/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/211216.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 16, 2021, Vol. 22, No. 245 Headlines B R A Z I L BRAZIL: Gets $100M IDB Loan to Boost Drinking Water Access in Para C A Y M A N I S L A N D S XANTHOS CAPITAL: First Creditors' Meeting on January 12 D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: People Say Tourism Dodged a Bullet E L S A L V A D O R GRUPO UNICOMER: Fitch Affirms 'BB-' LT IDRs, Alters Outlook to Pos. H A I T I HAITI: CDB Approves US$6.9M Natural Hazard Insurance J A M A I C A SAGICOR FINANCIAL: Reopens Senior Note Offering to Raise US$150M M E X I C O FINDEP: Fitch Affirms 'BB-' IDRs, Alters Outlook to Stable GRUPO AEROMEXICO: Gibson Dunn 2nd Update on Claimholders P U E R T O R I C O HOSPEDERIA VILLA: Seeks Cash Access Until Dec 31 X X X X X X X X LATAM: IDB Approves Additional $1.8B for Sustainable Development LATAM: IDB Approves US$1.65 BB Aid for Six Countries - - - - - =========== B R A Z I L =========== BRAZIL: Gets $100M IDB Loan to Boost Drinking Water Access in Para ------------------------------------------------------------------ More than 407,000 households will benefit from new or improved connections to drinking water and sanitation services thanks to a $100 million loan from the Inter-American Development Bank (IDB). The IDB approved a $100 million loan to finance drinking water, sanitation, and wastewater treatment projects in the metropolitan area of Belem, in the state of Para, Brazil. The loan is part of the Para Sanitation Development Project (PRODESAN), which will have a $25 million contribution from the state of Para, for a total of $125 million. The program's objective is to improve health conditions among the population of the Metropolitan Region of Belem, and specifically the municipalities of Belem, Ananindeua, and Marituba. The initiative will benefit nearly 407,000 households with new or improved connections to drinking water, sanitary sewerage, and wastewater treatment services. To achieve this goal, the program will finance infrastructure works for drinking water supply, sanitary sewage extension, and the construction of a wastewater treatment plant. Likewise, the project seeks to improve the operational efficiency of water supply services provided by the Para Sanitation Company (COSANPA) by modernizing its production systems and distribution network to reduce losses and increase energy efficiency. Additionally, the initiative will support the company's institutional strengthening through programs to improve operational, commercial, and asset management. The program also includes the development and implementation of an innovation and digital transformation plan for COSANPA, along with an internal and external gender policy. This project is aligned with the IDB Group's Vision 2025, which prioritizes social inclusion and equality, productivity and innovation, economic integration, and resilience to climate change. The loan has disbursement period of 5 years, with a 25-year amortization period, and a 5.5-year grace period. The interest rate is based on LIBOR. 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. 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 2021 with stable outlook. 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. Moody's credit rating for Brazil was last set at Ba2 with stable outlook (April 2018). DBRS's credit rating for Brazil is BB (low) with stable outlook (March 2018). =========================== C A Y M A N I S L A N D S =========================== XANTHOS CAPITAL: First Creditors' Meeting on January 12 ------------------------------------------------------- Xanthos Capital Partners Limited, in liquidation, will have its first meeting of creditors on Jan. 12, 2022 at 11:00 a.m. Creditors should submit notice of intention not later than 5:00 pm, Jan. 10, 2022 in order to join the meeting. The company's liquidators are: Naill Freeman Kalo (Cayman) Limited 38 Market Street, Suite 4208 PO Box 776, Canella Court Cayman Bay, Grand Cayman KYI-9006 Cayman Island =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: People Say Tourism Dodged a Bullet ------------------------------------------------------ Dominican Today reports that the tourism industry was forced to reinvent itself to promote one of the most amazing recoveries of the Dominican economy, with a record arrival of 519,349 tourists in November this year, surpassing the figures achieved in November 2019, prior to the pandemic. It is undeniable that to achieve those results, a lot of work has been done so that hotels, bars and restaurants will be able to adapt to a totally transformed world with a more demanding tourist, more technologically savvy, with a range of available offers that exceeds the all-inclusive, willing to live less conventional experiences and at lower costs, according to Dominican Today. The Dominican tourism industry realized in time the importance of joining the efforts that the Government was making to achieve a high degree of vaccinated people that would allow a sustainable economic opening and focused on demanding two doses of vaccine from its workers, as a sure way to attract a tourist eager for freedom but afraid of getting sick, 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. As reported in the Troubled Company Reporter-Latin America on Dec. 10, 2021, Fitch Ratings has revised the Outlook on Dominican Republic's Long-Term Foreign-Currency Issuer Default Rating (IDR) to Stable from Negative and affirmed the IDRs at 'BB-' TCRLA reported in April 2019 that the Dominican Today related that Juan Del Rosario of the UASD Economic Faculty cited a current economic slowdown for the Dominican Republic and cautioned that if the trend continues, growth would reach only 4% by 2023. Mr. Del Rosario said that if that happens, "we'll face difficulties in meeting international commitments." An ongoing concern in the Dominican Republic is the inability of participants in the electricity sector to establish financial viability for the system. Fitch Ratings on Jan. 18, 2021, assigned a 'BB-' rating to Dominican Republic's USD1.5 billion 5.3% notes due Jan. 21, 2041. Concurrently, the Dominican Republic reopened its 2030 4.5% notes for an additional USD1.0 billion, which Fitch rates 'BB-', raising the total outstanding amount of the 2030 notes to USD2.0 billion. Standard & Poor's, on December 4, 2020, affirmed its 'BB-' long-term foreign and local currency sovereign credit ratings on the Dominican Republic. The outlook remains negative. S&P also affirmed its 'B' short-term sovereign credit ratings. The negative outlook reflects S&P's view that it could lower the ratings on the Dominican Republic over the next six to 18 months, given the severe impact of the COVID-19 pandemic on the sovereign's already vulnerable fiscal and external profiles, as well as the potential for a weaker-than-expected economic recovery. Moody's credit rating for Dominican Republic was last set at Ba3 with stable outlook (July 2017). Fitch's credit rating for Dominican Republic was last reported at BB- with negative outlook (May 8, 2020). ===================== E L S A L V A D O R ===================== GRUPO UNICOMER: Fitch Affirms 'BB-' LT IDRs, Alters Outlook to Pos. ------------------------------------------------------------------- Fitch Ratings has affirmed Grupo Unicomer Corp.'s Long-Term Local and Foreign Currency Issuer Default Ratings (IDRs) and USD350 million senior notes due 2024 at 'BB-'. The Rating Outlook has been revised to Positive from Stable. The Positive Outlook reflects Fitch's expectations that Unicomer's operating results and credit metrics will continue improving within the next 18-24 months after weakening during the coronavirus pandemic. The company quickly responded to the challenges in 2020-2021 on its retail and financial businesses and Fitch expects Unicomer will benefit from the recovery of consumer spending in the markets where it operates. Fitch projects the company's revenues and EBITDAR will reach pre-pandemic levels by YE 2022, and total adjusted debt to EBITDAR (pre IFRS 16) and total adjusted net debt to EBITDAR will strengthen toward 4.5x and below 4.0x, respectively, by 2023-2024. Also, retail-only adjusted net leverage is projected to be below 3.5x for the same period. KEY RATING DRIVERS Post Pandemic Recovery: Fitch expects Unicomer's consolidated revenues and EBITDAR will increase 7% and 43%, respectively, in 2022. The recovery in revenues will be mainly supported by higher sales from its retail business as physical stores normalize their operations and a gradual recovery in its finance income associated with its credit portfolio. EBITDAR growth will be mainly driven by a decline of impairment provisions and credit portfolio growth and collections. For the first six months ended September 2021, the company's revenues increased 16% to USD757 million when compared with the same period in 2020, while EBITDAR (pre IFRS 16) reached approximately USD109 million after being negative the previous year. Leverage Declining: Unicomer's ratings incorporate its leverage metrics returning to historical levels after peaking in 2021 due to the disruptions of the coronavirus pandemic. The company's consolidated net adjusted debt to EBITDAR is projected by Fitch to be around 4.1x by FY 2022 and then should continue to decline in the absence of major acquisitions or investments in its retail and financial businesses. Unicomer's total debt as of September 2021 was USD708 million, of which an important portion is related to the financial business and is repaid with credit portfolio collections. Excluding the consumer finance business, Fitch projects that the retail-only adjusted net leverage ratio, calculated pre-IFRS 16, would be close to 3.8x by FY 2022. Positive FCF: Fitch expects Unicomer will maintain its consistent FCF capacity in the medium term. While the company's cash flow from operations (CFFO) is projected to be at lower levels in 2022 due to higher net working capital requirements, particularly higher inventory to mitigate the effects of supply disruptions, Fitch anticipates that it will recover to over USD80 million by 2023 and onward. CFFO will be sufficient to cover annual capex and dividends payments, which are estimated at USD35 million and USD16 million, respectively. FCF is projected to be above USD20 million in 2023 and onward. For the last twelve months (LTM) ended in September 2021, the company generated USD7 million of CFFO and had a negative USD13 million of FCF. Stable Portfolio Net Yield: The company's consumer finance strategy includes sufficient financial spreads to cover credit risks in the portfolio. During the past five years, the portfolio yield after deducting uncollectable expenses and write-offs has been nearly 35% on average. As of Sept. 30, 2021, Unicomer's credit portfolio had NPLs of 9.1% (past due accounts for 90 days or more), significantly lower than that of a year ago of 17.1%. The company has provisions equivalent to 145% of those NPLs. The level of overdue accounts is partially offset by the company's efficient collection program and portfolio yield. Solid Business Position: Grupo Unicomer has commercial operations in 27 countries across Central America, South America and the Caribbean. The company has a track record of more than 19 years in consumer durables sales, which enabled it to develop long-term relationships with suppliers. These relationships provide competitive advantages in terms of store location within small countries, where prime retailing points of sale are very limited. The company maintains a leading business position in the retailing of consumer durable goods. This is supported by proprietary financing services and economies of scale in terms of purchasing power and logistics. Geographic and Format Diversification: Geographic diversification allows Unicomer to have a broad revenue base, supported by different economic dynamics and mitigates the company's country risk from any individual market. Costa Rica, Jamaica, El Salvador, Trinidad and Tobago, and Guyana are among the most important cash flow contributors, which gives Unicomer some strength and stability to operating cash flows. Despite geographic diversification, most of the Sovereign Ratings of countries in which the company operates are in the 'B' rating category. The company has several store formats and brands across operations that cover different socioeconomic segments of the population. Strong Shareholders: Unicomer's ratings are viewed on a standalone basis; however, the ratings consider the sound financial position of Unicomer shareholders Milady Group and El Puerto de Liverpool, S.A.B. de C.V. (BBB+/Stable), each of which owns 50.1% and 49.9%, respectively, of Unicomer. In Fitch's view, the shareholders' solid credit profiles give flexibility to Unicomer, as the shareholders' financial positions do not rely on Unicomer's dividend payments. Milady's operations include real estate developments, department store chains, all Inditex's franchises in Central America, and a vertically integrated textile manufacturing and wholesaling business. Liverpool, a department store business with 287 units and 28 shopping malls in Mexico, had approximately USD5.6 billion in total revenues during 2020. DERIVATION SUMMARY The company has about the same scale in number of stores as Grupo Elektra, S.A.B. de C.V. (BB/Stable), while El Puerto de Liverpool S.A.B. de C.V. (BBB+/Stable) and Grupo Sanborns S.A.B. de C.V. (AAA(mex)/Stable) has fewer stores. Unicomer's credit portfolio is smaller in size than Elektra's and Liverpool's, but bigger than GSanborns. The company is more geographically diversified than Elektra, Liverpool and GSanborns, which mitigates Unicomer's operating risk of any individual market. From a financial profile view, the company maintains lower profitability margins and higher leverage than its Mexican peers. Unicomer's operating margins are healthy, while Elektra has the stronger operating margins of the four companies. As per Fitch's criteria, Unicomer's applicable Country Ceiling is 'BB'. At the current rating level, the operating environments (OE) of the countries where the company has operations do not constrain the ratings, but the OE cap the ratings in the upper 'BB' rating range. KEY ASSUMPTIONS Fitch's key assumptions within the rating case for the issuer include: -- Consolidated revenues grow 6.6% for FY 2022 and 6.4% on average for FY 2023-FY 2025; -- An EBITDAR margin of 10.9% during FY 2022 and 11.7% on average for FY 2023 to FY 2025; -- Capex of USD30 million for FY 2022 and USD38 million per year on average for FY 2023 to FY2025; -- Dividend payments around USD16 million for FY 2022 to FY 2025; -- NPLs recover gradually to historical levels; -- Potential inorganic growth in FY 2023-FY 2025. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Diversification of operating subsidiaries in countries with lower sovereign risk; -- Consolidated adjusted net leverage close to 4.0x on a sustained basis; -- Retail-only adjusted net leverage close to 3.5x on a sustained basis; -- Maintained credit quality of the portfolio and significant reduction in its current maturities, resulting in a consistent ratio of cash plus CFFO/short-term debt of 1.0x. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Sustained deterioration in overdue accounts from the consumer finance business; -- A significant reduction in cash flow generation that results in sustained negative FCF margin; -- Further debt-financed acquisition activity resulting in a consolidated net adjusted debt/EBITDAR above 5.0x; -- Retail-only net adjusted leverage above 4.5x on a sustained basis; -- Deterioration of liquidity compared with short-term debt; -- Sustained deterioration in the operating environment of countries where Unicomer operates. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Non-Financial Corporate issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. LIQUIDITY AND DEBT STRUCTURE Adequate Liquidity: Unicomer reported total debt of USD708 million, as of Sep. 30, 2021, of which USD153 million was short-term. This level of short-term debt compares with USD88 million of cash and marketable securities and a short-term credit receivables portfolio of USD431 million. Fitch believes Unicomer's liquidity cushion of cash on hand and operating cash flows coupled with its receivables portfolio will be sufficient to cover short-term debt. The liquidity ratio, measured as FCF plus cash and marketable securities over short-term debt, was 0.6x as of Sep. 30, 2021. When including short-term account receivables in the calculation, the ratio increases to 3.4x. ISSUER PROFILE Grupo Unicomer Corp. (Unicomer) is a leading retailer of durable consumer goods with operations in Central America, South America and the Caribbean. The company operates 1,153 points of sale and 4.2 million square feet of retail space with different store formats and brands. ESG CONSIDERATIONS Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. ========= H A I T I ========= HAITI: CDB Approves US$6.9M Natural Hazard Insurance ---------------------------------------------------- RJR News reports that the Board of Directors of the Caribbean Development Bank (CDB) approved funding for the full premium for natural hazard insurance for Haiti. The Bank is providing $US6.9 million as a grant on a one-time request by the Haitian Government to cover the premium of the Caribbean Catastrophe Risk Insurance Facility Segregated Portfolio Company (CCRIF SPC) for the period 2021/2022, according to RJR News. Haiti suffered its latest disaster in August this year, with the occurrence of a 7.2 magnitude earthquake, the report notes. The event triggered the largest single pay-out by CCRIF SPC, with a total of US$40 million, the report adds. ============= J A M A I C A ============= SAGICOR FINANCIAL: Reopens Senior Note Offering to Raise US$150M ---------------------------------------------------------------- Jamaica Observer reports that following its successful US$400-million senior note offering in May, Sagicor Financial Company Limited (SFC) has reopened the offer to raise an additional US$150 million ($23.31 billion) for general corporate purposes including, but not limited to, supporting the growth in its US business (Sagicor Life USA). SFC refinanced US$318.1 million of its 2022 debt which resulted in the company saving US$7.2 million in annual interest expenses plus US$70 million in net proceeds for general corporate purposes, according to Jamaica Observer. The new notes were issued at an interest rate of 5.30 per cent and are redeemable in May 2028, the report notes. As guarantors of the new offer, SFC and Sagicor Life USA have entered into a note purchase agreement with JP Morgan Securities LLC and RBC Capital Markets LLC who represent several initial purchasers, the report relays. According to an article by Latin Finance, the offer garnered US$200 million in subscriptions. It was further noted that it was priced at US$101.50 to yield 5.023 per cent which was just above the original offer price of US$101, the report relays. Sagicor Investments Jamaica Limited and JMMB Securities Limited were mentioned as joint book runners, the report discloses. With a strong interest to grow its USA business and move up in its credit ratings, SFC is executing more internal reinsurance transactions through Sagicor Reinsurance Bermuda Limited to optimise its capital structure, the report relays. In quarter two (Q2) 2020, US$195 million of financial instruments and insurance risks associated with certain policies from Sagicor Life USA were transferred to the reinsurance subsidiary, the report notes. The company did another reinsurance transaction in April and expects to complete another one in Q1 2022, the report discloses. "With respect to the specific strategy on this block of business out of the US, effectively, we were taking advantage of the ability to unlock redundant reserves. None of that changes the underlying cash flows of the policies, and so you would see a recovery of some of that income loss over time," said chief financial officer of SFC Andre Mousseau in an August 2020 earnings call, the report notes. Fitch Ratings reaffirmed SFC's Long-Term Issuer Default Rating at BB with a stable outlook. Fitch also affirmed the debt rating of its senior notes at BB-. In a release, Fitch made mention of SFC's MCCSR (Minimum Continuing Capital Surplus Requirements) ratio at 247 per cent and financial leverage at just 29 per cent. However, it made mention that the company's rating is constrained by its heavy concentration in Jamaica and Barbados which is influenced by the economic environment and sovereign risk. An investment grade rating is BBB- and up with an upgrade putting SFC at BB+. "The affirmation of SFCL's ratings considers the company's 'less favorable' business profile, which is heavily influenced by the economic environment and sovereign risks of Barbados and Jamaica. SFCL's investment portfolio has considerably above average investment risk relative to the industry. SFCL's investment portfolio has substantial concentrations in Jamaica and Barbados sovereigns. These investments are primarily used to meet regulatory requirements and for insurance liability matching purposes; as a result the portfolio has a significant concentration of below investment-grade debt," the release stated. As reported in the Troubled Company Reporter on Dec. 8, 2021, Fitch Ratings has affirmed Sagicor Financial Company Limited's (SFCL) Long-Term Issuer Default Rating (IDR) at 'BB'. Fitch has also affirmed SFCL's senior debt ratings at 'BB-'. The Rating Outlook is Stable. =========== M E X I C O =========== FINDEP: Fitch Affirms 'BB-' IDRs, Alters Outlook to Stable ---------------------------------------------------------- Fitch Ratings has revised Financiera Independencia S.A.B. de C.V., SOFOM, E.N.R.'s (Findep) Rating Outlook to Stable from Negative, and affirmed its Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) and global senior unsecured debt at 'BB-', and Short-Term Local and Foreign Currency IDRs at 'B'. In addition, Fitch has affirmed Findep's, and its subsidiary Apoyo Economico Familiar S.A. de C.V., SOFOM, E.N.R.'s (AEF), Long- and Short-Term National Scale ratings at 'A-(mex)' and 'F1(mex)', respectively. The Rating Outlook on the Long-Term national ratings was also revised to Stable from Negative. The Stable Outlook reflects Fitch's expectation that asset quality and pandemic-related profitability pressures have eased, and the entity will be able to sustain such factors at levels commensurate with its rating. In Fitch's view, Findep has adequately adapted its business strategy to the new economic conditions and strengthened its financial profile, as reflected by improved profitability ratios, more stable asset quality and loan growth in Mexico and the U.S. Findep's relatively low leverage and comfortable liquidity position provide an adequate cushion to absorb current sector risks. KEY RATING DRIVERS Findep's company profile highly influences its ratings. Despite its moderate size, Findep has a well-positioned franchise in the microfinance sector with geographic diversification, mainly in Mexico and U.S. However, its specialized business model focus on unsecured and consumer and microfinance lending to low income customers is highly sensitive to economic conditions. In Fitch's view, Findep adequately adapted its business model to economic conditions with its strategy to exit some of its riskier business lines back in 2020 to contain asset quality deterioration, while rapidly stabilizing loan growth. In October 2021, Findep announced an additional agreement to sell its subsidiary, Finsol Brazil to OMNI S.A. - CRÉDITO, FINANCIAMENTO E INVESTIMENTO .Finsol Brazil's loan portfolio represented approximately 4% of Findep's total loan portfolio as of September 2021. The company's ratings also consider, with high importance, Findep's recently improved profitability ratios. As of September 2021, the pre-tax income to average asset ratio increased to 6.3% from losses of 3.0% at YE 2020 (average 2017-2020:1.6%), underpinned by increased business volumes, lower credit costs and interest expenses, along with reduced operating expenses. Loan impairment charges represented a moderate 53.9% of pre-impairment operating profit (2020: 125%, 2019:75.8%) and net interest margin (NIM) remains stable ranging from 51 to 55% over the past three years. Fitch believes Findep's profitability ratios could remain supported by higher loan growth, driven by the expected recovery of the U.S. and Mexican economies, and controlled operating expenses. Although some additional pressures on asset quality could arise due to the vulnerable segment the company serves and increasing interest rates, Fitch believes its current assessment on profitability captures such risks. Fitch has maintained its assessment of Findep's operating environment (OE) at 'bbb-' and revised the trend to stable, and its relative importance to moderate. The operating environment assessment considers a blended approach and incorporates the company's operations in Mexico and the U.S., which represented roughly 56% and 40% of the total loan portfolio as of September 2021. The stable trend on the OE reflects an easing of downside risks despite the still challenging economic conditions and benefits from the extended footprint in the U.S. Fitch has revised the OE's importance to moderate, as the OE and sovereign rating no longer constrain Findep's 'BB-' IDR. Delinquency ratios stabilized at levels similar to pre-pandemic averages; however, they remain high compared to peers and represent the financial profile's main weakness. As of September 2021, non-performing loans (NPL) decreased to 3.8% compared to 5.1% at YE 2020, while the adjusted impairment ratio (considering charge offs) was 18.9%, lower than 24.9% at YE 2020 (average 2017-2020:20.7%). As of 3Q21, trailing 12 months charge offs decreased 24%, and the restructured loan portfolio represented a low 1.6% of total portfolio. Fitch does not expect the asset quality score to change; however, asset quality will remain challenged by the effects from the pandemic. Findep's leverage position remains sound and compares favorably with similarly rated peers. As of 3Q21, Findep's tangible debt-to-capital ratio improved to 1.9x from its 2020 and 2019 levels of 2.6x and 3.4x, respectively. Improvements in the company's leverage were mostly due to a reduction in the company's indebtedness, moderate loan expansion and net income recovery. Findep's capitalization and loan losses reserves reflect a reasonable capacity to absorb losses. Fitch expects Findep's capitalization ratios to remain commensurate with its current rating. Fitch deems Findep's funding profile as appropriate and more flexible than other non-bank financial institutions rated by Fitch. This is due to a higher proportion of unsecure funding, although with some concentration in global and local debt markets, which is sensitive to investor sentiment. As of 3Q21, Findep's unsecured debt-to-total debt ratio was 68.5% derived entirely from its global unsecured bond. Findep's liquidity position is comfortable in Fitch´s opinion, as of 3Q21 cash on hand and available credit facilities covered around 187% of debt maturities in the next 12 months. On the other hand refinancing risk remains modest, as the FINDEP24 unsecured bond maturity will occur in July 2024 and total debt outstanding (MXN 3,638 million) represents 67% of Findep's total liabilities, however available credit facilities and cash in balance covered around 83% of this amount as of 3Q21. The entity reported related party transactions that accounted for 58.6% of total capital and 92.3% of the total tangible equity as of September 2021. Such transactions are mostly related to credit facilities granted to AEF and AFI for loan origination, and are consolidated in Findep's financial statements. In Fitch's view, related party transactions are higher than other rated non-financial institutions, which heavily influences the agency's assessment of corporate governance. Findep's global debt issuance is in line with its respective corporate rating level, as the debt is senior unsecured. Apoyo Economico Familiar (AEF) AEF's national ratings are driven by Findep's ability and propensity to provide support if required. Fitch's assessment of support considers, with high importance the high level of management and operational integration and funding fungibility, as well as the core role of AEF in the group strategy. AEF's customer base accounts for about one third of the group's clients and the company also focuses on consumer loans. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: Findep -- Over the medium term, the ratings could be upgraded by a significant and sustained improvement in the company's overall financial profile, particularly profitability and asset quality. In particular, a material strengthening of Findep's franchise and business model consistency combined with the maintenance of profitability ratio consistently above 3.5%, in conjunction with a reduction of adjusted NPL ratios could lead to an upgrade. AEF -- An upgrade of AEF's ratings will be driven by an upgrade of Findep's ratings. Factors that could, individually or collectively, lead to negative rating action/downgrade: Findep -- A downgrade of Findep's ratings could be triggered by a material deterioration in the company's asset quality, which sustains profitability ratios consistently below 1%, and weakens its capital position. Specifically, a sustained increase in the debt/tangible equity ratio consistently above 5.5x would be negative. -- A downgrade could also arise from a relevant deterioration of Findep's business prospects and diversification, which could result in a change on Fitch's assessment of its company profile and operating environment. -- A significant change to its funding structure or liquidity management could also lead to a downgrade. AEF -- AEF's ratings could be downgraded if Findep's ratings are downgraded or by a change on Fitch's evaluation of the entity's strategic importance to the parent. SENIOR UNSECURED DEBT Senior unsecured debt ratings would mirror any changes in Findep's IDRs or could be downgraded below Findep's IDR if the level of unencumbered assets substantially deteriorates, subordinating bondholders to other debt. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Financial Institutions and Covered Bond issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. SUMMARY OF FINANCIAL ADJUSTMENTS Pre-paid expenses and other deferred assets were reclassified as intangibles and deducted from equity to reflect their low loss absorption capacity. PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS AEF´s rating are driven by support from Financiera Independencia ESG CONSIDERATIONS Findep has an ESG Relevance Score of '4' for Customer Welfare - Fair Messaging, Privacy & Data Security as its business model has high lending rates to unbanked, lower-income segments of the population which exposes Findep to relatively high regulatory, legal and reputational risks. This has a negative impact on the credit profile and is relevant to the rating in conjunction with other factors. Findep has an ESG Relevance Score of '4' for Exposure to Social Impacts given that its business model (individual loans to low-income segments) is exposed to shifts of consumer or social preferences or to measures that the government could take to increase financial inclusion. This has a negative impact on the credit profile and is relevant to the rating in conjunction with other factors. Fitch has revised Findep's Management Strategy ESG Relevance Score to '3' from '4' as the frequent managerial shifts that occurred in the past no longer have a negative impact on the entity. Findep rapidly adapted its business model to new economic conditions and on-going management execution has efficiently enhanced financial performance. The ESG Score of '3' implies that this issue is credit neutral or has only minimal credit impact on the entity. Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. GRUPO AEROMEXICO: Gibson Dunn 2nd Update on Claimholders -------------------------------------------------------- Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure, the law firm of Gibson, Dunn & Crutcher LLP submitted a second amended verified statement to provide an updated list of Claimholders that it is representing in the Chapter 11 cases of Grupo Aeromexico, S.A.B. de C.V., et al. On or about July 2021, certain members of the Ad Hoc Group of Unsecured Claimholders retained attorneys presently with Gibson, Dunn & Crutcher LLP to represent them as counsel in connection with the pending chapter 11 cases of the above- captioned debtors and certain of their subsidiaries and affiliates. From time to time thereafter, certain additional holders of unsecured claims have joined the Ad Hoc Group of Unsecured Claimholders. On August 9, 2021, the Ad Hoc Group of Unsecured Claimholders filed the Verified Statement of the Ad Hoc Group of Unsecured Claimholders Pursuant to Bankruptcy Rule 2019 [Docket No. 1530]. On September 17, 2021, the Ad Hoc Group of Unsecured Claimholders filed the First Amended Verified Statement of the Ad Hoc Group of Unsecured Claimholders Pursuant to Bankruptcy Rule 2019 [Docket No. 1733]. Since that time, the membership of the Ad Hoc Group of Unsecured Claimholders and the disclosable economic interests in relation to the Debtors held or managed by such members has changed. The Ad Hoc Group of Unsecured Claimholders submits this Amended Verified Statement accordingly. Gibson Dunn represents the members of the Ad Hoc Group of Unsecured Claimholders in their capacity as holders of general unsecured claims asserted against one or more of the Debtors. Gibson Dunn does not represent or purport to represent any other entities in connection with the Debtors' chapter 11 cases. Gibson Dunn does not represent the Ad Hoc Group of Unsecured Claimholders as a "committee" and does not undertake to represent the interests of, and is not a fiduciary for, any creditor, party in interest, or other entity that has not signed a retention agreement with Gibson Dunn. In addition, the Ad Hoc Group of Unsecured Claimholders does not represent or purport to represent any other entities in connection with the Debtors' chapter 11 cases. Upon information and belief formed after due inquiry, Gibson Dunn does not hold any disclosable economic interests in relation to the Debtors. As of Dec. 4, 2021, members of the Ad Hoc Group of Unsecured Claimholders and their disclosable economic interests are: Unsecured Claims ---------------- Bank of America $32,492,534.00 National Association Gateway Village #900 900 West Trade St. NC1-026-05-41 Charlotte, NC 28202 Nut Tree Capital Management $150,000,000.00 55 Hudson Yards 22nd Floor New York, NY 10001 P. Schoenfeld Asset Management $29,300,000.00 1350 6th Avenue 21st Floor New York, NY 10019 The Ad Hoc Group of Unsecured Claimholders, through its undersigned counsel, reserves the right to amend or supplement this Amended Verified Statement in accordance with the requirements of Bankruptcy Rule 2019 at any time in the future. Counsel to the Ad Hoc Group of Unsecured Claimholders can be reached at: GIBSON, DUNN & CRUTCHER LLP Joshua K. Brody, Esq. Scott J. Greenberg, Esq. Matthew J. Williams, Esq. 200 Park Avenue New York, NY 10166 Telephone: (212) 351-4000 Facsimile: (212) 351-4035 E-mail: jbrody@gibsondunn.com sgreenberg@gibsondunn.com mjwilliams@gibsondunn.com A copy of the Rule 2019 filing is available at https://bit.ly/3DyUxqB at no extra charge. 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. ===================== P U E R T O R I C O ===================== HOSPEDERIA VILLA: Seeks Cash Access Until Dec 31 ------------------------------------------------ Hospederia Villa Verde, Inc. and YAJAD 77, LLC filed a joint motion with the U.S. Bankruptcy Court for the District of Puerto Rico to extend their stipulation on the Debtor's use of cash collateral until December 31, 2021, according to the terms agreed upon by the parties. The Debtor and YAJAD have agreed, in principle, to enter into a Discounted Payoff, Settlement and Release Agreement, which should resolve all the pending controversies between and among them, including the treatment of YAJAD's Claim No. 2, as amended and filed in the Claims Register in the case. The Parties further inform the Court that a draft of the Settlement Agreement is in an advanced stage. The Parties have exchanged several versions of the deal. The Debtor and YAJAD jointly requested the continuance of the confirmation hearing for the next available date in January 2022. The Court granted the request and continued the confirmation hearing for January 12. The Parties have negotiated and agreed to a further extension of the Stipulation from October 31 until December 31, 2021, pursuant to the same terms and conditions of the approved Stipulation. The Debtor will provide the Secured Creditor with a monthly adequate protection payment in the amount of $5,000, which is due and payable on November 1 and December 1, 2021. The reporting requirements in the Amended Stipulation will continue in full force and effect. A copy of the joint motion is available for free at https://bit.ly/3dHif9B from PacerMonitor.com. About Hospederia Villa Verde Hospederia Villa Verde, Inc., owner and operator of the Villa Verde Inn, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D.P.R. Case No. 21-01015) on March 31, 2021, listing $500,001 to $1 million in both assets and liabilities. Harold A. Frye Maldonado, Esq., at Frye Maldonado Law Office, serves as the Debtor's legal counsel. YAJAD 77, LLC, as secured creditor, is represented by Hermann D. Bauer, Esq. and Gabriel A. Miranda Rivera, Esq. at O'Neill and Borges LLC. =============== X X X X X X X X =============== LATAM: IDB Approves Additional $1.8B for Sustainable Development ---------------------------------------------------------------- The Board of Directors of the Inter-American Development Bank (IDB) approved five operations, totaling $1.8 billion, to foster sustainability and inclusion policies and programs in Barbados, Brazil and the Dominican Republic. The funds will also help strengthen economic integration among the River Plate Basin countries. The resources will support macroeconomic stability, land-use planning and management of water resources in Barbados; contribute to climate resilience, agricultural productivity, and access to water and sanitation services in Brazil; and improve living conditions for vulnerable populations in the Dominican Republic. The approvals also include a $300 million credit line for sustainable infrastructure, trade facilitation and interventions in the border areas of the River Plate Basin countries - Argentina, Bolivia, Brazil, Paraguay and Uruguay. Operations and amounts approved by country/geographic area: Barbados: A $100 million loan will help maintain a stable macroeconomic environment and deepen reforms in areas including the regulatory framework for land-use planning, management of the impact of development activities, and water-resource management, among others. Barbados' population as a whole - some 285,000 people - will benefit from the program. Brazil: The IDB approved two operations for Brazil for a total of $1.3 billion, accounting for nearly 70% of total resources approved. The first operation is a $1.2 billion credit line to improve productivity and resilience in the agricultural sector, supporting the income of producers, and to expand access to infrastructure and basic services in Brazil's rural areas. The first credit under this line, in the amount of $230 million, will support the country's Northeast Region to improve the sustainability and competitiveness of its agricultural sector. The second operation approved is a $100 million loan to finance drinking water, sanitary sewage, and wastewater treatment in the metropolitan area of Belem in the state of Para. The program will benefit nearly 407,000 households with new or improved connections to these services, improving their overall health conditions. Dominican Republic: A $100 million loan will help improve the living conditions of the country's vulnerable populations through conditional cash transfers for health and education. The program aims to improve the Dominican Republic's social protection network, introducing innovations to the Single Beneficiaries System to help identify users. It will also provide access to employment support for beneficiaries of the Superate program in the caregivers sector and will also finance medical devices for people with disabilities. River Plate Basin: The $300 million credit line for the River Plate Basin countries includes a $100 million operation to improve transportation logistics and operations; promote urban development in border areas; and strengthen the capacities of the Financial Fund for the Development of the River Plate Basin (FONPLATA), which is both the lending agency and the entity managing the resources. The River Plate Basin comprises the watersheds of the Paraguay, Parana, Río de la Plata and Uruguay rivers and is home to nearly 130 million inhabitants. The Basin's hydrocarbons, minerals, agricultural, agroindustrial, and trade sectors generate nearly 80% of the gross domestic product (GDP) of Argentina, Bolivia, Brazil, Paraguay and Uruguay. LATAM: IDB Approves US$1.65 BB Aid for Six Countries ---------------------------------------------------- The Inter-American Development Bank (IDB) approved eight financial operations for Argentina, Brazil, Ecuador, Haiti, Honduras, and Uruguay for a value of US$1.65 billion. The operations they will be destined for aim to strengthen public finances, reactivate the economy, and improve health services, water and sanitation, and transportation. These funds are also expected to contribute to improving resilience to natural disasters, food security, the business climate, and connectivity in rural areas, among other areas, the IDB reported in a statement. Within this aid package, there are two loans for Argentina for 500 million. The first seeks to finance access to public health services for the Province of Buenos Aires population, and the second is to improve the safety of road networks in the same area. For Brazil, a loan for US $ 80 million was approved to improve the coverage of drinking water and sanitation in Manaus and for urbanization projects, digital transformation, and inclusion of gender and diversity. The loan for Ecuador amounts to 400 million. It will finance a program to strengthen the institutional and regulatory framework to improve the business climate, promote international trade and enhance financial stability and access to financing. For Haiti, the IDB has planned non-reimbursable financing for US $ 60 million to improve the food security of rural households, including the country's farmers, fishermen, seafood traders, and rural workers, by promoting rural productivity and connectivity markets. This project will be co-financed with 18.3 million from the Global Agriculture and Food Security Program. In the case of Honduras, the 400 million loans will help to face natural and public health disasters. They will cushion the impact of a natural disaster or a severe or catastrophic health event on public finances. Finally, the IDB approved two loans for Uruguay for 210 million. The first, of 145 million to promote the post-pandemic economic and fiscal recovery, with measures to protect the income of vulnerable households and increase the liquidity of micro, small and medium-sized enterprises. The second loan for Uruguay, of 65 million, will be used to rehabilitate different road sections. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Latin America is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA, Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A. Chapman, Editors. Copyright 2021. All rights reserved. ISSN 1529-2746. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Latin America subscription rate is US$775 per half-year, delivered via e-mail. 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