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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
Tuesday, April 26, 2022, Vol. 23, No. 77
Headlines
A R G E N T I N A
ARGENTINA: Economy Grew 9.1% Year-On-Year in February, Says INDEC
MERCADO LIBRE: Egan-Jones Retains 'BB' Senior Unsecured Ratings
B E R M U D A
TEEKAY CORP: Egan-Jones Keeps B Senior Unsecured Ratings
B R A Z I L
AEGEA FINANCE: Discloses Cash Tender Offer & Consent Solicitation
[*] BRAZIL: Curitiba and IDB Launch Call to Find Innovations
D O M I N I C A N R E P U B L I C
DOMINICAN REPUBLIC: Construction Costs Rose 14.69% in One Year
DOMINICAN REPUBLIC: Finds Measures Against Possible Food Shortages
P U E R T O R I C O
TOYS "R" US: Creditors' Trust Can't Claw Back the $12M From UPS
U R U G U A Y
URUGUAY: Fuel Prices Drop on Border due to Large Gap w/ Argentina
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A R G E N T I N A
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ARGENTINA: Economy Grew 9.1% Year-On-Year in February, Says INDEC
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Buenos Aires Times reports that Argentina's economy rebounded in
February and grew at its fastest pace in several months, despite a
contraction the previous month.
According to official data published by the INDEC national
statistics bureau, the economy grew 9.1% year-on-year in February
and by 7% in the first two months of 2022, the report notes.
Economic activity was up 1.8% from the previous month, January,
according to Buenos Aires Times.
Led by tourism, the increase came in one of Argentina's busiest
months for the summer holidays, and compares with February a year
earlier, when tourism was limited and Covid vaccines were in their
early stages of implementation, the report discloses.
Transport, mining and retail trade also experienced double-digit
growth rates, with all but one sector expanding, the report
relays.
Argentina's gross domestic product (GDP) has been rising for 12
consecutive months and was up 10.3% in 2021 after a 9.9% slump the
preceding year amid the worst of the coronavirus pandemic, the
report notes.
Nevertheless, the growth comes with inflation accelerating sharply.
Prices rose 6.7% in March, according to INDEC, the report
discloses.
The International Monetary Fund (IMF) forecasts that Argentina's
economy will grow by 4% in 2022. However, economists surveyed by
the Central Bank estimate predict 3.2%, the report says.
It would be Argentina's second consecutive year of economic growth
in a decade and comes after a three-year recession, the report
discloses.
The government recently reached an agreement with the IMF to
refinance a debt of almost US$45 billion. Quarterly reviews will
begin in May, 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.
Argentina obtained on March 25, 2022, approval from the Executive
Board of the International Monetary Fund (IMF) of a 30-month
extended arrangement under the Extended Fund Facility (EFF)
amounting to SDR 31.914 billion (equivalent to US$44 billion).
Under the new terms, Argentina secured a much-needed grace period
that postpones repayment of its debt. However, IMF warned of
exceptionally high risks to the program.
MERCADO LIBRE: Egan-Jones Retains 'BB' Senior Unsecured Ratings
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Egan-Jones Ratings Company on March 25, 2022, maintained its 'BB'
foreign currency and local currency senior unsecured ratings on
debt issued by Mercado Libre, Inc.
Headquartered in Buenos Aires, Argentina, Mercado Libre, Inc. is an
Argentine company headquartered in Buenos Aires, incorporated in
the United States that operates online marketplaces dedicated to
e-commerce and online auctions, including mercadolibre.com.
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B E R M U D A
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TEEKAY CORP: Egan-Jones Keeps B Senior Unsecured Ratings
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Egan-Jones Ratings Company, on March 21, 2022, maintained its 'B'
foreign currency and local currency senior unsecured ratings on
debt issued by Teekay Corporation. EJR also maintained its 'C'
rating on commercial paper issued by the Company.
Headquartered in Hamilton, Bermuda, Teekay Corporation is a
provider of international crude oil and liquefied natural gas (LNG)
marine transportation services.
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B R A Z I L
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AEGEA FINANCE: Discloses Cash Tender Offer & Consent Solicitation
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AEGEA Finance S.a r.l. (the "Issuer"), which is a wholly-owned
subsidiary of AEGEA Saneamento e Participacoes S.A. ("Aegea"), has
commenced a cash tender offer (the "Tender Offer") for any and all
of the outstanding U.S.$400,000,000 aggregate principal amount of
its 5.750% Senior Notes due 2024 (the "Notes").
In conjunction with the Tender Offer, the Issuer is also soliciting
consents (the "Consent Solicitation") from the holders of the Notes
for the adoption of proposed amendments (the "Proposed
Amendments"), which would, among other things, (i) eliminate
substantially all of the restrictive covenants and certain events
of default and related provisions contained in the Indenture (as
defined below) and (ii) reduce the minimum required notice period
for the redemption of Notes from 30 days to three business days
prior to the date fixed for redemption (maintaining the maximum
notice period of 60 days).
The Tender Offer and the Consent Solicitation are being made
pursuant to an Offer to Purchase and Consent Solicitation
Statement, dated April 21, 2022 (as amended or supplemented from
time to time, the "Offer to Purchase").
Holders who tender Notes must also consent to the Proposed
Amendments to the Indenture. Holders of Notes may not deliver
consents to the Proposed Amendments without validly tendering the
Notes in the Tender Offer and may not revoke their consents without
withdrawing the previously tendered Notes to which they relate. The
Proposed Amendments will be set forth in a supplemental indenture
relating to the Notes and are described in more detail in the Offer
to Purchase. Adoption of the Proposed Amendments requires the
delivery of consents by holders of Notes of a majority of the
aggregate outstanding principal amount of Notes (not including any
Notes that are owned by Aegea or any of its affiliates).
A full text copy of the company's press release is available free
at:
https://prn.to/3rRzsVz
AEGEA is one of the largest private water and sewage players in
Brazil, with 39% market share of the private sector. The company is
present in 153 municipalities in 12 states, through 42 concessions,
6 public-private-partnerships (PPPs) and 1 sub-concession, with 28
years of average remaining concession period. In December 2020, the
company serviced 1.3 million active households in the sewage
segment and 1.9 million in the water segment, representing a 21.4%
and 8.0% increase from the previous year, respectively.
* * *
As reported in the Troubled Company Reporter-Latin America on May
14, 2021, Moody's Investors Service affirmed AEGEA Saneamento e
Participacoes S.A's ("Aegea") corporate family rating at Ba1. At
the same time Moody's affirmed the Ba2 rating assigned to Aegea
Finance S.a r.l.'s senior unsecured bonds, backed by Aegea. The
outlook for all ratings changed to negative from stable.
[*] BRAZIL: Curitiba and IDB Launch Call to Find Innovations
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The Inter-American Development Bank (IDB) and the city of Curitiba,
in Brazil, are launching a call to find innovations in
transportation, energy, and state-of-the-art technologies that will
reduce the number of cars and motorcycles in the city. This
initiative is part of Curitiba's modernization plan for the
network of bus lanes and passenger. It includes a new
self-sustaining station model that will function as an intelligent
multimodal transport hub. An information session will be held on
April 26th, 2022.
The international public call for the prototype station, estimated
to cost US$970,000, is open and part of the Sustainable Urban
Mobility Program, which has financing of US$106 million from the
IDB. It promotes integration with other forms of transport, such as
carpooling and shared bicycles, and emphasizes the energy matrix of
the teams. The station's solar energy will be captured through
photovoltaic panels to ensure efficiency throughout the operation,
from internal air conditioning to monitoring and users'
communication systems.
The new station must also have a design that considers gender and
disability issues, as well as the potential to become mobility
centers and serve as a model for other cities.
The selection of the winning proposal will be made according to
criteria based on performance indices and cost evaluation
throughout the entire project, seeking the best cost-benefit ratio.
Once the model has been developed and approved, it will be
replicated in the 12 other stations of the Inter 2 itinerary.
"Curitiba is already a reference in Latin America for
transportation and in this program, innovation is used as a
starting point to meet new demands and once again revolutionize
urban mobility. It is another important step towards sustainability
and social and gender inclusion," says Morgan Doyle, IDB
representative in Brazil.
This model of international competition focused on solutions is
unprecedented for the municipality. It covers the contract design
of the executive project, the execution of the work, the
installation of the solutions and the monitored operation for the
validation and improvement of technologies. The innovation
component of the model will facilitate proposals that consider
environmental, economic, and social sustainability aspects, as well
as efficiency and scalability for the 12 other stations. Consortia
are authorized to allow companies with complementary experiences
and innovative solutions to participate in the competition.
In addition to improving stations, the IDB-financed program
includes projects that increase the capacity and speed of Inter 2
and Interbarrios II, which carry the largest number of passengers
in the city. This includes more than 70 km of road rehabilitation
works, including exclusive channels, binaries, cycle paths, as well
as new integration terminals with the Intermunicipal Transport
Network (RIT). The improvements in the sixth transport axis of the
city will benefit more than 180,000 passengers daily.
The strength of the program is proportional to the challenge of the
urban mobility that the city of Curitiba has defined for the coming
years. "Curitiba has always been a reference in the urban transport
system and we are consolidating this vocation with the new era of
sustainable intermodality, with strategic partners to achieve these
objectives," said the city's mayor, Rafael Greca.
Learn more about the call for proposals (in portuguese) and join
the information session that will be held on April 26th, 2022. The
deadline for submitting proposals has been extended until May 18th,
2022.
As reported in the Troubled Company Reporter-Latin America on
Apr 15, 2022, Moody's Investors Service has affirmed the Government
of Brazil's long-term Ba2 issuer ratings and senior unsecured bond
ratings, (P)Ba2 senior unsecured shelf ratings and maintained the
stable outlook.
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D O M I N I C A N R E P U B L I C
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DOMINICAN REPUBLIC: Construction Costs Rose 14.69% in One Year
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Dominican Today reports that in one year, the country's direct
housing construction costs increased by 14.69%. Moreover, the
projections of the sector's representatives indicate that they will
continue to increase because the war between Russia and Ukraine has
once again complicated the scenario.
Last February, practically all types of housing and materials and
subcontracts registered increases, according to Dominican Today.
Among the materials that rose in price in the period between
February 2021 and the same month of this 2022 are cements and
glues, steel, wood, aggregates, paint, pipes and PVC2 parts, wires,
nails, zinc, among others, the report notes.
The report discloses that these increases have translated into an
increase in the cost of one- and two-story single-family homes and
four-story multi-family homes, which increased 0.09% 0.11% 0.54%
last February, respectively.
These price increases apply to houses built in the National
District and the province of Santo Domingo, the area taken into
account to elaborate the Index of Direct Costs of Housing
Construction (ICDV), the report says.
The analysis does not include the indirect costs of land, design,
building permits, financial costs, construction company profits and
others that are added to the final price of housing, the report
notes.
The ICDV is published by the Oficina Nacional de EstadÃstica (ONE)
and coordinated by the Asociacion Dominicana de Constructores y
Promotores de la Vivienda (Acoprovi), the report relays.
Outlook
The representatives of the sector foresee that this upward trend
will continue, especially as of next month when the cost of labor
will increase due to the Government's disposition to increase the
salary of the workers of the sector, the report notes. This is why
they have been making suggestions to the Government since last year
o face the situation, the report discloses.
One of the recommendations is that for the calculation of tariffs
and the Tax on the Transfer of Industrialized Goods and Services
(ITBIS) paid by raw materials and construction products, the cost
of freight before the pandemic should be taken as a base. This
takes into account that the freight price has shot up by more than
300% percent in some cases, according to the president of Acoprovi,
Jorge Montalvo, the report says.
Montalvo indicated that this could be a transitory measure while
prices in international markets stabilize. The authorities'
response has been that they are willing to evaluate this and other
suggestions.
Growth of The Sector
In 2021, the construction activity grew 23.4 % and consolidated as
the one with the highest incidence in the growth of the economy,
the report relays.
This growth was primarily driven by private investment for the
development of crucial real estate projects of low and medium-cost
residential units, among other aspects, according to the Central
Bank's (BCRD) economy report, the report notes.
The report states that the behavior of the sector is also reflected
in the dynamism observed in the local sales volumes of the main
inputs of this industry, such as metallic structures, whose sales
grew 35.8%; the sale of paint increased 32.9%; cement 24.2%; and
the rest of materials (2.5%), the report discloses.
Likewise, last year the resources channeled through the financial
system for the construction and acquisition of housing increased
15.4%, the report says.
The president of Acoprovi, Jorge Montalvo, has estimated that since
the beginning of the pandemic to date, costs in the construction
sector have increased by around 30%, the report relays.
Meanwhile, the Government has ordered an increase of 24% for
construction workers, 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: Finds Measures Against Possible Food Shortages
------------------------------------------------------------------
Dominican Today reports that Luis Abinader informed in Bonao,
Monsennor Nouel province, that the priority of his administration
is to promote family agriculture in view of the possibility of a
worldwide food shortage caused by Russia's invasion of Ukraine.
To this end, the head of State announced the creation of a program,
with all government agencies, to promote the creation of family
gardens and crops in the lands of the State Sugar Council (CEA),
according to Dominican Today.
He said that they would be giving away seeds and vegetables and
laying hens and animals to the population, the report relays.
"We are going to get ready to plant our yards," said the President,
the report notes.
He indicated that the government continues to monitor the
international crisis, which directly impacts the country, the
report discloses.
Luis Abinader made the announcement while leading the ceremony that
started the 2022 rice harvest, the report says. The activity was
held at the Bio-Arroz Rice Experimental Station, located in the
Juma Bejucal municipal district in the province of Monsenor Nouel,
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.
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P U E R T O R I C O
=====================
TOYS "R" US: Creditors' Trust Can't Claw Back the $12M From UPS
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Matthew Santoni of Law360 reports that the trust representing
creditors for the Toys R Us bankruptcy estate can't claw back $12
million that the retailer had paid UPS, after a Virginia
bankruptcy
judge ruled that the 2018 settlement wrapping up the chain's
operations had released avoidance claims against other creditors.
The creditors' trust had claimed that the settlement didn't apply
to UPS because it had gotten paid in full before the deal took
effect and that it hadn't suffered any loss in the bankruptcy, but
U. S. Bankruptcy Judge Keith L. Phillips held that the
settlement release covered creditors past and present.
About Toys "R" Us
Toys "R" Us, Inc., was an American toy and juvenile-products
retailer founded in 1948 and headquartered in Wayne, New Jersey, in
the New York City metropolitan area. Merchandise was sold in 880
Toys "R" Us and Babies "R" Us stores in the United States, Puerto
Rico and Guam, and in more than 780 international stores and more
than 245 licensed stores in 37 countries and jurisdictions.
Merchandise was also sold at e-commerce sites including Toysrus.com
and Babiesrus.com.
On July 21, 2005, a consortium of Bain Capital Partners LLC,
Kohlberg Kravis Roberts, and Vornado Realty Trust invested $1.3
billion to complete a $6.6 billion leveraged buyout of the
company.
Toys "R" Us became a privately owned entity but still filed with
the U.S. Securities and Exchange Commission as required by its debt
agreements.
Toys "R" Us, Inc., and certain of its U.S. subsidiaries and its
Canadian subsidiary voluntarily filed for relief under Chapter 11
of the Bankruptcy Code (Bankr. E.D. Va. Lead Case No. Case No.
17-34665) on Sept. 19, 2017. In addition, the Company's Canadian
subsidiary voluntarily commenced parallel proceedings under the
Companies' Creditors Arrangement Act ("CCAA") in Canada in the
Ontario Superior Court of Justice. The Company's operations outside
of the U.S. and Canada, including its 255 licensed stores and joint
venture partnership in Asia, which are separate entities, were not
part of the Chapter 11 filing and CCAA proceedings.
The Company's consolidated balance sheet showed $6.572 billion in
assets, $7.891 billion in liabilities, and a stockholders' deficit
of $1.319 billion as of April 29, 2017.
Judge Keith L. Phillips presides over the Chapter 11 cases.
In the Chapter 11 cases, Kirkland & Ellis LLP and Kirkland & Ellis
International LLP serve as the Debtors' legal counsel. Kutak Rock
LLP serves as co-counsel. Toys "R" Us employed Alvarez & Marsal
North America, LLC as its restructuring advisor; and Lazard Freres
& Co. LLC as its investment banker. It hired Prime Clerk LLC as
claims and noticing agent. Consensus Advisory Services LLC and
Consensus Securities LLC, serve as sale process investment banker.
A&G Realty Partners, LLC, serves as its real estate advisor.
On Sept. 26, 2017, the U.S. Trustee for Region 4 appointed an
official committee of unsecured creditors. The Committee retained
Kramer Levin Naftalis & Frankel LLP as its legal counsel; Wolcott
Rivers, P.C., as local counsel; FTI Consulting, Inc., as financial
advisor; and Moelis & Company LLC as investment banker.
Grant Thornton is the monitor appointed in the CCAA case.
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U R U G U A Y
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URUGUAY: Fuel Prices Drop on Border due to Large Gap w/ Argentina
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Rio Times Online reports that the price gap with Argentina, which
has widened recently, is a concern for businessmen on the Uruguayan
coast and mayors of border departments.
Recent increases in fuel prices in Uruguay prompted departmental
leaders to call for an additional reduction, pointing out that it
is currently even more common for Uruguayans to cross the border to
fill up on cheaper gasoline and diesel in the neighboring country,
according to Rio Times Online.
That claim was echoed by the government, which confirmed a measure
on the issue, the report relays.
"The amount of the internal specific tax on the sale of gasoline
will be reduced by up to 30% of the sale price," says the decree
sent by the president to mayors. Previously, the refund was 24%,
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.
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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