/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/211223.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 23, 2021, Vol. 22, No. 250 Headlines B A R B A D O S CORNERSTONE FINANCIAL: Confident on Its Defense to Sagicor's Claim B O L I V I A BANCO UNION: S&P Affirms 'B+/B' ICRs, Outlook Negative C H I L E LATAM AIRLINES: Creditors Slam Bankruptcy Plan, Tout Azul Offer C O S T A R I C A BAC SAN JOSE: Fitch Affirms BB+ Rating on Series 2020-1 Notes H O N D U R A S BANCO ATLANTIDA: S&P Affirms 'BB-' ICR, Outlook Stable P A N A M A BANISTMO SA: Fitch Affirms 'BB+' LT IDR, Outlook Stable MULTIBANK INC: Fitch Affirms 'BB+' LT IDR, Outlook Stable - - - - - =============== B A R B A D O S =============== CORNERSTONE FINANCIAL: Confident on Its Defense to Sagicor's Claim ------------------------------------------------------------------ RJR News reports that Cornerstone Financial Holdings has responded to the claim filed by Sagicor Investments in the Barbados Supreme Court against it. Cornerstone says it expects to be able to successfully defend the claim against it and its directors, according to RJR News. Sagicor Investments is seeking US$4 million due to losses it claims to have incurred due to a rights issue by Cornerstone Financial Holdings, the report notes. Sagicor had a near five per cent stake in Cornerstone; however, that fell to 2.77% after it did not participate in the 2020 and 2021 rights issue, the report relays. A court date has not yet been set for Sagicor Investments, Cornerstone and its directors to appear before the court, the report adds. As reported in the Troubled Company Reporter on Oct 7, 2009, Amy Beth Hanson at The Associated Press reports that the state of Montana and a court-appointed receiver are taking inventory of the assets of Keith Kovick and Robert Congdon and their companies as they seek to recover money for those who invested in what the state calls a $14 million Ponzi scheme. According to the report, Messrs. Kovick and Congdon and their businesses, Cornerstone Financial Corp. and K & B Investments, are the subjects of an administrative action by the state commissioner of securities and insurance. The state has also referred the matter to federal authorities, said Lynne Egan, deputy securities administrator. District Judge Kathy Seeley has extended a preliminary injunction against Messrs. Kovick and Congdon and their businesses, admonishing them against selling securities in Montana, disposing of any assets or harassing any of the alleged victims. The court also ruled that the men and their businesses must request in writing any funds they need to pay personal expenses. ============= B O L I V I A ============= BANCO UNION: S&P Affirms 'B+/B' ICRs, Outlook Negative ------------------------------------------------------ S&P Global Ratings has affirmed its issuer credit ratings on Banco Mercantil Santa Cruz S.A. (BMSC) and Banco Union S.A. The affirmations follow a revision to its criteria for rating banks and nonbank financial institutions and for determining a Banking Industry Country Risk Assessment (BICRA). S&P's outlooks on the two banks remain unchanged. S&P said, "Our assessments of economic risk and industry risk in Bolivia (B+/Negative/B) also remain unchanged at '9' and '8', respectively. These scores determine the BICRA and the anchor, or starting point, for our ratings on financial institutions that operate in that country. The trends we see for economic risk and industry risk remain both stable." BMSC S&P said, "We affirmed our issuer credit ratings on BMSC because our credit analysis on the lender remained the same under the revised criteria. The ratings reflect its sound business position in the domestic financial system, diversified revenue, and effective management direction, which have helped to generate stable income in recent years. Moreover, we expect the bank to maintain reasonable profitability despite pressures from government-directed lending and the pandemic. The bank's diversified funding sources and adequate liquidity also support its creditworthiness. On the other hand, constrained capital adequacy levels per our risk-based capital model limits BMSC's credit quality. Finally, our ratings on BMSC reflect the economic and operating conditions in Bolivia, where the bank operates. "BMSC's stand-alone credit profile (SACP) is 'bb-', above the rating on Bolivia. However, the sovereign rating constrains the ratings on the bank because we don't think it could withstand a sovereign default scenario given its large exposure to the country in the form of loans and investments." Outlook The negative outlook on BMSC reflects that on Bolivia, which in turn indicates an at least one-in-three chance of a downgrade in the next six to 18 months if the sovereign's fiscal or external profile worsen beyond our base case. S&P could also downgrade the bank if its credit fundamentals worsen because of difficult operating conditions. In particular, we could lower the ratings if economic conditions pressure its capital adequacy beyond our current expectations. Upside scenario: S&P could revise the outlook on the bank to stable if it was to take the same action on Bolivia. Ratings score snapshot Issuer Credit Rating: B+/Negative/B Stand-alone credit profile: bb- Anchor: b+ Business Position: Strong (+1) Capital and Earnings: Constrained (0) Risk Position: Adequate (0) Funding and Liquidity: Adequate and adequate (0) Comparable Rating Analysis: 0 Support: 0 ALAC Support: 0 GRE Support: 0 Group Support: 0 Sovereign Support: 0 Additional Factors: 0 Banco Union S&P said, "We affirmed our issuer credit ratings on Banco Union because our credit analysis on the lender remained the same under the revised criteria. The ratings reflect its good business position in the Bolivian financial system and its diversified revenue, which result in stable income. Moreover, we expect Banco Union to maintain satisfactory profitability. The bank also benefits from diversified funding sources and a contingent liquidity source due to the government-related funds that it manages. However, we believe Banco Union's capitalization levels have a limited capacity to withstand credit losses, according to our risk-based capital model. In addition, the inherent likelihood of political influence from the shareholder, the Bolivian government, because of its potential interference in the bank's operations, drags down Banco Union's business position, in our view. "Banco Union's SACP is 'bb-', above our ratings on Bolivia. However, the sovereign rating caps that on the bank because we don't believe it could withstand a sovereign default scenario, given its large exposure to the country in the form of loans and investments." Outlook S&P said, "The negative outlook on Banco Union reflects that on Bolivia, which in turn indicates an at least one-in-three chance of a downgrade in the next six to 18 months if the sovereign's fiscal or external profile worsen beyond our base-case assumptions. We could also downgrade the bank if its credit fundamentals worsen because of difficult operating conditions. In particular, we could lower the rating if economic conditions pressure Banco Union's capital adequacy beyond our current expectations." Upside scenario: S&P could revise the outlook on the bank to stable if it was to take the same action on Bolivia. Ratings score snapshot Issuer Credit Rating: B+/Negative/B Stand-alone credit profile: bb- Anchor: b+ Business Position: Adequate (0) Capital and Earnings: Constrained (0) Risk Position: Adequate (0) Funding and Liquidity: Strong and Strong (+1) Comparable Rating Analysis: 0 Support: 0 ALAC Support: 0 GRE Support: 0 Group Support: 0 Sovereign Support: 0 Additional Factors: 0 Ratings List RATINGS AFFIRMED BANCO MERCANTIL SANTA CRUZ S.A. Issuer Credit Rating B+/Negative/B RATINGS AFFIRMED BANCO UNION S.A. Issuer Credit Rating B+/Negative/B ========= C H I L E ========= LATAM AIRLINES: Creditors Slam Bankruptcy Plan, Tout Azul Offer --------------------------------------------------------------- Jeremy Hill and Augusta Saraiva at Bloomberg News report that Latam Airlines Group SA's official low-ranking creditor group is unhappy with the Chilean carrier's bankruptcy exit proposal, arguing a sale to rival Azul SA could leave its members much better off. In court papers filed, Santiago-based Latam's unsecured creditor committee said the airline's current reorganization plan is so unfair that it can't win court approval, according to Bloomberg News. It flouts U.S. bankruptcy rules by favoring some evenly-ranked creditors over others and giving value to shareholders that don't deserve it, lawyers for the group wrote, the report notes. "Rather than use the past eighteen months to negotiate and prepare a value-maximizing plan that treats all constituents fairly and in accordance with the Bankruptcy Code, the Debtors have used their exclusive opportunity to negotiate an unconfirmable insider deal at the expense of non-preferred creditors," lawyers from the Dechert firm wrote on behalf of unsecured creditors, the report relays. Under the current proposal, Latam locked arms with key shareholders -- Delta Air Lines Inc., Qatar Airways and Chile's Cueto family -- and a major creditor group on a deal that would raise about $5 billion and slash its debt load, the report relays. Sixth Street Partners, Sculptor Capital and SVPGlobal are leading the creditor group that has agreed to backstop the plan, the report notes. The plan would result in creditors taking control of the company, while existing shareholders could retain a sizable ownership stake. That's unusual in U.S. bankruptcy -- stockholders are last in line to be repaid -- but Latam's deal would smooth over potentially thorny Chilean securities law issues, the report discloses. Latam's low-ranking creditor group is urging the company to consider alternative plans, like Azul's offer to buy the company, the report says. A term sheet submitted to Latam from Azul would offer some creditors recoveries three times as high as those expected under Latam's current plan, the group said, the report notes. $13 Billion Offer "The court need not speculate as to what distributions to creditors would be in such a scenario, because a strategic acquirer -- Azul -- has already offered to purchase the Debtors' businesses for $13 billion," the creditor group said in its pleadings, the report discloses. Latam Chief Executive Officer Roberto Alvo has said Azul's proposal was "hypothetical" and impossible to bring forward, the report notes. Representatives for Latam didn't immediately provide a comment on the creditor committee's most recent pleadings, the report says. U.S. bankruptcy rules give troubled companies the exclusive right to pitch their own restructuring plans, which creditors then vote on, the report relays. That dynamic limits Azul and dissenting creditors' options for advancing competing plans, but they can try to persuade Latam's bankruptcy judge to strike down the deal or open the case to alternative offers, the report discloses. The case is LATAM Airlines Group SA et al., 20-11254, U.S. Bankruptcy Court for the Southern District of New York (Manhattan), the report adds. About LATAM Airlines Group LATAM Airlines Group S.A. -- http://www.latam.com/-- is a pan-Latin American airline holding company involved in the transportation of passengers and cargo and operates as one unified business enterprise. It is the largest passenger airline in South America. Before the onset of the COVID-19 pandemic, LATAM offered passenger transport services to 145 different destinations in 26 countries, including domestic flights in Argentina, Brazil, Chile, Colombia, Ecuador and Peru, and international services within Latin America as well as to Europe, the United States, the Caribbean, Oceania, Asia and Africa. LATAM and its 28 affiliates sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 20-11254) on May 25, 2020. Affiliates in Chile, Peru, Colombia, Ecuador and the United States are part of the Chapter 11 filing. The Debtors disclosed $21,087,806,000 in total assets and $17,958,629,000 in total liabilities as of Dec. 31, 2019. The Hon. James L. Garrity, Jr., is the case judge. The Debtors tapped Cleary Gottlieb Steen & Hamilton LLP as bankruptcy counsel, FTI Consulting as restructuring advisor, Lee Brock Camargo Advogados as local Brazilian litigation counsel, and Togut, Segal & Segal LLP and Claro & Cia in Chile as special counsel. The Boston Consulting Group, Inc. and The Boston Consulting Group UK LLP serve as the Debtors' strategic advisors. Prime Clerk LLC is the claims agent. The official committee of unsecured creditors formed in the case tapped Dechert LLP as its bankruptcy counsel, Klestadt Winters Jureller Southard & Stevens, LLP as conflicts counsel, UBS Securities LLC as investment banker, and Conway MacKenzie, LLC as financial advisor. Ferro Castro Neves Daltro & Gomide Advogados is the committee's Brazilian counsel. The Ad Hoc Group of LATAM Bondholders tapped White & Case LLP as counsel. Glenn Agre Bergman & Fuentes, LLP, led by managing partner Andrew Glenn and partner Shai Schmidt, has been retained as counsel to the Ad Hoc Committee of Shareholders. =================== C O S T A R I C A =================== BAC SAN JOSE: Fitch Affirms BB+ Rating on Series 2020-1 Notes ------------------------------------------------------------- Fitch Ratings has affirmed the rating of the series 2020-1 notes issued by BAC San Jose DPR Funding Ltd at 'BB+' with a Stable Rating Outlook. DEBT RATING PRIOR ---- ------ ----- BAC San Jose DPR Funding Ltd 2014-2 (144A) 05633WAB9 LT PIF Paid In Full BB+ 2014-2 (Reg S) USG0701RAB18 LT PIF Paid In Full BB+ 2014-2 05633WAD5 LT PIF Paid In Full BB+ 2020-1 LT BB+ Affirmed BB+ TRANSACTION SUMMARY The transaction is backed by existing and future U.S. dollar-denominated diversified payment rights (DPRs) originated by Banco BAC San Jose, S.A. (BAC SJ). The majority of DPRs are processed by designated depository banks (DDBs) that have signed Acknowledgement Agreements (AAs), irrevocably obligating them to make payments to an account controlled by the transaction trustee. Fitch's ratings address the timely payment of P&I on a quarterly basis. KEY RATING DRIVERS FF Rating Driven by Originator's Credit Quality: On Sep. 24, 2021, Fitch affirmed BAC SJ's Long-Term (LT) Local Currency (LC) Issuer Default Rating (IDR) at 'BB-' with a Negative Outlook. The LT LC IDR is at the maximum uplift of two notches above Costa Rica's sovereign rating (B/Negative) allowed by Fitch's criteria. Fitch also affirmed BAC SJ's Viability Rating at 'b', which remains at the same level of the sovereign and is highly influenced by the financial sector's worsening operating environment. Fitch expects pandemic-related uncertainties around economic recovery will continue to pressure local banks' performance due to lower loan growth and higher credit costs over the short to medium term. The Negative Outlook on BAC SJ's IDR mirrors the Negative Outlook on Costa Rica's sovereign rating. Going Concern Assessment (GCA) Score: Fitch uses a GCA score to gauge the likelihood that the originator of a future flow transaction will stay in operation through the transaction's life. Fitch assigns a GCA score of 'GC2' to BAC SJ, based on the bank's strategic important to its parent (Banco de Bogota), as well as its position as the third-largest bank in Costa Rica and the largest private bank in the country with assets that represented 14.6% of the financial system assets as of March 2021. Several Factors Limit Notching Differential: The 'GC2' score allows for a maximum rating uplift of four notches from the bank's IDR pursuant to Fitch's future flow methodology. However, the uplift is tempered to two notches given the maximum uplift is only applied to transactions with originators that are rated in the lower end of the rating scale, and BAC SJ's IDR is support-driven. Moderately High Future Flow Debt Relative to Balance Sheet: Future flow debt represents approximately 2.4% of BAC SJ's total funding and 30.9% of non-deposit funding when considering the current outstanding balance on the program ($150 million) as of November 2021 and utilizing September 2021 financials. While Fitch considers these ratios small enough to differentiate from BAC SJ's LT LC IDR, an increase in future flow debt size would constrain the transaction ratings. Pandemic Pressures Transaction Flows: BAC SJ's annual DPR volume exhibited consistent growth yoy between 2015 and 2019. However, global events including the coronavirus pandemic negatively affected the originator's DPR flows in 2020 with BAC SJ processed approximately $5.40 billion in DPR flows for the year, a decrease of 3.3% from $5.58 billion in 2019. Flows have since recovered, superseding pre-pandemic levels with BAC SJ processing $5.79 billion for YTD November 2021, which is up approximately 21% and 15% yoy versus YTD November 2020 ($4.77 billion) and YTD November 2019 ($5.03 billion), respectively. Resilience of BAC SJ's DPR business line is supported by the bank's positioning as the largest private bank in the country, as well as Costa Rica's growing export sector. Strong Coverage Levels Continue to Support Assigned Rating: Although flows were negatively impacted in 2020, transaction cash flows remained sufficient to cover maximum quarterly coverage levels well over 100.0x. When considering average rolling quarterly DDB flows over the last five years (November 2016-November 2021) and the maximum periodic debt service over the life of the program, Fitch's projected quarterly debt service coverage ratio (DSCR) is 131.0x. Moreover, the transaction can withstand a drop in flows of approximately 99.2% and still cover the maximum quarterly principal and interest payment. Nevertheless, Fitch will continue to monitor the performance of the flows, as potential pressures could negatively impact the assigned rating. Structure Reduces Sovereign/Diversion Risks: The structure mitigates certain sovereign risks by keeping cash flows offshore until scheduled debt service is paid to investors, allowing the transactions to be rated above Costa Rica's country ceiling. Fitch believes diversion risk is partially mitigated by the AAs executed by the four DDBs processing the vast majority of DPR flows. The KRDs listed in the applicable sector criteria, but not mentioned above, are not material to this rating action. RATING SENSITIVITIES Factors that could, individually or collectively, lead to negative rating action/downgrade: -- The transaction ratings are sensitive to changes in the credit quality of the originating bank. A deterioration of the credit quality of the sovereign and/or originating bank by more than one notch is likely to pose a constraint to the rating of the transaction from its current level. -- The transaction ratings are sensitive to the ability of the DPR business line to continue operating, as reflected by the GCA score. Additionally, the transaction rating is sensitive to the performance of the securitized business line. The quarterly DSCRs are expected to be more than sufficient to cover debt service obligations and should therefore be able to withstand a significant decline in cash flows in the absence of other issues. -- However, significant further declines in flows could lead to a Negative rating action. Any changes in these variables will be analyzed in a rating committee to assess the possible impact on the transaction ratings. -- No company is immune to the economic and political conditions of its home country. Political risks and the potential for sovereign interference may increase as a sovereign's rating is downgraded. However, the underlying structure and transaction enhancements mitigate these risks to a level consistent with the assigned rating. Factor that could, individually or collectively, lead to positive rating action/upgrade: -- Fitch does not anticipate developments having a high likelihood of triggering an upgrade. However, the main constraint to the program rating is the originator's rating and bank's operating environment. If upgraded, Fitch will consider whether the same uplift could be maintained or if it should be further tempered in accordance with criteria. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Structured Finance transactions have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of seven 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 seven notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAAsf' to 'Dsf'. Best- and worst-case scenario credit ratings are based on historical performance. USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10 Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action. PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS The future flow ratings are driven by the credit risk of BAC SJ as measured by its LT LC IDR. 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 O N D U R A S =============== BANCO ATLANTIDA: S&P Affirms 'BB-' ICR, Outlook Stable ------------------------------------------------------ S&P Global Ratings affirmed its issuer and issue credit ratings on the following 19 Colombian and Central American banks and NBFIs. We also kept one entity on CreditWatch positive. The affirmations follow a revision to our criteria for rating banks and NBFIs and for determining a Banking Industry Country Risk Assessment (BICRA). The affirmations include: Atlantic Security Bank (BBB-/Negative/A-3) Banistmo S.A. (BB+/Stable/B) Banco General S.A. (BBB/Negative/A-2) Promerica Financial Corp. (B+/Stable/B) Banco Nacional de Panama (BBB/Negative/A-2) Global Bank Corp. y Subsidiarias (BBB-/Stable/A-3) Multibank Inc. y Subsidiarias (BB+/Stable/B) Banco de Bogota S.A. y Subsidiarias (BB+/Stable/B) Bancolombia S.A. y Companias Subordinadas (BB+/Stable/B) Bancolombia Panama S.A. (BB+/Stable/B) Banco Davivienda S.A. (BB+/Stable/B) Financiera de Desarrollo Nacional S.A. (BB+/Stable/--) Financiera de Desarrollo Territorial S.A. FINDETER(BB+/Stable/B) Credivalores - Crediservicios SAS (B/Negative/B) Banco G & T Continental S.A. (BB-/Stable/B) Banco Industrial S.A. (BB-/Stable/B) Banco Agricola S.A. (B-/Negative/B) Inversiones Atlantida S.A. (B+/Negative/--) Banco Atlantida S.A. (BB-/Stable/B) S&P's outlooks on the 19 banks and NBFIs remain unchanged. At the same time, S&P kept its ratings on one bank on CreditWatch positive: BAC International Bank Inc. (BB+/Watch Pos/B) In addition, the stand-alone credit profiles (SACPs) of the 20 Colombian and Central American banks and NBFIs, and S&P's assessment of the likelihood of extraordinary external support, remain unchanged under its revised criteria. Panamanian Banks S&P said, "Our assessments of economic risk and industry risk in Panama remain unchanged at '5' and '5', respectively. These scores determine the BICRA and the anchor, or starting point, for our ratings on financial institutions that operate primarily in that country. The trends we see for economic risk and industry risk remain negative and stable, respectively." Colombian Banks S&P said, "Our assessments of economic risk and industry risk in Colombia also remain unchanged at '7' and '5', respectively. These scores determine the BICRA and the anchor, or starting point, for our ratings on financial institutions that operate primarily in that country. The trends we see for economic risk and industry risk both remain stable." Colombian NBFIs The starting point--or anchor for our ratings on finance companies (fincos or NBFIs) in Colombia remains unchanged at 'b+'. The anchor is three notches below the 'bb+' Colombia bank anchor to reflect that Colombian fincos rely on wholesale funding sources, including credit facilities from commercial and multilateral lenders, and market debt issuances. Moreover, these entities usually face stronger competition from banks and new players with digital offerings. Therefore, their margins are more susceptible to competition and market conditions and their revenues tend to be more volatile than the average of the banking system, given that fincos usually serve riskier clients, to which banks are reluctant to lend. Colombian NBFIs aren't subject to the significant prudential regulatory oversight and additional liquidity contingent sources, unlike banks. Guatemalan Banks S&P said, "Our assessments of economic risk and industry risk in Guatemala remain unchanged at '8' and '5', respectively. These scores determine the BICRA and the anchor, or starting point, for our ratings on financial institutions that operate primarily in that country. Our economic risk and industry risk trends both remain stable." El Salvadoran Banks S&P said, "Our assessments of economic risk and industry risk in El Salvador also remain unchanged at '9' and '7', respectively. These scores determine the BICRA and the anchor, or starting point, for our ratings on financial institutions that operate primarily in that country. The trends we see for economic risk and industry risk remain negative." Honduran Banks S&P said, "Our assessments of economic risk and industry risk in Honduras also remain unchanged at '8' and '7', respectively. These scores determine the BICRA and the anchor, or starting point, for our ratings on financial institutions that operate primarily in that country. The trends we see for economic risk and industry risk remain stable." Atlantic Security Bank S&P said, "The rating reflects our view of ASB's status as a highly strategic subsidiary of Credicorp Ltd. (BBB/Negative/--). We believe the group is willing and able to support ASB under any foreseeable circumstances and will continue its commitment through additional financial flexibility to fund ASB's business operations via either credit line loans or capital injections, if needed." Outlook The negative outlook on ASB mirrors the one on Credicorp. Therefore, S&P could downgrade the bank in the next six to 24 months if it did the same on its parent, due to ASB's highly strategic subsidiary status. Upside scenario In the next six to 24 months, S&P could revise its outlook on ASB to stable if it was to take the same action on Credicorp. Ratings score snapshot Issuer Credit Rating: BBB-/Negative/A-3 Banistmo S.A. The ratings on Banistmo reflect its revenue stability, supported by its diversified credit portfolio and its solid market share as the second largest private bank in Panama. S&P's ratings also reflect the bank's projected risk-adjusted capital (RAC) ratio —of 8.2%-8.5% for the next two years. Although asset quality indicators still compare unfavorably with those of the overall banking industry in Panama, they remain consistent with its view of the bank's risk position. Finally, the bank's funding assessment is supported by the funding structure, which is similar to the industry's norm, and a liquidity position that provides adequate cushion to cope with unexpected cash outflows in the next 12 months. Outlook S&P said, "The stable outlook on Banistmo reflects that on its ultimate parent, Bancolombia, which limits our ratings on the subsidiary. The outlook also reflects our expectation that Banistmo's RAC ratio will remain above 7% despite the challenging operating conditions and larger credit losses. Finally, we expect its asset quality metrics will peak during 2021 and then revert to more manageable levels in 2022, although still weaker than the Panamanian banking system's average." Downside scenario S&P said, "We could downgrade Banistmo if we take the same action on its parent in the next 12 months. We would also lower the ratings in the next 12 months if we revise Banistmo's SACP downward by two notches. This could happen if its asset quality indicators worsen significantly beyond our expectations and above the industry average, coupled with a drop in its RAC ratio to below 7%." Upside scenario If S&P upgrades Bancolombia in the next 12-24 months, it would take a similar action on Banistmo. Nonetheless, S&P doesn't view this scenario as likely due to the economic fallout from the COVID-19 pandemic. Ratings score snapshot Issuer Credit Rating: BB+/Stable/B Stand-alone credit profile: bbb- Anchor: bbb- Business Position: Adequate (0) Capital and Earnings: Adequate (0) Risk Position: Adequate (0) Funding and Liquidity: Adequate and adequate (0) Comparable Rating Analysis: 0 Support: -1 ALAC Support: 0 GRE Support: 0 Group Support: -1 Sovereign Support: 0 Additional Factors: 0 Banco General S.A. S&P said, "The ratings reflect our belief that the bank will maintain its leading position within the Panamanian banking system with well-diversified business operations. The ratings also reflect its solid capital base that translates to a projected RAC ratio of about 14.1% in average for the next 24 months. Additionally, they incorporate our belief that Banco General's asset quality metrics will worsen--stemming from the debt moratorium programs that will end--but will remain manageable. Finally, we also incorporate the bank's ample and pulverized deposit base and the comfortable liquidity position with no significant maturities in the next couple of years." Outlook S&P said, "The negative outlook on Banco General reflects our view that if we downgrade Panama in the next 12 to 24 months, we could take the same rating action on the bank. This is because we rarely rate financial institutions above the long-term sovereign rating because during sovereign stress, the latter's regulatory and supervisory powers may restrict a bank's or financial system's flexibility. In our view, banks are affected by many of the same economic factors that cause sovereign stress." Downside scenario S&P could lower the ratings on Banco General if it downgrades Panama in the next 12 to 24 months. Upside scenario S&P could revise the outlook on the bank to stable if it was to take same rating action on the sovereign. Ratings score snapshot Issuer Credit Rating: BBB/Negative/A-2 Stand-alone credit profile: bbb+ Anchor: bbb- Business Position: Strong (+1) Capital and Earnings: Strong (+1) Risk Position: Adequate (0) Funding and Liquidity: Adequate and strong (0) Comparable Rating Analysis: 0 Support: 0 ALAC Support: 0 GRE Support: 0 Group Support: 0 Sovereign Support: 0 Additional Factors: -1 Promerica Financial Corp. The ratings on Promerica (PFC) reflects its resilient business stability despite difficult economic and operating conditions across the region. Additionally, its asset quality metrics remain manageable even amid pandemic-induced volatility, although risks haven't eased. Despite pressures on profitability, PFC has kept stable capitalization metrics. Finally, the bank's funding structure relies on a stable and highly diversified deposit base with manageable short-term financial obligations. Outlook S&P said, "The stable outlook on PFC for the next 12 months reflects our expectation that the bank will maintain stable capitalization metrics, reflected in our projected RAC ratio of about 4.19% for the next two years. Additionally, despite the region's slow and gradual economic recovery, we expect the bank to keep manageable asset quality metrics and sufficient loan-loss reserves to absorb potential credit losses. Finally, we expect PFC to keep its market share in the countries where it operates, and to maintain its highly diversified loan portfolio, which have proven to be fairly resilient under stress conditions." Downside scenario S&P could lower the ratings if its projected RAC ratio drops and remains below 3%. This could occur if PFC's lending growth rate is significantly higher than its expectations, and/or if the bank's asset quality worsens more so than those of its regional peers and of the Central American and Ecuadorian banking systems' averages. Upside scenario If PFC's RAC ratio rises to and remains above the 5% threshold, S&P could revise its capital and earnings assessment to a stronger category, which could in turn lead to an upgrade. This could occur if the bank generates higher-than-expected internal capital, while the rest of its SACP assessment remains unchanged. Ratings score snapshot Issuer Credit Rating: B+/Stable/B Stand-alone credit profile: bb- Anchor: bb- Business Position: Strong (+1) Capital and Earnings: Constrained (-1) Risk Position: Adequate (0) Funding and Liquidity: Adequate and adequate (0) Comparable Rating Analysis: 0 Support: 0 ALAC Support: 0 GRE Support: 0 Group Support: 0 Sovereign Support: 0 Additional Factors: -1 Banco Nacional de Panama The ratings on Banco Nacional de Panama (Banconal) reflect its status as a government-related entity and the almost certain likelihood of extraordinary support based on the bank's critical role for--and integral link with--the Panamanian government. Moreover, the ratings reflect its good business diversity and market share in the Panamanian banking system. S&P also incorporates Banconal's solid capitalization metrics, supported by its internal capital. Banconal's asset quality metrics remain in line with the system (at manageable levels) despite some forbearance programs granted. Finally, the company benefits from a stable deposit base representing about 90% of its total funding structure, with a sound liquid position and low short-term obligations. Outlook The negative outlook on Banconal reflects the outlook on Panama. S&P expects the bank to maintain its critical role for--and integral link with--the government. Therefore, the ratings on the bank will move in tandem with those on Panama. Downside scenario If S&P lowers the ratings on Panama in the next 12-24 months, it would also downgrade Banconal. Upside scenario S&P could revise its outlook on Banconal to stable if it was to take the same rating action on the sovereign, reflecting its assessment of an almost certain likelihood of government support to the bank. Ratings score snapshot Issuer Credit Rating: BBB/Negative/A-2 Stand-alone credit profile: bbb+ Anchor: bbb- Business Position: Adequate (0) Capital and Earnings: Strong (+1) Risk Position: Adequate (0) Funding and Liquidity: Strong and strong (+1) Comparable Rating Analysis: 0 Support: 0 ALAC Support: 0 GRE Support: -1 Group Support: 0 Sovereign Support: 0 Additional Factors: 0 Global Bank Corp. y Subsidiarias S&P said, "Our ratings reflect our view that Global Bank will maintain its sound market share in the Panamanian banking system with operating revenues that have proven to be resilient during the pandemic. The ratings also reflect its sound capital base that translates to a projected RAC ratio of about 8.3% on average for the next 24 months. Additionally, we think the bank's asset quality metrics will worsen--stemming from the debt moratorium programs in Panama that will end--but will remain manageable. Finally, we expect deposits to continue to represent the bulk of its funding base, providing sufficient liquidity to cover any potential needs that could arise in the next 12 months." Outlook S&P said, "The stable outlook on Global Bank for the next 24 months incorporates our opinion that the bank will keep its RAC ratio above 7% despite the potential materialization of the negative trend in our BICRA's economic risk for Panama. The outlook also incorporates our view that Global Bank's asset quality metrics will deteriorate but will remain manageable as the loan forbearance programs are phased out. Finally, we consider that the bank will maintain its liquidity ratio above 2x while maintaining a solid funding profile that primarily consists of deposits." Downside scenario S&P said, "We could lower the ratings in the next 24 months if Global Bank's consolidated RAC ratio consistently drops below 7%. This could happen if the negative trend in Panama's BICRA economic risk materializes and the bank's asset quality deteriorates beyond our expectations, forcing the bank to increase its loan-loss reserves, which would hurt its internal capital. Additionally, we could lower the ratings if asset quality weakens beyond our expectations and it's no longer in line with the banking system's average." Upside scenario S&P considers that given the economic stress stemming from the pandemic and the pressures on the BICRA's economic risk, an upgrade of Global Bank in the next 24 months is unlikely. Ratings score snapshot Issuer Credit Rating: BBB-/Stable/A-3 Stand-alone credit profile: bbb- Anchor: bbb- Business Position: Adequate (0) Capital and Earnings: Adequate (0) Risk Position: Adequate (0) Funding and Liquidity: Adequate and adequate (0) Comparable Rating Analysis: 0 Support: 0 ALAC Support: 0 GRE Support: 0 Group Support: 0 Sovereign Support: 0 Additional Factors: 0 Multibank Inc. y Subsidiarias S&P said, "Our ratings on Multibank reflect its strategic importance for its parent, Banco de Bogota S.A. y Subsidiarias (BB+/Stable/B), and its position as the second largest financial group in Panama. It also incorporates our expectation that its RAC ratio will be about 7.6% in the next 12 months and that its asset quality metrics will weaken this year--but still be manageable. Finally, its funding remains stable, with a broad funding base, deposit diversification, and relatively low short-term liquidity needs." Outlook The stable outlook on Multibank mirrors that on its parent and S&P's expectation that the bank will continue to be a core subsidiary of Banco de Bogota in the next 12-18 months. It also incorporates that Multibank will operate in the same business lines as its parent and will increase its presence in Panama and consolidate its leading position in Central America. Downside scenario S&P could downgrade Multibank in the next 12-18 months if it takes a similar action on its parent. Upside scenario An upgrade of Multibank would follow a similar action on its parent. However, S&P considers this unlikely given the stable outlook on Banco de Bogota. Ratings score snapshot Issuer Credit Rating: BB+/Stable/B Stand-alone credit profile: bbb- Anchor: bbb- Business Position: Adequate (0) Capital and Earnings: Adequate (0) Risk Position: Adequate (0) Funding and Liquidity: Adequate and adequate (0) Comparable Rating Analysis: 0 Support: 0 ALAC Support: 0 GRE Support: 0 Group Support: -1 Sovereign Support: 0 Additional Factors: 0 Banco de Bogota y Subsidiarias S&P said, "Despite the recent announced spinoff of BAC International Bank Inc. (BAC) that will narrow Banco de Bogota's (BBogota) geographic diversification, we consider that its strong brand in Colombia and its long-standing client relationships will continue to support its business stability. Additionally, we expect that the bank's RAC ratio will remain about 4% for the next 12 months, underpinned by internal capital. The ratings also reflect our expectation of higher--but still manageable-- asset quality ratios because of BAC's deconsolidation. Asset quality will now solely reflect BBogota's Colombian operations. Finally, we expect that its funding base will continue supported by a highly pulverized deposit base that will provide sufficient liquidity to face the prolonged adverse economic conditions." Outlook S&P said, "The stable outlook on Bogota for the next 12 months reflect our expectation that the bank will maintain its solid brand and market position in Colombia. Additionally, it reflects its projected RAC ratio that's slightly above 4% and its higher asset quality metrics, although these remain manageable. Finally, we expect that the bank will maintain its funding and liquidity metrics in line with the system." Downside scenario S&P could lower the ratings in the next 12 months if: -- The RAC ratio drops below 3%. This could happen if the bank posts higher-than-expected loan growth, weaker asset quality that could pressure internal capital generation, or a higher-than-expected dividend payout ratio that could hurt its capital base; or -- The bank's asset quality metrics worsen beyond S&P's expectations and no longer compare with its regional peers. Upside scenario S&P could raise the ratings in the next 12 months if the bank's RAC ratio rises consistently above 5%. This could happen if BBogota increases its internal capital while maintaining manageable asset quality metrics. Ratings score snapshot Issuer Credit Rating: BB+/Stable/B Stand-alone credit profile: bb+ Anchor: bb+ Business Position: Strong (+1) Capital and Earnings: Constrained (-1) Risk Position: Adequate (0) Funding and Liquidity: Adequate and adequate (0) Comparable Rating Analysis: 0 Support: 0 ALAC Support: 0 GRE Support: 0 Group Support:0 Sovereign Support: 0 Additional Factors: 0 Bancolombia S.A. y Companias Subordinadas & Bancolombia Panama S.A. The ratings incorporate the bank's leading market position in the Colombian banking system and its large presence in Central America that have lessened the impact of the economic turmoil across the region. A well-diversified loan portfolio in terms of geography and sector will help cushion the deterioration of the loan book and allow for manageable asset quality indicators in the next couple of years. The ratings also incorporate S&P's projected RAC ratio at about 4.8% for 2021 and 2022. The ratings also consider that Bancolombia benefits from a large and stable deposit base that supported its funding even amid difficult market conditions. In S&P's opinion, the bank will manage to have a sufficient liquidity position to cover expected and unexpected cash flows in the next 12 months. S&P considers Bancolombia Panama a core entities of its ultimate parent, Bancolombia. The parent views Panama as a strategic growth market and has continued to develop its presence in Central America. Outlook S&P said, "The stable outlook on Bancolombia for the next year reflects our expectation the bank will keep manageable asset quality metrics and stable liquidity cushion to meet financial obligations, despite uncertainty about the region's economic recovery. Additionally, we expect Bancolombia to keep its leading business position in Colombia and its solid franchise in Central America." Downside scenario A downgrade of the bank in the next year would result from a downgrade of Colombia (foreign currency: BB+/Stable/B; local currency: BBB-/Stable/A-3) and/or the worsening of the bank's credit fundamentals, driven by deteriorating asset quality beyond our base-case scenario, leading us to revise its SACP downward. Upside scenario S&P said, "The sovereign ratings on Colombia limit those on Bancolombia because given its large exposure to the country (about 71%), we don't think that the bank would pass our sovereign stress test in the event of sovereign distress. However, we could upgrade Bancolombia if we did so on the sovereign while the bank withstands the depressed economic conditions without a sharp weakening of its asset quality metrics, and its risk-adjusted capital (RAC) ratio increases and remains consistently above 5.25%." Ratings score snapshot Bancolombia S.A. y Companias Subordinadas Issuer Credit Rating: BB+/Stable/B Stand-alone credit profile: bb+ Anchor: bb+ Business Position: Strong (+1) Capital and Earnings: Constrained (-1) Risk Position: Adequate (0) Funding and Liquidity: Adequate and adequate (0) Comparable Rating Analysis: 0 Support: 0 ALAC Support: 0 GRE Support: 0 Group Support:0 Sovereign Support: 0 Additional Factors: 0 Bancolombia Panama Issuer Credit Rating: BB+/Stable/B Banco Davivienda S.A. The ratings consider our expectation that Banco Davivienda's prominent market position and diversified business activities will keep supporting its business profile. They also consider the bank's stable capitalization--about 6.2%--mainly supported by internal capital generation. S&P said, "Additionally, we expect the bank's asset quality to worsen but to remain manageable and to continue to be in line with its regional and domestic peers. Finally, we expect its ample deposit base to continue to support Davivienda's funding and to provide enough liquidity to face any potential needs that could arise in the next 12 months." Outlook S&P said, "The stable outlook for the next two years on Davivienda reflects our view that despite the challenging conditions in the region, the bank's asset quality and capitalization will remain manageable, supported by its solid market position in Colombia and well-diversified loan portfolio in terms of industries and borrowers. We think the bank's nonperforming assets (NPAs) will be about 4% and its projected RAC ratio at about 6.2% in the next two years. Davivienda will support these metrics through its business stability, prudent underwriting standards, and stable internal capital, helped by better efficiency and reinforced by its digitalization strategy." Downside scenario S&P could lower the ratings if: -- The bank's RAC ratio drops below 5%. This could happen if the dividend payout ratio is higher than S&P expects or loan growth rates increase more than projected; or -- Its asset quality metrics worsen more than the industry norm and above those of its main regional competitors. Upside scenario S&P said, "Given that the sovereign ratings on Colombia cap those on Davivienda, we expect the ratings to move in tandem with those on the sovereign in the next two years. This is because we rarely rate financial institutions above the long-term sovereign rating because during sovereign stress, the latter's regulatory and supervisory powers may restrict a bank's or financial system's flexibility. In our view, banks are affected by many of the same economic factors that cause sovereign stress. If we upgraded Colombia, we would do the same on Davivienda." Ratings score snapshot Issuer Credit Rating: BB+/Stable/B Stand-alone credit profile: bbb- Anchor: bb+ Business Position: Strong (+1) Capital and Earnings: Moderate (0) Risk Position: Adequate (0) Funding and Liquidity: Adequate and adequate (0) Comparable Rating Analysis: 0 Support: 0 ALAC Support: 0 GRE Support: 0 Group Support: 0 Sovereign Support: 0 Additional Factors: -1 Financiera de Desarrollo Nacional S.A. S&P said, "The rating on Financiera de Desarrollo Nacional S.A. (FDN) reflects our assessment of a very high likelihood of extraordinary government support due to the bank's strategic importance for the government as a financial vehicle to develop key infrastructure programs in Colombia. The rating on FDN also captures its relatively high risk concentration by sector, although we expect the bank will maintain healthy asset quality metrics. In our view, the ongoing support the government provides to FDN provides it with the financial and funding flexibility to manage its liquidity profile. Finally, the ratings capture our expected RAC ratio of about 11.1% for 2021 and 2022." Outlook S&P said, "The stable outlook on FDN reflects that on Colombia, given the bank's status as a government-related entity (GRE). It also reflects our expectation that FDN will maintain its high likelihood of extraordinary government support in the next 24 months because of its critical role for and very strong link to the government. Even if FDN's SACP weakens by one notch (which isn't part of our base-case scenario), the issuer credit rating would remain unchanged, reflecting two notches of government support." Downside scenario S&P could downgrade FDN if it downgrades Colombia, or if it revises FDN's SACP downward by two or more notches, which it sees as very unlikely. Upside scenario S&P could upgrade FDN if it was to take the same rating action on Colombia. Ratings score snapshot Issuer Credit Rating: BB+/Stable/-- Stand-alone credit profile: bb Anchor: bb+ Business Position: Moderate (-1) Capital and Earnings: Strong (+1) Risk Position: Moderate (-1) Funding and Liquidity: Adequate and adequate (0) Comparable Rating Analysis: 0 Support: +1 ALAC Support: 0 GRE Support: +1 Group Support: 0 Sovereign Support: 0 Additional Factors: 0 Financiera de Desarrollo Territorial S.A. FINDETER The ratings incorporate the bank's very important role to the Colombian government given its ability to provide financing to urban infrastructure. S&P said, "Additionally, Findeter's financial performance and single digit loan portfolio growth will help the bank keep strengthening its capital base, reflected in our forecast RAC ratio of 11.3% on average for the next 12 months. We expect Findeter's asset quality metrics to remain solid, supported by its second-floor clients." Finally, the bank's funding base will continue to be concentrated in wholesale funding sources and it will have comfortable liquidity. Outlook The stable outlook on Findeter in the next 12 months stems from S&P's stable outlook on Colombia. Thus, the ratings on Findeter will continue to move in tandem with those on the sovereign, reflecting its status as a government-related entity (GRE) to the Colombian government. Downside scenario S&P could lower the ratings on Findeter if its reassess the likelihood of extraordinary government support to a weaker category or if it takes a negative rating action on the sovereign in the next 12 months. Upside scenario If S&P upgrades the sovereign in the coming 12 months, ite would take the same action on the bank. Ratings score snapshot Issuer Credit Rating: BB+/Stable/B Stand-alone credit profile: bb+ Anchor: bb+ Business Position: Adequate (0) Capital and Earnings: Strong (+1) Risk Position: Adequate (0) Funding and Liquidity: Moderate and adequate (-1) Comparable Rating Analysis: 0 Support: 0 ALAC Support: 0 GRE Support: 0 Group Support: 0 Sovereign Support: 0 Additional Factors: 0 Credivalores - Crediservicios SAS S&P said, "We expect that the firm's digital push and new partnerships will support its operating revenue and loan growth while it keeps its leading competitive position in the Colombian NBFI segment. We also consider that Credivalores' aggressive loan growth and below-historical-average profitability will pressure its RAC ratio, resulting in a ratio of about 5.1% for the next couple of years. Additionally, we expect that the company's efforts to improve its client profile will prevent loan quality from deteriorating much further from current metrics. Finally, we consider that the recovery in loan collections and new funding sources will enable the firm to meet its operating and financial needs, but we will closely monitor its upcoming debt maturity in 2022." Outlook The negative outlook on Credivalores for the next 12 months reflects the downward trend in its RAC ratio due to the double-digit lending growth, modest profitability, and no additional capital injections in 2021. Downside scenario S&P said, "We could lower the ratings in the next 12 months if Credivalores' RAC ratio drops below 5% due to higher-than-expected growth in risk-weighted assets or lower profitability amid a slower-than-expected recovery of fee and net interest income or higher provision charges. We could also lower the ratings if, contrary to our expectations, the NPA ratio rises above 15%." Upside scenario S&P could revise the outlook on Credivalores to stable if profitability improves and the lender keeps an adequate market position and diversified business mix that allow for steady operating revenue and a forecasted RAC ratio consistently above 5%. Ratings score snapshot Issuer Credit Rating: B/Negative/B Stand-alone credit profile: b Preliminary Anchor: b+ Anchor Adjustment: 0 Business Position: Adequate (0) Capital and Earnings: Moderate (0) Risk Position: Moderate (-1) Funding and Liquidity: Moderate and adequate (-1) Comparable Rating Analysis: +1 Support: 0 ALAC Support: 0 GRE Support: 0 Group Support: 0 Sovereign Support: 0 Additional Factors: 0 Banco G&T Continental S.A. S&P said, "We affirmed our ratings on Banco G&TC, the main operating subsidiary of Grupo Financiero G&T Continental (Grupo G&TC; not rated). The ratings reflect its good market position in the Guatemalan corporate lending segment and its brand recognition as one of the largest financial institutions in the country. The ratings also incorporate our projected RAC ratio for Grupo G&TC (consolidated) of about 6.7% for the next two years." The ratings also capture the higher dollarization of the bank's balance sheet compared to the financial system. In addition, Banco G&T's funding base relies mainly on deposits from the retail sector, which have been resilient and stable and provide the bank with enough liquidity to face its short-term obligations. Outlook S&P said, "Our stable outlook on Banco G&TC for the next 12 months mirrors that on Guatemala (foreign currency: BB-/Stable/B; local currency: BB/Stable/B). The stable outlook also reflects our expectation that the bank will withstand the effects of the COVID-19 pandemic with adequate capital metrics, despite rising credit losses and modest internal capital." Downside scenario If S&P's downgrade Guatemala in the next 12 months, it would take a similar action on Banco G&TC. Upside scenario An upgrade of Banco G&TC would require that we upgrade Guatemala. S&P sees this scenario as unlikely in the next 12 months because of the prolonged economic downturn in the country and its near-term impact on the sovereign's financial profile. Ratings score snapshot Issuer Credit Rating: BB-/Stable/B Stand-alone credit profile: bb Anchor: bb Business Position: Strong (+1) Capital and Earnings: Moderate (0) Risk Position: Moderate (-1) Funding and Liquidity: Adequate and adequate (0) Comparable Rating Analysis: 0 Support: 0 ALAC Support: 0 GRE Support: 0 Group Support: 0 Sovereign Support: 0 Additional Factors: -1 Banco Industrial S.A. S&P said, "We affirmed our ratings on Banco Industrial. The ratings reflect its business resilience, supported by its position as the largest lender in Guatemala and its highly diversified business profile. Our ratings also incorporate our consolidated projected RAC ratio for the bank's parent, Bicapital Corp. (Bicapital; not rated), of about 6.7% for the next two years. We also account for the above-average dollarization on Banco Industrial's balance sheet and its manageable delinquency and credit loss levels. Finally, the bank's deposit base remains one of its main strengths and provides it with enough liquidity to face short-term obligations, despite adverse market conditions." Outlook S&P said, "Our stable outlook on Banco Industrial for the next 12 months mirrors that on Guatemala, which constrains our rating on the bank. The outlook also incorporates our opinion that Banco Industrial will remain one of the most resilient banks in the country to the effects of the COVID-19 pandemic, thanks to its solid market position and large deposit base. We think Banco Industrial will continue posting a stable operating performance and healthier asset quality metrics than the Guatemalan system average." Downside scenario S&P could lower the ratings on Banco Industrial in the next 12 months if it takes a similar action on Guatemala, which could occur if the pandemic-induced economic shock and the government's fiscal deficit lead to persistently weak public finances in the next few years. Upside scenario An upgrade of Banco Industrial would require an upgrade of Guatemala. S&P views such a scenario as unlikely in the next 12 months because of the economic slowdown in the country and its potential harsh impact on Guatemala's financial profile. Ratings score snapshot Issuer Credit Rating: BB-/Stable/B Stand-alone credit profile: bb Anchor: bb Business Position: Strong (+1) Capital and Earnings: Moderate (0) Risk Position: Moderate (-1) Funding and Liquidity: Adequate and adequate (0) Comparable Rating Analysis: 0 Support: 0 ALAC Support: 0 GRE Support: 0 Group Support: 0 Sovereign Support: 0 Additional Factors: -1 Banco Agricola S.A. S&P said, "We affirmed our ratings on Banco Agricola. Our ratings on the bank continue to incorporate our expectation that the bank will maintain its resilience and business stability despite the adverse economic conditions in El Salvador. Business stability is supported by Banco Agricola's leading market position and its well-diversified business profile. Moreover, the ratings incorporate a projected RAC ratio of 6.5% for the next 12 months. Finally, the ratings reflect manageable delinquencies and credit losses, as well as its large and diversified retail deposit base that supports its funding and liquidity profile amid the difficult market conditions." Outlook The outlook on Banco Agricola is negative, reflecting an at least one-in-three chance of a downgrade in the next six to 18 months. Despite the bank's adequate liquidity, the negative outlook reflects that a potential deterioration in El Salvador's economic conditions could harm the bank's liquidity. Upside scenario If Banco Agricola's liquidity remains adequate, S&P could revise the outlook to stable. Ratings score snapshot Issuer Credit Rating: B-/Negative/B Stand-alone credit profile: bb- Anchor: b+ Business Position: Strong (+1) Capital and Earnings: Moderate (0) Risk Position: Adequate (0) Funding and Liquidity: Adequate and adequate (0) Comparable Rating Analysis: 0 Support: +2 ALAC Support: 0 GRE Support: 0 Group Support: +2 Sovereign Support: 0 Additional Factors: -5 Inversiones Atlantida S.A. S&P said, "We affirmed our ratings on Inversiones Atlantida. The ratings reflect its position as one of the largest financial conglomerates in the Honduran financial system, its growing operations in subsidiaries outside the country, and the stability of operating revenues. The ratings also account for our RAC ratio forecast of about 5.5% for the next 24 months and our expectation that the group's asset quality metrics will remain manageable and comparable with its peers. Additionally, Inversiones Atlantida's solid deposit base comes mainly from retail deposits; therefore, we consider the bank to have enough liquidity to support its operations in upcoming months. Finally, the ratings incorporate the conglomerate's heavy dependence on upstream dividends from subsidiaries, especially Banco Atlantida, to meet financial obligations, which results in an issuer credit rating one notch below the group credit profile." Outlook S&P's negative outlook on the group for the next six months reflects the double leverage ratio's rise above 120% in the first quarter of 2021. In its view, a consistent increase in this ratio could erode the group's credit risk profile due to a heavier dependence on dividends from its operating subsidiaries. Downside scenario S&P could downgrade Inversiones Atlantida if its double leverage ratio remains consistently above 120% in the next six months. Upside scenario S&P could revise the outlook to stable from negative in the next six months if the group's double leverage ratio returns to historical levels and remains consistently below 120%. This could happen if the group successfully strengthens its capital base. Ratings score snapshot Issuer Credit Rating: B+/Negative/-- Stand-alone credit profile: bb Anchor: bb- Business Position: Strong (+1) Capital and Earnings: Moderate (0) Risk Position: Adequate (0) Funding and Liquidity: Adequate and adequate (0) Comparable Rating Analysis: 0 Support: 0 ALAC Support: 0 GRE Support: 0 Group Support: 0 Sovereign Support: 0 Additional Factors (Nonoperating Holding Company): -2 Banco Atlantida S.A. S&P said, "We affirmed our ratings on Banco Atlantida. The ratings reflect its position as one of the largest banks in the Honduran financial system and the stability of operating revenues and loan portfolio. The ratings also incorporate our RAC ratio forecast of about 5.6% for the next 24 months and our expectation that the bank's asset quality metrics will remain manageable and comparable with its peers. Additionally, Banco Atlantida's solid deposit base comes mainly from retail deposits; therefore, we consider the bank has enough liquidity to support its operations in upcoming months." Outlook S&P said, "The stable outlook on Banco Atlantida for the next 12 months reflects our expectation that it will maintain manageable asset quality metrics despite the ongoing adverse economic conditions stemming from the pandemic. The outlook also incorporates our expectation that the bank will maintain stable capitalization mainly thanks to modest, but consistent, internal capital generation. The outlook also incorporates our expectation that the bank will remain the main operating subsidiary for Inversiones Atlantida." Downside scenario S&P said, "If we lower the ratings on Honduras (BB-/Stable/B), we would take the same action on Banco Atlantida. This is because we rarely rate financial institutions above the long-term sovereign rating given that we believe that during sovereign stress, regulatory and supervisory powers may restrict the bank's financial flexibility." Upside scenario If S&P upgrades Honduras in the next 12-24 months, it would take a similar action on Banco Atlantida. However, S&P doesn't view this scenario as likely due to the sharp economic downturn in Honduras stemming from the COVID-19 pandemic. Ratings score snapshot Issuer Credit Rating: BB-/Stable/B Stand-alone credit profile: bb Anchor: bb- Business Position: Strong (+1) Capital and Earnings: Moderate (0) Risk Position: Adequate (0) Funding and Liquidity: Adequate and adequate (0) Comparable Rating Analysis: 0 Support: 0 ALAC Support: 0 GRE Support: 0 Group Support: 0 Sovereign Support: 0 Additional Factors: -1 BAC International Bank Inc. S&P said, "Our ratings on BAC International Bank Inc. (BAC) reflect its leading market position in Central America on a consolidated basis and its large, sticky, and well-diversified customer base. The ratings also reflect our projected RAC ratio of 6.5%, on average, for 2021-2022, underpinned by the gradual recovery of profitability and modest loan growth. Moreover, we expect the bank to keep manageable asset quality metrics despite the still adverse operating conditions across the region. Finally, BAC's main strengths stem from its funding structure that is supported by a stable and pulverized deposit base with manageable short-term financial obligations." CreditWatch S&P said, "The CreditWatch positive listing reflects a one-in-two chance of an upgrade after BAC's spinoff is completed. The upgrade could reach the level of BAC's 'bbb-' SACP, given that we don't consider that Banco de Bogota will have a negative influence on BAC in case of stressful conditions that could weaken BAC's SACP. On the other hand, we could affirm the ratings on BAC if the spinoff doesn't take place. We expect to resolve the CreditWatch placement once there is regulatory approval and the remaining legal and operational processes are finalized, which is likely in December 2021." Ratings score snapshot Issuer Credit Rating: BB+/Watch Pos/B Stand-alone credit profile: bbb- Anchor: bb+ Business Position: Strong (+1) Capital and Earnings: Moderate (0) Risk Position: Adequate (0) Funding and Liquidity: Adequate and adequate (0) Comparable Rating Analysis: 0 Support: -1 ALAC Support: 0 GRE Support: 0 Group Support: -1 Sovereign Support: 0 Additional Factors: 0 Ratings List RATINGS AFFIRMED Banco Davivienda S.A. Issuer Credit Rating BB+/Stable/B RATINGS AFFIRMED BANCO DE BOGOTA S.A. Y SUBSIDIARIAS Issuer Credit Rating BB+/Stable/B RATINGS AFFIRMED MULTIBANK INC. Y SUBSIDIARIAS Issuer Credit Rating BB+/Stable/B RATINGS AFFIRMED BANCO G & T CONTINENTAL S.A. Issuer Credit Rating BB-/Stable/B RATINGS AFFIRMED BANCO GENERAL S.A. Issuer Credit Rating BBB/Negative/A-2 RATINGS AFFIRMED BANCO INDUSTRIAL S.A. Issuer Credit Rating BB-/Stable/B RATINGS AFFIRMED BANCO NACIONAL DE PANAMA Issuer Credit Rating BBB/Negative/A-2 RATINGS AFFIRMED BANCO AGRICOLA S.A Issuer Credit Rating B-/Negative/B RATINGS AFFIRMED BANCOLOMBIA PANAMA S.A. Issuer Credit Rating BB+/Stable/B RATINGS AFFIRMED BANCOLOMBIA S.A. Y COMPANIAS SUBORDINADAS Issuer Credit Rating BB+/Stable/B RATINGS AFFIRMED BANISTMO S.A. Issuer Credit Rating BB+/Stable/B RATINGS AFFIRMED ATLANTIC SECURITY BANK Issuer Credit Rating BBB-/Negative/A-3 RATINGS AFFIRMED CREDIVALORES - CREDISERVICIOS SAS Issuer Credit Rating B/Negative/B RATINGS AFFIRMED FINANCIERA DE DESARROLLO NACIONAL S.A. Issuer Credit Rating BB+/Stable/-- RATINGS AFFIRMED FINANCIERA DE DESARROLLO TERRITORIAL S.A. FINDETER Issuer Credit Rating BB+/Stable/B RATINGS AFFIRMED GLOBAL BANK CORP. Y SUBSIDIARIAS Issuer Credit Rating BBB-/Stable/A-3 RATINGS AFFIRMED BANCO ATLANTIDA S.A. Issuer Credit Rating BB-/Stable/B RATINGS AFFIRMED INVERSIONES ATLANTIDA S.A. Issuer Credit Rating B+/Negative/-- RATINGS AFFIRMED PROMERICA FINANCIAL CORP. Issuer Credit Rating B+/Stable/B RATINGS STILL ON CREDITWATCH BAC INTERNATIONAL BANK INC. Issuer Credit Rating BB+/Watch Pos/B =========== P A N A M A =========== BANISTMO SA: Fitch Affirms 'BB+' LT IDR, Outlook Stable ------------------------------------------------------- Fitch Ratings has affirmed Banistmo, S.A.'s Long-Term Issuer Default Rating (IDR) at 'BB+' with a Stable Rating Outlook, Short-Term IDR at 'B' and the Viability Rating (VR) at 'bb+'. Additionally, Banistmo's National Long- and Short-Term Ratings were affirmed at 'AA(pan)' with a Stable Outlook and 'F1+(pan)', respectively. Fitch has also withdrawn Banistmo's Support Rating (SR) of '3' as it is no longer relevant to the agency's coverage following the publication of Fitch's updated Bank Rating Criteria on Nov. 12, 2021. In line with the updated criteria, Fitch has assigned Banistmo a Shareholder SR (SSR) of 'bb+'. KEY RATING DRIVERS IDRs, SSR, NATIONAL AND SENIOR UNSECURED DEBT RATINGS Banistmo's IDRs, SSR, national and senior unsecured debt ratings reflect Fitch's appreciation on the ability and propensity of its shareholder, Bancolombia, S.A. (BB+/Stable), to provide support to Banistmo, if required. The bank's IDR Stable Outlook mirrors the same of its parent. The Long-Term national rating indicates the relative credit strength of Bancolombia's support in relation to other rated entities in Panama, which the agency expects to remain, reflecting in the Stable Outlook. Fitch's propensity-to-support view is strongly influenced by Banistmo's key strategic role in Bancolombia's diversification in a core market as the Central American region, factor to drive to Banistmo's IDR being equalized with its owner's IDR. The ratings also weight moderately the huge reputational risk that a potential subsidiary default would pose to its parent, impacting its franchise. Bancolombia has a significant footprint in Central America, and Banistmo is its second largest operation in the region. Fitch rates senior unsecured debt at the same level as Banistmo's international and national ratings, as the probability of default on the debt is equal to the bank. VR Banistmo's VR of 'bb+' is one notch above its implied 'bb' VR, reflecting the strength of the bank's business profile, which Fitch considers as an important influence element. The VR captures its relevant position in the Panamanian banking system, as the second largest player by loans and deposits, with a market share of 13.5% and 14.1%, respectively, as of September 2021. The agency also believes that being part of Bancolombia has reinforced its franchise, giving it more recognition in the market and benefiting its deposit base. The bank's VR also remain highly influenced by the still challenging Panamanian operating environment (OE), evaluated by Fitch at 'bb+' with a negative trend, which exerts pressures on the bank's financial performance, primarily asset quality and profitability. Although Fitch expects an economic recovery of 12.1% by 2021, the OE reactivates at a slower pace due to the high unemployment rate and the important share of relief loans (September 21: 19%). In Fitch's view, Panamanian banks will not start a material path of credit and performance recovery until these loans are fully addressed. Fitch expects Banistmo's loan quality to return to levels close to pre-pandemic, albeit it is still exposed to pressure given the downside risks in the OE and the modified loans' percentage (October 21: 25%), as forbearance measures ended. As of 3Q21, NPL ratio (higher than 90 days) reached the highest value observed in recent years of 4.3% (2017-2020: 2.7%), above some peers and the system (2.3%). In contrast, loan loss allowances, which was prudently widened since 2020, reaching 164.4% at 3Q21 (industry: 147.9%). Meanwhile, a substantial reduction in loan impairment charges boosted an improvement in Banistmo's profitability at 3Q21, which was already stressed. At 3Q21, the operating profit to risk-weighted assets (RWA) metric turned at 1.6% from a negative 1.1% in 2020 (2017-2020: 0.9%), mainly affected by high provisions for NPLs recorded prudently in 2020 due to high uncertainty. Fitch expects the favorable performance to persist, although it believes profitability will remain vulnerable to still difficult conditions that could put pressure on it again. Banistmo's capitalization kept its smooth positive trajectory, partly sustained by low credit growth. At 3Q21, the common equity Tier 1 (CET1) to RWA metric was 12.7%, slightly above of the 12.3% average of the last four years. The regulatory capital ratio stood at 14.6% (2017-2020: 14.1%), providing a reasonable cushion over the regulatory limit of 8% under the prevailing environment. The bank's capital factor is further bolstered by shareholder's potential ordinary support, in Fitch's view. The bank's diversified funding profile is underpinned by its sound local franchise and good access to resources from local and global markets. It has also reinforced by the parent's support and synergies produced between them, translating in an ample deposit base and variety of relationship with local and international institutions. This also gives Banistmo room to continue navigating in the current OE and weighting positively in the agency's assessment. At 3Q21, the loan-to-deposit ratio improved to 111.3% (2017-2020: 115.3%). RATING SENSITIVITIES Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Since Banistmo's support-driven IDR is at the same level as its standalone creditworthiness as reflected in its VR, a downgrade of the bank's IDRs and national ratings could be possible only if both its VR and Bancolombia's IDRs are downgraded; -- Any negative action on Bancolombia's IDRs would lead to a similar action on Banistmo's IDRs and SSR. In addition, IDRs, SSR and national ratings could also be downgraded if Fitch's assessment of its parent's propensity and ability to provide support the bank changes; -- A lower than expected recovery or further prolongation of economic deterioration that could lead to a downgrade OE score for Panama's banks, which would pressure Banistmo's VR; -- Banistmo's VR could be pressured by a further deterioration of profitability and asset quality ratios that undermine the bank's financial performance, driving a decline in its CET1 ratio consistently below 10% and/or its operating profitability/RWA metric consistently below 0.5%; -- Banistmo's senior unsecured debt would mirror any potential downgrade on the bank's International and national ratings. Factors that could, individually or collectively, lead to positive rating action/upgrade: -- A positive rating action on Bancolombia's IDRs would trigger similar rating action on Banitsmo's IDRs, SSR and national ratings; -- Over the medium term, Banistmo's VR could be upgraded by the confluence of an improvement of the OE and the financial profile of the bank; -- Banistmo's senior unsecured debt would mirror any potential upgrade on the bank's ratings. VR ADJUSTMENTS The VR of 'bb+' has been assigned above the 'bb' implied VR due to the following adjustment reason: Business Profile (positive). The Earnings & Profitability Score of 'bb-' has been assigned above the 'b' category implied score due to the following adjustment reason: Historical and Future Metrics (positive). 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. PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS Banistmo, S.A.'s ratings are based on Fitch's opinion on the ability and propensity of its ultimate parent, Bancolombia, S.A., to provide support to the subsidiary, if needed. 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. MULTIBANK INC: Fitch Affirms 'BB+' LT IDR, Outlook Stable --------------------------------------------------------- Fitch Ratings has affirmed Multibank Inc.'s Long- and Short-Term Issuer Default Rating (IDR) at 'BB+' and 'B' respectively and its Viability Rating (VR) at 'bb+'. Fitch has also affirmed the bank's National Long- and Short-Term Ratings at 'AA(pan)' and 'F1+(pan)', respectively. The Outlook for Long-Term Ratings is Stable. Fitch has also withdrawn Multibank's Support Rating of '3' as it is no longer relevant to the agency's coverage following the publication of Fitch's updated Bank Rating Criteria on 12 Nov. 2021. In line with the updated criteria, Fitch has assigned Multibank's Shareholder Support Ratings (SSRs) of 'bb+'. KEY RATING DRIVERS IDRs, NATIONAL RATINGS AND SENIOR DEBT Multibank IDRs, national and senior unsecured debt ratings reflect Fitch Ratings' view of the propensity and ability of Banco de Bogota to provide support to Multibank should the need arise. The Stable Outlook on Multibank mirrors that on Banco de Bogota which indicates that Fitch expects any additional fallout from the pandemic to be manageable at current rating levels. Multibank's Long-Term IDR and Outlook are equalized with its ultimate parent, Banco de Bogota's Long-Term IDR at 'BB+', Outlook Stable. Fitch considers with high importance that the propensity of Banco de Bogota to support Multibank derives from the relevant role of its only direct Panamanian subsidiary in the group's business model and regional strategy, providing key services in a market considered core. Additionally, Fitch's support assessment considers the reputational risk that the default of the recently acquired operation could involve, which could materially damage its franchise. The ratings of Multibank's outstanding senior unsecured obligations are at the same level as the company's IDR and its National Ratings, as the likelihood of default of the obligations is the same as that of Multibank. VR Multibank's VR is highly influenced by the operating environment, any negative rating action on the sovereign or further deterioration of the operating environment will likely lead to a similar adjustment of this factor, reflecting its influence over the bank's financial profile. Multibank's VR of 'bb+' is one notch above the implied VR of 'bb' and considers as a positive adjustment reason the bank's business profile, which is a high importance factor for the rating given the bank's sound franchise, albeit of its medium size and benefits from strong customer relationships as it is integrated to Grupo Aval. Fitch expects Multibank's capitalization to remain adequate in 2022, driven by moderate assets growth, improvement in earnings, and sound reserves coverage. Multibank's common equity Tier 1 (CET1) capital ratio declined to 11.6% at 3Q21 from 12.2% at YE 2020, reflecting higher risk-weighted assets (RWA). However, this ratio compares better than the bank's average of 11.3% from 2017 to 2019 and favorably with the minimum regulatory requirements (4.5%). Loan loss allowances for impaired loans are sound, which further supports the bank's loss absorption capacity. Fitch's assessment also considers the ordinary support that could receive from its parent if need arises. Overall, Multibank's loan portfolio quality evolved favorably during 2021. The 90-days NPL improved to 1.9% as of September 2021 (2020: 2.1%) thanks to a better than expected performance in the consumer loans after finalizing the relief period in Panama and by the improved commercial loan placement related to the still moderate economic reactivation. However, the negative trend is kept due to the relevant proportion of the modified portfolio, which as of September 2021 represented close to 25% of its gross loans, potentially leading to additional loan impairments. Multibank's performance during 2021 improved thanks to decreasing loan impairment charges due to COVID-19 along with higher revenue streams and no longer having extraordinary expenses related to the acquisition by Grupo Aval, like those of 2020. Its operating profit/RWA ratio stood at 0.6% at 3Q21, above that of YE 2020 (-1.2%) but still below the average for 2017-2019 (2.0%) and compares lower than its local peers'. Multibank benefits from a wide deposit base of well-diversified and stable funds. As of 3Q21, its loans to deposit ratio of 117% (2020: 105.7%) reflect the mild reduction of deposits by 2.8%, in line with the trend observed in the system. Historically, customer deposits have provided close to 70% of total funding. The bank's liquidity position is sound, as reflected in a liquid asset to deposits ratio above 35% for the last four periods. Fitch expects liquidity to remain sound, no significant reductions in deposits are expected in the medium term as deposits relationships are strengthened by belonging to a strong regional group. RATING SENSITIVITIES Factors that could, individually or collectively, lead to negative rating action/downgrade: -- A downgrade of Multibank's IDR and National Ratings could be possible only if both its VR and Banco de Bogota's IDRs are downgraded; -- A downgrade of Multibank's SSR could result from a downgrade of Banco de Bogota's IDR or from a reduced propensity of Banco de Bogota to support its subsidiary, both of which are unlikely at present; -- Multibank's senior unsecured debt would mirror any potential downgrade on its IDRs; -- Multibank's VR could be downgraded as a result of a sustained deterioration of profitability (operating profit to RWAs below 0.5%) and asset quality ratios that undermine the bank's financial performance, driving a decline in its CET1 ratio consistently below 10% that leads to downgrade the Business Profile assessment score. Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Positive rating actions on Multibank's IDR, National Ratings and SSR could be driven by positive rating actions on Banco de Bogota's IDR; -- Positive rating actions on Multibank's IDR and National Ratings could be driven by positive rating action on its VR; -- Multibank's VR could be upgraded upon the sustained strengthening of the Business Profile and of its capitalization levels, showing a CET1 of at least 15%; -- Multibank's senior unsecured debt would mirror any potential upgrade on the bank's ratings. VR ADJUSTMENTS The VR of 'bb+' has been assigned above the implied VR of 'bb' due to the following adjustment reason(s): Business Profile (positive). The Business Profile score has been assigned above the implied score due to the following adjustment reason(s): Business Model (positive), Group Benefits and Risks (positive). The Earnings & Profitability score has been assigned in line with the implied score. Historical and Future Metrics was identified as a relevant positive factor in the assessment. The Capitalisation & Leverage score has been assigned above the implied score due to the following adjustment reason(s): Capital Flexibility and Ordinary Support (positive), Internal Capital Generation and Growth (positive). 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. PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS Multibank's IDRs are driven by the potential support it could receive from its parent, Banco de Bogota, S.A. if required. 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. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Latin America is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA, Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A. Chapman, Editors. Copyright 2021. All rights reserved. ISSN 1529-2746. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Latin America subscription rate is US$775 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Peter A. Chapman at 215-945-7000. . * * * End of Transmission * * *