/raid1/www/Hosts/bankrupt/TCRLA_Public/220111.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
Tuesday, January 11, 2022, Vol. 23, No. 2
Headlines
A R G E N T I N A
ARGENTINA: Bonds Slump as Economy Chief Criticizes IMF Proposals
B R A Z I L
BRAZIL: Brazilians' Savings Showed Negative Balance in 2021
BRAZIL: Domestic Air Traffic Closed 2021 With Recovery of 85%
BRAZIL: Industrial Production Falls 0.2% in November
C H I L E
CHILE: Inflation at a 14-Year High
P U E R T O R I C O
PUERTO RICO: U.S. to Intervene in Bankruptcy to Defend PROMESA
- - - - -
=================
A R G E N T I N A
=================
ARGENTINA: Bonds Slump as Economy Chief Criticizes IMF Proposals
----------------------------------------------------------------
globalinsolvency.com, citing Bloomberg News, reports that Argentine
dollar bonds fell the most since September after Economy Minister
Martin Guzman criticized spending cuts proposed by the
International Monetary Fund, highlighting the difficulties ahead in
securing a new agreement.
Notes maturing in 2041 dropped 1 cent to 32.8 cents on the dollar,
the biggest decline since Sept. 20, according to data compiled by
Bloomberg, according to globalinsolvency.com. Credit-default swaps
widened the most in five weeks, the report notes.
While Argentina and the IMF are "on the same page" on the level of
foreign reserves needed to support the country, they disagree on
how quickly the government must reduce its fiscal deficit, Guzman
said as he laid out his most detailed vision yet for negotiations
with the Fund, the report relays.
"A fiscal middle ground is possible between the IMF and the
government," said Nathalie Marshik, a managing director for fixed
income at Stifel Nicolaus & Co. "But we find the lack of details
this far in the conversation worrying, indicating a deal is not
imminent and the market will likely have to contend with
negotiations going close to the March payment deadline," the report
discloses.
Argentina owes the IMF $2.8 billion in March, a payment many
analysts see as a deadline to reach a deal considering the central
bank's depleted reserves, the report says. The two sides are in
talks to restructure some $40 billion in loans, the report notes.
The IMF's proposal would probably "halt the economic recovery that
Argentina is witnessing and is essentially a program of real
spending cuts," Guzman said during a presentation to governors in
Buenos Aires, alongside President Alberto Fernandez, the report
relays.
About Argentina
Argentina is a country located mostly in the southern half of South
America. It's capital is Buenos Aires. Alberto Angel Fernandez is
the current president of Argentina after winning the October 2019
general election. He succeeded Mauricio Macri in the position.
Argentina has the third largest economy in Latin America. The
country's economy is an upper middle-income economy for fiscal year
2019, according to the World Bank. Historically, however, its
economic performance has been very uneven, with high economic
growth alternating with severe recessions, income maldistribution
and in the recent decades, increasing poverty.
Fitch Ratings' affirmed Argentina's 'CCC' Long-Term
Foreign-Currency and Local-Currency Issuer Default Ratings (IDRs)
at 'CCC' last Oct. 18, 2021, reflecting macroeconomic imbalances
and acute financing constraints that continue to undermine debt
repayment capacity following 2020 bond restructurings, and
significant political uncertainty around how these challenges will
be addressed.
Standard & Poor's credit rating for Argentina stands at CCC+ with
stable outlook, which was a rating upgrade issued on Sept. 8,
2020. Moody's credit rating for Argentina was last set at Ca on
Sept. 28, 2020. DBRS' credit rating for Argentina is CCC, given
on Sept. 11, 2020.
As reported by The Troubled Company Reporter - Latin American, DBRS
noted that the recent upgrade in Argentina's ratings (September
2020) follows the closing of two debt restructuring agreements
between the Argentine government and private creditors. The first
restructuring involved $65 billion in foreign-law bonds. The deal
achieved the requisite participation necessary to trigger the
collective action clauses and finalize the restructuring on 99% on
the aggregate principal outstanding of eligible bonds. DBRS added
that the debt restructurings conclude a prolonged default and
provide the government with substantial principal and interest
payment relief over the next four years.
DBRS further relayed that Argentina is also seeking a new agreement
with the International Monetary Fund (IMF) to replace the canceled
2018 Stand-by Agreement. Formal negotiations on the new financing
began in November 2020. Obligations to the IMF amount to $44
billion, with major repayments coming due in 2022 and 2023.
===========
B R A Z I L
===========
BRAZIL: Brazilians' Savings Showed Negative Balance in 2021
-----------------------------------------------------------
Rio Times Online reports that Brazilians' savings, after reaching a
record high in 2020 due to the uncertainties generated by the
pandemic, registered its first negative balance in the last five
years in 2021, apparently due to the need to compensate for the
loss of income, the Central Bank reported.
The value withdrawn by Brazilians from their savings accounts last
year exceeded BRL35.5 billion (US$6.4 billion) that were deposited
in the same accounts, according to data released by the issuing
agency, according to Rio Times Online.
This is the first negative annual result since 2016, the report
notes.
In total, Brazilians deposited BRL3.410 trillion (US$609 billion)
in their savings accounts last year, from which they withdrew
BRL3.445 trillion (US$615 billion), the report discloses.
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).
he Brazilian State of Amapa, bordering French Guyana and Suriname,
announced that it fined the mining company Mina Tucano, a
subsidiary of the Canadian company Great Panther, R$50 (US$8.7)
million for having caused unprecedented fish mortality in the
extreme north of the Amazon as a result of contamination by mercury
cyanide used for gold extraction.
This was announced by the Secretariat of the Environment of the
State of Amapa, in the extreme north of Brazil, which indicated
that the fine was applied on December 21 for the contamination of
two streams
Mina Tucano, which specializes in gold, is a Great Panther Mining
Limited subsidiary headquartered in Vancouver, Canada, with
operations in Brazil, Mexico, and Peru.
BRAZIL: Domestic Air Traffic Closed 2021 With Recovery of 85%
-------------------------------------------------------------
Rio Times Online reports that Brazilian Airline Association
(Abear), the Brazilian domestic air network closed 2021 with a
recovery of nearly 85% compared to operations in March 2020, the
month the pandemic began.
December was the best month since the last 21 years, with an
average of 2,036 takeoffs per day, and offers very good prospects
for January 2022, according to Rio Times Online.
As HOSTELTUR has reported, Brazil has started an accelerated
recovery process of its domestic connections after the end of the
second wave of COVID-19 (March and April 2021), the report relays.
However, the reality and timeline look different for international
air travel, due to the restrictions that remain in place, the
report notes. Data show that airlines achieved a 41.1% recovery
in December, the report says. In this case, a full recovery is not
expected before the end of 2023, adds the report.
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).
he Brazilian State of Amapa, bordering French Guyana and Suriname,
announced that it fined the mining company Mina Tucano, a
subsidiary of the Canadian company Great Panther, R$50 (US$8.7)
million for having caused unprecedented fish mortality in the
extreme north of the Amazon as a result of contamination by mercury
cyanide used for gold extraction.
This was announced by the Secretariat of the Environment of the
State of Amapa, in the extreme north of Brazil, which indicated
that the fine was applied on December 21 for the contamination of
two streams
Mina Tucano, which specializes in gold, is a Great Panther Mining
Limited subsidiary headquartered in Vancouver, Canada, with
operations in Brazil, Mexico, and Peru.
BRAZIL: Industrial Production Falls 0.2% in November
----------------------------------------------------
Rio Times Online reports that industrial production fell by 0.2% in
November compared to October, recording the sixth consecutive month
of negative results. Compared to November 2020, the industry
shrank 4.4% in November 2021, according to Rio Times Online.
The data was released by the Brazilian Institute of Geography and
Statistics (IBGE).
The data frustrated the estimates, the report notes. The median
expectation of analysts heard by Refinitiv was a slight increase of
0.1% in the monthly comparison and a drop of 4.2% in the annual
comparison, the report discloses.
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).
he Brazilian State of Amapa, bordering French Guyana and Suriname,
announced that it fined the mining company Mina Tucano, a
subsidiary of the Canadian company Great Panther, R$50 (US$8.7)
million for having caused unprecedented fish mortality in the
extreme north of the Amazon as a result of contamination by mercury
cyanide used for gold extraction.
This was announced by the Secretariat of the Environment of the
State of Amapa, in the extreme north of Brazil, which indicated
that the fine was applied on December 21 for the contamination of
two streams
Mina Tucano, which specializes in gold, is a Great Panther Mining
Limited subsidiary headquartered in Vancouver, Canada, with
operations in Brazil, Mexico, and Peru.
=========
C H I L E
=========
CHILE: Inflation at a 14-Year High
----------------------------------
Buenos Aires Times reports that Chile registered inflation of 7.2
percent in 2021, the highest level in 14 years, the INE statistics
agency said.
For the month of December, the figure was a higher-than-expected
0.8 percent, driven by higher prices for transport and food,
according to Buenos Aires Times.
Annual inflation was far higher than the Central Bank's target of
3.0 percent, the level of the year before, the report notes.
Price rises were fuelled partly by increased public spending
boosted by government grants amounting to some US$3 billion to
stimulate a pandemic-ravaged economy, and individual withdrawals
from private pension funds totaling US$50 billion, the report
discloses.
The withdrawals, three in total, were approved by Congress in
response to strong public pressure - a short-term poverty
alleviation measure that will leave millions of Chileans with less
money to retire on, the report says.
Chile's Central Bank has already raised interest rates twice since
October, by 1.25 percentage points each time, the report notes.
The government expects GDP to have expanded about 11.5 percent in
2021 compared to a fall of 5.8 percent in 2020, the report
discloses.
Tourism experts predict 'record season' as Argentines flock to
their favourite destinations, the report notes.
Elsewhere in Latin America, inflation is at more than 10 percent in
economic giant Brazil, while in Argentina it is around 50 percent,
the report adds.
=====================
P U E R T O R I C O
=====================
PUERTO RICO: U.S. to Intervene in Bankruptcy to Defend PROMESA
--------------------------------------------------------------
The United States of America, through the U.S. Department of
Justice, on Jan. 7, 2022, notified the U.S. Bankruptcy Court for
the District of Puerto Rico, that it intends to participate in the
PROMESA Title III proceedings of the Commonwealth of Puerto, et
al., for the purpose of defending the constitutionality of PROMESA
as it applies to the proposed approval of the Plan of Adjustment.
The United States will file its memorandum of law no later than
February 7, 2022.
Congress passed PROMESA in 2016 to help resolve Puerto Rico's
financial crisis. Some of the island's creditors allege Promesa
violates the U.S. Constitution.
According to Bloomberg News, the DOJ's decision to intervene in
the
case is expected to delay U.S. District Court Judge Laura Taylor
Swain's ruling on a restructuring plan that would include cutting
$22 billion of bonds down to $7.4 billion. Confirmation hearings
on that debt plan ended Nov. 23.
Puerto Rico has been in bankruptcy since May 2017 after years of
borrowing to paper over budget deficits, economic decline and
population loss.
About Puerto Rico
Puerto Rico is a self-governing commonwealth in association with
the United States that's facing a massive bond debt of $70
billion,
a 68% debt-to-GDP ratio and negative economic growth in nine of
the
last 10 years.
The Commonwealth of Puerto Rico has sought bankruptcy protection,
aiming to restructure its massive $74 billion debt-load and $49
billion in pension obligations.
The debt restructuring petition was filed by Puerto Rico's
financial oversight board in U.S. District Court in Puerto Rico
(Case No. 17-01578) on May 3, 2017, and was made under Title III
of
2016's U.S. Congressional rescue law known as the Puerto Rico
Oversight, Management, and Economic Stability Act ('PROMESA').
The Financial Oversight and Management Board later commenced Title
III cases for the Puerto Rico Sales Tax Financing Corporation
(COFINA) on May 5, 2017, and the Employees Retirement System (ERS)
and the Puerto Rico Highways and Transportation Authority (HTA) on
May 21, 2017. On July 2, 2017, a Title III case was commenced for
the Puerto Rico Electric Power Authority ("PREPA").
U.S. Chief Justice John Roberts has appointed U.S. District Judge
Laura Taylor Swain to oversee the Title III cases. The Honorable
Judith Dein, a United States Magistrate Judge for the District of
Massachusetts, has been designated to preside over matters that
may
be referred to her by Judge Swain, including discovery disputes,
and management of other pretrial proceedings.
Joint administration of the Title III cases, under Lead Case No.
17-3283, was granted on June 29, 2017.
The Oversight Board has hired as advisors, Proskauer Rose LLP and
O'Neill & Borges LLC as legal counsel, McKinsey & Co. as strategic
consultant, Citigroup Global Markets, as municipal investment
banker, and Ernst & Young, as financial advisor.
Martin J. Bienenstock, Esq., Scott K. Rutsky, Esq., and Philip M.
Abelson, Esq., of Proskauer Rose; and Hermann D. Bauer, Esq., at
O'Neill & Borges are on-board as attorneys.
McKinsey & Co. is the Board's strategic consultant, Ernst & Young
is the Board's financial advisor, and Citigroup Global Markets
Inc.
is the Board's municipal investment banker.
Prime Clerk LLC is the claims and noticing agent. Prime Clerk
maintains a case web site at
https://cases.primeclerk.com/puertorico
Epiq Bankruptcy Solutions LLC is the service agent for ERS, HTA,
and PREPA.
O'Melveny & Myers LLP is counsel to the Commonwealth's Puerto Rico
Fiscal Agency and Financial Advisory Authority (AAFAF), the agency
responsible for negotiations with bondholders.
The Oversight Board named Professor Nancy B. Rapoport as fee
examiner and chair of a committee to review professionals' fees.
*********
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 2022. 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 * * *