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/raid1/www/Hosts/bankrupt/TCRLA_Public/211202.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, December 2, 2021, Vol. 22, No. 235 Headlines B R A Z I L BRAZIL MINERALS: Incurs $821K Net Loss in Third Quarter BRAZIL: S&P Affirms 'BB-/B' SCRs on Moderate Growth Prospects BRAZIL: To Close Air Borders to 6 African Countries due to Omicron MV24 CAPITAL: S&P Affirms 'BB' Rating on $1.1BB Sr. Secured Notes D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: Gov't. Wants Sectors' Help With Migrants DOMINICAN REPUBLIC: US$877M Fixed Income Issue at 20Yrs Authorized [*] DOMINICAN REPUBLIC: 2021 Remittances Already Surpass 2020's J A M A I C A JAMAICA: BOJ Intervenes in Forex Market Again JAMAICA: PM Pledges Financial Support For Entertainment Industry M E X I C O GRUPO AEROMEXICO: Katten, Arnold Represent Invictus, 3 Others GRUPO GICSA: S&P Keeps 'CCC' ICR on CreditWatch Negative P A R A G U A Y PARAGUAY: Fitch Affirms 'BB+' LT IDR, Outlook Stable X X X X X X X X CARIBBEAN: Region Needs Fresh Economic Thinking - - - - - =========== B R A Z I L =========== BRAZIL MINERALS: Incurs $821K Net Loss in Third Quarter ------------------------------------------------------- Brazil Minerals, Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $820,591 on $2,984 of revenue for the three months ended Sept. 30, 2021, compared to a net loss of $372,598 on $10,688 of revenue for the three months ended Sept. 30, 2020. For the nine months ended Sept. 30, 2021, the Company reported a net loss of $3.10 million on $9,088 of revenue compared to a net loss of $1.38 million on $22,254 of revenue for the nine months ended Sept. 30, 2020. As of Sept. 30, 2021, the Company had $1.61 million in total assets, $1.19 million in total liabilities, and $420,747 in total stockholders' equity. A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1540684/000149315221027841/form10-q.htm About Brazil Minerals Brazil Minerals, Inc., together with its subsidiaries, is a mineral exploration company currently primarily focused on the development of its two 100%-owned hard-rock lithium projects. Its initial goal is to be able to enter commercial production of spodumene concentrate, a lithium bearing commodity. Visit http://www.brazil-minerals.comfor more information. Brazil Minerals reported a net loss of $1.55 million for the year ended Dec. 31, 2020, a net loss of $2.08 million for the year ended Dec. 31, 2019, and a net loss of $1.85 million for the year ended Dec. 31, 2018. As of June 30, 2021, the Company had $1.77 million in total assets, $1.89 million in total liabilities, and a total stockholders' deficit of $119,656. Lakewood, Colorado-based BF Borgers CPA PC, the Company's auditor since 2015, issued a "going concern" qualification in its report dated March 31, 2021, citing that the Company has suffered recurring losses from operations and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern. BRAZIL: S&P Affirms 'BB-/B' SCRs on Moderate Growth Prospects ------------------------------------------------------------- S&P Global Ratings affirmed its 'BB-/B' long- and short-term foreign and local currency sovereign credit ratings on Brazil. The outlook on the long-term ratings remains stable. S&P also affirmed its 'brAAA' national scale rating, and the outlook remains stable. The transfer and convertibility assessment on Brazil is still 'BB+'. Outlook The stable outlook assumes that the government will be able to undertake a gradual fiscal consolidation and contain the growth on its already high debt burden over the next two years despite spending pressure and national elections in 2022. It also assumes that inflation will gradually decline next year, reducing potential risks to the sovereign's debt dynamics. We also expect that small current account deficits (CADs), fully funded by foreign direct investment (FDI), will help sustain Brazil's net external creditor position. Downside scenario S&P could lower the rating over the next two years if worse-than-expected fiscal results, potentially signaling a weaker institutional capacity to implement corrective fiscal measures, further erode public finances. A looser fiscal consolidation path could also sustain high inflation and reduce the sovereign's monetary flexibility. Similarly, fiscal imbalances that worsen Brazil's currently favorable external profile could result in a downgrade. Upside scenario Conversely, S&P could raise the ratings in the next two years if a combination of better-than-expected GDP growth and fiscal performance markedly improves the sovereign's financial profile. More forceful and timely policy measures that boost trend GDP growth prospects and presage favorable government debt dynamics could improve the sovereign's financial profile. Rationale S&P's ratings on Brazil reflect its weak fiscal performance, resulting in high general government debt and interest burden. They also reflect its poor GDP growth over many years, worse than its similarly rated peers. The ratings are supported by Brazil's strong external position, which its narrow net external creditor position since 2016 reflects. A flexible exchange rate and inflation targeting monetary policy conducted by the central bank, which recently gained more autonomy from the government, also support Brazil's monetary flexibility and credit rating. Deep domestic capital markets mitigate the sovereign's funding risk and allow the government to maintain a favorable debt profile, mostly denominated in local currency. Institutional and economic profile: Moderate economic growth expected and relatively weak capacity to pass structural reforms -- Brazil's economy recovered faster than expected following a 4% contraction in 2020. -- The economy should grow by 4.8% in 2021 but deaccelerate to an annual average of 1.7% during 2022-2024. -- S&P believes that Brazil has limited capacity to advance with structural reforms needed to achieve faster growth and reduce government debt levels. Brazil's GDP has bounced back faster than expected this year and is likely to exceed pre-pandemic levels by year-end 2021. A large fiscal response in 2020, coupled with favorable terms of trade, contained the contraction at 4% in 2020. Still-favorable external conditions, plus a resilient service sector, will boost GDP growth to 4.8% in 2021. S&P expects GDP per capita to trend toward US$8,400 by 2024. However, the country's medium-term growth outlook is poor. The combination of recent monetary tightening by the central bank, upcoming national elections, and investor concerns about long-term fiscal policy will constrain consumption and investment in 2022, resulting in GDP growth below 1%. GDP is likely to grow around 2% in 2023-2024, following a decade of marginal or negative per capita GDP growth. Over the forecast period, Brazil should sustain growth thanks to recent measures to encourage more investment in the gas, energy, and sanitation sectors, as well as implementation of an ambitious program to reduce the government's stake in electricity utility companies and to advance with privatization and concessions. Brazil is a stable democracy with extensive checks and balances, including an active judiciary. It enjoys political stability and continuity in key economic policies. However, its political system imposes the need to build extensive consensus to pass legislation. Many laws that require the support of a simple majority in other countries require a three-fifths majority in the Brazilian Congress, along with a lengthy procedure to approve them. The combination of such an institutional setting and a highly fragmented Congress that has many political parties often delays or deters fiscal (such as tax reforms) and other reforms, which could address economic weaknesses in a timely manner. The government is seeking to amend Brazil's Constitution to marginally modify its legal spending ceiling to allow higher spending for social programs, as well as to make partial payments in 2022 on growing liabilities from court ruling. The changes to the spending ceiling illustrate the longstanding difficulties in controlling and reducing the fiscal deficit in a sustainable manner. More than 90% of budgetary spending is nondiscretionary, reflecting commitments to various mandated spending programs and other revenue and expenditure rigidities. Brazilian politics will be driven by the October 2022 national elections for the president, the national Congress, and governors. S&P expects broad continuity in key economic policies after the elections. The new administration will likely face a fragmented legislature, reinforcing the need for pragmatic policies. So far, the two main presidential candidates are incumbent President Jair Bolsonaro and former president Lula da Silva. Flexibility and performance profile: Prolonged fiscal consolidation, central bank credibility, and strong external position -- A spike in inflation has led to a quick tightening of monetary policy. -- Higher interest rates would translate into a higher government interest burden and a more prolonged fiscal consolidation. -- Still-favorable international conditions will result in a low CAD and a narrow net external creditor position. S&P said, "A strong economic recovery and withdrawal of fiscal stimulus will result in a significant correction of the general government deficit, which we now expect at 6.5% of GDP for 2021, compared with 12.3% in 2020. The recent rise in the government's debt stock, combined with higher interest rates due to rising inflation, is likely to boost the general government interest burden to 5.3% of GDP on average over 2021-2024 (increasing to around 5.9% of GDP in 2022 from only 4.1% in 2020). We expect that the change in net general government debt will average 6.6% of GDP over the same period, while the net general government debt is expected to trend toward 75% of GDP by 2024. The interest burden would average 14.5% of general government revenues over the forecast period." A favorable composition of debt (mostly denominated in local currency), large government liquid assets, and limited contingent liabilities mitigate the risks of managing Brazil's high debt burden. Nonresidents hold just below 15% of general government debt, limiting the risk of potential adverse external shocks on debt rollover. The country's external profile has remained resilient in recent years despite frequent episodes of global volatility. Brazil has been in a narrow net external creditor position since 2016 thanks to ample domestic financing sources, combined with a large stock of international reserves. S&P said, "We project a narrow net external asset position of 14% of current account receipts on average over the next three years. Brazil's external profile will continue to benefit from favorable global conditions, including high commodity prices and sustained demand from the U.S. and China. We expect Brazil to post a CAD on average of 2.2% of GDP during 2021-2024, fully financed by FDI. We classify the Brazilian real as an actively traded currency, based on the 2019 Bank for International Settlements' Triennial Survey, which showed that the real contributes at least 1% of global foreign exchange market turnover." Inflation has risen since late 2020 because of significant currency depreciation, higher energy prices, and a drought that reduced hydroelectricity output and boosted food prices. Consumer inflation surpassed 10% in October 2021, well above the central bank's target of 3.75% in 2021 and 3.5% in 2022 (with a tolerance range of plus/minus 1.5%). In response, the central bank has increased its policy rate six times since March 2021. The central bank's reference interest rate, the Selic, now stands at 7.75% compared with 2% at the beginning of the tightening period. S&P's base case expects inflation to be 5% by year-end 2022 (from 10% at year-end 2021), and to average 7.7%. Congress passed legislation that strengthened the autonomy of the central bank in February 2021. In addition, the central bank has made progress on regulatory reforms to maintain effective oversight of financial institutions. The banking sector is strong and well regulated. Nonperforming loans have remained low, largely due to renegotiations and postponements of payments in 2020. S&P expects lending to slow in 2022 as consumption cools down. In accordance with S&P's relevant policies and procedures, the Rating Committee was composed of analysts that are qualified to vote in the committee, with sufficient experience to convey the appropriate level of knowledge and understanding of the methodology applicable. At the onset of the committee, the chair confirmed that the information provided to the Rating Committee by the primary analyst had been distributed in a timely manner and was sufficient for Committee members to make an informed decision. After the primary analyst gave opening remarks and explained the recommendation, the Committee discussed key rating factors and critical issues in accordance with the relevant criteria. Qualitative and quantitative risk factors were considered and discussed, looking at track-record and forecasts. The committee's assessment of the key rating factors is reflected in the Ratings Score Snapshot above. The chair ensured every voting member was given the opportunity to articulate his/her opinion. The chair or designee reviewed the draft report to ensure consistency with the Committee decision. The views and the decision of the rating committee are summarized in the above rationale and outlook. The weighting of all rating factors is described in the methodology used in this rating action. Ratings List RATINGS AFFIRMED BRAZIL Sovereign Credit Rating BB-/Stable/B Brazil National Scale brAAA/Stable/-- Transfer & Convertibility Assessment Local Currency BB+ BRAZIL Senior Unsecured BB- Senior Unsecured brAAA BRAZIL: To Close Air Borders to 6 African Countries due to Omicron ------------------------------------------------------------------ Rio Times Online report that Brazil officially announced that it decided to close "air borders" with six southern African countries starting Nov. 29, in an attempt to prevent or delay the arrival of the new variant of Covid-19, baptized Omicron. "We are going to protect Brazilians in this new phase of the pandemic," said on Twitter the president's Chief of Staff, Ciro Nogueira, specifying that the rule will be published and that the restriction will include South Africa, Botswana, Eswatini, Lesotho, Namibia and Zimbabwe, according to Rio Times Online. The rule will be made official, the report notes. 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). MV24 CAPITAL: S&P Affirms 'BB' Rating on $1.1BB Sr. Secured Notes ----------------------------------------------------------------- On Nov. 30, 2021, S&P Global Ratings affirmed its 'BB' issue-level rating on MV24 Capital B.V.'s (MV24 or the project) $1.1 billion 6.748% senior secured notes. The stable outlook reflects its expectation that the asset will operate at a minimum of 96% availability in the next 24 months and conduct seven maintenance stoppage days per year, leading to a DSCR of about 1.3x. The rating reflects the contracted nature of the asset, which results in very stable and predictable cash flows. The rating is one notch above the rating on the weakest of the revenue counterparties, Petrobras, because S&P believes that there are economic incentives for the owners of the oilfield to continue oil production, even during financial distress. This reflects its view of the essential service the project provides to the oil production, which generates cash flows to the owners of the field, combined with the asset's unique characteristics that were designed to operate in the Tupi field; that is, it's a difficult asset to replace. The field is under the first quartile of its cash-cost, with an oil break-even cost below $20 per barrel of oil equivalent. S&P said, "Therefore, we cap the rating on MV24 at one notch above the rating on Petrobras. Our analysis also incorporates the operational risk inherent to oil production, limited to activities of light process and oil storage, that is, excluding activities of a subsea wellhead; the benefit of a long-term, availability-based charter agreement that eliminates market risk; and the operator's experience that has maintained 96.7% average availability of the asset since it started operations in October 2014. "Our base-case scenario, which assumes 96% average availability and the prices included in the charter agreement, adjusted by higher U.S. CPI reflecting our updated macroeconomic forecast of 4.5% in 2021, 3.9% in 2022, 2.4% in 2023, and 2.1% from 2024 onward, resulting in a slightly higher minimum annual DSCR of 1.27x in 2032 and an average DSCR of 1.4x throughout the notes' term. In our view, the project's resilience under a downside-case scenario supports MV24's strength, given its low exposure to price variations due to its availability-based payments. These factors result in a higher adjusted preliminary operations phase stand-alone credit profile (SACP) of 'bb+' from the previous 'bb', while the project's SACP is limited at 'bb' considering the cap at one notch above the rating on Petrobras. "Finally, the rating on the project's notes is higher than that on Brazil, given that we believe the project would be able to pass a sovereign stress scenario. This is principally due to the exporting nature of the asset, smooth debt payments, and existence of debt reserve accounts. Although the vessel operates in Brazil, the documentation of the transaction defines that payments are deposited in offshore accounts, all cash is held offshore, and revenue and costs are denominated in U.S. dollars, offsetting the foreign-exchange conversion risk. We didn't apply the typical cash haircut because all cash is held offshore, invested under permitted investment-grade securities." =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: Gov't. Wants Sectors' Help With Migrants ------------------------------------------------------------ Dominican Today reports that the Minister of the Interior and Police, Jesus (Chu) Vasquez Martinez, welcomed the support offered by the agricultural and productive sectors of the country, who welcomed the request of the Government to regularize the foreign labor force residing in the Dominican Republic, in order to enforce the Migration Law and the decisions approved by the National Migration Council, the entity reported. According to a press release, during a socialization meeting between the productive, agricultural and construction sectors, held at the headquarters of the Ministry of Foreign Affairs, Vasquez Martinez stated that the time had come to unite wills in favor of national sovereignty, since compliance with the law is the most suitable mechanism to achieve these objectives, according to Dominican Today. "What we want to ask all of you is that you join us in this decision, which is of high national interest, and that a survey be made of the foreign labor required by each sector," the report notes. About Dominican Republic The Dominican Republic is a Caribbean nation that shares the island of Hispaniola with Haiti to the west. Capital city Santo Domingo has Spanish landmarks like the Gothic Catedral Primada de America dating back 5 centuries in its Zona Colonial district. Luis Rodolfo Abinader Corona is the current president of the nation. The Troubled Company Reporter-Latin America reported in April 2019 that the Dominican Today related that Juan Del Rosario of the UASD Economic Faculty cited a current economic slowdown for the Dominican Republic and cautioned that if the trend continues, growth would reach only 4% by 2023. Mr. Del Rosario said that if that happens, "we'll face difficulties in meeting international commitments." An ongoing concern in the Dominican Republic is the inability of participants in the electricity sector to establish financial viability for the system. Fitch Ratings on Jan. 18, 2021, assigned a 'BB-' rating to Dominican Republic's USD1.5 billion 5.3% notes due Jan. 21, 2041. Concurrently, the Dominican Republic reopened its 2030 4.5% notes for an additional USD1.0 billion, which Fitch rates 'BB-', raising the total outstanding amount of the 2030 notes to USD2.0 billion. Standard & Poor's, on December 4, 2020, affirmed its 'BB-' long-term foreign and local currency sovereign credit ratings on the Dominican Republic. The outlook remains negative. S&P also affirmed its 'B' short-term sovereign credit ratings. The negative outlook reflects S&P's view that it could lower the ratings on the Dominican Republic over the next six to 18 months, given the severe impact of the COVID-19 pandemic on the sovereign's already vulnerable fiscal and external profiles, as well as the potential for a weaker-than-expected economic recovery. Moody's credit rating for Dominican Republic was last set at Ba3 with stable outlook (July 2017). Fitch's credit rating for Dominican Republic was last reported at BB- with negative outlook (May 8, 2020). DOMINICAN REPUBLIC: US$877M Fixed Income Issue at 20Yrs Authorized ------------------------------------------------------------------ Dominican Today reports that the Securities Superintendence approved the application for authorization and registration in the Securities Market Registry a Program of Issuance of Fixed Income Trust Securities of up to RD$50.0 billion (US$877 million), to be carried out by Fiduciaria Reservas, SA, with charge and account of the Trust for the Operation, Maintenance and Expansion of the Main Road Network of the Dominican Republic (RD VIAL Trust). The decision was announced through the first resolution dated November 22, 2021. "This document indicates that the trustor is the Dominican State, represented by the Ministry of Public Works and Communications (MOPC), being the first trust to which approve a second public offering of securities," the report notes. The maturity of the new fixed income trust securities to be issued under the second program, in accordance with the provisions of their issuance prospectus, will be up to 20 years from the date of each issuance generated by the issuance program, without however, the maturity of the securities will never exceed the term of the Trust, 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). [*] DOMINICAN REPUBLIC: 2021 Remittances Already Surpass 2020's --------------------------------------------------------------- Dominican Today reports that the remittances received up to October 2021 in the Dominican Republic are 40.2% higher than those received in October 2019, and 30.7% higher than those of October 2020. In addition, the United States is the main sender of remittances to the Dominican Republic, according to Dominican Today. As of October 2021, 83.9% of remittances came from that country, the report notes. According to data from the Central Bank of the Dominican Republic, between January and October 2021 remittances reached US$8.7 billion, to exceed the same period of 2020 with US$2.0 billion, a 30.7% year-on-year growth, the report says. The total received until October in 2021 exceeded by more than US$450 million the US$8.2 billion received in the entire 2020, when there are two months left in the year, the report adds. About Dominican Republic The Dominican Republic is a Caribbean nation that shares the island of Hispaniola with Haiti to the west. Capital city Santo Domingo has Spanish landmarks like the Gothic Catedral Primada de America dating back 5 centuries in its Zona Colonial district. Luis Rodolfo Abinader Corona is the current president of the nation. The Troubled Company Reporter-Latin America reported in April 2019 that the Dominican Today related that Juan Del Rosario of the UASD Economic Faculty cited a current economic slowdown for the Dominican Republic and cautioned that if the trend continues, growth would reach only 4% by 2023. Mr. Del Rosario said that if that happens, "we'll face difficulties in meeting international commitments." An ongoing concern in the Dominican Republic is the inability of participants in the electricity sector to establish financial viability for the system. Fitch Ratings on Jan. 18, 2021, assigned a 'BB-' rating to Dominican Republic's USD1.5 billion 5.3% notes due Jan. 21, 2041. Concurrently, the Dominican Republic reopened its 2030 4.5% notes for an additional USD1.0 billion, which Fitch rates 'BB-', raising the total outstanding amount of the 2030 notes to USD2.0 billion. Standard & Poor's, on December 4, 2020, affirmed its 'BB-' long-term foreign and local currency sovereign credit ratings on the Dominican Republic. The outlook remains negative. S&P also affirmed its 'B' short-term sovereign credit ratings. The negative outlook reflects S&P's view that it could lower the ratings on the Dominican Republic over the next six to 18 months, given the severe impact of the COVID-19 pandemic on the sovereign's already vulnerable fiscal and external profiles, as well as the potential for a weaker-than-expected economic recovery. Moody's credit rating for Dominican Republic was last set at Ba3 with stable outlook (July 2017). Fitch's credit rating for Dominican Republic was last reported at BB- with negative outlook (May 8, 2020). ============= J A M A I C A ============= JAMAICA: BOJ Intervenes in Forex Market Again --------------------------------------------- RJR News reports that the Bank of Jamaica has intervened in the foreign exchange market for a second consecutive day. The bank sold US$20 million to five banks and three cambios through a flash sale, according to RJR News. The central bank has pumped US$50 million into the foreign currency market, the report notes. As reported in the Troubled Company Reporter-Latin America on Nov. 25, 2021, Moody's Investors Service has affirmed the Government of Jamaica's long-term issuer and senior unsecured ratings at B2. The senior unsecured shelf rating has also been affirmed at (P)B2. The outlook on the ratings remains stable. JAMAICA: PM Pledges Financial Support For Entertainment Industry ---------------------------------------------------------------- RJR News reports that Prime Minister Andrew Holness has pledged financial support to help members of the entertainment industry recover from the shutdowns caused by the covid-19 pandemic. Speaking during the JLP's annual conference, Mr. Holness acknowledged that the covid-19 containment measures have been devastating to many in the industry, according to RJR News. He said the government is still working out how this assistance will be rendered, the report notes. "We will do something for the entertainment sector generally. We have contemplated how to , and how we can very quickly after the pandemic, resuscitate and support the sector. The sector is responsible for brand Jamaica and keeping the Jamaican flag flying all around the world - so we can't be mean spirited to the entertainment sector," he said, the report relays. The government ceased issuing entertainment permits soon after Jamaica registered its first covid-19 case in March 2020. The nightly curfews and social gathering rules have also curbed entertainment activities, the report says. While the sector reopened with strict rules during the summer, it was shut down again within weeks as Jamaica battled a third wave of the pandemic, the report adds. As reported in the Troubled Company Reporter-Latin America on Nov. 25, 2021, Moody's Investors Service has affirmed the Government of Jamaica's long-term issuer and senior unsecured ratings at B2. The senior unsecured shelf rating has also been affirmed at (P)B2. The outlook on the ratings remains stable. =========== M E X I C O =========== GRUPO AEROMEXICO: Katten, Arnold Represent Invictus, 3 Others ------------------------------------------------------------- In the Chapter 11 cases of Grupo Aeromexico, S.A.B. de C.V., et al., the law firms of Katten Muchin Rosenman LLP and Arnold & Porter Kaye Scholer LLP submitted a verified statement under Rule 2019 of the Federal Rules of Bankruptcy Procedure, to disclose that they are representing the Ad Hoc Group of OpCo Creditors. Katten and A&P represent the Ad Hoc Group and do not represent or purport to represent any entities other than the Ad Hoc Group in connection with the Debtors' chapter 11 cases. In addition, neither Invictus, Corvid Peak, Hain Capital, nor Livello represent or purport to represent any other entities within the Debtors' chapter 11 cases. As of Nov. 24, 2021, members of the Ad Hoc Group and their disclosable economic interests are: Invictus Global Management, LLC 310 Comal Street Building A, Suite 229 Austin, TX 78702 * General Unsecured Claims against Aerovias: $48,537,744.21 Corvid Peak Capital Management LLC 299 Park Avenue 13th Floor New York, NY 10171 * General Unsecured Claims against Aerovias: $46,375,364.42 * 7.00% Senior Notes: $6,960,000.00 Hain Capital Group, LLC Meadows Office Complex 301 Route 17, 7th Floor Rutherford, NJ 07070 * General Unsecured Claims against Aerovias: $15,737,906.45 * General Unsecured Claims against Aerolitoral: $14,219.10 Livello Capital Management LP 1 World Trade Center 85th Floor New York, NY 10007 * General Unsecured Claims against Aerovias: $12,796,333.00 * 7.00% Senior Notes: $2,600,000.00 Katten and A&P reserve the right to amend this Verified Statement as may be necessary in accordance with the requirements set forth in Bankruptcy Rule 2019. Co-Counsel to the Ad Hoc Group of OpCo Creditors can be reached at: Steven J. Reisman, Esq. Cindi M. Giglio, Esq. David A. Crichlow, Esq. Michael E. Comerford, Esq. KATTEN MUCHIN ROSENMAN LLP 575 Madison Avenue New York, NY 10022 Tel: (212) 940-8800 Fax: (212) 940-8776 E-mail: sreisman@katten.com cgiglio@katten.com david.crichlow@katten.com michael.comerford@katten.com - and - Jonathan I. Levine, Esq. Maja Zerjal Fink, Esq. Lucas B. Barrett, Esq. ARNOLD & PORTER KAYE SCHOLER LLP 250 West 55th Street New York, NY 10019 Tel: (212) 836-8000 Fax: (212) 836-8689 E-mail: maja.zerjalfink@arnoldporter.com jonathan.levine@arnoldporter.com lucas.barrett@arnoldporter.com A copy of the Rule 2019 filing, downloaded from PacerMonitor.com, is available at https://bit.ly/3D0dSRq About Grupo Aeromexico Grupo Aeromexico, S.A.B. de C.V. (BMV: AEROMEX) -- https://www.aeromexico.com/ -- is a holding company whose subsidiaries are engaged in commercial aviation in Mexico and the promotion of passenger loyalty programs. Aeromexico, Mexico's global airline, has its main hub at Terminal 2 at the Mexico City International Airport. Its destinations network features the United States, Canada, Central America, South America, Asia and Europe. Grupo Aeromexico and three of its subsidiaries sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 20-11563) on June 30, 2020. In the petitions signed by CFO Ricardo Javier Sanchez Baker, the Debtors reported consolidated assets and liabilities of $1 billion to $10 billion. The Debtors tapped Davis Polk and Wardell LLP as their bankruptcy counsel, KPMG Cardenas Dosal S.C. as auditor, and Rothschild & Co US Inc. and Rothschild & Co Mexico S.A. de C.V. as financial advisor and investment banker. White & Case LLP, Cervantes Sainz S.C. and De la Vega & Martinez Rojas, S.C., serve as the Debtors' special counsel. Epiq Corporate Restructuring, LLC, is the claims and administrative agent. The U.S. Trustee for Region 2 appointed a committee to represent unsecured creditors on July 13, 2020. The committee is represented by Willkie Farr & Gallagher, LLP and Morrison & Foerster, LLP. GRUPO GICSA: S&P Keeps 'CCC' ICR on CreditWatch Negative -------------------------------------------------------- On Nov. 30, 2021, S&P Global Ratings kept its 'CCC' global scale and 'mxCCC' national scale issuer credit ratings on Mexican real estate operator and developer Grupo GICSA S.A.B. de C.V. (Gicsa) on CreditWatch with negative implications. Additionally, S&P kept its 'mxCCC' ratings on the company's GICSA 15, GICSA 17, and GICSA 19 notes on CreditWatch negative, and their recovery ratings remain at '3'. The CreditWatch negative listing on Gicsa continues to reflect S&P's view that default risk remains elevated over the next few months, given the company's tight liquidity amid upcoming debt maturities in March 2022. On Nov. 29, 2021, Gicsa reached standstill agreements with its local bondholders, including GICSA 15 (mxCCC/Watch Neg), GICSA 16U (not rated), GICSA 17 (mxCCC/Watch Neg), GICSA 18U (not rated), and GICSA 19 (mxCCC/Watch Neg) to defer interest payments on those obligations for up to 90 days. As part of these agreements, Gicsa will automatically and fully pay the deferred interest obligations on GICSA 16U and GICSA 18U on Feb. 14, 2022, unless it would not have sufficient liquidity to cover those interest obligations, for which it could capitalize them until the debt instruments are repaid in full. For the notes GICSA 15, GICSA 17, and GICSA 19, the company will defer its interest obligations until Feb. 27, 2022 and will capitalize them afterward. In addition, as part of these agreements, bondholders will temporarily grant waivers on financial covenants, among other terms. Other original terms for these notes remain unchanged, including their maturity date, interest rate, and ranking. S&P said, "In our view, these agreements are not tantamount to default because bondholders will receive a five basis points (bps) compensation fee on the outstanding balance on the notes at the end of the deferral periods that will be capitalized once the deferral period ends. We consider the compensation of these 90-day standstill agreements as at least similar to a previous standstill that the company did in 2020, when it offered a 10 bps fee for a 270-day deferral period." Gicsa continues to explore alternatives for its debt structure and is working on monetizing nonproductive assets to improve its financial position. At this point, there's still limited visibility on the scope of this plan, while operating performance remains subpar to pre-pandemic levels. S&P downgraded Gicsa several times in the last couple of quarters, which triggered interest rate hikes of about 300 bps, per the original terms of the notes. As the company prepares a proposed debt restructure that it will announce in early 2022, the rating trajectory will depend on the sustainability of the company's capital structure and on the new terms and conditions for bondholders. S&P Global Ratings believes the new Omicron variant is a stark reminder that the COVID-19 pandemic is far from over. Although already declared a variant of concern by the World Health Organization, uncertainty still surrounds its transmissibility, severity, and the effectiveness of existing vaccines against it. Early evidence points toward faster transmissibility, which has led many countries to close their borders with Southern Africa or reimpose international travel restrictions. S&P said, "Over coming weeks, we expect additional evidence and testing will show the extent of the danger it poses to enable us to make a more informed assessment of the risks to credit. Meanwhile, we can expect a precautionary stance in markets, as well as governments to put into place short-term containment measures. Nevertheless, we believe this shows that, once again, more coordinated, and decisive efforts are needed to vaccinate the world's population to prevent the emergence of new and more dangerous variants." =============== P A R A G U A Y =============== PARAGUAY: Fitch Affirms 'BB+' LT IDR, Outlook Stable ---------------------------------------------------- Fitch Ratings has affirmed Paraguay's Long-Term Foreign Currency Issuer Default Rating (IDR) at 'BB+' with a Stable Outlook. KEY RATING DRIVERS Paraguay's ratings reflect its track record of prudent and consistent macroeconomic policies anchored by a floating currency, an inflation-targeting regime and a fiscal responsibility law (FRL). The ratings also reflect a general government debt level that is still relatively low despite a steep rise in 2020 and a projected upward trend, along with robust external liquidity relative to 'BB' peers. Its ratings are mainly constrained by weak governance indicators and a shallow local capital market that narrows fiscal financing flexibility. Paraguay had the shallowest contraction among Fitch-rated Latin American sovereigns in 2020 (0.8%) despite the pandemic, although in part due to base effects from a drought-induced recession in 2019. Fitch forecasts a strong recovery of 4.5% in 2021, led by services, construction and manufacturing. Vaccination has picked up pace in recent months despite a slow start earlier in the year. A historic drought has affected agriculture and the waterways that are the main transit routes for exports as well as hydroelectricity exports, but rain in key regions during the soy planting season has improved prospects for the 2021-2022 harvest. Fitch forecasts 4% growth in 2022. Announcement of a large project in the pulp sector, expected to be the largest investment in Paraguay's history, should support favorable growth in the coming years. Fiscal consolidation is on track this year following a suspension of the FRL in 2020 to facilitate pandemic response measures and use of the escape clause in 2019 due to drought. The government expects a 4% of GDP central government deficit in 2021, down from 6.1% of GDP in 2020, but could be even lower given the positive trend so far in the year (3.6% of GDP in the 12-months through October). Tax revenue rose 19.2% in 10M21 compared with 10M20, and now exceeds pre-pandemic levels, helping to offset lower fiscal revenue due to the historic drought that has reduced hydroelectricity exports. Additional social transfers introduced last year are being wound down this year. Public investment is being reduced gradually from high levels to avoid damaging the recovery. The government aims to gradually return to compliance with the FRL central government deficit limit of 1.5% of GDP by 2024. The authorities project a 3% of GDP deficit in 2022 and 2.3% of GDP in 2023, broadly in line with Fitch's forecasts. The 2022 budget does not propose new structural revenue-enhancing measures to underpin consolidation, although the 2019 tax reforms are expected to gradually generate 0.7% of GDP in revenue, with potential upside. Fitch expects that meeting fiscal targets in 2023 and 2024 could be harder to achieve, and could rely on the authorities' willingness to use capex as the adjustment variable. Paraguay's intention to renegotiate some parts of the Itaipu Dam Treaty with Brazil could pose some upside to hydroelectricity export revenue and fiscal revenues in the medium term, but the potential magnitude is uncertain and subject to talks that could take some time. By default, the prices at which Itaipu sells electricity to each of its member countries will fall when debt is paid off in 2023. If current prices are maintained, Paraguay could receive up to USD1 billion per year in additional fiscal revenues. The government has made efforts to develop the local capital market by issuing domestic guarani-denominated debt more frequently and at longer tenors, although it remains shallow, limiting financing options for the government, and the foreign currency share of debt has been increasing. The government is exploring ways to further develop the local market, including by attracting non-resident investors to the local market, but this could be difficult. The local investor base is small. Public sector pension funds are forbidden from investing in government domestic debt. A reform intended to create a pension regulator failed in 2020 that could have changed the prohibition. General government debt to GDP is one of the lowest in the 'BB' category at 30% of GDP in 2020 compared with the current 'BB' median of 59%, although has risen sharply from 20% of GDP in 2019 and remains on a gradual upward trend. Nearly 90% of Paraguay's debt is in foreign currency, exposing it to FX rate volatility. Reform momentum is weak, reflecting the challenges the Abdo administration faces in securing political support and the upcoming electoral cycle, with internal elections in the ruling Colorado Party due in 2022 and presidential elections in 2023. Changes to the FRL proposed earlier this year are stuck in Congress and are unlikely to proceed before the 2023 elections, along with reforms to public procurement and the civil service. Pension reform is also on the agenda but will likely be pushed to the next administration as well. The pension system could put pressure on public finances in the medium term without changes to the parameters. The public pension system retains a surplus given favorable demographics, but this is diminishing, and the teacher and military pension regimes are already in deficit. Structural features are weak compared to peers, particularly governance indicators despite gradual improvement in recent years. High levels of corruption combined with an ineffective judicial system means many crimes result in impunity. An ongoing AML/CTF review by GAFILAT highlights international concerns in this area. Inflation has risen above the target range, driven by food and energy prices, reaching 7.6% yoy in October. The central bank has responded with cumulative YTD hikes of 325 bps in the policy rate, and signalled an additional hike of 125 bps in December. Paraguay remains in a favorable external position, with significant international reserves and a current account surplus. Fitch estimates the current account surplus to reach 1.8% of GDP in 2021, down slightly from 2.3% in 2020 due to a record soy harvest. Reserves were up to USD9.9 billion in November 2021, or 9.4 months of current external payments (CXP) compared to a 'BB' median of 5.6 months in 2020. Net external debt at 8.9% in 2020 remains low relative to the 'BB' median (14.9%). ESG - Governance: Paraguay has an ESG Relevance Score (RS) of '5' for both Political Stability and Rights and for the Rule of Law, Institutional and Regulatory Quality and Control of Corruption. Theses scores reflect the high weight that the World Bank Governance Indicators (WBGI) have in Fitch's proprietary Sovereign Rating Model. Paraguay has a medium WBGI ranking at the 39th percentile, reflecting a recent track record of peaceful political transitions, a moderate level of rights for participation in the political process, weak institutional capacity, weak rule of law and a high level of corruption. RATING SENSITIVITIES Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Public Finances: Strengthening of fiscal financing flexibility through development of the local capital market; fiscal consolidation that ensures preservation of low debt/GDP levels. -- Macro: Higher economic growth (in the context of macro stability) that increases prospects for GDP per capita convergence with higher-rated sovereigns. -- Structural: Sustained improvement in governance indicators – for example, as a result of the government's efforts to combat corruption and strengthen public institutions. Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Public Finances: A perceived deterioration in fiscal policymaking, such as a failure to achieve consolidation that stabilizes debt/GDP at low levels. -- Macro: Deterioration in the credibility of macroeconomic policymaking, or a shock that worsens economic prospects and external accounts - for example, due to a fall in commodity prices or adverse climate conditions. SOVEREIGN RATING MODEL (SRM) AND QUALITATIVE OVERLAY (QO) Fitch's proprietary sovereign rating model (SRM) assigns Paraguay a score equivalent to a rating of 'BB' on the Long-Term Foreign Currency (LT FC) IDR scale. Fitch's sovereign rating committee adjusted the output from the SRM to arrive at the final LT FC IDR by applying its qualitative overlay (QO), relative to SRM data and output, as follows: -- Macroeconomic: +1 notch, to reflect Paraguay's track record of prudent and consistent macroeconomic policies that include a floating FX regime, inflation targeting and a fiscal responsibility law. Fitch's SRM is the agency's proprietary multiple regression rating model that employs 18 variables based on three-year centered averages, including one year of forecasts, to produce a score equivalent to a LT FC IDR. Fitch's QO is a forward-looking qualitative framework designed to allow for adjustment to the SRM output to assign the final rating, reflecting factors within Fitch's criteria that are not fully quantifiable and/or not fully reflected in the SRM. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Sovereigns, Public Finance and Infrastructure 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 three notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. ESG CONSIDERATIONS Paraguay has an ESG Relevance Score of '5' for Political Stability and Rights as World Bank Governance Indicators have the highest weight in Fitch's SRM and are therefore highly relevant to the rating and a key rating driver with a high weight. As Paraguay has a percentile rank below 50 for the respective Governance Indicator, this has a negative impact on the credit profile. Paraguay has an ESG Relevance Score of '5' for Rule of Law, Institutional & Regulatory Quality and Control of Corruption as World Bank Governance Indicators have the highest weight in Fitch's SRM and are therefore highly relevant to the rating and are a key rating driver with a high weight. As Paraguay has a percentile rank below 50 for the respective Governance Indicator, this has a negative impact on the credit profile. Paraguay has an ESG Relevance Score of '4' for Human Rights and Political Freedoms as the Voice and Accountability pillar of the World Bank Governance Indicators is relevant to the rating and a rating driver. As Paraguay has a percentile rank below 50 for the respective Governance Indicator, this has a negative impact on the credit profile. Paraguay has an ESG Relevance Score of '4' for Creditor Rights as willingness to service and repay debt is relevant to the rating and is a rating driver for Paraguay, as for all sovereigns. As Paraguay has a fairly recent restructuring of public debt in 2004, this has a negative impact on the credit profile. Except for the matters discussed above, the highest level of ESG credit relevance, if present, is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity(ies), either due to their nature or to the way in which they are being managed by the entity(ies). =============== X X X X X X X X =============== CARIBBEAN: Region Needs Fresh Economic Thinking ----------------------------------------------- Asha Javeed at Trinidad Express reports that the Caribbean needs to refresh its economic and education model as it moves forward. That's the view of Professor Avinash Persaud, chairman of the Caricom Commission on the Economy, which delivered a report entitled "Caribbean 9.58-Speeding up the Caribbean," which was published in October 2020, according to Trinidad Express. Persaud was a panellist at the opening of the 15th Annual Conference on the Economy (COTE), the theme of which is "Accelerating Caribbean Development - Retooling and Restructuring Caribbean Economies Post Covid-19," the report notes. He posited that Caricom was often viewed as a series of countries squabbling and never reaching agreement, when that is not the reality, the report discloses. But Caricom needs to be "unstuck", he said, the report discloses. "Our problem is that we have required unanimity. And what often happens in Caricom, on the major economic issues is that you may well get 12 people agreeing, even 13, sometimes 14, but just not 15. And so we decided to address that issue with something called enhanced cooperation. "What that means is that if a minimum of five countries agree to move ahead on something, and the other ten have been satisfied that those five moving ahead does not cause them a disadvantage, the five can move ahead. And we think this was well received within the heads of government and we think this will make an important difference in unsticking Caricom." He said that the second problem that Caricom has is that it tries to do too many things, the report says. "The problem with regional integration is that you have people who believe that everything we do, should be regionally done. And people believe that nothing we do should be regionally done. I've come across groups who are working to see whether there should be a common drinking age across the entire Caricom. I mean, why? "So we came up with something called subsidiarity. So it's a decision that should be made at the closest level in which it is efficient for that decision to be made, the closest level to the people. So you don't want to Caricom in Georgetown, deciding what day of the week your garbage will be collected. But you may want Caricom to be thinking about things of regional security, of regional trade, regional transport. So subsidiarity is saying, look, there's some things better with Caricom. And there's some things that are not the best done by countries, best done by a couple of countries," he said, the report relays. He observed that when Caricom does squabble, it squabbles over money, the report notes. "What we tried to do in our report is that we can do an awful lot without money. We can unstick the region without money so we discipline ourselves to come up with recommendations that would cost nobody any money. So subsidiarity, enhanced cooperation and things we can do without money," he said, the report notes. The report discloses that among the recommendations of the Commission are: 1. Ease of transport. Persaud said that the region has a transport problem. "We are the most expensive region in the world to move things around," he said. "Imagine if in the future, I am in Barbados, and I order a basket of the most amazing fruits from Dominica. And it arrives the next day. We don't have daily fast ferries across the region. We have expensive weekly ferries. Now, does that require money? What is stopping fast ferries operating in the region?" he asked. 2. Greater mobility of people. He described the present way in which people are allowed to move as " a clunky, hard to process ratio". "We're saying that people should be allowed to work in other countries, as long as they have a minimum of two CXCs subjects. And all they need to do is have evidence on them having two CXCs on a blockchain certificate that they carry on their phone and the immigration officer will accept that. They don't need to get approval in each country and get sent in tons of forms, etc. So we want greater mobility of people," he said. 3. Digital employment Persaud said that the region should find a way to modernise social security in the "new world." "Now the future is that people are working in different countries, different islands, maybe different continents without actually moving. So we also talked about creating a new type of digital employment, where you can be employing people in Barbados from a Trinidadian company. And you have a digital employment contract, which makes it very clear where you are making their social security contributions, where you are paying their taxes and where they're paying their taxes," he said, the report adds. ********* 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. 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