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T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Monday, February 14, 2022, Vol. 23, No. 26
Headlines
B R A Z I L
BRAZIL: Has Largest Dollar Drop in 2022, Says Survey
JBS SA: Buyout Talks Continue with Pilgrim's Pride Corp
C H I L E
CHILE: Central Bank Hikes Rates Again as Inflation Hits 14Yr High
MYSTIC MOUNTAIN: Attraction Park Placed in Receivership
D O M I N I C A N R E P U B L I C
DOMINICAN REPUBLIC: Central Bank Sees Up to 6% Growth in Economy
M E X I C O
CREDITO REAL: S&P Cuts Rating to Default After Missed Payment
X X X X X X X X
[^] BOND PRICING: For the Week Feb. 7 to Feb. 11, 2022
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B R A Z I L
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BRAZIL: Has Largest Dollar Drop in 2022, Says Survey
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Rio Times Online reports that Brazil is the country with the
largest devaluation of the dollar in 2022, according to the
financial information company Economatica.
The North American currency closed February 9, quoted at R$5.22,
and accumulated a fall of 6.2% in the year, according to Rio Times
Online.
According to economists, two main factors explain this movement of
the dollar against the real: the new commodities boom, raw
materials of which Brazil is a major exporter; and the substantial
increase in the economy's basic interest rate, the Selic, which
reached 10.75% in the last meeting of the Central Bank's Monetary
Policy Committee (Copom), the report notes.
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
December 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).
JBS SA: Buyout Talks Continue with Pilgrim's Pride Corp
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supermarketperimeter.com reports that Pilgrim's Pride Corp. (PPC)
for a second time rejected an offer from Sao Paulo, Brazil-based
JBS SA for the remaining shares of common stock of PPC. JBS USA,
the Brazilian meat and poultry processor's subsidiary, currently
has an 80.21% ownership stake in Pilgrim's.
In August 2021, officials with JBS SA offered $26.50 per share in
cash for all of the outstanding shares of common stock that JBS
does not own, the report notes.
In an update on the status of negotiations between the companies, a
special committee of independent directors of Pilgrim's informed
JBS that it would not support the proposal unless JBS significantly
increased its purchase price, according to
supermarketperimeter.com. On Nov. 15, 2021, JBS offered to
increase its purchase price to $28.50 per share, the report
recalls.
"The Special Committee, in consultation with its financial and
legal advisors, determined that the revised proposal from JBS does
not appropriately value the shares of Pilgrim's Pride owned by
shareholders other than JBS, and again informed JBS that the
Special Committee would not support the JBS proposal unless JBS
significantly increased its purchase price," the committee said,
according to the report.
JBS said company officials would continue to evaluate the special
committee's response and consider whether to revise the terms of
its proposal. On Feb. 4, JBS said the company would have a
response by the end of the month, the report says.
"There can be no assurance that JBS and the Special Committee will
reach an agreement with respect to the JBS proposal, or that a
transaction will be completed," the committee said, the report
adds.
As reported in the Troubled Company Reporter-Latin America in
August 2021, S&P Global Ratings revised the global scale outlook on
JBS S.A. (JBS) and its fully owned subsidiary JBS USA Lux S.A. (JBS
USA) to positive from stable and affirmed its 'BB+' issuer credit
rating. The recovery expectations remain unchanged, and S&P
affirmed the 'BB+' ratings on the senior unsecured notes and the
'BBB' ratings on the secured term loans.
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C H I L E
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CHILE: Central Bank Hikes Rates Again as Inflation Hits 14Yr High
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Buenos Aires Times reports that Chile's Central Bank approved a
third successive hike in its benchmark interest rate in a bid to
contain inflation, which is at a 14-year high.
The bank announced an increase of 1.5 percentage points from 4.0%
to 5.5% -- the largest such hike in more than 20 years, according
to Buenos Aires Times.
Its previous two increases were both by 1.25 percentage points, the
report notes.
Having been stable at 0.5% for 30 months up to July 2021, the
country's interest rate has been rocketing ever since, the report
discloses.
Inflation, spurred by an excess of liquidity, ended at 7.2% in
2021, more than double the Central Bank's target of 3.0%, the
report notes.
The liquidity surplus came about after Congress allowed Chileans to
withdraw funds on three occasions from their private retirement
savings in order to weather the economic and social consequences of
the coronavirus pandemic, the report discloses.
Chileans withdrew some US$50 billion, nearly a quarter of the value
of the funds created under the dictatorship of Augusto Pinochet,
and to which workers alone contribute for their retirement, the
report notes.
The report says a large social benefits scheme costing US$3 billion
a month -- also implemented to help mitigate the effects of the
pandemic -- likewise contributed to the increase in liquidity.
"The risks posed by the continued evolution of inflation remain
significant," said the Central Bank, adding that international
pressures contributing to inflation had also increased, the report
adds.
MYSTIC MOUNTAIN: Attraction Park Placed in Receivership
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RJR News reports that attraction park, Mystic Mountain Limited, in
Ocho Rios, St. Ann in Jamaica, was certified bankrupt by the
government's Office of the Supervisor of Insolvency (OSI).
The majority of its creditors voted down a proposal, denying the
company time to repay its $1.3 billion debt to bondholder, Sky High
Holdings Limited, according to RJR News.
According to Mystic Mountain's newly appointed receiver, Wilfred
Baghaloo, once the bondholder's debt is settled, the company can
exit the receivership or the receiver may have to seek many
possible solutions to settle the bondholder's debt, the report
notes.
The attraction will remain open to the public for business, the
report adds.
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D O M I N I C A N R E P U B L I C
===================================
DOMINICAN REPUBLIC: Central Bank Sees Up to 6% Growth in Economy
----------------------------------------------------------------
The deceleration of inflation in the Dominican Republic has
occurred at a slower rate than expected, according to a document
prepared by technicians from the country's Central Bank, Dominican
Today reports.
However, it is projected that the momentum shown by domestic
demand, the recovery of tourism, the high flows of foreign direct
investment and the revitalization of public investment will
contribute to the Dominican economy growing up to 6.0% in 2022.
In the document "Monetary policy rate: main tool of central banks,"
the institution's technicians explain that, in Latin America, most
central banks have had to increase their interest rates more
rapidly to face high inflationary pressures and depreciation of
their currencies, as well as to avoid potential capital outflows.
About Dominican Republic
The Dominican Republic is a Caribbean nation that shares the island
of Hispaniola with Haiti to the west. Capital city Santo Domingo
has Spanish landmarks like the Gothic Catedral Primada de America
dating back 5 centuries in its Zona Colonial district. Luis Rodolfo
Abinader Corona is the current president of the nation.
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.
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M E X I C O
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CREDITO REAL: S&P Cuts Rating to Default After Missed Payment
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S&P Global Ratings lowered its long-term issuer credit rating on
Credito Real S.A.B. de C.V. SOFOM, E.N.R. to 'SD' from 'CCC-' on
global scale and to 'SD/SD' from 'mxCCC-/mxC' on national scale.
S&P also lowered the long-term issue-level rating on the CHF170
million senior unsecured notes to 'D' from 'CCC-'. Finally, S&P
maintained its 'CCC-' issue-level rating on the other rated senior
unsecured notes and its 'C' rating on the subordinated perpetual
bond on CreditWatch negative.
The Mexico-based non-bank financial institution failed to pay
principal on CHF170 million senior notes due Feb. 9, 2022.
Consequently, S&P lowered the long-term issue level rating on these
notes to 'D' from 'CCC-'.
S&P said, "We lowered the issuer credit rating to 'SD' because the
lender didn't pay principal on its CHF170 million senior notes.
Consequently, we lowered the rating on these notes to 'D', while
the ratings on the other senior notes remains at 'CCC-'. We will
monitor closely if there's any written notification of payment
acceleration from the trustees or the holders of at least 25% in
principal amount of outstanding notes. This is because the offering
memorandums provide bond holders the right to accelerate interest
and/or principal payment, triggering a cross defaults of Credito
Real's outstanding bonds. In such a case, we would lower ratings on
the respective bonds to 'D'."
On Feb. 9, 2022, the lender announced that it hired legal and
restructuring advisors to evaluate strategic alternatives. Once
these alternatives are disclosed, S&P will analyze their impact on
Credito Real's credit quality.
Environmental, social, and governance (ESG) credit factors for this
change in credit rating/outlook and/or CreditWatch status:
-- Governance - Risk management, culture and oversight
Credito Real's persistent inability to complete some of the plans
to obtain funds during the past few months eroded its financial
flexibility. In particular, S&P believes the lender had a poor
record of execution in slowing its loan origination pace to improve
its liquidity through loan repayments and build up internal funds.
Additionally, Credito Real failed to achieve several initiatives
during 2021 to strengthen and improve its liquidity position,
including securing loans and selling a large portion of its
portfolio.
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X X X X X X X X
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[^] BOND PRICING: For the Week Feb. 7 to Feb. 11, 2022
------------------------------------------------------
Issuer Name Cpn Price Maturity Country Curr
----------- --- ----- -------- ------- ----
Odebrecht Finance Ltd 6.0 16.4 4/5/2023 KY USD
Esval SA 3.5 49.9 2/15/2026 CL CLP
Metrogas SA/Chile 6.0 41.6 8/1/2024 CL CLP
Province of Santa Fe 6.9 75.2 11/1/2027 AR USD
Provincia del Chubut A 4.5 2208 3/30/2021 AR USD
Argentine Republic Gov 4.3 70.0 12/31/2033 AR JPY
Automotores Gildemeist 6.8 54.9 1/15/2023 CL USD
Province of Santa Fe 6.9 75.2 11/1/2027 AR USD
Argentine Republic Gov 6.3 74.1 11/9/2047 AR EUR
YPF SA 16.5 67.3 5/9/2022 AR ARS
Fospar S/A 6.5 1.2 5/15/2026 BR BRL
Argentina Bonar Bonds 7.6 74.4 4/18/2037 AR USD
Avadel Finance Cayman 4.5 55.0 2/1/2023 US USD
Provincia de Rio Negro 7.8 70.4 12/7/2025 AR USD
Noble Holding Internat 5.3 60.5 3/15/2042 KY USD
Provincia de Cordoba 7.1 72.7 8/1/2027 AR USD
Provincia de Buenos Ai 7.9 75.3 6/15/2027 AR USD
Province of Santa Fe 6.9 74.7 11/1/2027 AR USD
City of Cordoba Argent 7.9 73.1 9/29/2024 AR USD
YPF SA 16.5 67.3 5/9/2022 AR ARS
Polarcus Ltd 5.6 71.8 7/1/2022 AE USD
Argentine Republic Gov 8.3 72.9 12/31/2033 AR USD
Argentine Republic Gov 8.3 74.5 12/31/2033 AR USD
Cia Latinoamericana de 9.5 74.3 7/20/2023 AR USD
Sylph Ltd 2.4 65.1 9/25/2036 KY USD
Banco Macro SA 17.5 65.2 5/8/2022 AR ARS
Noble Holding Internat 6.2 62.2 8/1/2040 KY USD
Province of Santa Fe 6.9 74.7 11/1/2027 AR USD
Provincia de Rio Negro 7.8 70.3 12/7/2025 AR USD
Argentine Republic Gov 0.5 27.6 12/31/2038 AR JPY
Odebrecht Finance Ltd 6.0 16.4 4/5/2023 KY USD
Odebrecht Finance Ltd 6.0 16.4 4/5/2023 KY USD
Provincia del Chaco Ar 4.0 0.0 12/4/2026 AR USD
Argentine Republic Gov 6.9 75.2 1/11/2048 AR USD
Argentina Bonar Bonds 5.8 75.2 4/18/2025 AR USD
Noble Holding Internat 6.1 62.0 3/1/2041 KY USD
Provincia de Cordoba 7.1 74.7 8/1/2027 AR USD
YPF SA 16.5 67.3 5/9/2022 AR ARS
Argentine Republic Gov 8.3 74.5 12/31/2033 AR USD
AES Tiete Energia SA 6.8 1.2 4/15/2024 BR BRL
Enel Americas SA 5.8 32.7 6/15/2022 CL CLP
Cia Latinoamericana de 9.5 73.9 7/20/2023 AR USD
KrisEnergy Ltd 4.0 40.4 6/9/2022 SG SGD
Banco Macro SA 17.5 65.2 5/8/2022 AR ARS
Argentine Republic Gov 8.3 72.9 12/31/2033 AR USD
Argentine Republic Gov 7.1 75.7 6/28/2117 AR USD
Provincia del Chaco Ar 9.4 74.8 8/18/2024 AR USD
Provincia de Rio Negro 7.8 70.3 12/7/2025 AR USD
Automotores Gildemeist 6.8 54.9 1/15/2023 CL USD
Argentine Republic Gov 8.3 72.9 12/31/2033 AR USD
*********
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.
.
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