/raid1/www/Hosts/bankrupt/TCRLA_Public/220617.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Friday, June 17, 2022, Vol. 23, No. 115
Headlines
A R G E N T I N A
ARGENTINA: Sky-High Inflation Eases Slightly to 5.1% in May
B R A Z I L
BRAZIL: S&P Affirms BB-/B Sovereign Credit Ratings, Outlook Stable
ELETROBRAS: S&P Affirms 'BB-' ICR Following Privatization
C H I L E
LATAM AIRLINES: To Get $2.75BB in New Loans for Bankruptcy Exit
D O M I N I C A N R E P U B L I C
DOMINICAN REPUBLIC: No Legal Framework for Env'l. Liabilities
[*] DOMINICAN REPUBLIC: Joblessness Improves
M E X I C O
GRUPO AEROMEXICO: Convenes Shareholder Meeting to Delist
P U E R T O R I C O
CYMA CLEANING: Taps Jimenez Vazquez & Associates as Accountant
INNOVA INDUSTRIAL: Taps Jimenez Vazquez & Associates as Accountant
SIRIUS PROPERTIES: Files Bare-Bones Chapter 11 Petition
X X X X X X X X
[*] LATAM: Nearshoring Can Add Annual $78-Bil. in Exports
- - - - -
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A R G E N T I N A
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ARGENTINA: Sky-High Inflation Eases Slightly to 5.1% in May
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globalinsolvency.com, citing Reuters, reports that Argentina's
monthly inflation clocked in at 5.1% in May, still painfully high
but below expectations and slower than the two previous months as
the South American grains producer battles to bring down consumer
prices.
That was below the median forecast of 5.2% that local and foreign
analysts polled by Reuters gave, according to globalinsolvency.com.
The rate was 6% in April and a year-high 6.7% in March, the report
notes. The annual inflation rate, however, is expected to top 70%
by the end of the year, the report relays.
"Although this represents a slowdown in the monthly variation, this
must be weighed against annual inflation that continues to grow and
will end the year above 70%," said Eugenio Mari, chief economist at
Libertad y Progreso, the report discloses.
The rolling 12-month inflation rate ticked up to 60.7% in May while
prices year-to-date were up 29.3%, Argentina's INDEC statistics
agency said, 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.
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B R A Z I L
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BRAZIL: S&P Affirms BB-/B Sovereign Credit Ratings, Outlook Stable
------------------------------------------------------------------
S&P Global Ratings affirmed its 'BB-/B' long- and short-term
foreign and local currency sovereign credit ratings on Brazil. The
outlook on the long-term ratings remains stable. S&P also affirmed
its 'brAAA' national scale rating, and the outlook remains stable.
The transfer and convertibility assessment remains 'BB+'.
Outlook
The stable outlook reflects S&P's base-case assumption that Brazil
will maintain its fiscal anchors over the next two years despite an
increasing interest burden, preventing significant fiscal slippage
and limiting the rise in its already high debt burden. The outlook
also incorporates moderate economic growth, high but declining
inflation, and a strong external position.
Downside scenario
S&P could lower the ratings over the next two years if
worse-than-expected fiscal results, potentially signaling a weaker
institutional capacity to implement corrective fiscal measures,
further erode public finances. Looser fiscal policy could also
sustain high inflation for a longer period and reduce the
sovereign's monetary flexibility. A worsening of Brazil's currently
strong external position could also result in a downgrade.
Upside scenario
S&P could raise the ratings in the next two years if
better-than-expected policy implementation results in faster and
sustainable GDP growth and structurally stronger fiscal
performance.
Rationale
S&P's ratings on Brazil reflect a complex institutional framework
that anchors its macroeconomic fundamentals. This framework will
likely continue to limit changes in key economic policies but also
result in slow progress on addressing fiscal and economic
rigidities that have led to poor GDP growth over the past 10
years.
The ratings are supported by Brazil's strong external position, a
flexible exchange rate, and inflation-targeting monetary policy
conducted by an autonomous central bank. Moreover, deep domestic
capital and debt markets mitigate the sovereign's funding risk and
allow the government to maintain a favorable composition of debt,
mostly denominated in local currency.
Institutional and economic profile: A complex institutional
arrangement impedes fast policy implementation
-- A fragmented but largely centrist Congress will continue to
anchor Brazil's economic policy framework.
-- Upcoming national elections create uncertainty about continued
political support for pro-investment and growth policies.
-- Resilient domestic consumption and favorable terms of trade
will contribute to GDP growth of around 1.2% in 2022.
Brazil is a stable democracy with extensive checks and balances,
including an active judiciary. It enjoys political stability and
continuity in key economic policies. However, its political system
requires extensive consensus to pass legislation. Due to a very
detailed constitution, many changes in economic policy require
reforms to the constitution, resulting in lengthy procedures.
Moreover, the combination of such an institutional setting and a
highly fragmented Congress that has many political parties often
delays or deters fiscal reforms (such as tax and administrative
reforms) and other reforms that could address economic weaknesses
in a timely manner.
Brazil will hold national elections on Oct. 2, 2022 (and a second
round if needed on Oct. 30). President Jair Bolsonaro and former
President Lula da Silva continue to dominate in polls. Election
rhetoric from leading candidates on energy and fuel pricing, the
expenditure ceiling, and labor law, among other topics, has created
uncertainty about policy direction. S&P expects the next president
will not have a majority in Congress, forcing the administration to
seek compromises and advance new policies only slowly.
Brazil's economic output modestly exceeded its pre-pandemic level
by the end of 2021. S&P expects the economy to grow 1.2% in 2022
and average less than 2% growth in 2023-2025--still below the
growth rate of countries at a similar level of development. GDP per
capita, at US$9,000 in 2022, is expected to trend toward US$9,800
by 2025. Resilient consumption (partly due to supportive
countercyclical measures), high prices, and rising export volumes
continue to support economic growth.
Investment is experiencing a significant recovery associated with
the government's efforts to improve its infrastructure concession
programs and legal framework across sectors, with the aim of
greater private-sector participation in the economy. S&P expects
investment to remain around 18% of GDP in 2022-2025, compared with
a 15% average in 2016-2020.
That said, S&P continues to see elevated downside risks, given high
inflation. A scenario of prolonged inflation and restrictive
monetary policy would dampen consumption and investment and worsen
public finances.
Flexibility and performance profile: Weak fiscal performance
mitigated by strong external position and monetary policy
credibility
-- S&P expects fiscal deficits and the debt burden to remain high
over the forecast horizon.
-- Favorable prices and greater export volumes continue to
strengthen Brazil's external position.
-- Restrictive monetary policy should help curb inflation.
The general government's primary fiscal outcome (which excludes
interest payments) is likely to be almost in balance in 2022,
following strong performance in 2021. Economic recovery, plus the
impact of inflation on government revenues, will contribute to this
result, along with some transitory measures to contain expenditure
growth. That said, higher interest costs and increasing spending
pressures, most notably in public employee salaries and social
spending, will contribute to general government deficits likely
averaging over 6.1% of GDP in 2022-2025. S&P expects a slightly
higher annual increase in net general government debt over this
period, due partly to indexation to inflation.
S&P expects net general government debt to rise toward 70% of GDP
by 2025 from 58% in 2021. The higher interest cost will result in
interest payments averaging 15% of general government revenue in
2022-2025, higher than the 12.2% average of 2017-2019, when
reference rates were historically low.
The composition of Brazil's debt limits the risks embedded in the
high debt burden. The debt is mostly denominated in local currency,
and the central government's strong liquidity position mitigates
rollover risk. Nonresidents hold only around 10% of local currency
central government debt, limiting the risk of potential adverse
external shocks on debt rollover. The share of domestic lenders,
including the banking sector, is high. On the other hand, the
banking sector's high exposure to the government (which accounts
for over 20% of its assets) will constrain the availability of
credit to other sectors of the economy.
Contingent liabilities from the financial system are low, taking
into account the size of the financial sector, at around 135% of
GDP, and our Banking Industry Country Risk Assessment of '6'. Debt
issued by public-sector companies is less than 10% of GDP and poses
limited risk to the government. That said, potential legal claims
against the government amount to over 20% of GDP, which S&P
considers a significant contingent liability. Yearly payments on
legal claims are capped by law until 2027, but significant shares
of legal claims are likely to materialize as debt over the long
term.
The country's external position has been resilient despite global
volatility. High commodity prices, high export volumes, and a local
currency that is still weaker than before the pandemic favor export
performance. S&P expects Brazil to post minuscule current account
deficits of around 0.1% of GDP on average in 2022-2025. Coupling
this with net foreign direct investment inflows of around 2% of
GDP, S&P expects Brazil to regain and maintain its narrow net
external debt creditor position in 2022-2025.
S&P classifies the Brazilian real as an actively traded currency,
based on the 2019 Bank for International Settlements' Triennial
Survey, which showed that the real contributes at least 1% of
global foreign exchange market turnover.
Inflation has risen since late 2020 because of significant currency
depreciation; higher electric energy prices, given a drought that
reduced hydroelectricity output and boosted food prices; and a
prolonged energy price surge exacerbated by the supply shock from
economic sanctions on Russia. Consumer inflation has remained above
10% since September 2021 (11.7% in May 2022) and well above the
central bank's 2022 target of 3.5% (with a tolerance range of
plus/minus 1.5%).
In response, the central bank has increased its policy rate (SELIC)
in 11 board decisions since March 2021 to 12.75% from 2%. Our base
case expects inflation to be 8% by year-end 2022 and to average
10.5% for the year. Highly restrictive monetary policy should help
inflation to trend toward 4.1% by year-end 2023.
In accordance with S&P's relevant policies and procedures, the
Rating Committee was composed of analysts that are qualified to
vote in the committee, with sufficient experience to convey the
appropriate level of knowledge and understanding of the methodology
applicable. At the onset of the committee, the chair confirmed that
the information provided to the Rating Committee by the primary
analyst had been distributed in a timely manner and was sufficient
for Committee members to make an informed decision.
After the primary analyst gave opening remarks and explained the
recommendation, the Committee discussed key rating factors and
critical issues in accordance with the relevant criteria.
Qualitative and quantitative risk factors were considered and
discussed, looking at track-record and forecasts.
The committee's assessment of the key rating factors is reflected
in the Ratings Score Snapshot above.
The chair ensured every voting member was given the opportunity to
articulate his/her opinion. The chair or designee reviewed the
draft report to ensure consistency with the Committee decision. The
views and the decision of the rating committee are summarized in
the above rationale and outlook. The weighting of all rating
factors is described in the methodology used in this rating
action.
Ratings List
RATINGS AFFIRMED
BRAZIL
Sovereign Credit Rating BB-/Stable/B
Brazil National Scale brAAA/Stable/--
Transfer & Convertibility Assessment
Local Currency BB+
BRAZIL
Senior Unsecured BB-
Senior Unsecured brAAA
ELETROBRAS: S&P Affirms 'BB-' ICR Following Privatization
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Brazilian electric utility Centrais Eletricas Brasileiras S.A.
(Eletrobras), on June 14, 2022, delivered and settled the sale of
697.5 million shares, diluting the Brazilian government's direct
and indirect ownership to about 45% from 61% of total capital (72%
of controlling shares).
S&P Global Ratings affirmed its 'BB-' global scale issuer credit
and issue-level ratings on Eletrobras. S&P revised its view of the
likelihood of Eletrobras receiving extraordinary government support
to high from extremely high, which doesn't affect the rating
considering the company's 'bb-' stand-alone credit profile (SACP).
S&P also affirmed its 'brAAA/brA-1+' national scale ratings on the
company.
The stable outlook on Eletrobras reflects S&P's expectation that
the company will continue deleveraging through higher EBITDA
generation from the 5.7 gigawatt (GW) new concessions and the
gradual migration of 7.5 GW of energy currently under the quota
regime to independent contracts starting in 2023.
Eletrobras' new corporate governance standards limit the
government's influence on the company's administrative and
strategic decisions, given the board's greater independence. Under
the new corporate governance framework, a single shareholder
(direct or indirect) has its voting rights limited to 10%. In
addition, there is a poison pill mechanism to limit the ownership
by any shareholder to 30% (except the remaining government shares
following the public offering dilution). The government retained a
golden share with sole purpose of being able to veto to any changes
to the new corporate bylaws -- in particular, the one that limits
single or multiple shareholder voting rights to 10%.
S&P said, "As a result of the lower government influence and owner
position, we revised our assessment of the link between Eletrobras
and the government to strong from very strong. This in turn
triggered a downward revision of our assessment of an extraordinary
likelihood of support (LOS) from the government in case of
financial distress to high from extremely high. This assessment
still reflects that the government owns about 45% of the company's
total capital after the public offering, and that the sovereign has
incentives, capacity, and tools to support the company if needed.
The LOS also continues to capture the following factors:
"No change in our view of Eletrobras's critical role for the
government. Eletrobras is the largest integrated utility in
Brazil's electricity sector, accounting for about 30% of total
generation capacity and 44% of transmission lines in the country.
Given the company's size and the time it would take to replace
and/or build new assets, we think another entity couldn't undertake
these services in the next few years. We also believe that under
the new corporate structure, Eletrobras will have more flexibility
and agility to invest and expand its portfolio, which will maintain
its importance to the Brazilian energy matrix over time.
"A strong link to the government. We revised downward this link to
reflect the dilution of the company's control, with no single
shareholder entitled to have more than 10% of the board's
composition, and the clear limits under the government's golden
share. At the same time, the government still guarantees part of
Eletrobras's debt (about R$1.05 billion as of March 2022), and has
a record of providing cash injections in financial distress
scenarios.
"We expect Eletrobras to benefit from more independent governance
to accelerate its ongoing strategy to focus on its core business
and operating efficiencies, which we view as positive from a credit
perspective, but as neutral for the ratings. We expect to see, for
example, an acceleration of nonstrategic asset disposals and
restructuring of contingent liabilities, including about R$21
billion in financial guarantees provided to projects, which in
aggregate could reduce the group's adjusted financial debt from our
current base case. In addition, we expect EBITDA to gradually
increase as the energy generated by Eletrobras' power plants under
the quotas regime gradually migrates to the independent production
regime in the next five years: from 100% in 2022 to 80% in 2023,
60% in 2024, 40% in 2025, 20% in 2026, and 0% from 2027 onward.
This is because the current average energy price under the quota
regime is lower than prices negotiated in the free market and
regulated contracts."
ESG credit indicators: To E-3, S-2, G-3; From E-3, S-3, G-3
Following the execution of the privatization, Eletrobras will
transfer the ownership of Eletronuclear and all its assets to a
newly created government entity that will remain fully controlled
by the government. As such, S&P has revised its view of potential
health and safety issues related to the construction of the nuclear
plant Angra 3.
Governance factors remain a moderately negative consideration in
S&P's credit analysis, because ite expects the company to revise
its internal governance and risk management procedures under the
new corporate governance structure following the privatization.
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C H I L E
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LATAM AIRLINES: To Get $2.75BB in New Loans for Bankruptcy Exit
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LATAM Airlines announced June 11, 2022, that after carrying out an
exhaustive search process for the best available conditions for its
financing to exit the Chapter 11 process, LATAM has signed debt
commitment letters with various financial entities, which
represents a sign of market confidence in LATAM, and allows the
group to take a further step towards emerging from the Chapter 11
process during the second half of 2022 with a solid financial
structure.
The exit financing is part of the restructuring contemplated in the
Reorganization Plan and considers new debt of US$2.250 billion, and
a new revolving credit facility for US$500 million, and is subject
to the approval of the United States Court. The financial entities
with which the commitment letters were signed are: JPMorgan Chase
Bank, N.A., Goldman Sachs Lending Partners LLC, Barclays Bank PLC,
BNP Paribas, BNP Paribas Securities Corp., and Natixis, New York
Branch.
"This commitment secures us the full amount of financing required
to complete our restructuring plan and, very importantly, with a
degree of flexibility that allows us to optimize existing market
conditions. The US$2.25 billion of debt is in addition to the
US$5.4 billion of equity we secured in January of this year. This
is another important step towards emerging from Chapter 11 as a
strengthened airline group," said LATAM Airlines CEO Roberto Alvo.
The exit financing commitment letters also provide for US$1,172
million in financing to be provided during the life of the Chapter
11 process (i.e., prior to exit) in the form of a
debtor-in-possession (DIP) financing with a lower repayment
preference than the exit financing ("Junior DIP Financing"). The
financial institutions with which the commitment letter for the
Junior DIP Financing was entered into are: Delta Air Lines, Inc,
Lozuy S.A., Costa Verde Aeronáutica S.A., QA Investments Limited,
and members of LATAM's ad hoc group of creditors represented by
Evercore.
The Exit Financing has been structured as a debtor-in-possession
(DIP) financing to be provided during the Chapter 11 process.
Notwithstanding the foregoing, and unlike the DIP Financing
currently in place (the "Existing DIP Financing"), it has been
structured so that, subject to the satisfaction of certain
conditions customary in this type of transaction, it will remain in
place after LATAM's emergence from the Chapter 11 process.
Accordingly, to the extent such conditions are met, on the exit
date from the Chapter 11 process, the Exit Financing will
automatically convert into a financing that will remain in place
thereafter. This does not apply with respect to Junior DIP
Financing, which must be fully repaid prior to the exit from the
Chapter 11 Proceeding.
The proceeds from the Exit Financing and the Junior DIP Financing
will be used in part to repay the Existing DIP Financing in full
during the Chapter 11 process.
The exit financing has been structured as follows:
* US$500 million Exit Revolving Facility, which will accrue
interest at LATAM's election, either: (i) ABR plus an
applicable margin of 3.00%; or (ii) SOFR rate plus an
applicable margin of 4.00%.
* US$750 million Term B Loan Facility, which will accrue
interest at LATAM's choice, either: (i) ABR plus an
applicable margin to be determined at time of allocation
thereof; or (ii) SOFR rate plus an applicable margin to be
determined at time of allocation thereof.
* US$750 million Bridge to 5Y Notes Facility Proposal
* US$750 million Bridge to 7Y Notes Facility Proposal
The interest rate for the bridge loans indicated above will be
determined based on market conditions available at the time of
closing, subject in all cases to certain limits established in the
financing commitment letters.
LATAM is awaiting the ruling of the United States Court regarding
its Reorganization Plan, which has substantial support from the
creditors that represent close to 90% of the LATAM Parent unsecured
claims. This was reinforced after having reached an agreement with
the holders of bonds issued in Chile (including those represented
by Banco Estado), the Official Committee of Valista Creditors
(UCC), the Ad Hoc group of LATAM surety creditors (led by Sixth
Street, Strategic Value Partners and Sculptor Capital) and the main
shareholders of the group (Delta Air Lines, Qatar Airways, Grupo
Cueto).
About LATAM Airlines Group
LATAM Airlines Group S.A. -- http://www.latam.com/-- is a
pan-Latin American airline holding company involved in the
transportation of passengers and cargo and operates as one unified
business enterprise. It is the largest passenger airline in South
America.
Before the onset of the COVID-19 pandemic, LATAM offered passenger
transport services to 145 different destinations in 26 countries,
including domestic flights in Argentina, Brazil, Chile, Colombia,
Ecuador and Peru, and international services within Latin America
as well as to Europe, the United States, the Caribbean, Oceania,
Asia and Africa.
LATAM and its 28 affiliates sought Chapter 11 protection (Bankr.
S.D.N.Y. Lead Case No. 20-11254) on May 25, 2020. Affiliates in
Chile, Peru, Colombia, Ecuador and the United States are part of
the Chapter 11 filing.
The Debtors disclosed $21,087,806,000 in total assets and
$17,958,629,000 in total liabilities as of Dec. 31, 2019.
The Hon. James L. Garrity, Jr., is the case judge.
The Debtors tapped Cleary Gottlieb Steen & Hamilton LLP as
bankruptcy counsel, FTI Consulting as restructuring advisor, Lee
Brock Camargo Advogados as local Brazilian litigation counsel, and
Togut, Segal & Segal LLP and Claro & Cia in Chile as special
counsel. The Boston Consulting Group, Inc. and The Boston
Consulting Group UK LLP serve as the Debtors' strategic advisors.
Prime Clerk LLC is the claims agent.
The official committee of unsecured creditors formed in the case
tapped Dechert LLP as its bankruptcy counsel, Klestadt Winters
Jureller Southard & Stevens, LLP as conflicts counsel, UBS
Securities LLC as investment banker, and Conway MacKenzie, LLC as
financial advisor. Ferro Castro Neves Daltro & Gomide Advogados is
the committee's Brazilian counsel.
The Ad Hoc Group of LATAM Bondholders tapped White & Case LLP as
counsel.
Glenn Agre Bergman & Fuentes, LLP, led by managing partner Andrew
Glenn and partner Shai Schmidt, has been retained as counsel to the
Ad Hoc Committee of Shareholders.
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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: No Legal Framework for Env'l. Liabilities
-------------------------------------------------------------
Dominican Today reports that Dominican Republic does not have a
legal framework that defines and regulates the environmental
liabilities generated by mining activity and lacks an inventory
that lists existing mining environmental liabilities.
These are two of the main conclusions of an audit carried out by
the Chamber of Accounts, and which analyzes the different legal
instruments that affect the conservation of the environment and
their application from January 1, 2015 to March 31 of 2020,
according to Dominican Today.
In its report, the Chamber of Accounts also highlights that in
addition to the absence of "specific regulations and policies
related to the management of Environmental Mining Liabilities
(PAM)," the country also does not have "procedures for the
corrective management of Environmental Mining Liabilities,"
Dominican Today relays.
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: Joblessness Improves
--------------------------------------------
Dominican Today reports that the Central Bank of the Dominican
Republic (BCRD) reported that the percentage of unemployed people
who are actively looking for work stood at 6.4% in January-March
2022, for a reduction of 1.6 percentage points compared to the
level of 8.0%. recorded in the same period of the previous year.
According to the institution, this is positive news, since the
unemployment rate is falling within the framework of a significant
resumption of active job search work by people, as economic
activity has been recovering, the report notes.
The BCRD statement indicates that the poll of the Continuous
National Survey of the Workforce (ENCFT) corresponding to the
period January-March 2022, which like every quarter is carried out
under a sampling framework of 8,480 selected homes throughout the
national territory, showed that the total number of employed
persons reached 4,640,113 workers in the first quarter of the year,
a level close to the total employment observed prior to the
pandemic, for an increase of 226,730 net employed persons compared
to the January-March 2021 quarter, equivalent to a growth of 5.1%,
the report relays.
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.
===========
M E X I C O
===========
GRUPO AEROMEXICO: Convenes Shareholder Meeting to Delist
--------------------------------------------------------
Kylie Madry at Reuters reports that Mexican airline Grupo
Aeromexico, which exited Chapter 11 bankruptcy in March, said it
will convene an extraordinary shareholder meeting at the end of
June to discuss delisting its shares from Mexico's main stock
exchange.
The move would make Aeromexico the latest to exit the exchange,
joining other companies like dairy corporation Grupo Lala,
telecommunications firm Maxcom and paper producer Bio Pappel, who
have recently delisted or announced plans to do so, according to
Reuters.
"Such process of cancellation of registry and delisting of its
shares is part of the agreements entered by Aeromexico with its
former creditors and investors, currently shareholders of the
company," part of the so-called registration rights agreement, the
carrier said in a statement, the report notes.
Analysts at Mexico brokerage operator Monex said in a note that it
was "important to mention that the news is related to the
restructuring plan . . . From our perspective, such news wouldn't
have negative implications . . . it will be important to know the
price of the offer," the report discloses.
In March, construction material providers Fortaleza Materiales and
Elementia Materiales launched share buy-back programs as part of
the process of exiting the market, the report relays.
Close to 150 companies are listed on Mexico's main exchange, the
report discloses. Of those, seven have now announced plans to exit
the market, including Aeromexico. A company last went public on the
exchange in 2017, the report relays.
As reported that Troubled Company Reporter-Latin America on April
28, 2022, Moody's Investors Service has assigned a B3 corporate
family rating to Grupo Aeromexico S.A.B. de C.V. in connection with
its post-bankruptcy exit financing. Moody's has also assigned a B3
rating to Aeromexico's exit $762.5 million senior secured notes due
2027. The outlook is stable.
=====================
P U E R T O R I C O
=====================
CYMA CLEANING: Taps Jimenez Vazquez & Associates as Accountant
--------------------------------------------------------------
CYMA Cleaning Contractors, Inc. seeks approval from the U.S.
Bankruptcy Court for the District of Puerto Rico to employ Jimenez
Vazquez & Associates, PSC as its accountant.
The firm will render these services:
a. assist the Debtor in gathering and compiling information
required by the court, and provide consulting services;
b. assist the Debtor in documenting the reorganization plan
to
be filed in its Chapter 11 case;
c. prepare monthly operating reports, financial projections
and other relevant information;
d. prepare tax returns;
e. assist the Debtor in all matters related to court
instructions, transactions and information requests of an
accounting or financial nature.
The firm will charge $165 per hour for its services.
As disclosed in court filings, Jimenez Vazquez & Associates is a
"disinterested person" within the meaning of Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Jose Victor Jimenez, CPA
Jimenez Vazquez & Associates, PSC
D-1 8th St Valparaiso
Toa Baja, P.R. 00949
P.O Box 3774
Bayamon, PR 00958
Tel: 787 447 0098
Fax: 939 338 2362
Email: jvjimenez@jimenezvazquezcpa.com
About CYMA Cleaning Contractors
CYMA Cleaning Contractors, Inc. filed a petition under Chapter 11,
Subchapter V of the Bankruptcy Code (Bankr. D.P.R. Case No.
22-01377) on May 16, 2022, listing as much as $1 million in both
assets and liabilities. Jose A. Diaz Crespo serves as Subchapter V
trustee.
Jesus E. Batista Sanchez, Esq., at The Batista Law Group, PSC and
Jimenez Vazquez & Associates, PSC serve as the Debtor's legal
counsel and accountant, respectively.
INNOVA INDUSTRIAL: Taps Jimenez Vazquez & Associates as Accountant
------------------------------------------------------------------
Innova Industrial Contractor, Inc. seeks approval from the U.S.
Bankruptcy Court for the District of Puerto Rico to employ Jimenez
Vazquez & Associates, PSC as its accountant.
The firm will render these services:
a. assist the Debtor in gathering and compiling information
required by the court, and provide consulting services;
b. assist the Debtor in documenting the reorganization plan
to
be filed in its Chapter 11 case;
c. prepare monthly operating reports, financial projections
and other relevant information;
d. prepare tax returns;
e. assist the Debtor in all matters related to court
instructions, transactions and information requests of an
accounting or financial nature.
The firm will charge $165 per hour for its services.
As disclosed in court filings, Jimenez Vazquez & Associates is a
"disinterested person" within the meaning of Section 101(14) of
the
Bankruptcy Code.
The firm can be reached through:
Jose Victor Jimenez, CPA
Jimenez Vazquez & Associates, PSC
D-1 8th St Valparaiso
Toa Baja, P.R. 00949
P.O Box 3774
Bayamon, PR 00958
Tel: 787 447 0098
Fax: 939 338 2362
Email: jvjimenez@jimenezvazquezcpa.com
About Innova Industrial Contractor
Innova Industrial Contractor, Inc. filed a petition under Chapter
11, Subchapter V of the Bankruptcy Code (Bankr. D.P.R. Case No.
22-01375) on May 16, 2022, listing as much as $1 million in both
assets and liabilities. Jose A. Diaz Crespo serves as Subchapter V
trustee.
Jesus E. Batista Sanchez, Esq., at The Batista Law Group, PSC and
Jimenez Vazquez & Associates, PSC serve as the Debtor's legal
counsel and accountant, respectively.
SIRIUS PROPERTIES: Files Bare-Bones Chapter 11 Petition
-------------------------------------------------------
Sirius Properties Corp. filed for chapter 11 protection in the
District of Puerto Rico without stating a reason.
According to court filing, Sirius Properties estimates 1 and 49
unsecured creditors. The bare-bones petition states funds will
not
be available to unsecured creditors.
A meeting of creditors under 11 U.S.C. Section 341(a) is slated for
July 18, 2022, at 9:00 a.m. via Telephonic Conference Information
for AUST/Trial Attys. Proofs of claims are due by Oct. 17, 2022.
Government proofs of claims are due by Dec. 7, 2022.
The Debtor's Chapter 11 Plan (Small Business) and Disclosure
Statement are due by Dec. 7, 2022.
About Sirius Properties Corp.
Sirius Properties Corp. sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. D.P.R. Case No. 22-01663) on June 10,
2022. In the petition filed by Gregorio Hernandez Jimenez, as
president, Sirius Properties estimated assets and liabilities
between $500,000 and $1 million each. Carlos A. Ruiz Rodriguez, of
Carlos A Ruiz Rodriguez, is the Debtor's counsel.
===============
X X X X X X X X
===============
[*] LATAM: Nearshoring Can Add Annual $78-Bil. in Exports
---------------------------------------------------------
Nearshoring could add an annual $78 billion in additional exports
of goods and services in Latin America and the Caribbean in the
near and medium term, with opportunities for quick wins in the auto
industry, textiles, pharmaceuticals, and renewable energy, among
others, according to estimates by the Inter-American Development
Bank (IDB).
Mexico and Brazil would see the biggest gains, though all countries
would benefit from nearshoring, according to data contained in a
forthcoming study. The $78 billion includes $64 billion in exported
goods and $14 billion in services.
The estimate was provided to senior government officials from Latin
America and the Caribbean, including ministers of trade and foreign
affairs, and senior executives from companies of the Western
Hemisphere, who gathered to analyze options for taking advantage of
the opportunities provided by the reconfiguration of global supply
chains, trends in trade sustainability and climate change, and the
increasing digitalization of economies.
The meeting of ministers and CEOs, which comes ahead of the Ninth
Summit of the Americas, represents an important effort by the IDB
to promote economic recovery through the collective action of
countries, in close cooperation with the private sector.
A full text copy of the press release is available free at
https://bit.ly/3xGxCtM
*********
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.
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