/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/211021.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Thursday, October 21, 2021, Vol. 22, No. 205 Headlines A R G E N T I N A ARGENTINA: IMF Rejected Request for Temporary Surcharges Relief B A H A M A S BAHAMAS: Cruise Shipping on Path to Recovery B R A Z I L BRAZIL: Finc'l. Market Raises IPCA Projection for 2021 to 8.59% FS AGRISOLUTIONS: Fitch Affirms 'BB-' LT IDRs, Outlook Stable C H I L E LATAM AIRLINES: Court Okays Cheaper $750MM Ch.11 Lending Facility LATAM AIRLINES: Shares Recover as It Finalizes Restructuring D O M I N I C A N R E P U B L I C DOMINICAN NATIONAL: Faces Bottle Crunch DOMINICAN REPUBLIC: Household Staples Drop in Prices E L S A L V A D O R EL SALVADOR: IDB OKs $400MM Loan to Up Resilience to Disasters P E R U MINSUR SA: Moody's Hikes CFR to Ba2 & Alters Outlook to Stable - - - - - ================= A R G E N T I N A ================= ARGENTINA: IMF Rejected Request for Temporary Surcharges Relief --------------------------------------------------------------- globalinsolvency.com, citing Bloomberg News, reports that the International Monetary Fund's board of directors turned down a request by Argentina to discuss relief on the commissions the country pays for its record loan, a setback for the government of President Alberto Fernandez. In an informal meeting held last month, the board rejected a proposal to discuss temporary relief on so-called surcharges, which are the commissions charged to countries that use the lender's credit lines extensively, according to globalinsolvency.com. Argentina, the IMF's largest debtor, has proposed that countries be exempted from paying the surcharges amid the financial and economic burden of the pandemic, the report notes. But the other member countries of the Washington-based organization didn't see reasons to explore the idea, which is now unlikely to be discussed again anytime soon, the report relays. Without access to international debt markets and unable to pay back the Fund a loan worth more than $40 billion, Argentine officials have since last year campaigned against the surcharges as a way of reducing financial costs, the report notes. The lender charges a rate of 200 basis points, or 2 percentage points, on outstanding loans above 187.5% of a country's quota, growing to 300 basis points if a credit remains above that percentage after three years, the report adds. About Argentina Argentina is a country located mostly in the southern half of South America. It's capital is Buenos Aires. Alberto Angel Fernandez is the current president of Argentina after winning the October 2019 general election. He succeeded Mauricio Macri in the position. Argentina has the third largest economy in Latin America. The country's economy is an upper middle-income economy for fiscal year 2019, according to the World Bank. Historically, however, its economic performance has been very uneven, with high economic growth alternating with severe recessions, income maldistribution and in the recent decades, increasing poverty. Standard & Poor's credit rating for Argentina stands at CCC+ with stable outlook, which was a rating upgrade issued on Sept. 8, 2020. Moody's credit rating for Argentina was last set at Ca on Sept. 28, 2020. Fitch's credit rating for Argentina was last reported on Sept. 11, 2020 at CCC, which was a rating upgrade from CC. DBRS' credit rating for Argentina is CCC, given on Sept. 11, 2020. As reported by The Troubled Company Reporter - Latin American, DBRS noted that the recent upgrade in Argentina's ratings (September 2020) follows the closing of two debt restructuring agreements between the Argentine government and private creditors. The first restructuring involved $65 billion in foreign-law bonds. The deal achieved the requisite participation necessary to trigger the collective action clauses and finalize the restructuring on 99% on the aggregate principal outstanding of eligible bonds. DBRS added that the debt restructurings conclude a prolonged default and provide the government with substantial principal and interest payment relief over the next four years. DBRS further relayed that Argentina is also seeking a new agreement with the International Monetary Fund (IMF) to replace the canceled 2018 Stand-by Agreement. Formal negotiations on the new financing began in November 2020. Obligations to the IMF amount to $44 billion, with major repayments coming due in 2022 and 2023. ============= B A H A M A S ============= BAHAMAS: Cruise Shipping on Path to Recovery -------------------------------------------- RJR News reports that excursion boats left The Bahamas' Nassau cruise port filled to capacity - as far as COVID-19 regulations allow - and Downtown Nassau bustled with activity as five cruise ships with 8,000 to 9,000 passengers called on the port at once. Nassau Cruise Port Limited's Chief Executive Officer Mike Maura said it was the first time since The Bahamas began being affected by COVID-19 that so many cruise ships were berthed at the cruise port together, according to RJR News. According to Mr. Maura, the cruise port will begin to average about three to four berthed vessels daily as the cruise industry continues to ramp up operations, the report notes. =========== B R A Z I L =========== BRAZIL: Finc'l. Market Raises IPCA Projection for 2021 to 8.59% --------------------------------------------------------------- Richard Mann at Rio Times Online reports that the Market Report Focus from the Brazilian Central Bank released showed that the median forecast for Brazil's Gross Domestic Product (GDP) for 2021 was maintained at 5.04%, the exact estimate as four weeks ago. Four weeks ago, it was 1.72%. For 2022, the forecast for GDP expansion rose from 1.57% to 1.54%, according to Rio Times Online. The median of the projections of market economists for the National Wide Consumer Price Index (IPCA) in 2021 rose from 8.51% to 8.59%. For 2022, it rose from 4.14% to 4.17%, the report notes. The Focus also showed that the projection for the indicator that measures the ratio between net public sector debt and GDP for 2021 rose from 60.95% to 60.90%. A month ago, it was at 61%, the report relays. For 2022, expectations rose from 62.95% to 62.80%, compared to 62.60% a month ago, 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). FS AGRISOLUTIONS: Fitch Affirms 'BB-' LT IDRs, Outlook Stable ------------------------------------------------------------- Fitch Ratings has affirmed FS Agrisolutions Industria de Biocombustiveis Ltda's (FS) Long-Term Local and Foreign Currency Issuer Default Ratings (IDR) at 'BB-'. Fitch has also affirmed at 'BB-' the senior secured notes issued by fully-owned FS Luxembourg S.a r.l and irrevocably and unconditionally guaranteed by FS. In addition, Fitch has upgraded FS's Long-Term National Scale rating to 'AA-(bra)' from 'A+(bra)'. The Rating Outlook for the corporate ratings is Stable. The ratings incorporate FS's adequate business model and low cash costs in the volatile Brazilian ethanol industry. The high volatility of Brazil's corn and ethanol prices and the lack of meaningful short-term price correlation between these two commodities are key considerations. The upgrade of the National Scale rating incorporates the strengthening of FS's credit profile within the 'BB-' rating category relative to companies with lower National Scale ratings. The upgrade reflects stronger than anticipated cash flow generation and expectation of low leverage during the investment cycle over the next two years. KEY RATING DRIVERS High Price Volatility: FS is exposed to price volatility from both raw material and product price perspectives. Spot corn prices adjust rapidly to supply and demand imbalances and follow parity with Chicago Board of Trade (CBOT) corn prices over the long run. The short-term correlation between corn and ethanol prices in Brazil is weak, as Brazilian ethanol prices depend largely on local gasoline price levels, which move in tandem with international oil prices and the Brazilian FX rate. Ethanol prices are also indirectly influenced by sugar prices, as near 90% of all Brazilian ethanol produced comes from sugar cane processors, which typically shift a portion of production between ethanol and sugar depending on prevailing price parity with sugar. Positive Price Backdrop: Brazilian ethanol producers should continue to benefit from elevated domestic prices. The ethanol market in 2021 will remain tight, as sugar cane crushed volumes fall and historically high sugar prices reduce the availability of ethanol in the market. The combination of high oil prices and a depreciated local currency in a tight market will keep ethanol prices at elevated levels in 2021. Fitch raised its 2021 projections for average Brent prices to USD63/bbl from USD58/bbl and to USD55/bbl from USD53/bbl in 2022. Hydrous ethanol prices at the mill in Sao Paulo are currently trading at BRL3.43/liter, which is 68% higher than early 2021 and 70% above the same period of 2020. Corn prices in Brazil are currently at historical highs, but are expected to decline in 2022 following an expected reduction in international levels and a recovery in Brazilian output. Fitch projects international corn prices of USD500 cents/bushell in 2022 and USD470 cents/bushell in 2023, from high USD548 cents/bushell in 2021. Improved Operating Cash Flows: FS's EBITDA generation should improve over the rating period, as scale gains follow the conclusion of expansionary investments. The company finished the expansion at the Sorriso plant in early 2021 and will add another 500 million liters of ethanol once the investment in a new plant in Primavera do Leste, Mato Grosso State, become operational in fiscal 2024. FS is expected to generate EBITDA and CFFO of BRL2.4 billion and BRL1.5 billion, respectively, in fiscal 2022, comparing favorably with EBITDA of BRL1 billion and breakeven CFFO in fiscal 2021. Higher sales volume will offset most of the expected decline in ethanol prices in fiscal 2023 and contribute with EBITDA and CFFO of BRL1.9 billion and BRL1.3 billion, respectively. FS is expected to generate negative FCF of BRL145 million in fiscal 2022 and near BRL501 million in fiscal 2023, as investments in the new plant accelerate. Base case projection incorporates total investments of BRL850 million in fiscal 2022 and BRL1.6 billion in fiscal 2023. The company is expected to generate meaningful FCF as from fiscal 2024 as expansionary investments are concluded. FS's flexibility to reduce dividends is more limited than peers. The company should distribute with dividends of BRL780 million in fiscal 2022 due to strong results and BRL235 million in fiscal 2023. Adequate Business Model: FS's business model benefits from its sizable 1.4 billion liters of corn ethanol production capacity. The company's cash cost structure is in line with some of the most efficient sugar cane producers. FS's efficient operational performance is able to deliver a yield of 430 liters of ethanol per ton of processed corn. FS produces and sells corn co-products used in animal nutrition whose prices tend to correlate with corn prices, helping to reduce the inherent price volatility. Fitch expects that revenues from animal nutrition products will provide the company with a satisfactory 44% coverage over corn costs in the long term. In fiscal 2021, coverage was at 51% comparing favorably with 38% in fiscal 2020. The company's location in the State of Mato Grosso, Brazil's largest corn producing state with the lowest cash cost in the world, reduces its logistics costs and attenuates corn origination risks. FS's large storage capacity enables the company to purchase corn up to two years ahead of the beginning of the crop season, thus avoiding short-term volatilities of spot corn prices. The long-term purchase agreements with corn suppliers are fixed on a BRL per bag price basis and referenced to CBOT corn prices in BRL when the agreements are closed. These agreements significantly reduce the company's exposure to short-term price volatility. The company already hedged 100% of all of its expected corn needs for 2021/2022 at average price of BRL50.97/bag and 40% for the corn needed for the 2022/2023 season at BRL46.15/bag, which mitigates the impact of a 90% increase in average spot corn prices in Mato Grosso seen in 2021 compared to 2020. Satisfactory Leverage During Investments: Fitch expects that FS will keep net leverage at satisfactory levels during its new investment cycle. FS's net debt/EBITDA will peak at 1.9x in fiscal 2023 before decreasing to below 1.0x in fiscal 2024, as higher volumes from investments in Primavera do Leste/MT kick in. FS's net leverage for fiscal 2022 is expected at 1.3x, comparing favorably with 2.6xin fiscal 2021. The company reported total debt of BRL3.3 billion as of June 30 2021, net of FX derivatives and the total return swap (TRS) balance, of which the 2025 notes and working capital lines in BRL accounted for 90% and 10%, respectively. DERIVATION SUMMARY FS operates in a volatile industry and is more exposed to commodity price risk compared with sugar cane processors, which rely on a market pricing mechanism that links sugar cane costs to commodity prices. However, this is partly mitigated by FS's large storage capacity and well-established commercial policies with corn grain producers, which enhance corn price stability. The natural hedge provided by animal nutrition products and typically small investments necessary to run the business place FS's cash flow generating capacity in an advantaged position compared to sugar cane processors. While the absence of sugar sales makes the company more exposed to ethanol prices in Brazil, the use of corn as the main raw production material translates into a much less capital-intensive production process in comparison with sugar cane processors. FS is a low-cost producer with capacity to produce ethanol with cash cost comparable with Jalles Machado (A+[bra]/Positive) and Adecoagro (not rated), a cost benchmark in the industry. While still concentrated in one region, FS's ratings incorporate an expected high capacity to deleverage once expansionary investments are concluded. Jalles Machado should consume its currently high liquidity as it advances with its investments plan, while FS's access to both domestic and international capital markets and presence of largely liquid corn inventories place its liquidity at higher levels compared to most sugar cane processors. KEY ASSUMPTIONS -- Ethanol sales volumes of 1.4 billion liters in fiscal 2022 and 2023. Ethanol sales will increase to over 1.8 billion liters in fiscal 2024 following investments in capacity expansion. Hydrous ethanol will make up 56% of total ethanol volumes going forward; -- Sales of animal nutrition products of over 1.2 million tons in fiscal 2022 and 2023 and near 1.7 million tons in fiscal 2024; -- Ethanol prices to vary in tandem with a combination of oil prices and the FX rate. Brent crude prices have been forecast to average USD63/bbl in 2021 and USD55/bbl in 2022; -- Average FX rate at BRL5.20/USD in fiscal 2022 and 2023; -- Corn prices at BRL49/bag in the current crop season and BRL46/bag in 2022/2023; -- Animal nutrition products providing 44% coverage for total corn costs; -- Total investments of BRL848 million in 2021/2022 and BRL1.6 billion in 2022/2023; -- Dividends of BRL780 million in fiscal 2022 and BRL235 million in fiscal 2023. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Longer track record in different cycles of ethanol and corn prices; -- FCF consistently positive, with the maintenance of conservative capital structure. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Deterioration in liquidity and/or difficulties refinancing short-term debt; -- EBITDA margins below 20% on a sustainable basis; -- Net leverage above 3.0x on a sustainable 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 Satisfactory Liquidity: FS is expected to end fiscal 2022 with cash and short-term debt positions of BRL1.2 billion and BRL660 million, respectively, including net derivative balances. The company has diversified its funding sources by issuing a BRL300 million four-year CRA due 2025 in August 2021. Readily marketable inventories and offtake contracts with large fuel distributors reduce refinancing risks and improve financial flexibility; inventories can be easily monetized and accounts receivables can be used as collateral under new credit facilities, if required. As of June 30, 2021, cash and marketable securities were BRL1 billion, including restricted cash, which is assumed to be transitory, and compared favorably with short-term debt of BRL735 million including net derivative balances. Fitch estimates corn inventories of BRL634 million at market value as of the 1Q22, bringing the coverage ratio to about 2.30x. ISSUER PROFILE FS produces corn-based hydrous and anhydrous ethanol, dried distillers' grains with Solubles (DDGS) for animal nutrition, corn oil and energy from cogeneration. The company runs two plants in the State of Mato Grosso with total capacity to crush 3.2 million tons of corn and produce 1.4 billion liters of ethanol annually. SUMMARY OF FINANCIAL ADJUSTMENTS -- Fitch included net derivative balances as debt. -- The total return swap and Cedula de Produto Rural Financeira debt balances have been netted out. 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. ========= C H I L E ========= LATAM AIRLINES: Court Okays Cheaper $750MM Ch.11 Lending Facility ----------------------------------------------------------------- Vince Sullivan of Law360 reports that bankrupt South American air carrier LATAM Airlines Group SA received court approval October 18, 2021, in New York court for a new Chapter 11 loan that will provide access to $750 million in new cash on better terms than its existing loan packages. During a video conference, LATAM attorney Luke A. Barefoot of Cleary Gottlieb Steen & Hamilton LLP said agreements governing a two-tranche, $2.45 billion debtor-in-possession financing package already approved by the bankruptcy court allowed the debtor to seek out a third silo of lending in an amount up to $750 million. About LATAM Airlines Group LATAM Airlines Group S.A. -- http://www.latam.com/-- is a pan-Latin American airline holding company involved in the transportation of passengers and cargo and operates as one unified business enterprise. It is the largest passenger airline in South America. Before the onset of the COVID-19 pandemic, LATAM offered passenger transport services to 145 different destinations in 26 countries, including domestic flights in Argentina, Brazil, Chile, Colombia, Ecuador and Peru, and international services within Latin America as well as to Europe, the United States, the Caribbean, Oceania, Asia and Africa. LATAM and its 28 affiliates sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 20-11254) on May 25, 2020. Affiliates in Chile, Peru, Colombia, Ecuador and the United States are part of the Chapter 11 filing. The Debtors disclosed $21,087,806,000 in total assets and $17,958,629,000 in total liabilities as of Dec. 31, 2019. The Hon. James L. Garrity, Jr., is the case judge. The Debtors tapped Cleary Gottlieb Steen & Hamilton LLP as bankruptcy counsel, FTI Consulting as restructuring advisor, Lee Brock Camargo Advogados as local Brazilian litigation counsel, and Togut, Segal & Segal LLP and Claro & Cia in Chile as special counsel. The Boston Consulting Group, Inc. and The Boston Consulting Group UK LLP serve as the Debtors' strategic advisors. Prime Clerk LLC is the claims agent. The official committee of unsecured creditors formed in the case tapped Dechert LLP as its bankruptcy counsel, Klestadt Winters Jureller Southard & Stevens, LLP as conflicts counsel, UBS Securities LLC as investment banker, and Conway MacKenzie, LLC as financial advisor. Ferro Castro Neves Daltro & Gomide Advogados is the committee's Brazilian counsel. The Ad Hoc Group of LATAM Bondholders tapped White & Case LLP as counsel. Glenn Agre Bergman & Fuentes, LLP, led by managing partner Andrew Glenn and partner Shai Schmidt, has been retained as counsel to the Ad Hoc Committee of Shareholders. LATAM AIRLINES: Shares Recover as It Finalizes Restructuring ------------------------------------------------------------ Market Research Telecast reports that the shares of the airline Latam Airlines, the largest in the region, recovered on Friday, Oct. 15, 2021, on the Santiago Stock Exchange after the bump on Thursday, when the company petitioned a New York court extend the deadline for submitting your reorganization plan. The deadline to present the plan expired Oct. 15, but the group asked to postpone it again until Nov. 26, 2021, to continue negotiating with bondholders and creditors, something that has yet to be confirmed by the US judge handling the case. In September 2021, the company already requested and received approval to extend its exclusive period until October 15, 2021. The current application, the firm explained, "supports the continuity of progress in the negotiations with the various parties interested in the Chapter 11 procedure" of the United States Bankruptcy Law, which was voluntarily filed in May 2020 after the economic blow that the pandemic hit. This judicial formula, which allows a company that cannot pay its debts to restructure without pressure from creditors, included both the parent company -- which is listed on the New York Stock Exchange and the Santiago Stock Exchange -- and its subsidiaries in Chile, Peru, Colombia, Ecuador and the USA. THE NEGOTIATIONS CONTINUE According to analysts, the postponement was expected by the market because already the group had hinted that it had not yet reached an agreement. The airline unveiled one of the financing proposals, which ultimately fell through and was submitted by Moelis & Company and White & Case LLP. About LATAM Airlines Group LATAM Airlines Group S.A. -- http://www.latam.com/-- is a pan-Latin American airline holding company involved in the transportation of passengers and cargo and operates as one unified business enterprise. It is the largest passenger airline in South America. Before the onset of the COVID-19 pandemic, LATAM offered passenger transport services to 145 different destinations in 26 countries, including domestic flights in Argentina, Brazil, Chile, Colombia, Ecuador and Peru, and international services within Latin America as well as to Europe, the United States, the Caribbean, Oceania, Asia and Africa. LATAM and its 28 affiliates sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 20-11254) on May 25, 2020. Affiliates in Chile, Peru, Colombia, Ecuador and the United States are part of the Chapter 11 filing. The Debtors disclosed $21,087,806,000 in total assets and $17,958,629,000 in total liabilities as of Dec. 31, 2019. The Hon. James L. Garrity, Jr., is the case judge. The Debtors tapped Cleary Gottlieb Steen & Hamilton LLP as bankruptcy counsel, FTI Consulting as restructuring advisor, Lee Brock Camargo Advogados as local Brazilian litigation counsel, and Togut, Segal & Segal LLP and Claro & Cia in Chile as special counsel. The Boston Consulting Group, Inc. and The Boston Consulting Group UK LLP serve as the Debtors' strategic advisors. Prime Clerk LLC is the claims agent. The official committee of unsecured creditors formed in the case tapped Dechert LLP as its bankruptcy counsel, Klestadt Winters Jureller Southard & Stevens, LLP as conflicts counsel, UBS Securities LLC as investment banker, and Conway MacKenzie, LLC as financial advisor. Ferro Castro Neves Daltro & Gomide Advogados is the committee's Brazilian counsel. The Ad Hoc Group of LATAM Bondholders tapped White & Case LLP as counsel. Glenn Agre Bergman & Fuentes, LLP, led by managing partner Andrew Glenn and partner Shai Schmidt, has been retained as counsel to the Ad Hoc Committee of Shareholders. =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN NATIONAL: Faces Bottle Crunch --------------------------------------- Dominican Today reports that the Dominican National Brewery related that the demand for its flagship product Cerveza Presidente has grown in the period of economic reopening in the current pandemic and the company, despite having increased production compared to the period prior to the health crisis, has found it difficult to satisfy 100%. "The fundamental reason is that the company has not received the amount of bottles it requires to meet this new demand due to the global shortage of glass containers, in addition to the great difficulties in the global supply chain, something that is also felt in the local market as access to various mass consumer goods becomes more difficult," the company reported in a press release, according to Dominican Today. It highlighted that, according to media reports, 94% of the companies included in the Fortune 1000 list are facing interruptions in their production processes due to the global shortage of supplies such as cardboard, aluminum or plastic, necessary for the packaging of its products, the report notes. DOMINICAN REPUBLIC: Household Staples Drop in Prices ---------------------------------------------------- Dominican Today reports that vendors and traders of the Merca Santo Domingo, Ciudad Ganadera, and the Mercado Nuevo de la Duarte assured that the primary agricultural products that make up the basic family food basket registered significant reductions and stable prices in the last two weeks. According to a note from the Ministry of Agriculture, the traders reported that red, white, black, and green beans registered reductions of between five and 10 pesos to be sold at 40 pesos per pound, the report notes. In addition, other items such as potato, onion, pumpkin/squash, cocoyam, plantain, ripe and green banana, cassava, tomato, cabbage lettuce, and cubanela chili also dropped in price, according to Dominican Today. "Despite the fact that worldwide, according to the FAO, food prices increased by 33 percent in the last year, the government of President Luis Abinader and the Ministry of Agriculture, headed by Minister Limber Cruz, has managed to maintain the stability of the products and the profitability of the producer, due to the economic support to the countryside and the adequate planning of the sowings," says the note, the report relays. The banana at between one and three pesos Some of the products consulted, such as the plantain, are sold at 10 pesos per unit and the Creole banana at eight pesos per unit, the report notes. While in some streets and avenues of the capital, such as Juana Saltitopa, Doctor Defilló, Carretera Mella, Independencia, Máximo Gómez, among others, you can find mobile stores selling them at three pesos per unit, the report relays. Similarly, through the Price Stabilization Institute (Inespre), bananas are marketed at one peso in its producers' markets and mobile warehouses, the report discloses. Sugar remains stable, averaging 25 pesos per pound; garlic (126 pesos per pound), select rice (25 pesos per pound), and cubanela bell pepper and onion between 35 and 40 pesos per pound, the report relays. Potatoes are estimated at 10 pesos per pound, while cassava is sold at 12 pesos per pound and waxed cassava at 15 pesos per pound, the report notes. Fruits such as pineapple are sold at three for 100 pesos. Watermelon at 20 pesos per pound, melons at 60 pesos per unit, avocado at 25 pesos per unit), mango at 10 per unit, and sour lime at 3.5 per unit, the report adds. About Dominican Republic The Dominican Republic is a Caribbean nation that shares the island of Hispaniola with Haiti to the west. Capital city Santo Domingo has Spanish landmarks like the Gothic Catedral Primada de America dating back 5 centuries in its Zona Colonial district. Luis Rodolfo Abinader Corona is the current president of the nation. The Troubled Company Reporter-Latin America reported in April 2019 that the Dominican Today related that Juan Del Rosario of the UASD Economic Faculty cited a current economic slowdown for the Dominican Republic and cautioned that if the trend continues, growth would reach only 4% by 2023. Mr. Del Rosario said that if that happens, "we'll face difficulties in meeting international commitments." An ongoing concern in the Dominican Republic is the inability of participants in the electricity sector to establish financial viability for the system. Fitch Ratings on Jan. 18, 2021, assigned a 'BB-' rating to Dominican Republic's USD1.5 billion 5.3% notes due Jan. 21, 2041. Concurrently, the Dominican Republic reopened its 2030 4.5% notes for an additional USD1.0 billion, which Fitch rates 'BB-', raising the total outstanding amount of the 2030 notes to USD2.0 billion. Standard & Poor's, on December 4, 2020, affirmed its 'BB-' long-term foreign and local currency sovereign credit ratings on the Dominican Republic. The outlook remains negative. S&P also affirmed its 'B' short-term sovereign credit ratings. The negative outlook reflects S&P's view that it could lower the ratings on the Dominican Republic over the next six to 18 months, given the severe impact of the COVID-19 pandemic on the sovereign's already vulnerable fiscal and external profiles, as well as the potential for a weaker-than-expected economic recovery. Moody's credit rating for Dominican Republic was last set at Ba3 with stable outlook (July 2017). Fitch's credit rating for Dominican Republic was last reported at BB- with negative outlook (May 8, 2020). ===================== E L S A L V A D O R ===================== EL SALVADOR: IDB OKs $400MM Loan to Up Resilience to Disasters -------------------------------------------------------------- The Inter-American Development Bank (IDB) has approved a $400 million contingent loan for a program to help offset the possible impact of natural disasters and health emergencies on El Salvador's public finances. The project will allow the country to build greater financial resilience against earthquakes, tropical cyclones, volcanic eruptions, and future epidemic and pandemic outbreaks. In addition, it will provide timely access to resources in case of both natural disaster and public health emergencies, funding extraordinary public expenditures to care for affected populations and contribute to a rapid recovery. The loan was granted under the Contingent Credit Facility for Natural Disaster Emergencies and Public Health (CCF), an innovative and cost-efficient IDB tool to foster greater financial resilience among countries and increase the Bank's climate funding for the region. With this loan approval, the Bank now provides ex ante financial coverage to fifteen mostly small and vulnerable countries in the region for a total of nearly $2.5 billion. El Salvador is highly exposed and vulnerable to natural hazards and public health events. As climate change's effects gradually intensify, these events, which tend to disproportionately affect vulnerable populations - particularly women - are expected to become more frequent and intense. These risks potentially constitute a significant contingent tax liability as they would generate great financing needs. Given the need to increase the country's resilience, the operation will structure fast-access, cost-effective ex-ante financial coverage of $400 million under the CCF, with $300 million under modality I for earthquakes and tropical cyclones, and $100 million under modality II for volcanic eruptions, and future epidemic and pandemic outbreaks. Through this coverage, the country will strengthen its capacity to deploy a rapid and effective response to emergencies, including humanitarian assistance activities and the rehabilitation of public services, among other emergency response measures. The operation also seeks to improve the country's comprehensive disaster risk management by promoting improvements in the five strategic axes of the Comprehensive Natural Disaster Risk Management Plan (PGIRDN). These axes are: Governance and development of the governing framework, risk identification and knowledge, disaster risk reduction, emergency preparedness, and financial risk management. Disaster risk management operations in the country will also promote a gender equity approach through a gender action plan to address the main gender gaps. The contingent loan will potentially benefit El Salvador's population in general and the affected population that will receive emergency assistance under the proposed coverage in particular. The operation is aligned with Vision 2025 - Reinvesting in the Americas: A Decade of Opportunities, created by the IDB to achieve recovery and inclusive growth in Latin America and the Caribbean in the areas of gender and inclusion and climate change, two of its main priorities. The IDB loan of $50 million has a 25-year repayment term, a five and a half year grace period, and an interest rate based on LIBOR. ======= P E R U ======= MINSUR SA: Moody's Hikes CFR to Ba2 & Alters Outlook to Stable -------------------------------------------------------------- Moody's Investors Service upgraded Minsur S.A.'s corporate family rating and the rating on its senior unsecured notes due 2024 to Ba2 from Ba3. The outlook was changed to stable from positive. RATINGS RATIONALE Minsur's upgrade to Ba2 reflects the completion of a large expansion project in Mina Justa, which will strengthen Minsur's business profile over the long term and provide a significant uplift in cash generation from 2021 onward. The upgrade considers the positive long term fundamentals for tin and copper prices, which together will account for 90% of the company's cash flows by 2022. Mina Justa will strengthen cash generation and lead to positive free cash flow at around $350 million supporting liquidity and an improvement in credit metrics with Moody's adjusted debt-to-EBITDA below 2 times from the 4.8 times in December 2020. Minsur's Ba2 ratings remain supported by the company's competitive cost position in tin and copper which supports high margins, along with its position as the third-largest tin producer worldwide. The company's credit quality is additionally supported by low costs and high-grade ore, largely because of its ownership of the San Rafael mine, the world's largest tin-producing underground mine; and the diversification into copper which will represent half of Minsur's cash flows from 2022 onward. The company's track record of strong credit metrics and liquidity is also credit positive. Going forward, although Minsur will improve its diversification, it will remain low when compared to other rating peers, as 90% of its cash flows will be concentrated in one country, Peru, in two metals and in two mines, exposing Minsur to commodity price volatility. Minsur's relatively modest revenue size expected to reach $1.6 billion by 2021 compared to its global peers is an additional constraint. Minsur liquidity is good with cash at $248 million plus short term investments of $70 million as of June 2021 due to the company's costs reduction initiatives and favorable metal prices including gold that represented 21% of revenues in 2020. Minsur also implemented several projects in its existing operations including the B2 tailings reprocessing facility that expanded the mining life and capacity at San Rafael tin mine. As a consequence, the company's EBIT margin (including Moody's adjustments) improved to 45.2% for the first six months of 2021 from 26.3% on average during the 2016-2020 period. This led to a Moody's adjusted debt/EBITDA of 3.5 times at June 2021, which includes debt related to Mina Justa. As of that date, 56% or $900 million of total reported debt is related to Mina Justa syndicated loan. Minsur's maturity profile includes $37 million maturing in 2021 and $434 million maturing in the 4Q 2022. This amount is related to the Mina Justa loan which includes a $215 million reserve that is fully funded. While Minsur does not have committed credit facilities, Moody's notes that available cash on hand plus expected free cash flow at around $350 million in 2022 would ease refinancing risk. In addition, Minsur has a strong track record of conservative financial policies and, although the Ba2 rating does not factor in any uplift because of Minsur's ownership by the Breca group, one of Peru's largest conglomerates, it is considered credit positive for the company as Minsur benefits mostly by way of potential access to funding and occasional implicit support. The Ba2 rating incorporates Moody's assumption that financial policies will remain prudent. The stable outlook reflects Moody's view that the company's operating performance will materially improve in the next 12 to 18 months supported by cash flows from operations at Mina Justa, and that the company will maintain its competitive cost position supporting deleveraging below 2 times from 4.8 times in 2020. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Positive rating pressure would require Minsur to maintain or even improve its production profile including cost position, life of mine and reserves, supporting free cash flow generation and at least adequate liquidity to carry out its operations and meet debt obligations. Additionally, the outlook or ratings could be positively affected if the company's leverage, measured as total Moody's-adjusted debt/EBITDA, consistently remains below 2.75x or lower with interest coverage, measured as adjusted EBIT/interest expenses, above 4.0x and CFO - Dividends / debt above 30% on a consistent basis. Negative pressure on Minsur's ratings or outlook could arise if there is any material change in the company's underlying financial or operational strategy, including material debt-funded acquisitions, aggressive shareholder returns or additional tax burden that harm company's profitability and its cash generation capacity straining liquidity. Quantitatively, Minsur's rating could be downgraded if the company's liquidity contracts substantially. An decrease in cash flows that result in CFO minus dividends/debt remaining below 25% on a sustained basis could also lead to a downgrade with leverage (total adjusted gross debt/EBITDA) above 3.5 times on a consistent basis or adjusted EBIT/interest expense trending down to 3.5x. The principal methodology used in these ratings was Mining published in September 2018. Headquartered in Lima, Peru, Minsur is a majority-owned subsidiary of the Peruvian conglomerate Inversiones Breca S.A. The company is primarily a producer and seller of tin, copper and gold in Peru and Brazil, where it also produces tin, as well as niobium and tantalum alloys as byproducts at Taboca. Minsur revenues are expected to reach $1.6 billion in 2021 from $649 in 2020. ********* 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. 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