/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/220204.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 Friday, February 4, 2022, Vol. 23, No. 20 Headlines B A H A M A S BAHAMAS: Working to Restore Investor Confidence, Says PM B R A Z I L BRF S.A.: S&P Upgrades ICR to 'BB' with Stable Outlook GUARA NORTE: Fitch Affirms BB+ Rating on Sec. Notes, Outlook Neg. D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: Central Bank Raises Benchmark Rate to 5% DOMINICAN REPUBLIC: Starts Mega Tourism Project E L S A L V A D O R TITULARIZADORA: Fitch Affirms BB- Rating on Series 2019-1 Loan P U E R T O R I C O METRO PUERTO RICO: Unsecureds to Recover 100% in 60 Months T R I N I D A D A N D T O B A G O TRINIDAD PETROLEUM: S&P Downgrades ICR to 'B+' with Stable Outlook X X X X X X X X LATAM: $1B+ Loss in 2021 in the Region, CHTA Says - - - - - ============= B A H A M A S ============= BAHAMAS: Working to Restore Investor Confidence, Says PM -------------------------------------------------------- RJR News reports Bahamas Prime Minister Philip Brave Davis said the government is working to restore the investor confidence that has waned in Grand Bahama over the years. Mr. Davis admitted that potential investors he met with during his Dubai trip were eager to invest in The Bahamas, but not the beleaguered second city, according to RJR News. Speaking during a press conference following his first official visit to Grand Bahama since the September 16 general election, the prime minister said the government wants to have partners in Grand Bahama that have a vision that they are prepared to put their money behind, but that has been hard to come by, the report notes. Grand Bahama was devastated by Hurricane Dorian in 2019. According to the Inter-American Development Bank, Dorian caused about $3.4 billion in damage, which is equal to one-quarter of the Bahamas' gross domestic product, the report relays. As reported in the Troubled Company Reporter-Latin America on Nov. 16, 2021, S&P Global Ratings lowered its long-term foreign and local currency sovereign credit ratings on the Commonwealth of The Bahamas to 'B+' from 'BB-'. At the same time, S&P Global Ratings revised its transfer and convertibility assessment to 'BB-' from 'BB'. The outlook is stable. =========== B R A Z I L =========== BRF S.A.: S&P Upgrades ICR to 'BB' with Stable Outlook ------------------------------------------------------- S&P Global Ratings raised its global scale issuer credit rating on Brazil-based food company BRF S.A. to 'BB' from 'BB-' and its national scale issuer credit rating to 'brAAA' from 'brAA+'. S&P also raised the issue-level rating to 'BB' from 'BB-', with a recovery rating remaining at '3'. The stable outlook reflects S&P's view that, although margins will remain pressured in 2022, the company will keep adjusted debt to EBITDA below 3.0x due to the follow-on, and continue deleveraging as margins recover, while BRF maintains a conservative financial policy regarding acquisitions and investments to control leverage. BRF announced the completion of the pricing of its follow-on, issuing 270 million shares and raising R$5.4 billion. Proceeds should improve the company's leverage metrics, leading to adjusted debt to EBITDA below 3.0x, and support the capex plan, Vision 2030. The latter intends to do the following: -- Increase overall volumes and footprint in Brazil and the Middle East. For example, BRF recently announced a new joint venture in Saudi Arabia with estimated capex of $350 million (or about R$2 billion) 70% of which BRF will provide. -- Improve efficiency through digitization and modernization of assets. -- Raise the share of processed and higher value-added and innovative products in the portfolio through the company's well-recognized brands: Sadia, Perdigao, Qualy, Banvit, along with ready meals, alternative proteins, and value-added pork. -- Develop new businesses with high synergies, such as in the ingredients and pet food segments, as seen in recent acquisitions of Hercosul and Mogiana for R$1.35 billion. After deleveraging somewhat in 2020 due to higher demand during the pandemic-induced turmoil, BRF's margin slipped, especially in the second half of 2021. This mainly resulted from high grain prices in Brazil due to a severe drought and other inflationary pressures such as transportation -- because of higher gasoline prices and bottlenecks in the ports -- increased labor costs, and a sharp rise in grain demand globally. Grain prices should remain high in the first half of 2022, given the continuation of drought in Brazil's southern region that caused the summer corn harvest to contract, but could somewhat decline due to the expected record winter harvest in Brazil in the second half of the year. While demand for pork, poultry, and processed food products remains steady, Brazil's renewed economic weakness, FX volatility, and unstable political scenario could limit price adjustments for the final customer. Still, the share of higher value-added products with recognized brands in BRF's portfolio is rising, which enables the company to mitigate the impact of higher input costs. At the same time, export profits should remain favorable amid a weak Brazilian real and Asia's still strong demand for protein (albeit moderating as China's hog production is recovering), while BRF improves its margins in the Middle East. Overall, S&P expects margins to slip to roughly 11.0% in 2022 from about 11.5% in 2021. The R$15 billion – R$16 billion investment program planned for 2022-2024 should allow BRF to improve its margins to more than 13% in 2023. Free operating cash flow (FOCF) will be negative for the next two years, but turn positive as the company improves cash generation in 2024. Leverage, however, would drop to about 2.5x amid rising EBITDA, starting in 2023. S&P said, "We expect BRF to maintain financial discipline in terms of shareholder remuneration, acquisitions, and capex to keep leverage controlled and consistently maintain net debt to EBITDA below 3.0x even while it pursues growth, according to its newly publicized policy. To reach these goals, we believe BRF has plenty of flexibility in its discretionary capex and could postpone investments if costs remain high and its ability to adjust prices is limited, as seen in 2021. In addition, higher cash generation may result from lower interest payments thanks to debt reduction." GUARA NORTE: Fitch Affirms BB+ Rating on Sec. Notes, Outlook Neg. ----------------------------------------------------------------- Fitch Ratings affirms the senior secured notes issued by Guara Norte S. a r.l. at 'BB+' with a Negative Outlook. The notes are collateralized by a charter agreement and the related proceeds from the operations of the Cidade de Ilhabela (CdI) floating-production storage and offloading (FPSO) vessel. The rating covers the timely payment of both interest and principal components to the notes, including the principal amortization schedule, in line with the transaction documentation. DEBT RATING PRIOR ---- ------ ----- Guara Norte S.a r.l. Senior Secured Notes LT BB+ Affirmed BB+ due 15-Jun-2034 400666AA1 TRANSACTION SUMMARY The senior secured notes issued by Guara Norte S.a.r.l. are backed by the flows related to the charter agreement initially signed with Guara B.V. for the use of the FPSO Cidade de Ilhabela (CdI) for a term of 20 years. The BM-S-9 consortium is comprised of Petrobras, with 45% share, and Shell Brasil (wholly owned subsidiary of Royal Dutch Shell plc) with 30% share, and Repsol YPF Brazil S.A. (a joint venture [JV] between Repsol and Sinopec) with 25% share. The vessel is operated by a Brazilian subsidiary of SBM Offshore, through a services agreement. The CdI FPSO began operating in 2014 at the Sapinhoa oil field in the pre-salt layer of the Santos Basin off the coast of Brazil. Fitch's rating addresses the timely payment of interest and principal on a semiannual basis until the legal final maturity in June 2034. KEY RATING DRIVERS CONSORTIUM OBLIGATION STRENGTH EXCEEDS PETROBRAS' The offtaking consortium is backed by Petrobras (45% share), the Shell subsidiary Shell Brasil Petroleo Ltda (30%) and the Repsol/Sinopec joint venture (25%); all the pro rata obligations are guaranteed by affiliate companies (for the Petrobras group, Petrobras International Braspetro B.V.). The offtakers' obligations related to the 20-year charter and joint operating agreements are several, but not joint, as each party guarantees that it will make its portion of the payment. However, these payments can be seen as joint and several as the underlying concession states that each party must support all the obligations related to ongoing production. Fitch expects the payments to continue given the high economic incentives to maintain the concession. Therefore, the rating of the lowest-rated member, Petrobras (BB-/Negative), does not strictly limit the notes' rating. SOVEREIGN EVENT RISK; T&C MITIGATED The transaction's reserve of six months of debt service (through letters of credit provided by Mizuho Bank Ltd. and MUFG Bank Ltd., both rated A-/Stable/F1) and the offshore payment obligations offer sufficient protection to mitigate potential transfer and convertibility (T&C) restrictions and exceed Brazil's Country Ceiling of 'BB' by one notch. However, the event risk linked to the operating environment, with Petrobras a state-owned enterprise, potentially subject to political interference, limits the uplift over Brazil's Issuer Default Rating (IDR) of 'BB-'/Negative to two notches and, therefore, to 'BB+' with a Negative Outlook. EXPERIENCED OPERATOR MITIGATES RISK The group of the operator, SBM Offshore, is a global player in building and managing FPSOs, a concentrated industry. Fitch views SBM's experience as the operator as a strength, given the past performance of rated transactions. CdI's record shows an excellent historical commercial uptime, at 99.7% from October 2020 to September 2021. Due to the complexities of replacing SBM as the operator, the credit quality remains a potential risk to the transaction, but Fitch views the credit quality of SBM as in line with investment grade, and the standalone strength of the underlying operator is well supported by the transaction's financials. STRONG FINANCIAL METRICS Fitch's cash flow analysis has assessed the repayment of the fully amortizing debt, assuming timely interest and principal payments according to a nondeferrable sculpted amortization schedule and a cash trapping condition should the debt service coverage ratio (DSCR) fall below 1.15x. In Fitch's base case, the DSCR remains at 1.90x-2.20x through the life of the transaction, and stress case DSCRs remain well above the trigger levels. The key rating drivers 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: -- As described in Key Rating Drivers, the rating of the transaction is linked to Brazil's IDR, with an uplift of two notches. Therefore, a sovereign downgrade would trigger a downgrade of the notes. Both ratings are on a Negative Outlook. -- For offtakers, Fitch could assign a rating in excess of Petrobras' by two notches, and this remains possible as long as the other offtakers remain rated above the notes. Given the current ratings of the other offtakers, Fitch deems this risk particularly remote. -- The other counterparty that could constrain the rating is the operator, the SBM group, which Fitch considers to be of better credit quality than the senior notes. -- Finally, the cash flow analysis results in very robust output, consistent with ratings in the 'BBB' category. Although the DSCR and ultimate debt repayment depend on uptime, maintenance days, opex and CPI, none of these variables could drive ratings down under the stresses Fitch applied (and considering a cap for opex). Factors that could, individually or collectively, lead to positive rating action/upgrade: -- The rating is constrained by the operating environment and counterparty issues. An upgrade of Brazil (which would likely also result in an upgrade of Petrobras) may result in an upgrade. However, as the rating currently has a Negative Outlook, such a scenario is not anticipated. -- Fitch's approach remains unchanged and a variation is no longer warranted as the criteria was updated. 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. 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. =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: Central Bank Raises Benchmark Rate to 5% ------------------------------------------------------------ Dominican Today reports the Central Bank increased its monetary policy interest rate by 50 basis points, going from 4.50% to 5.00% per year. "In this way, the rate of the permanent liquidity expansion facility (1-day Repos) increases from 5.00% to 5.50% per year and the interest-bearing deposit rate (Overnight) from 4.00% to 4.50% per year," according to Dominican Today. The monetary authorities earlier this week said the decision is based on an exhaustive evaluation of the behavior of the world economy, the greater persistence of inflationary pressures and the perspectives of international financial conditions, the report relays. It said the price dynamics continue to be affected by external shocks that are more permanent than expected, associated with higher prices for oil and other important raw materials for local production, as well as the increase in the global cost of transporting containers and other disruptions in supply chains, the report notes. About Dominican Republic The Dominican Republic is a Caribbean nation that shares the island of Hispaniola with Haiti to the west. Capital city Santo Domingo has Spanish landmarks like the Gothic Catedral Primada de America dating back five centuries in its Zona Colonial district. Luis Rodolfo Abinader Corona is the current president of the nation. Fitch Ratings in December 2021 revised the Outlook on Dominican Republic's Long-Term Foreign-Currency Issuer Default Rating (IDR) to Stable from Negative and affirmed the IDRs at 'BB-'. The revision of the Outlook to Stable reflects the narrowing of Dominican Republic's government deficit and financing needs since Fitch's last review resulting in the stabilization of the government debt/GDP ratio, as well as the investment-driven economic momentum, reflected in the faster-than-expected economic recovery in 2021 that Fitch expects to carry into above-potential GDP growth during 2022 and 2023. Standard & Poor's, also in December 2021, revised its outlook on the Dominican Republic to stable from negative. S&P also affirmed its 'BB-' long-term foreign and local currency sovereign credit ratings and its 'B' short-term sovereign credit ratings. The stable outlook reflects S&P's expectation of continued favorable GDP growth and policy continuity over the next 12 to 18 months that will likely stabilize the government's debt burden, despite lack of progress with broader tax reforms, S&P said. A rapid economic recovery from the downturn because of the pandemic should mitigate external and fiscal risks. Moody's affirmed the Dominican Republic's long-term issuer and senior unsecured ratings at Ba3 and maintained the stable outlook in March 2021. DOMINICAN REPUBLIC: Starts Mega Tourism Project ----------------------------------------------- Dominican Today reports that the energy production in Pedernales (southwest) is not enough for the mega tourism development project at Cabo Rojo in that province, promoted by the government of Luis Abinader. The project considers the construction of a solar farm among the sources to diversify the energy matrix of the region, according to Dominican Today. According to the estimates set forth in the plan, the demand for energy would increase to 72% in the next 20 years, as the hotels projects are developed, the report relays. For 2015, the establishments in Pedernales with the largest number of employees estimated that, in percentage terms, spending on salaries ranked second, only behind the cost of electricity, which in some cases represented up to 60% of expense totals, the report adds. About Dominican Republic The Dominican Republic is a Caribbean nation that shares the island of Hispaniola with Haiti to the west. Capital city Santo Domingo has Spanish landmarks like the Gothic Catedral Primada de America dating back five centuries in its Zona Colonial district. Luis Rodolfo Abinader Corona is the current president of the nation. Fitch Ratings, in December 2021, revised the Outlook on Dominican Republic's Long-Term Foreign-Currency Issuer Default Rating (IDR) to Stable from Negative and affirmed the IDRs at 'BB-'. The revision of the Outlook to Stable reflects the narrowing of Dominican Republic's government deficit and financing needs since Fitch's last review resulting in the stabilization of the government debt/GDP ratio, as well as the investment-driven economic momentum, reflected in the faster-than-expected economic recovery in 2021 that Fitch expects to carry into above-potential GDP growth during 2022 and 2023. Standard & Poor's, also in December 2021, revised its outlook on the Dominican Republic to stable from negative. S&P also affirmed its 'BB-' long-term foreign and local currency sovereign credit ratings and its 'B' short-term sovereign credit ratings. The stable outlook reflects S&P's expectation of continued favorable GDP growth and policy continuity over the next 12 to 18 months that will likely stabilize the government's debt burden, despite lack of progress with broader tax reforms, S&P said. A rapid economic recovery from the downturn because of the pandemic should mitigate external and fiscal risks. Moody's affirmed the Dominican Republic's long-term issuer and senior unsecured ratings at Ba3 and maintained the stable outlook in March 2021. ===================== E L S A L V A D O R ===================== TITULARIZADORA: Fitch Affirms BB- Rating on Series 2019-1 Loan -------------------------------------------------------------- Fitch Ratings has affirmed the rating of the Series 2019-1 loan issued by Titularizadora de DPRs Limited at 'BB-' with a Negative Rating Outlook. DEBT RATING PRIOR ---- ------ ----- Titularizadora de DPRs Limited Series 2016-1 Bank Loan LT PIF Paid In Full BB- Series 2019-1 Variable Funding Loan LT BB- Affirmed BB- TRANSACTION SUMMARY The transaction is backed by U.S. dollar-denominated existing and future diversified payment rights (DPRs) originated by Banco Cuscatlan de El Salvador, S.A. (BC). DPRs are processed by designated depository banks (DDBs) that have executed acknowledgement agreements (AAs), irrevocably obligating them to make payments to an account controlled by the transaction trustee. Fitch's rating addresses timely payment of interest and principal on a quarterly basis. KEY RATING DRIVERS Future Flow Rating Driven by Originator's Credit Quality: The rating of the transaction is tied to the credit quality of the originator, BC. The Long-Term (LT) Issuer Default Rating (IDR) is limited by El Salvador's Country Ceiling of 'B' and is driven by the potential support BC would receive from Grupo Terra if required, through its holding company, Imperia Intercontinental Inc. Fitch's assessment of the group's financial ability is highly linked to that of Petroholding, S.A. de C.V. (Petroholdings). Going Concern Assessment (GCA): Fitch uses a GCA score to gauge the likelihood that the originator of a future flow transaction will stay in operation throughout the transaction's life. Fitch assigns BC a GCA score of 'GC2' based on the bank's moderate systemic importance and potential support from Petroholdings. Several Factors Limit Notching Differential: The 'GC2' score allows for a maximum uplift of four notches from the bank's IDR; however, uplift is tempered to two notches due to factors mentioned below, including BC's IDR and GC score being support-driven, El Salvador's lack of last resort lender, and DDB concentration risk. Future Flow Debt Size Not a Constraint: Future flow debt represents approximately 1.8% of BC's total funding and 16.1% of non-deposit funding when considering the current outstanding balance on the program ($55 million) as of December 2021 and utilizing September 2021 financials. Fitch considers these ratios to be small, and, as a result, they do not currently pose a constraint to the assigned rating. Flows Remain Resilient Amidst Pandemic: BC's DPR program flows continued to exhibit growth despite pandemic pressures processing approximately $2.59 billion in DPR flows in 2020, up slightly from $2.58 billion in 2019. This trend continued into 2021 with BC processing $3.67 billion in DPR flows for the year, an increase of 41% yoy. Stability of BC's growing DPR business line is supported by the bank's moderate positioning within El Salvador, as well as El Salvador's growing export and family remittance sectors. Strong Coverage Levels Remain Supportive of Assigned Rating: Considering average rolling quarterly DDB flows over the last five years (January 2017-December 2021) and the maximum periodic debt service over the life of the program, including Fitch's interest rate stress, projected quarterly debt service coverage ratio (DSCR) is 114.6x. Fitch considers this coverage level to be strong. Moreover, the transaction can withstand a decrease in flows of over 99% and still cover the maximum quarterly debt service obligation. Nevertheless, Fitch will continue to monitor the performance of the flows as potential pressures from the ongoing health crisis could negatively impact the assigned rating. No Lender of Last Resort: El Salvador is a dollarized economy without a true lender of last resort. While certain mechanisms are in place to help fend off a banking system crisis, this limits the notching differential of the transaction. Potential Redirection/Diversion Risk: The structure mitigates certain sovereign risks by collecting cash flows offshore until collection of periodic debt service amount. In Fitch's view, diversion risk is partially mitigated by the acknowledgments signed by the three DDBs. The largest DDB, Citibank N.A., continues to process more than 75% of DPRs (78% in 2021). While this trend is decreasing, the agency believes Citibank's still relatively heavy DDB concentration exposes the transaction to a higher degree of diversion risk relative to other Fitch-rated DPR programs in the region, limiting the overall notching differential. 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 respective bank by 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, and a change in Fitch's view on the bank's GCA score can lead to a change in the transaction's rating. 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 with 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. 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. ===================== P U E R T O R I C O ===================== METRO PUERTO RICO: Unsecureds to Recover 100% in 60 Months ---------------------------------------------------------- Metro Puerto Rico LLC submitted an Amended Chapter 11 Small Business Plan and a Disclosure Statement. The Debtor operates a newspaper business with presence in Puerto Rico in physical and digital form. The sale gross income is $200,000 per month, and expenses are estimated at $185,000 monthly. Under the Plan, Class 2 Allowed General Unsecured Claims totaling $85,989 are impaired. Class 2 claims will be satisfied via monthly payments starting the Effective Date of the Plan. The Distribution of class 2 claims is estimated at 100%. The distribution on this class will be monthly starting on the effective date of the plan until the month 60. The Plan establishes that the Plan will be funded from the Reorganized Debtor's cash flow generated by the Debtor. It generally consists of the by the operating of the business. The Debtor will contribute her cash flow to fund the Plan commencing on the Effective Date of the Plan and continue to contribute through the date that Holders of Allowed Class 1, 2 and 3, Claims receive the payments specified for in the Plan. Attorney for the Debtor: Jose M Prieto Carballo, Esq. JPC LAW OFFICE PO Box 363565 San Juan, PR 00936 Tel: (787) 607-2066 Fax: (787) 200-8837 Email: jpc@jpclawpr.com A copy of the Disclosure Statement dated Jan. 28, 2021, is available at https://bit.ly/3KYKMHs from PacerMonitor.com. About Metro Puerto Rico Metro Puerto Rico LLC filed its voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr. D.P.R. Case No. 20-01543) on March 31, 2020. The petition was signed by Felix I. Caraballo, president. At the time of filing, the Debtor estimated $1 million to $10 million in assets and $500,000 to $1 million in liabilities. Judge Enrique S. Lamoutte oversees the case. Jose Prieto, of the JPC Law Office, represents the Debtor. ===================================== T R I N I D A D A N D T O B A G O ===================================== TRINIDAD PETROLEUM: S&P Downgrades ICR to 'B+' with Stable Outlook ------------------------------------------------------------------ S&P Global Ratings lowered its issuer credit rating on Trinidad and Tobago-based oil and gas producer Trinidad Petroleum Holdings Ltd. (TPHL) to 'B+' from 'BB' and the issue-level rating to 'B+' from 'BB' on its 9.75% senior secured notes due 2026. At the same time, S&P lowered its issue-level rating to 'B' from 'BB-' on its 6.00% senior unsecured senior notes due 2022, given higher subordination risk. S&P said, "The stable outlook reflects our view that the company will continue to work on an alternative to meet its financial obligations due June 15, 2022. Moreover, we continue to expect a very high likelihood of extraordinary support from the Trinidadian government, which is the sole owner of the company, if TPHL encounters a stress scenario and requires financial intervention." About 53.0% of the company's total debt is maturing this year, including subsidiary Petrotrin's unpaid secured short-term debt. Even though S&P expects the company to rollover Petrotrin's short-term debt until it completes the sale of Petrotrin's noncore assets, the company still faces the repayment of about TT$2.3 billion in total debt from its tranche A secured term loan and 6.000% senior unsecured notes due 2022. As of Sept. 30, 2021, its total cash in hand was TT$2.9 billion, which could alleviate liquidity pressures under a stress scenario. However, on a stand-alone basis, the company still depends on favorable business conditions to reduce capital expenditure (capex) commitments, perform liability management within a short timeframe, or receive financial support from the government in order to meet its financial commitments by June 15, 2022. As a result, S&P revised its stand-alone credit profile (SACP) downward to 'ccc+' from 'b-'. Although it has published the financial statements of its operating subsidiaries, Heritage Petroleum Co. Ltd. and Paria Fuel Trading Co. Ltd., since 2019, TPHL has been breaching one of its administrative covenants related to the publication of the group's financial statements. Given that the fiscal year in Trinidad and Tobago (T&T) ends Sept. 30, the company must have the audited financial information published about 150 days after the end of period. As of Sept. 30, 2020, the noncompliance resulted in the classification of its total debt in the balance sheet, for financial reporting purposes, as short term (fiscal year 2020). S&P said, "We don't expect a potential acceleration on its debt because the company hasn't received a declaration by lenders that debt be due and payable, and we expect it could meet the publication of the financial statements in the coming weeks. However, in our view this still reflects negatively on its management and governance assessment at the holding level." S&P's ratings on TPHL continue to reflect its opinion that there's a very high likelihood that its owner, Trinidad and Tobago (T&T; BBB-/Negative/A-3) would provide timely and sufficient extraordinary support to the company in the event of financial distress. This stems from the company's very important role in T&T's energy and infrastructure policy because TPHL is the sole distributor of refined oil products. This supports a three-notch uplift to TPHL's SACP. ESG credit indicators: E-4, S-2, G-4 Environmental factors remain a negative consideration in S&P's rating analysis on TPHL related to the regulations on the oil and gas industry's greenhouse gas (GHG) emissions. TPHL has had a record of continued oil spills in bodies of water from tank and pipeline ruptures. However, since the company started operating, there have been no regulatory breaches, fines, or penalties that have hurt TPHL's profitability or cash flows. However, environmental factors continue to expose its financial risk profile and liquidity to risk. The company is actively upgrading its infrastructure to ensure the safety and reliability of its operations. Governance factors are a negative consideration given the delays in repayment of former company Petrotrin's outstanding debt, which could impair TPHL's cash position if accelerated. S&P also considers delays in financial reporting obligations at TPHL. =============== X X X X X X X X =============== LATAM: $1B+ Loss in 2021 in the Region, CHTA Says ------------------------------------------------- Jamaica Observer reports the Caribbean Hotel and Tourism Association (CHTA) has called for a concerted effort by Caribbean governments and private sector leaders to boost intra-regional travel, while fostering greater parity, clarity, and consistency for travel. The body argued that more than US$1 billion was lost in 2021 following a drop in inter-regional travel, according to Jamaica Observer. According to CHTA president Nicola Madden-Greig, while international travel to the region has rebounded to 75% of pre-pandemic levels, inter-regional business and leisure travel has dropped to around 30%, with smaller Caribbean economies and small businesses hit particularly hard, the report notes. She said that stimulating intra-regional travel would bring higher local spending, boost trade in local goods and services, increase government revenues and revitalize local economies, the report relays. Madden-Greig further cited the broad impact inter-regional travelers have on local economies, spending at a high level on local goods and services, and moving around the community more than travelers from outside the region, the report discloses. "We know that the economic and social linkages are stronger, and the leakages are less as more of the revenue circulates within our countries and territories, benefiting a range of businesses beyond just the accommodations sector," stated Madden-Greig, the report says. She also called on regional airlines such as Bahamasair, Caribbean Airlines, Cayman Airways, InterCaribbean Airways and LIAT to work collectively with both the public and private sectors to seamlessly stimulate intra-regional travel. "It is not beyond us to get this done," Madden-Greig declared, the report notes. Among the steps proposed for revitalizing sluggish local economies were increasing services to revive regional air travel, reducing COVID-19 testing costs, cutting testing time, and shrinking long isolation periods, the report discloses. CHTA also recommended an air travel tax/fee holiday or reduction, similar to that which was proposed to Caribbean leaders by Antigua and Barbuda's Prime Minister Gaston Browne, the report relays. Additionally, the organization emphasized that more uniform and consistent regional travel protocols would reduce traveler uncertainty, while health safety diligence and increased vaccinations were key to speeding up the return of local festivals and events, key elements of inter-regional travel, the report relays. Regional travelers include Caribbean residents visiting family and friends; attending holiday events, weddings, funerals, reunions and homecomings; conducting business; selling goods and services; participating in training and meetings; and enjoying vacations, festivals, sports and other events, the report notes. Reiterating the importance of consistency, CHTA, which speaks for private sector tourism stakeholders, recommended eliminating travel barriers that add significantly to travelers' cost and uncertainty, and putting into place low-risk protocols to stimulate travel, the report discloses. The protocols would include asking all travelers in the region to provide proof of a negative COVID-19 antigen test result 24 hours prior to departure when travelling from one Caribbean Community (Caricom) country to another, the report adds. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Latin America is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA, Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A. 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. 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