued public sector austerity measures, a sectorial and geographically concentrated island economy, and more recently, the economic disruption caused by the coronavirus pandemic. The ratings upgrade also reflects a long-term consolidation trend of the island's banking sector, which has led to higher operating margins for the remaining banks. The bank's capitalization is strong, with Moody's adjusted tangible common equity (TCE) as a percentage of risk-weighted assets of 17.0% at June 30, 2021. FirstBank's capital position remains a key credit strength because it provides the bank with a strong buffer against unexpected credit and/or operational losses. Moody's believes the bank will continue to maintain capital levels higher than US mainland regional bank peers over the next 12-18 months. FirstBank has made strong efforts to reduce its reliance on brokered deposits by capturing a larger proportion of more stable core deposits in recent years. The acquisition of Banco Santander Puerto Rico (BSPR), which closed on September 1, 2020, further reduced the bank's reliance on brokered deposits and other confidence-sensitive market funds, lowering refinancing risk. As of June 30, 2021, brokered deposits stood at just 2% of total liabilities, down from 5.4% for yearend 2019, and its reliance on market-based funding has fallen to 3% from 5.3% during the same period. The current low interest rate environment, coupled with changing asset mix with higher cash balances and low-yielding investment securities driven by strong deposit growth have pressured FirstBank's profitability. This led to a decline in the bank's net interest margin (NIM) to 3.8% for the second quarter of 2021 compared to 4.2% for the same period the previous year. However, FirstBank's pre-provision income remains elevated compared to higher rated regional banks on the US mainland. Asset quality remains a credit challenge, Moody's noted, as Puerto Rico's weak economy is reflected in FirstBank's relatively high problem loan ratio of 5.4% as of June 30, 2021, which continues to be significantly higher than US mainland peer average. The stable outlook reflects Moody's view of FirstBank's future performance relative to peers as the coronavirus-pandemic and acquisition-related integration challenges continue to abate, and on FirstBank's capital and profitability strength in light of the bank's resilience through Puerto Rico's continued economic challenges and recovery prospects. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS FirstBank's ba3 BCA could be upgraded if Moody's were to assess that the bank was able to maintain its improved operating performance, including its sizable capital buffer and strong profitability, without an increase in the level of non-performing loans. The BCA could also be upgraded if Moody's were to assess a sustainable improvement in Puerto Rico's operating environment, which would lead to a reduction in problem loans, sustained improvement in profitability, capitalization and/or liquidity. A higher BCA would likely lead to a ratings upgrade. The ratings could be downgraded if Moody's were to assess a stark deterioration in operating conditions in Puerto Rico, beyond its current expectations. Additionally, the BCA could be downgraded if Moody's believes the risk appetite of FirstBank has increased, for example because of above-peer average loan growth, a notable increase in lending concentrations, or heightened execution risks from unexpected integration challenges. Lower capitalization could also lead to a downgrade in the BCA. A lower BCA would likely lead to a rating downgrade for FirstBank. The principal methodology used in these ratings was Banks Methodology published in July 2021. ===================================== T R I N I D A D A N D T O B A G O ===================================== TRINIDAD & TOBAGO: Spent $13.74BB More Than it Collected in 2021 ---------------------------------------------------------------- Trinidad Express reports that the Trinidad and Tobago Government is estimated to have spent $13.74 billion more than it collected in fiscal 2021, as its total expenditure is projected at $50.79 billion and its total revenue and grants is estimated at $37.05 billion. That is according to the 2021 Review of the Economy budget document, which indicates that the overall deficit of the Government is estimated to be 9.2 per cent of GDP, according to Trinidad Express. The numbers in the Review of the Economy incorporate actual revenue and expenditure up to August 2021, the report notes. Of the $50.79 billion estimated expenditure in fiscal 2021, the Government estimates that $47.72 billion was recurrent expenditure - which includes wages and salaries, transfers and subsidies and debt service payments - accounting for 94 per cent of total expenditure, the report relays. Capital expenditure is estimated at $3.07 billion or six per cent of total expenditure, the report says. As a result of the 2021 fiscal deficit, balanced by debt repayments, the Government anticipates that what is now being called adjusted general Government debt will increase by 6.9 per cent in 2021 to $126.62 billion from $118.39 billion in fiscal 2020, the report discloses. Personnel expenditure, on wages and salaries is estimated to have decreased to $9.13 billion in fiscal 2021, compared to $9.24 billion in the previous fiscal year, the report relays. Total transfers and subsidies for fiscal 2021 are estimated at $27.24 billion, accounting for 53.6 per cent of total expenditure for the past fiscal year, the report relays. The expenditure on transfers and subsidies in fiscal 2021 was 1.24 per cent more than the $26.90 billion spent in 2020, the report notes. The Government estimates that 36.1 per cent of the $27.45 billion spent on transfers and subsidies in the last fiscal year was allocated to households, the report notes. "Transfers to households remain the largest share of expenditure under transfers and subsidies in fiscal 2021 and are estimated at $9.83 billion; $250.4 million lower than the previous year's total of $10.08 billion. This decrease in expenditure largely reflects the reclassification of items previously recorded in this category," according to the 2021 Review of the Economy, the report discloses. GDP The latest gross domestic product (GDP) at current prices for fiscal 2021 is $149,323.5 million, the report notes. "The Ministry of Finance forecasts Nominal GDP to rise to $150,957.3 million in calendar 2021," it added. "According to the Central Statistical Office (CSO), in annual terms Trinidad and Tobago's real GDP fell by 7.4 per cent in 2020 driven by a 12.2 per cent fall in energy sector activity and 5.6 per cent decline in non-energy sector activity. The latest available quarterly data from the CSO also indicates a 7.4-per cent contraction in real GDP at basic prices in the first quarter of 2021. Energy GDP contracted by 9.5 per cent during the quarter ended March 2021, while non-energy GDP fell by 5.9 per cent," it added. It noted the Heritage and Stabilisation Fund (HSF) stood at US$5.73 billion at the end of September 2020, but increased to US$5,888.1 million by December 31, 2020, on account of interest income earned during the period, the report notes. "During the fiscal year, withdrawals totalling US$892.0 million were made from the Fund. Despite these withdrawals, the value of the Fund stood at US$5,590.1 as at September 10, 2021," it added. For fiscal year 2021, it noted that the Government financing requirement of $13,741.6 million to be funded from external sources in the amount of $5,136.4 million and from domestic sources to the tune of $8,605.2 million, the report relays. Tax Revenue The Review of the Economy noted that taxes on Income and Profits exceeded fiscal 2020 receipts by 9.3 per cent, primarily due to enhanced collections of $1,044.8 million and $343.2 million from oil companies and other companies respectively, the report relays. "Higher weighted average oil and gas prices for the second half of the fiscal year and the recovery of economic activity arising from the relaxation of measures implemented to mitigate the spread of Covid-19 were the main reasons for this category of revenue surpassing fiscal 2020 receipts. "Contributions to the unemployment levy and green fund levy are also estimated to rise to $249.0 million and $713.4 million, respectively, on account of the higher projected energy prices during the latter half of the fiscal year. This represents a cumulative increase of $62.8 million from the outturn for fiscal 2021. Increases in business levy and withholding tax amounted to $47.7 million and $23.4 million, respectively," it noted, the report relays. It noted that conversely, collections from individuals declined marginally from $5.94 billion in fiscal 2020, to $5.92 billion during the period under review, the report notes. Estimated collections from health surcharge, amounted to $162.9 million in fiscal 2021; a decrease of $7.2 million from fiscal 2020, the report says, the report relays. Goods and Services Taxes It noted that income from taxes on goods and services, estimated at $9.48 billion, was 18.2 per cent higher than the $8.02 billion collected in fiscal 2020, the report discloses. "Higher net collections of Value Added Tax (VAT) amounted to $8.14 billion, reflecting a lower issuance of refunds during the current fiscal year in comparison to fiscal 2020. Motor vehicle taxes and duties are estimated to yield $245.4 million in revenue, primarily from the renewal of driving permits as persons capitalized on the moratorium granted for permits of five (5) and ten-year (10) duration which expired during the period of reduced activity due to Covid-19 restrictions. Further, higher revenues are estimated from taxes on online purchases (34.9 per cent or $61.5 million) as limited operations, and in some instances, the closure of non-essential businesses resulted in persons opting to utilize online platforms to purchase directly from abroad," it said, the report discloses. "Increased collections from Taxes on Goods and Services were partially offset by lower inflows under excise duties (by $25.8 million) and Club Gaming Tax (by $22.1 million). These revenues totalled $632.6 million and $9.8 million, respectively. The negative fallout in excise duties resulted from the closure of the West Indian Tobacco Company (WITCO), in accordance with Covid-19 regulations, thereby decreasing cigarette sales. Reduced collections of club gaming tax are a result of the closure of business in the gaming industry due to measures implemented to mitigate the spread of Covid-19 during the period under review," it said, the report says. It noted that taxes on International Trade for fiscal 2021, consisting mostly of Import Duties, are estimated at $2,372.9 million, representing a 3.1 per cent increase in collections from fiscal 2020 while receipts from Taxes on Property are estimated at $1.5 million; $0.3 million lower than receipts for fiscal 2020, consequent to delays in the implementation of the Property Tax regime, the report notes. "Other Taxes, which largely constitute Stamp Duties, are estimated at $310.0 million or 20.2 per cent higher than the amount collected in the previous fiscal year of $257.9 million," it added. Non-Tax Revenue For fiscal 2021, non-tax revenue is estimated at $6.48 billion, representing a 10.7-per cent decline over the previous year's receipts of $7.26 billion, the report relays. "Within this category, lower estimated collections from equity profit from the Central Bank and royalties on oil and gas were the main contributors to this weaker outturn. Estimates of equity profits from the Central Bank decreased by $506.4 million from $1.88 billion in fiscal 2020, to $1.37 billion in fiscal 2021 due to a lower than projected net profit from the Central Bank for the year ending September 30, 2020. Royalties on Oil and Gas is estimated at $2.42 billion, representing a $412.2 million reduction from the previous fiscal year's receipts. "Partially mitigating the fall in Non-Tax Revenues, were estimated improvements in Extraordinary Revenue from Oil and Gas Companies, Profits from the National Lotteries and Control Board (NLCB) and Profits from State Enterprises. Extraordinary Revenue from Oil and Gas Companies is estimated to amount to $277.9 million; $622.1 million lower than the originally budgeted figure but nonetheless $167.0 million higher than receipts of $110.9 million in fiscal 2020," it said, the report relays. Capital Revenue The Capital Revenue for fiscal 2021 was $912.1 million; an improvement of $385.5 million from the previous fiscal year, the report notes. "These receipts usually include proceeds from transactions under the Government's sale of assets program, related mainly to the repayment of debt owed to the Government of Trinidad and Tobago by Colonial Life Insurance Company (Trinidad) Limited (CLICO). Receipts from this program are estimated at $893.1 million in the 2021 fiscal year, $378.1 million higher than the year before," it said, the report discloses. =============== X X X X X X X X =============== [*] BOND PRICING: For the Week Oct. 4 to Oct. 8, 2021 ----------------------------------------------------- Issuer Name Cpn Price Maturity Country Curr ----------- --- ----- -------- ------- --- 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 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 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 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 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 Argentine Republic Gov 8.3 72.9 12/31/2033 AR USD Argentine Republic Gov 8.3 74.5 12/31/2033 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 * * *