/raid1/www/Hosts/bankrupt/TCRLA_Public/211206.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Monday, December 6, 2021, Vol. 22, No. 237
Headlines
A R G E N T I N A
ARGENTINA: IDB OKs $200M Loan for Buenos Aires' Road Safety Program
B E R M U D A
SEADRILL LTD: New Board to Assume Leadership After Ch.11 Exit
B R A Z I L
BRAZIL: GDP Drops in 3Q by 0.1%, Reflecting Stability, Says IBGE
PETROLEO BRASILEIRO: To Up Price of Gas Sold to Distribution Firms
D O M I N I C A N R E P U B L I C
DOMINICAN REPUBLIC: Meat Still Expensive & Trending Upward
DOMINICAN REPUBLIC: S&P Affirms 'BB-' LT SCR, Outlook Now Stable
J A M A I C A
SAGICOR SELECT: Funds Ends Third Quarter With $145MM Net Loss
P U E R T O R I C O
CDT DE SAN SEBASTIAN: Jan. 26, 2022 Plan Confirmation Hearing Set
U R U G U A Y
URUGUAY: To Get $65M Loan for the Improvement of Road Corridors
X X X X X X X X
[*] BOND PRICING: For the Week Nov. 29 to Dec. 3, 2021
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A R G E N T I N A
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ARGENTINA: IDB OKs $200M Loan for Buenos Aires' Road Safety Program
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The Inter-American Development Bank (IDB) approved a $200 million
loan for the Road Safety Program in the Metropolitan Area of Buenos
Aires Province with the principal aim of improving safety
conditions in the Buenos Aires Province's road networks.
The project, implemented by the Road Management Office of Buenos
Aires Province (DVBA, after its Spanish initials), also seeks to
improve road infrastructure quality and strengthen the management
capacity of the public agencies in charge of road safety.
In addition, the program will finance actions aimed at
strengthening the technical capacities of public actors in order to
foster better road safety policies and implement efficient
strategies to reduce traffic accidents.
The direct beneficiaries of the program will be the nearly 6.5
million residents of the Buenos Aires Metropolitan Area. The
intended transportation infrastructure improvements will have a
strategic impact on the whole country, since 38% of Argentina's
exports are shipped from ports in the Buenos Aires Province or the
Autonomous City of Buenos Aires, whereas 94% of the domestic
freight transport uses the road system.
Traffic accidents generate significant economic losses, additional
costs for the health sector, and productivity losses due to deaths
and serious injuries that prevent people from working. A study on
road accidents conducted in 2020 found that collisions were the
most prevalent type of accident in Argentina's capital, mainly due
to low road safety standards, distracted driving, risky maneuvers
and excess speed.
The program reflects the Bank's Vision 2025 "Reinvesting in the
Americas: A Decade of Opportunities," the IDB Group's roadmap to
achieve economic recovery and inclusive growth in Latin America and
the Caribbean in four of its main pillars - digital economy,
regional integration, gender and inclusion, and climate change.
The loan will be disbursed over a five-year period and is for a
25-year term, with a 5.5-year grace period and interest rate based
on LIBOR. It will be accompanied by an additional $50 million in
local counterpart funds.
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.
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B E R M U D A
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SEADRILL LTD: New Board to Assume Leadership After Ch.11 Exit
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Seadrill Limited or ("the Company") on Nov. 18 disclosed that a
new, independent, seven-member Board of Directors ("Board") will
assume leadership of the new parent company of the Seadrill group
upon emergence from Chapter 11. Seadrill received confirmation of
its Plan of Reorganization on October 26, 2021, and is targeting
emergence early in 2022.
The Board will be comprised of the following individuals, who
collectively bring extensive industry and leadership experience:
Julie Johnson Robertson, Chair of the Board
Ms. Robertson is one of the most respected leaders in the offshore
drilling business, and she also was one of the highest ranking
female chief executives in the energy sector. Her career at Noble
and its predecessor companies spanned more than 40 years and many
roles, including Executive Chairman, President, and CEO. She
currently sits on the Board of Directors for EOG Resources and
Superior Energy Services. She is a resident of Houston, Texas.
Mark McCollum, Chair of Audit Committee
Mr. McCollum has extensive global OFSE experience and is an NYSE
financial expert who has chaired three different public-company
Audit Committees. He is a 17-year veteran of the oil and gas
industry, having most recently served as President and CEO of
Weatherford International. He also held several roles of
prominence at Halliburton, including EVP and CFO. He currently sits
on the Board of Directors for Westlake Chemical Corporation. He is
a resident of Houston, Texas.
Karen Dyrskjot Boesen
Ms. Boesen brings more than 20 years' experience from finance and
commercial roles, and more recently general management roles,
within the Oil & Gas industry. She currently serves as the Group
Chief Financial Officer at Sonnedix Group. She has previously held
various CFO roles at TotalEnergies and A.P. Moller-Maersk. She is a
resident of London, England.
Jean Cahuzac
Mr. Cahuzac is a highly regarded senior executive in the offshore
energy service industry. Until recently the CEO of Subsea 7, he
brings over 41 years in the industry having previously worked for
Transocean and Schlumberger in operational and management roles. He
currently sits on the Audit Committee at Subsea 7 and is a member
of the Board at Bourbon Maritime. He is a resident of Paris,
France.
Jan Kjaervik
Mr Kjaervik is an accomplished financial executive who brings over
35 years of experience in financial roles across the banking,
energy and maritime sectors. He was most recently Head of Treasury
& Risk for A.P. Moller-Maersk and prior to that held similar role
at Aker Kvaerner/Solutions. He currently sits on the Board of
Directors for Hoegh Autoliners. Previous directorships includes
Maersk Supply Service, Maersk Insurance, Danish Ship Finance and
Britannia PI. He is a resident of Oslo, Norway.
Andrew Schultz
Mr. Schultz is an experienced turnaround investor and executive, as
well as a seasoned director with extensive experience in stressed
and distressed situations. As a lawyer and investor, his career
has spanned many industries. He is very familiar with both the
offshore drilling sector and the E&P sector, serving as Board Chair
for Pacific Drilling and a Director for Vanguard Natural Resources.
Currently a professional non-executive director advisor, he sits
on a total of seven Boards. He is a resident of New Canaan,
Connecticut.
Paul Smith
Mr. Smith is a highly analytical and energetic financial leader who
brings depth and expertise in capital allocation, capital
structure, capital markets, and restructurings with a global track
record across various industries, including mining & metals, oil &
gas, and steel. Currently, he is Founder and Principal of
Collingwood Capital Partners which manages public and private
investments focused on resources, energy transformation, and
technology sectors. He had a nine-year career with Glencore,
culminating as CFO for Katanga Mining. He currently sits on the
Board for Trident Royalties. He is a resident of Zug,
Switzerland.
Commenting on the new board, Seadrill Chief Executive Officer
Stuart Jackson said: "We look forward to welcoming this new Board
of Directors to help grow the Seadrill brand and execute on our
strategic priorities. The new Seadrill will start 2022 in a
position of strength and, together with our new Board, we will be
ready to focus on the reshaping of the industry."
About Seadrill Ltd.
Seadrill Limited (OSE: SDRL, OTCQX: SDRLF) --
http://www.seapdrill.com/-- is a deepwater drilling contractor
providing drilling services to the oil and gas industry. As of
March 31, 2018, it had a fleet of over 35 offshore drilling units
that include 12 semi-submersible rigs, 7 drillships, and 16 jack-up
rigs.
On September 12, 2017, Seadrill Limited sought Chapter 11
protection after reaching terms of a reorganization plan that would
restructure $8 billion of funded debt. It emerged from bankruptcy
in July 2018.
Demand for exploration and drilling has fallen further during the
COVID-19 pandemic as oil firms seek to preserve cash, idling more
rigs and leading to additional overcapacity among companies serving
the industry.
In June 2020, Seadrill wrote down the value of its rigs by $1.2
billion and said it planned to scrap 10 rigs. Seadrill said it is
in talks with lenders on a restructuring of its $5.7 billion bank
debt.
Seadrill Partners LLC, a limited liability company formed by
deepwater drilling contractor Seadrill Ltd. to own, operate and
acquire offshore drilling rigs, along with its affiliates, sought
Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 20-35740) on
December 1, 2020, after its parent company swept one of its bank
accounts to pay disputed management fees. Mohsin Y. Meghji,
authorized signatory, signed the petitions.
On Feb. 7, 2021, Seadrill GCC Operations Ltd., Asia Offshore
Drilling Limited, Asia Offshore Rig 1 Limited, Asia Offshore Rig 2
Limited, and Asia Offshore Rig 3 Limited sought Chapter 11
protection. Seadrill GCC estimated $100 million to $500 million in
assets and liabilities as of the bankruptcy filing.
Additionally, on Feb. 10, 2021, Seadrill Limited and 114 affiliated
debtors each filed a voluntary petition for relief under Chapter 11
of the United States Bankruptcy Code with the Court. The lead case
is In re Seadrill Limited (Bankr. S.D. Tex. Case No. 21-30427).
Seadrill Limited disclosed $7.291 billion in assets against $7.193
billion in liabilities as of the bankruptcy filing.
In the new Chapter 11 cases, the Debtors tapped Kirkland & Ellis
LLP as counsel; Houlihan Lokey, Inc. as financial advisor; Alvarez
& Marsal North America, LLC as restructuring advisor; Jackson
Walker LLP as co-bankruptcy counsel; Slaughter and May as co
corporate counsel; Advokatfirmaet Thommessen AS as Norwegian
counsel; and Conyers Dill & Pearman as Bermuda counsel. Prime Clerk
LLC is the claims agent.
On April 9, 2021, the board of directors of Debtor Seadrill North
Atlantic Holdings Limited unanimously adopted resolutions
appointing Steven G. Panagos and Jeffrey S. Stein as independent
directors to the board. Seadrill North Atlantic Holdings Limited
tapped Katten Muchin Rosenman LLP as counsel and AMA
CapitalPartners, LLC as a financial advisor at the sole direction
of independent directors.
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B R A Z I L
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BRAZIL: GDP Drops in 3Q by 0.1%, Reflecting Stability, Says IBGE
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Richard Mann at Rio Times Online reports that the Brazilian Gross
Domestic Product (GDP) decreased 0.1% in the third quarter of 2021,
compared to the previous three months, in the seasonally adjusted
series, reported the Brazilian Institute of Geography and
Statistics (IBGE).
Agriculture and Livestock fell 8%, Industry was stable, and
Services increased 1.1%, according to Rio Times Online.
There was, in the past, a consensus among economists and
specialists that a country's economy would be entering a
recessionary period, with a second consecutive quarterly fall, but
0.1% is not considered significant to demonstrate a fall, 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).
PETROLEO BRASILEIRO: To Up Price of Gas Sold to Distribution Firms
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Rio Times Online reports that Petroleo Brasileiro S.A. wants to
increase by 50% the price of the gas it sells to distribution
companies in Brazil and whose contracts expire this December.
The increase implies a rise of 8 to 12 dollars in the price per
million BTU, according to Rio Times Online.
The state-owned oil company defends the need to adjust the price of
gas to the international increase in LNG, but the distributors
question the fact that it is not complying with the opening of the
Brazilian market, the report relays.
In December, gas supply contracts between the state-owned oil and
distribution companies expire. Petrobras offered four-year
contracts with a 50% adjustment in gas price, the report discloses.
Distributors claim that the opening of the Brazilian market is not
being complied with, the report adds.
About Petrobras
Petroleo Brasileiro S.A. or Petrobras (in English, Brazilian
Petroleum Corporation - Petrobras) is a semi-public Brazilian
multinational corporation in the petroleum industry headquartered
in Rio de Janeiro, Brazil. Petrobras control significant oil and
energy assets in 16 countries in Africa, the Americas, Europe and
Asia. But, Brazil represents majority of its production.
The Brazilian government directly owns 54% of Petrobras' common
shares with voting rights, while the Brazilian Development Bank
and Brazil's Sovereign Wealth Fund (Fundo Soberano) each control
5%, bringing the State's direct and indirect ownership to 64%.
A corruption scandal was uncovered in 2014 that involved
Petrobras. The scandal related to money laundering that involved
Petrobras executives. The executives were alleged to get received
kickbacks from overpriced contracts, to the tune of about $3
billion in total.
S&P Global Ratings affirmed its 'BB-' global scale and its 'brAAA'
Brazilian national scale ratings on Petrobras on July 28, 2021.
Moody's Investors Service affirmed the 'Ba2' long term foreign
currency credit rating of Petrobras on August 23, 2019, with a
stable Outlook. Fitch revised outlook on Petrobras to negative and
affirmed 'BB-' long term foreign currency and local currency credit
ratings on May 7, 2020.
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D O M I N I C A N R E P U B L I C
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DOMINICAN REPUBLIC: Meat Still Expensive & Trending Upward
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Dominican Today reports that the price of a pound of meat, chicken,
and pork remains expensive in the market and with an upward trend,
as Christmas and New Year approach, according to sellers of both
products.
According to sellers, chicken sells for between 70 and 75 pesos,
while pork is offered at 90 and 95 pesos, who warn that prices may
rise more if the government does not import enough meat to supply
the market, the report notes.
"Here there is no price control, it is sold according to supply and
demand, and if the Government does not import enough meat, chicken
can be sold for more than 80 pesos at Christmas and New Year, and
pork at 110 pesos," Julio Alcantara a butcher in Villa Consuelo,
warned, according to Dominican Today.
Chicken and pork are the most consumed meats among the Dominican
population due to the high cost of beef, which sells for over 120
pesos, depending on the quality, the report relays.
The chicken is bought in bulk at 63 pesos per pound, to be sold at
70 and 75, according to the merchant Aridio Reinoso, owner of a
stall in the Cristo Rey market, the report discloses.
"We buy it at 63 and we have to sell it at 70 and 75 to be able to
earn something, but there are those who sell it up to 80, because
here there is no control of anything," said Reinoso, the report
notes.
Many food products have experienced increases in recent months,
attributed to the rise in the cost of international freight, the
report relays.
Some merchants allege that before the COVID-19 pandemic, bringing a
van to the country from China cost 2,500 dollars and that now the
same freight costs up to three times that amount, the report
discloses.
In raising chickens and pigs, raw material imported from different
parts of the planet is used, including corn and medicine used to
combat swine and poultry diseases, 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: S&P Affirms 'BB-' LT SCR, Outlook Now Stable
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S&P Global Ratings revised its outlook on the Dominican Republic to
stable from negative. S&P also affirmed its 'BB-' long-term foreign
and local currency sovereign credit ratings and its 'B' short-term
sovereign credit ratings. The transfer and convertibility (T&C)
assessment remains 'BB+'.
Outlook
The stable outlook reflects S&P's expectation of continued
favorable GDP growth and policy continuity over the next 12 to 18
months that will likely stabilize the government's debt burden,
despite lack of progress with broader tax reforms. A rapid economic
recovery from the downturn because of the pandemic should mitigate
external and fiscal risks.
Downside scenario
S&P could lower the ratings over the next 12 to 18 months if some
of the recent positive trends were to lose momentum, potentially
resulting in structurally weaker economic growth or a worsening
external profile. That could result in unexpectedly higher fiscal
deficits and a worse debt burden, leading to a downgrade.
Upside scenario
S&P said, "We could raise the ratings over the next 12 to 18 months
if there were a forceful track record of demonstrated capacity to
implement fiscal and other reforms that bolster the sovereign's
institutionality. We could also raise the ratings if a combination
of good GDP growth and improved fiscal performance results in a
structurally smaller fiscal deficit that reduces the sovereign's
debt and interest burden."
Rationale
S&P's 'BB-' long-term ratings on the Dominican Republic reflect its
fast-growing and resilient economy. Despite its vulnerability to
external shocks, the country has achieved an impressive economic
recovery following the latest unprecedented shock. The recovery has
corrected some of the sovereign's external and fiscal weaknesses.
The ratings also incorporate the country's historical political and
social challenges in passing structural reforms to contain fiscal
deficits and improve public-sector finances, despite recent
improvements in the electricity sector. The ratings are constrained
by relatively high debt, approaching 60% of GDP; a hefty interest
burden at 19% of government revenues; and the country's limited
monetary policy flexibility.
Institutional and economic profile: An impressive economic recovery
is mitigating the risks of long-standing delays in passing
structural reforms
-- The Dominican economy is posting an impressive recovery,
already surpassing pre-pandemic income and set to resume its
long-term trend growth by 2022.
-- Economic growth is mainly the result of private investment,
construction, manufacturing in free-trade zones, and a strong
tourism recovery.
-- The government's strong mandate in Congress and high popularity
have paved the way for some structural reforms, despite the
decision to delay a long-standing tax reform.
The Dominican Republic's economy is posting an impressive economic
recovery, following the severe impact of the pandemic. Backed by
private-sector investment and a recovery in tourism, GDP is set to
grow about 11% in 2021, after contracting 6.7% in 2020. As a
result, per capita GDP returned to its pre-pandemic level of about
$8,800 by mid-2021. S&P expects trend GDP growth to be 5% over the
next three years.
Tourism, one of the pillars of the economy, is recovering much
faster than expected, backed by a strong COVID-19 vaccination
campaign. Monthly arrivals already exceed pre-pandemic levels of
2019, suggesting a full recovery by the end of the year.
Furthermore, ongoing private investment, construction, domestic
consumption (helped by remittances), and manufacturing from
free-trade zones are driving economic reactivation.
The rapid recovery highlights the Dominican Republic's economic
dynamism, compared with peers with a similar level of development.
Our base case assumes GDP will grow 6% in 2022, as tourism fully
recovers, and by about 5% afterwards, driven by private-sector
investment.
Having said that, 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, more dangerous
variants."
An inability to pass and implement difficult fiscal- and
energy-sector reforms contributed to a deterioration in public
finances over the past decade, despite better GDP growth than in
most countries at a similar level of development. However, the
administration of President Luis Abinader of the Partido
Revolucionario Moderno (PRM) was able to advance important
structural reforms. For example, it secured approval of the
Electricity Pact in early 2021 (the pact was initially presented in
2017). The pact has led to the full dismantling of the inefficient
energy utility conglomerate and started a gradual increase in
electricity tariffs, which were frozen for 10 years. Furthermore,
there have been reforms to the judiciary, education, and police
force, among others. Nonetheless, the government's recent decision
to postpone a long-standing reform aimed at broadening the tax base
and increasing revenues demonstrates shortcomings in its ability to
undertake forceful and timely measures to strengthen public
finances. S&P expects that the Abinader Administration, which
enjoys a working majority in both chambers of Congress and governs
most municipalities, will pursue pro-investment policies and minor
steps to boost tax revenues and contain spending.
Despite economic recovery, the country's social indicators remain
relatively weak and have been affected by the pandemic. Poverty
will fall this year and remain around 20%. The rate of informality
in the labor market has risen recently to about 60%.
Flexibility and performance profile: External and fiscal buffers
have been rebuilt following a severe shock from the COVID-19
pandemic
-- Rising foreign currency inflows from tourism, rising exports,
record-high remittances, and long-term foreign direct investment
have reduced external debt vulnerabilities.
-- Higher government revenue collection and an inability to fully
execute public works are reducing the fiscal deficit and
stabilizing the debt burden.
-- The central bank has started monetary policy normalization
following a spike in inflation.
The rapid economic recovery has contained external vulnerabilities,
which had worsened during the pandemic. S&P said, "We expect
current account deficits (CAD) to stabilize around 2% of GDP over
the next two years as tourism fully recovers and extraordinarily
high remittances normalize. We expect the CAD to continue being
fully financed by foreign direct investment (FDI), projected at
3.2% of GDP in 2021-2024."
The improved external profile is due to higher current account
receipts (CARs), lower government financing needs, and recent
exchange-rate appreciation. S&P said, "We now project narrow net
external debt to decrease toward 87% of CARs in 2021-2024, similar
to pre-pandemic levels and down from a peak of 116% in 2020.
Nonetheless, the Dominican Republic remains exposed to sudden
changes in FDI flows since net external liabilities, which include
the high inward stock of FDI, account for about 200% of CARs.
External liquidity has remained relatively stable recently as
central bank foreign exchange reserves currently exceed 13% of GDP.
As a result, we expect the country's gross external financing needs
to remain about 85% of CARs plus usable reserves during
2021-2024."
The government has achieved strong fiscal consolidation in 2021,
following a steep hike in its fiscal deficit and debt in 2020.
Government revenues have recovered rapidly in line with an
impressive economic recovery, while expenditures have remained
curtailed by the inability to fully execute public works. The
government has also shifted its broad-based extraordinary subsidies
introduced during the pandemic into targeted transfers to the most
vulnerable. S&P said, "We project the general government deficit to
narrow to 4.2% of GDP this year (from 9.3% in 2020) and to slightly
decrease over the forecast horizon. Our definition of general
government includes the central government and the central bank
quasi-fiscal deficit, which accounts for 1.0%-1.5% of GDP."
S&P siad, "We do not project a substantial increase in government
revenues (as a share of GDP) over the coming years, given the
decision to postpone a tax reform. However, steps to improve
public-sector efficiency, reduce nonessential spending, and to cut
energy subsidies to distribution companies through quarterly
electricity tariff adjustments could narrow the consolidated fiscal
deficit.
"We expect the government to continue financing its fiscal deficits
largely through external borrowings, mainly in international debt
markets but also with official creditors. Despite some deepening in
recent years, shallow domestic markets limit the government's
capacity to raise debt internally.
"As a result of fiscal consolidation efforts and exchange-rate
appreciation this year, we expect the change in net general
government debt to narrow significantly to 3.4% of GDP in
2021-2024, after having reached 15.1% in 2020. We expect the
sovereign's net debt to stabilize just below 60% of GDP over the
forecast horizon. The net debt stock includes central bank
certificates (15% of GDP) and excludes the bonds that the central
government issued to capitalize the central bank (3% of GDP)
following the 2003-2004 bailout to the banking sector. Furthermore,
the historical reliance on international markets results in
vulnerability to currency depreciation, given that central
government debt in foreign currency is about 70% of total debt.
"We project interest payments to decline to around 19% of general
government revenues in 2021-2024, from 23% in 2020, as a result of
higher tax collections and active liability management operations
to reduce the cost of debt. The government successfully refinanced
its domestic and international debt for around $2.4 billion
maturing between 2021 and 2027. Our interest payment ratio
incorporates the interest paid to the central bank as a result of
its quasi-fiscal deficit, which stands around 2% of general
government revenue."
The central bank has begun tightening monetary policy as inflation
increased due to higher energy and food prices. The bank increased
its policy rates to 3.5% in November 2021 after keeping them at 3%
throughout the pandemic. It also started reducing the extraordinary
liquidity injected to the financial sector to withstand the
external shock. S&P expects inflation to remain within the central
bank's target in the coming years (4% plus or minus 1%).
The effectiveness of monetary policy is constrained by the central
bank's quasi-fiscal losses, a low level of domestic credit (about
30% of GDP), and shallow domestic debt and capital markets. An
ongoing negotiation between the Finance Ministry and the central
bank could allow for a gradual recapitalization of the bank over
the medium term, easing the central government's interest burden
and strengthening its policy tools.
S&P said, "We consider banking-sector contingent liabilities to be
limited, given its relatively small size, estimated at 58% of GDP.
The financial sector is concentrated in a few large banks, which we
consider to be systemic and have strong capital and liquidity
ratios. Since the last banking crisis in 2003, the central bank has
improved regulation and financial-sector oversight."
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
DOMINICAN REPUBLIC
Transfer & Convertibility Assessment
Local Currency BB+
DOMINICAN REPUBLIC
Senior Unsecured BB-
RATINGS AFFIRMED; CREDITWATCH/OUTLOOK ACTION
TO FROM
DOMINICAN REPUBLIC
Sovereign Credit Rating BB-/Stable/B BB-/Negative/B
=============
J A M A I C A
=============
SAGICOR SELECT: Funds Ends Third Quarter With $145MM Net Loss
-------------------------------------------------------------
RJR News reports that Sagicor Select Funds financial ended its
third quarter with a net loss of $145 million.
This was largely due to unrealized depreciation of $196 million in
the value of investments, as most of the securities in the Fund
recorded a fall in prices during the three months, according to RJR
News.
During the same period in 2020, the fund made a profit of $87
million, the report notes.
=====================
P U E R T O R I C O
=====================
CDT DE SAN SEBASTIAN: Jan. 26, 2022 Plan Confirmation Hearing Set
-----------------------------------------------------------------
On Oct. 13, 2021, Debtor CDT De San Sebastian Inc. filed with the
U.S. Bankruptcy Court for the District of Puerto Rico an Amended
Disclosure Statement referring to a Plan.
On Nov. 29, 2021, Judge Edward A. Godoy approved the Amended
Disclosure Statement and ordered that:
* Jan. 26, 2022 at 1:30 p.m., via Microsoft Teams is the
hearing for the consideration of confirmation of the Plan and of
such objections as may be made to the confirmation of the Plan.
* Objections to claims must be filed prior to the hearing on
confirmation.
* Acceptances or rejections of the Plan may be filed in
writing by the holders of all claims on/or before 14 days prior to
the date of the hearing on confirmation of the Plan.
* Any objection to confirmation of the plan shall be filed
on/or before 14 days prior to the date of the hearing on
confirmation of the Plan.
* The Debtor shall file with the Court a statement setting
forth compliance with each requirement in section 1129, the list
of
acceptances and rejections and the computation of the same, within
7 working days before the hearing on confirmation.
A copy of the order dated Nov. 29, 2021, is available at
https://bit.ly/3EdpL7Q from PacerMonitor.com at no charge.
Counsel for the Debtor:
Wallace Vazquez Sanabria
WVS LAW LLC.
17 Mexico Street, Suite D-1
San Juan, PR 00917-2202
Tel.: (787) 756-5730
Fax: (787) 764-0340
Email: wvslawllc@gmail.com
About CDT De San Sebastian
CDT De San Sebastian Inc. is a tax-exempt entity that operates an
outpatient care center in San Sebastian, P.R. The CDT has operated
for the last 34 years providing services to residents of San
Sebastian, Lares, Las Marias, Moca, Anasco and Isabela,
contributing to the economic growth of the region as one of the
principal employers of the Municipality of San Sebastian with
approximately 75 employees. CDT is managed by its president and
shareholder, Eduardo Rodriguez, MD.
CDT De San Sebastian sought Chapter 11 protection (Bankr. D.P.R.
Case No. 19-06636) on Nov. 13, 2019. At the time of the filing,
the Debtor disclosed assets of between $1 million and $10 million
and liabilities of the same range. Judge Brian K. Tester oversees
the case. The Debtor has tapped Jose Ramon Cintron, Esq., as its
legal counsel, and JE&MA CPA Consulting Solutions LLC, as its
accountant.
=============
U R U G U A Y
=============
URUGUAY: To Get $65M Loan for the Improvement of Road Corridors
---------------------------------------------------------------
The IDB Group has approved a $65 million loan to help Uruguay
repair several segments of road throughout the country. These
transport infrastructure improvements will play a key role in
boosting the competitiveness of the forestry and agro-industrial
industries.
The lockdown prompted by the COVID-19 pandemic, coupled with an
associated drop in demand, triggered a widespread decline in global
economic activity, and Uruguay was no exception - it saw its real
gross domestic product plunge by 4.5 percent in 2020.
The government has identified the transport infrastructure and
services sector as one of the pillars for the country's economic
recovery. The Bank's support will contribute to lower
transportation costs and boost exports competitiveness, thus
helping put Uruguay's productive sector back on its feet again.
Under the program to improve agroindustrial and forestry road
corridors, the National Development Corporation will use the funds
to rehabilitate and widen some road sections and bridges along
Route 6.
In addition to helping improve key road infrastructure, the funds
include an institutional strengthening component to finance
technical studies, procurement of technological equipment,
implementation of a new road asset management system, and the
design and implementation of a road transportation and
infrastructure management center.
This program is aligned the Vision 2025 created by the IDB Group to
achieve economic recovery and inclusive growth in Latin America and
the Caribbean in one of its key pillars - regional integration.
The IDB also deems essential to help prevent and mitigate
gender-based violence. Therefore, it contemplates the
implementation of measures to help close the gap of female
participation in the labor force through technical training,
mentoring and internship program with equal participation for women
and men.
The program's total cost is $77.8 million, of which $65 million
will be financed by the Bank, with the remaining $12.8 million
coming from local counterpart funding. The IDB loan will be
disbursed over a 4-year period, which is in sync with the program's
works schedule, and has a 14-year repayment term, with a 5.5-year
grace period and interest rate based on LIBOR.
===============
X X X X X X X X
===============
[*] BOND PRICING: For the Week Nov. 29 to Dec. 3, 2021
------------------------------------------------------
Issuer Name Cpn Price Maturity Country Curr
----------- --- ----- -------- ------- ---
Noble Holding Internat 5.3 60.5 3/15/2042 KY USD
Provincia de Cordoba 7.1 72.7 8/1/2027 AR USD
Provincia de Buenos Ai 7.9 75.3 6/15/2027 AR USD
Province of Santa Fe 6.9 74.7 11/1/2027 AR USD
Argentine Republic Gov 6.9 75.2 1/11/2048 AR USD
Argentina Bonar Bonds 5.8 75.2 4/18/2025 AR USD
City of Cordoba Argent 7.9 73.1 9/29/2024 AR USD
Odebrecht Finance Ltd 6.0 16.4 4/5/2023 KY USD
Odebrecht Finance Ltd 6.0 16.4 4/5/2023 KY USD
Provincia del Chaco Ar 4.0 0.0 12/4/2026 AR USD
YPF SA 16.5 67.3 5/9/2022 AR ARS
YPF SA 16.5 67.3 5/9/2022 AR ARS
Cia Energetica de Pern 6.2 1.1 1/15/2022 BR BRL
Polarcus Ltd 5.6 71.8 7/1/2022 AE USD
Argentine Republic Gov 0.5 27.6 12/31/2038 AR JPY
Noble Holding Internat 6.1 62.0 3/1/2041 KY USD
Provincia de Cordoba 7.1 74.7 8/1/2027 AR USD
YPF SA 16.5 67.3 5/9/2022 AR ARS
Argentine Republic Gov 8.3 74.5 12/31/2033 AR USD
AES Tiete Energia SA 6.8 1.2 4/15/2024 BR BRL
Enel Americas SA 5.8 32.7 6/15/2022 CL CLP
Cia Latinoamericana de 9.5 73.9 7/20/2023 AR USD
KrisEnergy Ltd 4.0 40.4 6/9/2022 SG SGD
Banco Macro SA 17.5 65.2 5/8/2022 AR ARS
Fospar S/A 6.5 1.2 5/15/2026 BR BRL
Provincia de Rio Negro 7.8 70.4 12/7/2025 AR USD
Argentine Republic Gov 8.3 72.9 12/31/2033 AR USD
Argentine Republic Gov 8.3 74.5 12/31/2033 AR USD
Argentina Bonar Bonds 7.6 74.4 4/18/2037 AR USD
Avadel Finance Cayman 4.5 55.0 2/1/2023 US USD
Cia Latinoamericana de 9.5 74.3 7/20/2023 AR USD
Noble Holding Internat 6.2 62.2 8/1/2040 KY USD
Province of Santa Fe 6.9 74.7 11/1/2027 AR USD
Provincia de Rio Negro 7.8 70.3 12/7/2025 AR USD
Sylph Ltd 2.4 65.1 9/25/2036 KY USD
Banco Macro SA 17.5 65.2 5/8/2022 AR ARS
Odebrecht Finance Ltd 6.0 16.4 4/5/2023 KY USD
Esval SA 3.5 49.9 2/15/2026 CL CLP
Metrogas SA/Chile 6.0 41.6 8/1/2024 CL CLP
Province of Santa Fe 6.9 75.2 11/1/2027 AR USD
Argentine Republic Gov 8.3 72.9 12/31/2033 AR USD
Argentine Republic Gov 7.1 75.7 6/28/2117 AR USD
Provincia del Chaco Ar 9.4 74.8 8/18/2024 AR USD
Provincia de Rio Negro 7.8 70.3 12/7/2025 AR USD
Automotores Gildemeist 6.8 54.9 1/15/2023 CL USD
Argentine Republic Gov 8.3 72.9 12/31/2033 AR USD
Provincia del Chubut A 4.5 2208 3/30/2021 AR USD
Argentine Republic Gov 4.3 70.0 12/31/2033 AR JPY
Automotores Gildemeist 6.8 54.9 1/15/2023 CL USD
Province of Santa Fe 6.9 75.2 11/1/2027 AR USD
Argentine Republic Gov 6.3 74.1 11/9/2047 AR EUR
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Latin America is a daily newsletter
co-published by Bankruptcy Creditors' Service, Inc., Fairless
Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C.,
USA, Marites O. Claro, Joy A. Agravante, Rousel Elaine T.
Fernandez, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A.
Chapman, Editors.
Copyright 2021. All rights reserved. ISSN 1529-2746.
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