/raid1/www/Hosts/bankrupt/TCRLA_Public/220314.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
Monday, March 14, 2022, Vol. 23, No. 46
Headlines
A R G E N T I N A
ARGENTINA: Manufacturing, Construction Shrink to Start 2022
ARGENTINA: Might Benefit From New Energy Crisis
B E R M U D A
INTELSAT JACKSON: Fitch Assigns 'B+' LT IDR, Outlook Positive
D O M I N I C A N R E P U B L I C
DOMINICAN REPUBLIC: Freezes Prices of Main Fuels
DOMINICAN REPUBLIC: Government Looks to Argentina for Fuel Relief
P A N A M A
PANAMA: IMF OKs $60M-Loan to Advance Digital Transformation
P E R U
NEXA RESOURCES: S&P Affirms 'BB+' ICR, Outlook Stable
PESQUERA EXALMAR: Moody's Withdraws B3 CFR Amid Debt Redemption
T R I N I D A D A N D T O B A G O
CARIBBEAN AIRLINES: Resumes Curacao Service
X X X X X X X X
[*] BOND PRICING: For the Week March 7 to March 11, 2022
- - - - -
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A R G E N T I N A
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ARGENTINA: Manufacturing, Construction Shrink to Start 2022
-----------------------------------------------------------
Buenos Aires Times reports that key sectors of Argentina's economy
contracted at the start of the year, posting their worst
performance in months, as the government seeks to strike a deal
with the International Monetary Fund.
Industrial production contracted 5.5 percent in January from the
previous month on a seasonally adjusted basis - its worst drop
since May, according to Buenos Aires Times.
Construction activity declined 3.9 percent in the same period - its
steepest one-month decline since early 2020, the report notes.
Both sectors also declined on an annual basis, according to
government data released by the INDEC national statistics bureau,
the report relays.
Argentina's automotive sector led the manufacturing slump in
January, down 12 percent from a year earlier, while furniture, food
and metal factories also posted annual declines, the report
discloses. After adding jobs for six months, construction firms
reduced hiring slightly in December, the most recent month for
which employment data are available, the report notes.
Argentina's government is nearing a US$45-billion deal with the
IMF, in which officials have emphasized the need for public policy
to invest in real economy sectors such as manufacturing and
construction to boost economic growth, the report relays.
The agreement, if approved, aims to increase infrastructure
spending above two percent of gross domestic product, the report
adds.
About Argentina
Argentina is a country located mostly in the southern half of South
America. Its 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.
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. Fitch's credit rating for Argentina was last reported on
Sept. 11, 2020 at CCC, which was a rating upgrade from CC. 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.
ARGENTINA: Might Benefit From New Energy Crisis
-----------------------------------------------
James Neilson at Buenos Aires Times reports that on taking office
early last year, Joe Biden declared war on carbon. Reborn as a
fierce eco-warrior, the US president said he was determined to
retool his country's enormous economy so it could operate without
filthy fossil fuels, according to the report. They would have to
make way for solar panels, wind farms and the high-tech novelties
that would soon be available, the report notes. Without wasting a
minute, he put a stop to a big pipeline project which, if
completed, would already be bringing plenty of oil from the
Canadian tar sands to refineries in places like Texas, the report
relays. Other Western leaders - especially the Germans who for
several centuries have worshipped greenery - agreed with Biden, the
report relays. Fossil fuels were overheating the planet and should
be banned forthwith, the report discloses. The future has arrived
and people had better get used to it even if they would have to pay
through the nose to keep their cars moving or stay warm when it got
cold outside.
All this was bad news for Argentina. After huge deposits of shale
oil and gas were found in northern Patagonia, it seemed that the
country boasted yet another raw material resource which would
enable whoever was in government to provide for the growing number
of people who for the foreseeable future will depend on
public-funded largesse, the report discloses. It was also hoped
that fracking, which in the United States had transformed the
energy business, would take off here too and make Neuquen a new
industrial hub, the report relays. But then worries about climate
warming intervened; combined with political shilly-shallying and
the usual bureaucratic incompetence, they put everything on hold,
the report notes.
Thanks to Vladimir Putin, attitudes have just done a U-turn. Fossil
fuels are back in fashion. Western leaders are now searching
frantically for exploitable oil and gas deposits that are beyond
the Russian despot's reach, the report relays. This could, indeed
should, renew interest in Argentina's ability to help the Europeans
get through winter without pumping large sums of money into the war
machine Putin is using not just to fight enemy soldiers but also to
murder large numbers of civilians in Ukraine by strafing refugees
and bombing hospitals and schools, the report notes.
If Argentina had a decent government, its envoys would be out there
telling Europeans they are in a position to supply them with the
oil and gas they so desperately need, though to get at it they
would have to spend many billions of euros on drilling,
infrastructure and pipelines comparable to the one designed to
funnel Russian fuel to Germany, Italy and other countries that has
just been halted, the report says. Perhaps some official
representatives and businessmen are now trying to do this, but for
understandable reasons few will take them that seriously, the
report discloses.
In the short term, the Western reaction to the invasion of Ukraine
by Putin's hordes is bound to have a negative economic impact not
only on Russians, of whom some are already beginning to feel the
pain, but also on the inhabitants of many other countries,
including Argentina which, because politicians are aware that
people tend to vote against governments rash enough to ask them to
pay more than a tiny fraction of what it costs to supply them with
the energy they consume, must import considerable amounts of gas
despite having more than enough underground to keep things humming
along nicely for several decades to come, the report relays.
According to current estimates, this year's bill could well be
about seven times bigger than had originally been expected;
needless to say, there is simply no way the government can find the
money required, the report discloses. While higher prices for
agricultural products should soften the blow a bit, they could also
lead to a repetition of the conflict between the farmers and the
government which in 2008 came close to putting an end to Cristina
Fernandez de Kirchner's term in office, the report says.
Kirchnerite zealots are already wondering how best to get their
fingers on any extra money that comes in and the farmers are
letting them know they are willing to put up a fight, the report
notes.
Much depends on how long the war in Europe lasts and whether or not
Putin remains in power, the report discloses. Military experts
agree that Russia's Armed Forces have performed far worse than had
been predicted, while the Ukrainian ones have done far better than
almost anyone had believed possible, the report says. They also
say that, with spring rains fast approaching, the Russians could
soon get even more bogged down than they already are, the report
relays. This, and the Ukrainians' well-attested talent for
guerrilla warfare, suggests that the struggle could go on for years
even if the Russians do manage to bludgeon Kyiv into submission and
install a puppet regime few outsiders would recognize, the report
relays. In that case, Western sanctions would continue to be
applied, though in all probability many European countries would
soften them as soon as possible because they have grown accustomed
to relying on energy supplies from Russia, the report notes.
Biden and others have taken to warning Russians that, unless Putin
falls or, at the very least, quickly backtracks, they will be
excluded from what remains of the Western world order for a great
many years to come, Even if China did offer them some support, most
would then face a very grim future without the consolation of
thinking their country had returned to being a genuine great power,
the report notes. Would that be enough to counter the
nationalistic enthusiasm Putin is trying to stir up, apparently
with considerable success, and make enough of them rise in
rebellion? If this happened, or if angry oligarchs ganged up
against the autocrat they have been kowtowing to and, with the help
of disgruntled military chiefs, decided to overthrow him, the
troops could soon go home and the status quo ante get restored,
which would give foreign governments an excuse to forget about
sanctions which are expected to hurt just about everybody, the
report notes.
These are questions politicians the world over are asking
themselves, the report relays. Those who see themselves as
realists agree that, no matter what happens, Europe should wean
itself from its overdependence on Russian energy supplies and it is
premature to think the world can get along just fine without fossil
fuels, If they have it right, Russia's unprovoked attack on Ukraine
could be as big a game-changer as many have taken to saying it is
and it would be far easier for Argentina to attract the sizeable
investments needed to take proper advantage of what is thought to
be one of the world's biggest reserves of natural gas. On the other
hand, while a rapid return to pre-war "normality" would be helpful
to the country in the short term because it would bring down the
price of the gas it still has to import, it would also make it that
much harder to get the money needed to take proper advantage of
what should be a key asset, the report adds.
About Argentina
Argentina is a country located mostly in the southern half of South
America. Its 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.
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. Fitch's credit rating for Argentina was last reported on
Sept. 11, 2020 at CCC, which was a rating upgrade from CC. 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 E R M U D A
=============
INTELSAT JACKSON: Fitch Assigns 'B+' LT IDR, Outlook Positive
-------------------------------------------------------------
Fitch Ratings has assigned Intelsat Jackson Holdings S.A. a 'B+'
Long-Term Issuer Default Rating (IDR). The Rating Outlook is
Positive. Intelsat emerged from bankruptcy on Feb. 23, 2022.
Fitch has assigned instrument ratings based on the company's
capital structure at emergence. A 'BB'/'RR2' rating has been
assigned to Intelsat Jackson Holdings' $500 million senior secured
super-priority revolving credit facility, and a 'BB-'/'RR3' rating
has been assigned to the senior secured first-lien term loan B and
notes.
The rating incorporates anticipated delevering following the
reimbursement of certain C-Band spectrum clearing expenses in 2022
and 2023, and the anticipated receipt of accelerated relocation
payments to be received in early 2024 following the clearing of
additional spectrum by YE 2023. Concerns include the secular
pressure on legacy revenues and execution risks around further
spectrum clearing and capitalizing on strong tailwinds regarding
inflight connectivity.
KEY RATING DRIVERS
Scale and Contractual Revenue Benefits: Intelsat is one of the
largest fixed satellites service (FSS) operators, with a fleet of
52 satellites providing service on a global basis. The company's
revenue is derived from customers in media, mobility, network
services and government. Intelsat's backlog, which provides some
insight into future revenues, declined modestly in 2021 to $5.7
billion at Sept. 30, 2021.
In December 2020, Intelsat acquired GoGo Inc.'s commercial aviation
business for $400 million in cash. An installed base of more than
3,000 aircraft positions Intelsat's commercial aviation business as
one of the largest inflight connectivity (IFC) and wireless
inflight entertainment providers. A portion of the company's
ongoing investment program in next generation software defined
satellites and related ground infrastructure support the expansion
of the IFC business. These services have strong tailwinds as
passengers and airlines put increased emphasis on being connected
inflight.
Post-Emergence Delevering: The rating incorporates the company's
long-term leverage target of 2.5x (gross debt to EBITDA) and the
potential for the company to reach its target range in 2024, when
it receives up to $3.7 billion in accelerated relocation payments
in early 2024 for clearing its C-Band spectrum. Fitch will assess
the Positive Outlook at that time, and consider the level of debt
repayment, the operating environment, and potential other uses of
proceeds to strengthen its operating profile. Fitch believes
provisions in the credit agreement will strike a balance between
significant debt repayment requirements while maintaining a fair
degree of financial flexibility.
Fitch believes the risk of major U.S. wireless carriers acquiring
C-Band spectrum not fulfilling their obligation to make clearing
payments is very low, as they are highly incentivized to make the
payments in order to begin deploying the spectrum. A two-week delay
in January 2022 in deploying the spectrum and mitigation efforts
over the coming months, agreed to by the carriers and the Federal
Aviation Administration, are not expected to impact the timeline to
receive the 2024 accelerated relocation payments.
C-band Spectrum Source of Funds: The FCC's final order for the
C-band auction provided for accelerated incentive payments to all
C-band operators of up to $9.7 billion, of which Intelsat would
receive $4.87 billion, in two tranches in 2022 (approximately $1.2
billion has been received) and 2024. The order also provided for
cost reimbursements.
Execution Risk: Intelsat must clear the second portion of the
spectrum by December 2023 to receive the next accelerated
relocation payment in early 2024. To clear the spectrum, the
company is building seven satellites, and the related ground
structure (teleports and antennas) at a cost of approximately $1.4
billion, nearly all of which will be reimbursed.
The payment declines over time if the clearing is delayed after the
December 2023 target date. The company has contingency plans in
case of unforeseen circumstances regarding the launch plans for the
seven satellites.
Revenue Trends: Intelsat has experienced secular pressure on
certain revenue streams, particularly the media and network
business, while the government business has been relatively stable.
The mobility business, particularly the commercial aviation
business, is expected to be a significant driver of growth,
potentially offsetting pressures in other areas of the business.
There are a number of other subsegments within mobility, including
wholesale transponders, maritime and other managed services under
the Flex brand.
EBITDA Margins: Projected EBITDA margins are expected to be lower
than historical margins given the expansion of managed services in
the product portfolio and the addition of the commercial aviation
business. The opportunity to expand margins in the latter will
arise as Intelsat consolidates capacity in its own satellites,
including new software defined satellites.
Capital Spending Higher: Intelsat's post emergence business plan
incorporates an additional eight satellites beyond the seven
satellites needed for C-Band clearing. Certain satellites are
nearing the end of their life cycle, and by the middle of the
decade Intelsat is planning to launch five advanced software
defined satellites that will have greater throughput and
flexibility, leading to a smaller satellite fleet over time.
Revenue Concentration: Intelsat's 10 largest customers provided 42%
of its revenues in 2020. No single customer accounted for more than
14% of revenue in the same period.
Low Earth Orbit Competition: Several low earth orbit (LEO)
constellations are in development, that if built out, will add a
significant amount of capacity to the satellite industry, and LEOs
constellations in particular will have the advantage of lower
latency, which could prove attractive in certain applications.
DERIVATION SUMMARY
Intelsat's rating reflects the company's capital-intensive business
model, with significant barriers to entry, due to the limited
number of orbital slots and the material costs associated with
constructing and launching a satellite fleet. The company's
business incorporates long-term contracts, up to 16 years, in its
media business, its largest source of revenue. The mobility line of
business is also an avenue for growth, and the government business
is stable with high rates of renewal. The media and network
businesses are exposed to secular pressures.
In the satellite services business, as a provider of communications
infrastructure, comparable businesses to Intelsat would be Eutelsat
Communications (BBB/Stable), Viasat Inc. (B+/Positive), Telesat
Canada (NR) and SBA Communications (NR). Eutelsat and Telesat are
the most directly comparable companies, given that they, along with
Intelsat, are three of the top four global fixed satellite services
provider.
Fitch expects Eutelsat to maintain a conservative financial policy
with funds from operations (FFO) net leverage not exceeding 3.3x
after its OneWeb investment, in line with its intention to maintain
an investment-grade rating and its target of 3x net debt/EBITDA
(company definition) leverage ratio in the medium term - this
broadly corresponds to Fitch's 3.2x FFO net leverage.
Unlike Intelsat, Eutelsat and Telesat or the tower companies,
Viasat provides services directly to consumers in its satellite
services segment, is vertically integrated as a satellite services
provider/manufacturer and has other business lines. SBA, a tower
company, leases space on towers and ground space to wireless
carriers, and is a key part of the wireless industry
infrastructure.
KEY ASSUMPTIONS
Fitch's key assumptions within the rating case for the issuer
include:
-- Fitch estimates revenues grew about 7% in 2021, aided by the
acquisition of GoGo's commercial aviation business in December
2020. Revenues are flat to down slightly in 2022, before
returning to low single digit growth in 2023, owing to the
continued expansion in the mobility line of business,
including commercial aviation.
-- Capital spending is expected to aggregate about $1.8 billion
over 2021-2024, including the remaining spending on the
clearance of the C-band and satellite expansion/replacement
capacity.
-- EBITDA margins in the mid-40% range over 2022-2024. The
commercial aviation business and managed services business
expansion have somewhat lower margins than the historical
business.
-- Fitch has included anticipated accelerated relocation payments
from the C-band spectrum plan to be allocated to Intelsat.
Intelsat is expected to receive a total of $4.87 billion in
proceeds in early 2022 and early 2024 should it meet spectrum
clearing goals. The 2022 payment of approximately $1.2 billion
was received in early January 2022.
-- Fitch has assumed the proceeds from the accelerated relocation
payments are primarily used to repay debt in 2024, while
preserving liquidity and financial flexibility.
Recovery
Fitch's recovery analysis assumes the enterprise value of Intelsat
is maximized in a going-concern scenario rather than liquidation.
Fitch has assumed a 10% administrative claim.
Fitch contemplates a scenario in which default is the result of one
or a combination of scenarios, such as revenue and EBITDA pressure
from new or existing competitors, delays in satellite launches, or
an inability to offset secular declines in existing businesses.
Fitch assumes Intelsat would be successfully reorganized.
Under this scenario, Fitch estimates a going-concern EBITDA
run-rate of $750 million, which is moderately below Fitch's
projected EBITDA for 2022. Expectations for 2022 currently include
continued improvement for its inflight connectivity (IFC) business,
moderate growth in the government business and continued secular
declines in the media and network business lines.
The FCC's order provided for accelerated relocation payments to
provide an incentive to encourage incumbent licenses to voluntarily
clear the lower C-Band spectrum as soon as possible. The payments
were designed to encourage entities with the right to broadcast in
the C-band to relinquish that right by specific early deadlines.
Fitch notes the Phase I accelerated relocation payment of $1.2
billion was received prior to emergence.
Fitch assumes that in 2022 the company receives nearly the full
value of cost reimbursements for
C-Band spectrum clearing projected for the end of 2021, and the
value of the Phase II accelerated relocation payment to be obtained
in 2024, reduced 30%. Fitch reduced the 2024 payment 30%, per the
schedule in the FCC order, to allow for a hypothetical six-month
delay in clearing. Clearing the spectrum in the second relocation
phase requires the launch of seven satellites, thus there is some
execution risk. Intelsat has back-up plans for potential launch
failures; however, Fitch has built into its assumptions the
potential for recovery delays.
Fitch assumes Intelsat will receive a going-concern recovery
multiple of 5.5x EBITDA under this scenario. In Intelsat's pending
bankruptcy case, the company has a midpoint valuation of $11
billion. This includes the full value of the Phase I and Phase II
accelerated payments the company will receive upon the clearing of
the portion of C-Band spectrum licensed to the wireless operators.
Excluding these payments, the company's operating assets are valued
at approximately $6.13 billion.
Based on the estimated 2022 adjusted EBITDA in the company's second
and amended disclosure statement of approximately $900 million,
Fitch estimates Intelsat's operating assets are valued at a 6.8x
multiple. Additionally, recovery is supported by the following:
Comparable Reorganizations: The 2021 Telecom, Media and Technology
Bankruptcy Enterprise Values and Creditor Recoveries case study
includes Speedcast International Limited, a satellite
communications and network service provider. Speedcast emerged from
bankruptcy in early 2021 with a multiple of 8.7x on estimated 2022
EBITDA (reflecting a partial recovery from a deep cyclical
trough).
Speedcast has a less diversified revenue stream than Intelsat, as a
significant percentage of its customers are in the maritime and oil
and gas industries, and faced headwinds and impacts from the
coronavirus pandemic that greatly affected its liquidity position.
Intelsat is a supplier to Speedcast.
The 2020 Industrial, Manufacturing, Aerospace and Defense
Bankruptcy Enterprise Values and Creditor Recoveries case study:
Fitch noted that the three aerospace and defense defaulting
companies had exit multiples between 4.8x-6.9x.
Fitch forecasts a going-concern valuation of $7.74 billion,
including the value of the 2024 accelerated relocation payment,
which results in a post-reorganization enterprise value of $6.97
billion, after the deduction of expected administrative claims.
Fitch assumes a fully drawn revolver.
At emergence, assuming a fully drawn revolver, the RCF and
first-lien term loan B and secured notes are fully recovered. The
instrument rating for Intelsat Jackson's super- priority RCF rating
is 'BB'/'RR2' and the first-lien senior secured debt rating is
'BB-'/'RR3'.
Although the recovery model indicates 100% (RR1) recovery for the
super-priority and first-lien senior secured debt, the 'RR2' for
the super-priority debt and 'RR3' for the first- lien debt reflects
the application of Fitch's notching as detailed in the January 2021
Country-Specific Treatment of Recovery Ratings Criteria. Luxembourg
is in Country Group B, which applies a soft cap to recoveries. In
group B, there are caps of 'RR2' for the most senior obligations
and potential compression of some senior obligation ratings.
The report indicates that in such jurisdictions, the insolvency
framework is deemed to be generally less creditor-friendly and the
rule of law is perceived as less strong than category A but still
well above average in aggregate. The issuer is incorporated in
Luxembourg, and the company states most of the collateral is
located outside of the U.S. Thus, creditors may have a more
difficult time foreclosing on the collateral due to the laws of
certain jurisdictions.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Gross leverage (total debt with equity credit/operating
EBITDA) sustained below 3.5x, combined with a resumption of
revenue and EBITDA growth in the low single digits could lead
to a positive rating action.
-- Completion of a significant portion of the C-Band satellite
construction and launch program.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Gross leverage sustained above 5.0x, could be a cause for a
negative action, with the higher leverage stemming from
weakness in sales/EBITDA, debt-funded shareholder returns, or
a significant increase in capex, leading to increased debt
action issuance.
-- Delays in the construction and launch of the C-band
satellites, introducing uncertainties in the amount and timing
of the Phase II accelerated relocation payment anticipated for
2024.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity Post-Emergence: The company emerged with a fully
available $500 million, super-priority first-lien senior secured
revolver. Additional liquidity will be provided by expected
reimbursements for C-Band clearing costs to be received in early
2022. Fitch expects the partial repayment of debt, beyond any
drawings on the revolver, from the receipt of the Phase II
(expected in 2024) accelerated relocation payment. The nearest
maturity following emergence is expected in approximately five
years.
Capital Structure: The company emerged with a five-year, $500
million super-priority first-lien RCF (S+275), a seven-year, $3.19
billion first-lien term loan B (S+425) and $3 billion of
eight-year, 6.5% first lien notes.
Maturities: There are no material near-term maturities at
emergence, with the RCF maturing in five-years.
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.
ISSUER PROFILE
Intelsat provides service through a global fleet of 52 satellites
and is the largest fixed satellites services (FSS) operator in the
world. Coverage is provided to more than 99% of the world's
population.
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D O M I N I C A N R E P U B L I C
===================================
DOMINICAN REPUBLIC: Freezes Prices of Main Fuels
------------------------------------------------
Dominican Today reports that the Ministry of Industry, Commerce,
and Mipymes (MICM) disclosed that the price of fuels would remain
unchanged for the week of March 12 to 18.
In this regard, Premium Gasoline will remain at RD$293.60, and
Regular Gasoline will remain at RD$274.50, according to Dominican
Today.
Meanwhile, Regular Gasoil will continue at RD$221.60, and Optimum
Gasoil will remain at RD$241.10 per gallon, the report notes.
Likewise, Liquefied Petroleum Gas (LPG) remains at RD$147.60 per
gallon, and Natural Gas maintains its price at RD$28.97 per m3, the
report relays.
Price Increases
However, for four other fuels, the Government ordered increases
ranging from RD$24.00 to RD$46.00 per gallon, the report
discloses.
Thus, Avtur increases RD$39.86 and will be sold at RD$249.54;
Kerosene increases RD$46.58 and will now be sold at RD$284.88; the
report relays.
Fuel Oil will also increase by RD$27.22 and will be priced at
RD$192.11 per gallon, and Fuel Oil 1% will increase RD$24.73 to be
sold at RD$211.77, the report notes.
Oil
The report notes that the price of Texas Intermediate Crude Oil
(WTI) closed with a fall of 2.46%. It stood at RD$106.02 per barrel
despite the significant rise with which it opened the day, a
pronounced variation resulting from the volatility that has taken
over the markets since the invasion of Ukraine by Russian forces.
According to data at the end of trading on the New York Mercantile
Exchange (Nymex), WTI futures contracts for April delivery were
down $2.68 from the previous close, the report says. This is in
the face of the global increase in fuel prices, the report relays.
The U.S. benchmark barrel thus continues a week of significant
volatility in which it has gone from the peak of 130 dollars
recorded on Sunday, a maximum not seen since the summer of 2008, to
103.6 dollars at its lowest point recorded during the day, the
report adds.
About Dominican Republic
The Dominican Republic is a Caribbean nation that shares the island
of Hispaniola with Haiti to the west. Capital city Santo Domingo
has Spanish landmarks like the Gothic Catedral Primada de America
dating back 5 centuries in its Zona Colonial district. Luis Rodolfo
Abinader Corona is the current president of the nation.
TCRLA reported in April 2019 that the Dominican Today related that
Juan Del Rosario of the UASD Economic Faculty cited a current
economic slowdown for the Dominican Republic and cautioned that if
the trend continues, growth would reach only 4% by 2023. Mr. Del
Rosario said that if that happens, "we'll face difficulties in
meeting international commitments."
An ongoing concern in the Dominican Republic is the inability of
participants in the electricity sector to establish financial
viability for the system.
Fitch Ratings, 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: Government Looks to Argentina for Fuel Relief
-----------------------------------------------------------------
Dominican Today reports that in the midst of global uncertainty due
to high oil prices, which had worsened with the pandemic and
worsened with the war between Russia and Ukraine, the Government of
the Dominican Republic is looking to the Argentine market to meet
the country's demand.
Argentina is the fifth largest oil producer in Latin America, which
in December 2021, estimated 550,000 barrels per day, according to
data from the Ministry of Energy of that country, the report
relays.
President Luis Abinader and his counterpart Alberto Fernandez
signed a "declaration of cooperation for hydrocarbon development
between the Argentine and Dominican Republic," according to
Dominican Today.
For this, Fiscal Oilfields (YPF) and the Dominican Petroleum
Refinery (Refidomsa), the state entities of both nations, will work
together to explore the Vaca Muerta area, a huge 36,000 square
kilometer deposit that produces more than 25% of Argentine oil, 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 5 centuries in its Zona Colonial district. Luis Rodolfo
Abinader Corona is the current president of the nation.
TCRLA reported in April 2019 that the Dominican Today related that
Juan Del Rosario of the UASD Economic Faculty cited a current
economic slowdown for the Dominican Republic and cautioned that if
the trend continues, growth would reach only 4% by 2023. Mr. Del
Rosario said that if that happens, "we'll face difficulties in
meeting international commitments."
An ongoing concern in the Dominican Republic is the inability of
participants in the electricity sector to establish financial
viability for the system.
Fitch Ratings, 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.
===========
P A N A M A
===========
PANAMA: IMF OKs $60M-Loan to Advance Digital Transformation
-----------------------------------------------------------
Panama will promote the digital transformation of management and
public services with a $60 million loan approved by the
Inter-American Development Bank (IDB).
The operation will finance a program to enhance the efficiency of
transactions and services by improving cybersecurity effectiveness
in digital services and meeting the demand for digital
transactions. This will lead to a cost reduction in the
government's interaction with citizens and companies, with an
emphasis on vulnerable populations.
The loan will support the institutional strengthening of the
digital innovation and cybersecurity ecosystem in the country. It
will finance the design, construction, and launch of the Digital
Government Innovation Hub building, which will house technical
units linked to the digital transformation process and cyber
security. In addition, it will finance an upgrade to the government
cloud and the management framework of the government's digital
innovation projects.
The program will also promote the simplification and digitization
of priority processes for economic and social recovery. Some of the
most important tasks to this effect include the implementation of
improvements to the Unified Citizen's Portal - integrating more
public agencies - the inclusion of unique digital files, and
support for the design and implementation of a National Data
Strategy.
In the area of digital talent training, IDB financing will support
the creation and strengthening of information and communication
technology (ICT) and cybersecurity skills throughout the public
administration.
Other IDB initiatives include a pilot program in three public
agencies for an ICT career plan with a gender and diversity focus,
as well as the development of ICT skills focused on the economic
empowerment of indigenous women, with the potential to be adapted
for other groups.
The project will also finance the use of mobile structures for
training activities in competencies, digital transactions, and ICT
skills with a gender perspective, to reach areas where vulnerable
populations have a greater presence.
Citizens and companies in general will be the program's direct
beneficiaries. Its implementation will reduce transaction costs
with the government, with a safer digital environment and adequate
management and protection of their data. The most vulnerable
population, particularly indigenous women, will have better access
to and skills for processing transactions and using digital
services.
This operation is in line with Vision 2025 - Reinvest in the
Americas: A Decade of Opportunity , created by the IDB to achieve
recovery and inclusive growth in Latin America and the Caribbean,
in the areas of digital economy, gender and inclusion, and climate
change, as well as with the IDB Group Country Strategy with Panama
for 2021-2024, where the digital transformation of public
administration is a priority area.
The IDB loan of $60 million has a repayment term of 20 years, a
grace period of 5 and a half years, an interest rate based on SOFR
(Secured Overnight Financing Rate), and local counterpart funds for
$14.4 million and with government approval.
About the IDB
The Inter-American Development Bank is devoted to improving lives.
Established in 1959, the IDB is a leading source of long-term
financing for economic, social, and institutional development in
Latin America and the Caribbean. The IDB also conducts cutting-edge
research and provides policy advice, technical assistance, and
training to public and private sector clients throughout the
region.
=======
P E R U
=======
NEXA RESOURCES: S&P Affirms 'BB+' ICR, Outlook Stable
-----------------------------------------------------
S&P Global Ratings revised upward Peruvian mining company Nexa
Resources Peru S.A.A.'s (NRP) stand-alone credit profile (SACP) to
'bb' from 'bb-'. At the same time, S&P affirmed its 'BB+' issuer
credit and issue-level ratings on NRP.
The stable outlook on NRP mirrors that on its parent company Nexa
Resources S.A. (BB+/Stable/B). In the next 12 months, S&P expects
NRP to generate annual free operating cash flow (FOCF) of over $70
million and to maintain its solid credit metrics.
S&P said, "In 2021, the company posted a strong operating and
financial performance, benefiting from soaring metal prices. This,
together with lower debt, has translated into faster deleveraging
than we expected, with an adjusted gross debt to EBITDA of about
0.8x and FOCF to debt of about 35% in the fiscal year ended Dec.
31, 2021. We expect NRP to keep posting solid credit metrics in the
next 12-24 months because we expect metal prices to stay high. We
forecast zinc prices to be about $3,000/ton in 2022 and about
$2,800/ton in 2023 due to restricted global supply and higher
production costs. We also believe copper prices will remain high at
about $9,000/ton in 2022 and about $8,500/ton in 2023 due to strong
demand as countries accelerate buildup of electric infrastructure.
We forecast these prices will help NRP maintain solid EBITDA
margins in the 34%-36% range, with annual EBITDA above $240
million. This should allow the company to maintain its good credit
metrics, with adjusted gross debt to EBITDA below 1.0x and FOCF to
debt above 40% in the next two years. As a result, we revised our
financial risk assessment on NRP to intermediate from significant,
which triggered the upward revision of its SACP.
"On the other hand, there has been uncertainty about potential tax
increases for the Peruvian mining industry. A proposal to raise
taxes could be discussed by Peru's Congress in the next 12 months,
and depending on the outcome could result in lower cash flow for
the company and the industry in general. In our view, the potential
proposal would face a fragmented Congress that will likely resist
material increases in tax rates. However, we will monitor if there
is a radical shift in policy that could disrupt Peru's mining
industry, although this isn't in our base case.
"We expect the development and execution of NRP's greenfield
projects to continue to be subject to the parent's strategy.
Although the Peruvian company has a robust greenfield project
pipeline, we don't expect any of these projects to start operating
in the next 12-24 months, because the parent's focus is completing
the Aripuaná (Brazil) project, which we now expect will start
ramping up its operations in the third quarter of this year.
Moreover, the decision about which project will be developed and
prioritized after Aripuaná will ultimately depend on the overall
group's strategy. As a result, we think NRP's revenue generation
will remain strongly concentrated in a single asset, Cerro Lindo,
which will likely represent more than 60% of its revenues in the
next 12-24 months, reducing operating flexibility.
"This concentration in Cerro Lindo will allow the company to keep
capital expenditures (capex) at relatively low levels of about $100
million in 2022 and about $120 million in 2023, with the vast
majority for maintenance. This should help NRP continue generating
solid FOCF, which we anticipate will be above $70 million per year.
We expect the company to use its strong cash position and cash flow
to reduce debt, including the prepayment of its senior unsecured
notes due 2023 which we expect to be completed in the next weeks.
Since we evaluate the company on a gross basis, the expected debt
reduction will provide more cushion on its credit metrics in the
event there is an unexpected shift in commodity prices.
"We continue to assess NRP as a core subsidiary of Nexa Resources
S.A., so we equalize the ratings on NRP with that on the parent.
NRP contributes about 40% of the group's consolidated EBITDA and we
expect it to remain integral to Nexa Resources' overall long-term
growth strategy. This is because the Peruvian company holds some of
the most important greenfield projects such as Magistral,
Shalipayco, and Pukaqaqa. In addition, the cross-default clauses
and full and unconditional guarantees that NRP's assets provide to
the notes issued by Nexa Resources reflect a clear incentive to the
parent to provide support under any foreseeable adverse
circumstances."
ESG credit indicators: E-3, S-3, G-2
PESQUERA EXALMAR: Moody's Withdraws B3 CFR Amid Debt Redemption
---------------------------------------------------------------
Moody's Investors Service has withdrawn all ratings for Pesquera
Exalmar S.A.A. (Exalmar) including the company's B3 Corporate
Family Rating.
The following ratings are affected by the action:
Withdrawals:
Issuer: Pesquera Exalmar S.A.A.
Corporate Family Rating, Withdrawn , previously rated B3
Outlook Actions:
Issuer: Pesquera Exalmar S.A.A.
Outlook, Changed To Rating Withdrawn From Stable
RATINGS RATIONALE
Moody's has withdrawn all of Exalmar's ratings following the
company's complete redemption of all its outstanding 8.000% senior
unsecured notes due 2025.
Founded in 1992, Pesquera Exalmar S.A.A. is a Peruvian fishing
company that produces fishmeal and fish oil used for indirect human
consumption. In addition, the company sells fresh and frozen fish
(mackerel, horse mackerel, giant squid and mahi-mahi) for direct
human consumption. Exalmar has a 6.7% assigned quota in the north
central region of Peru and the ability to process third-party
catch, which increase its overall market participation. This
positions the company as the third-largest fishing company in Peru
in terms of processed anchovy. Exalmar is majority owned (71%) and
controlled by its founder, Victor Matta Curotto, and the balance
(29%) is publicly traded on the Lima Stock Exchange. For year ended
December 31, 2021 the company reported revenue of $397 million.
=====================================
T R I N I D A D A N D T O B A G O
=====================================
CARIBBEAN AIRLINES: Resumes Curacao Service
-------------------------------------------
Trinidad Express reports that Caribbean Airlines (CAL) will resume
twice-weekly service between Trinidad and Curacao from April 5.
Non-stop, return flights between Piarco International and Curaçao
International Airports will operate on Tuesdays and Fridays,
according to Trinidad Express.
In a statement, CAL said the schedule is timed to facilitate
convenient regional and international connections throughout the
Caribbean Airlines-network, the report notes.
On Wednesday, the airline began flying to Houston, Texas, the
report relays.
CAL said the flights to Curacao on Tuesdays are nonstop from Port
of Spain (POS), while flights go through Guyana on Wednesdays, the
report discloses.
Ticket prices on the website start at US$345 one-way, the report
notes.
Houston is Caribbean Airlines' fifth US destination, and flights
will be operated by the airline's brand new 737-8 aircraft, the
report discloses.
The airline will be hoping to tap into Guyana's burgeoning oil and
gas sector by shuttling workers back and forth. Several major
energy companies have headquarters in Houston, including BP, Shell
and ExxonMobil, the report relays.
The airline was granted approval by the US Department of
Transportation (DOT) back in 2020 to operate flights to Houston,
but the pandemic and closure of T&T's borders forced the airline to
suspend-expansion plans, the report notes.
Direct flights go via Guyana and leave Trinidad on Wednesdays at
3.30 p.m., with BW702 arriving in Georgetown at 4:40 p.m. for a
brief stop to pick up passengers. The aircraft then heads north to
Texas, arriving in Houston at 10:35 p.m., the report says.
Travellers do have the option to leave at 2.15 p.m. instead on
BW526. However, they will be required to change aircraft in Guyana,
as BW526 continues on to New York's JFK International Airport, the
report adds.
About Caribbean Airlines
Caribbean Airlines Limited - http://www.caribbean-airlines.com/-
provides passenger airline services in the Caribbean, South
America, and North America. The company also offers freighter
services for perishables, fish and seafood, live animals, human
remains, and dangerous goods. In addition, it operates a duty
free store in Trinidad. Caribbean Airlines Limited was founded in
2006 and is based in Piarco, Trinidad and Tobago.
Caribbean Airlines is among many airlines whose business has been
greatly affected in 2020 by the slowdown of international travel
caused by the COVID-19 pandemic. The government of Trinidad &
Tobago guaranteed a US$65 million loan for the airline, and that
funding has helped with the airlines' cash flow shortfall since
May 2020. In September 2020, the airline related it will be
taking
cost-cutting measures to help keep it afloat. The measures, which
was to affect some 1,700 employees, included salary deductions,
no-pay leaves and lay-offs.
===============
X X X X X X X X
===============
[*] BOND PRICING: For the Week March 7 to March 11, 2022
--------------------------------------------------------
Issuer Name Cpn Price Maturity Country Curr
----------- --- ----- -------- ------- ---
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
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
YPF SA 16.5 67.3 5/9/2022 AR ARS
Polarcus Ltd 5.6 71.8 7/1/2022 AE USD
YPF SA 16.5 67.3 5/9/2022 AR ARS
Fospar S/A 6.5 1.2 5/15/2026 BR BRL
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
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 8.3 74.5 12/31/2033 AR USD
Provincia del Chaco Ar 4.0 0.0 12/4/2026 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
Odebrecht Finance Ltd 6.0 16.4 4/5/2023 KY USD
Esval SA 3.5 49.9 2/15/2026 CL CLP
Automotores Gildemeist 6.8 54.9 1/15/2023 CL USD
Province of Santa Fe 6.9 75.2 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 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
Argentine Republic Gov 6.3 74.1 11/9/2047 AR EUR
Argentina Bonar Bonds 7.6 74.4 4/18/2037 AR USD
Avadel Finance Cayman 4.5 55.0 2/1/2023 US 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
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
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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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* * * End of Transmission * * *