/raid1/www/Hosts/bankrupt/TCRLA_Public/220628.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
Tuesday, June 28, 2022, Vol. 23, No. 122
Headlines
A R G E N T I N A
ARGENTINA: IMF to Disburse US$4 Billion
MERCADOLIBRE INC: Egan-Jones Retains BB- Senior Unsecured Ratings
B E R M U D A
BERMUDA: March Retail Sales Continue Downward Spiral
B R A Z I L
BANCO ORIGINAL: Fitch Affirms & Then Withdraws 'B-' LongTerm IDRs
BRAZIL: Central Bank Focused on Inflation Below 4% in 2023
C H I L E
CODELCO: Chile to Close Smelter After Environmental Emergency
INVERSIONES LATIN AMERICA: S&P Lowers ICR to 'BB-', on Watch Neg.
D O M I N I C A N R E P U B L I C
DOMINICAN REPUBLIC: FSIS Says Process Missing for Beef Export
H O N D U R A S
HONDURAS: IMF Says Employment Remains Below Pre-Pandemic Levels
M E X I C O
ENGENCAP HOLDING: S&P Affirms 'BB-' LongTerm ICR, Outlook Stable
P U E R T O R I C O
EMPACADORA Y PROCESADORA: Aug. 11 Plan Disclosures Hearing Set
TRIPLE-S BLUE: A.M. Best Cuts Financial Strength Rating to B(Fair)
- - - - -
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A R G E N T I N A
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ARGENTINA: IMF to Disburse US$4 Billion
---------------------------------------
Buenos Aires Times reports that the International Monetary Fund has
completed its first review of a huge loan program agreed with
Argentina and will now disburse US$4 billion.
The multilateral lender's Executive Board approved the first
quarterly check on the US$44.5-billion debt program, paving the way
for the funds that will strengthen Argentina's Central Bank
reserves, according to Buenos Aires Times.
"Against the backdrop of increased global uncertainties, the
Executive Board assessed that all end-March 2022 and continuous
performance criteria and indicative targets were met, and that
initial progress was made on the structural front," the IMF said,
the report notes.
Under the deal struck in March -- the 13th that Buenos Aires has
signed with the IMF since the return of democracy in 1983 --
repayments will be made from 2026 to 2034 after a grace period, the
report discloses.
Approval had already been granted by the technical staff overseeing
Argentina's Extended Fund Facility program, headed by Julie Kozack,
deputy director of the Western Hemisphere Department, and Luis
Cubeddu, mission chief for Argentina, the report relays.
"All quantitative program targets for the first quarter of 2022
were met," the team concluded in its official report, which was
submitted to the board on June 8, the report notes.
In that document, the staff opened the door to adding flexibility
to the intermediate targets of the 30-month credit program, while
maintaining existing annual targets, the report says.
Argentina is emerging from three years of recession and battling a
high poverty rate and rising inflation, which hit 51 percent last
year, 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.
MERCADOLIBRE INC: Egan-Jones Retains BB- Senior Unsecured Ratings
-----------------------------------------------------------------
Egan-Jones Ratings Company on June 16, 2022, retained 'BB-' foreign
currency and local currency senior unsecured ratings on debt issued
by MercadoLibre Inc.
Headquartered in Buenos Aires, Argentina, MercadoLibre Inc.
operates an online trading site for the Latin American markets.
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B E R M U D A
=============
BERMUDA: March Retail Sales Continue Downward Spiral
----------------------------------------------------
The Royal Gazette reports that for the ninth consecutive month, the
Retail Sales Index has tumbled, a period stretching through to
March this year from as far back as the summer of 2021.
The Ministry of Economy and Labor has just released the 2022 Retail
Sales Index, with comparative information for the year to March
2022, according to The Royal Gazette.
March's retail sales fell 8.0 per cent compared with last year, the
report notes. In value terms, retail sales decreased 4.5 per cent
compared with the previous year (March 2021) to an estimated $100.1
million, the report discloses.
Compared with the pre-pandemic period of March 2019, volume sales
were higher by 1.3 per cent, with three sectors experiencing growth
in March 2022, the report says.
Sales at food stores decreased 12.2 per cent, the report relays.
An article in The Royal Gazette has already highlighted drastic
action being taken by the public to keep pace with rising prices,
the report says.
This newspaper reported earlier that some one in three residents
felt forced to buy less food and almost a fifth are choosing less
healthy options owing to rising prices, according to a new survey
by Narrative Research Bermuda
Meanwhile, the government report shows that even liquor stores'
sales fell 22.5 per cent. Compared with pre-pandemic sales in 2019,
food stores registered a 5.1 per cent decline, while sales for
liquor stores were 8.8 per cent higher, the report relays.
Motor vehicle stores' sales fell 29.7 per cent due to a decrease in
the inventory of automobiles available for sale, the report
discloses.
This sales level was 3.1 per cent below the sales volume in March
2019, prior to the pandemic, the report notes.
Building material stores' sales grew 8.3 per cent due to higher
demand for building material goods to support contract projects,
the report says.
The sales volume for this sector was 12.4 per cent above the 2019
sales level, the report relays.
Sales at apparel stores increased 8.0 per cent, reflecting
increased purchases of men's apparel and clothing accessories, the
report discloses. However, the sales level remained 14.2 per cent
below pre-pandemic sales in 2019, the report notes.
Service stations' volume sales increased 2.9 per cent from last
year but were 4.4 per cent lower than pre-pandemic sales in 2019,
the report relays.
All other sectors experienced declines in sales volume compared
with the previous year, the report notes.
In the all other store types sector (comprising stores selling
household items, furniture, appliances, electronics,
pharmaceuticals and tourist-related goods), there was a 6.9 per
cent decrease due to lower sales of pharmaceuticals and marine
supplies, the report says.
Sales for this sector registered 9.0 per cent above the sales
volume in 2019, the report notes.
Overseas declarations increased 6.3 per cent compared with March
2021, influenced primarily by increased imports of machinery and
equipment by residents via courier, the report adds.
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B R A Z I L
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BANCO ORIGINAL: Fitch Affirms & Then Withdraws 'B-' LongTerm IDRs
-----------------------------------------------------------------
Fitch Ratings has affirmed and withdrew Banco Original S.A.'s
(Original) Foreign and Local Currency Long-Term Issuer Default
Ratings (IDRs) at 'B-' and, National Long-Term Rating at 'BB+(bra)'
and Viability Rating (VR) at 'b-'. At the time of the withdrawal
the Rating Outlook on Original's Long-Term IDR and National
Long-Term Rating was evolving.
The ratings were withdrawn for commercial reasons.
KEY RATING DRIVERS
IDRS, VR AND NATIONAL RATINGS
Original's ratings reflect the improvements observed in the overall
credit profile, which could continue to stabilize, owing to ongoing
progress on the consolidation of its business plan that has started
to reflecting in incremental, albeit modest, internal capital
generation. However, it also reflects Fitch's view that such trend
will be subject to significant executions risks notably from its
unsecured loan portfolio growth, in the context of Brazil's still
uncertain operating environment. Particularly, it reflects the
significant influence that Original's rapidly growing exposure to
consumer finance lending, which Fitch views as more vulnerable
borrowers, has on asset quality expectations.
After several delays on previously stated business and financial
targets, the bank's business model has become more stable with the
potential to be developed. Original's business model is focused on
retail banking, which ended 2021 as the main business revenue
vertical, but also includes commercial banking activities and small
and midsize entities. Revenue generation and business volumes
benefited from a strong performance on retail lending, leading to a
67% consolidated loan portfolio growth in 2021, from a meager 7% in
2020.
Original achieved in 2021 its first-time recurring operational
profit since 2011 (0.2% operating profit/risk weighted assets
ratio; -1.3% four-year average from 2018-2020). At end-2021,
Original's common equity Tier 1 (CET1) capital ratio improved to
11.1% at end-2021, from 10.1% reported at end-2020, benefiting from
a BRL400 million capital injections.
Original has reported a deterioration in its asset quality ratios
over the last year following the current strategy of expanding its
retail arm trough unsecured loans, especially credit cards. The
bank's growing exposure toward unsecured consumer lending was 43%
of Original's loan portfolio at YE 2021, up from 20% a year prior.
However, Original's wholesale portfolio continues to present good
overall asset quality metrics despite moderate concentration. At
end-2021, the impaired loan ratio reached a high of 13.1%, up from
4.9% in 2020. Loan loss allowance coverage decreased to a low of
44%, up from 64.5%.
Original funding structure and liquidity remain stable and adequate
for the bank's business profile and size. Its funding base is
composed of deposits offered through brokerages, mainly retail term
deposits in addition to its digital bank. The bank's
loan-to-deposits ratio adjusted for the local deposit-like products
stood at an adequate 82% at end-2021. Despite lending growth,
Original continues to report adequate liquidity levels, BRL3.4
billion at end-2021. The bank's loan portfolio is also largely
short-term, which has been key to reinforcing its liquidity and
reducing potential cash flow mismatches.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
Rating sensitivities are not applicable as the ratings have been
withdrawn.
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
Rating sensitivities are not applicable as the ratings have been
withdrawn
VR ADJUSTMENTS
The VR has been assigned in line with the implied VR.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Financial Institutions and
Covered Bond 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.
ESG CONSIDERATIONS
Original has an ESG Relevance Score for Group Structure at '4' due
to intra-group dynamics that result in a high level of
related-party transactions, which adds to group complexity and
limits transparency. This has a negative impact on the credit
profile and is relevant to the ratings in conjunction with other
factors.
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.
DEBT RATING PRIOR
---- ------ -----
Banco Original S.A.
LT IDR B- Affirmed B-
LT IDR WD Withdrawn B-
LC LT IDR B- Affirmed B-
LC LT IDR WD Withdrawn B-
LC ST IDR B Affirmed B
LC ST IDR WD Withdrawn B
Natl LT BB+(bra) Affirmed BB+(bra)
Natl LT WD(bra) Withdrawn BB+(bra)
Natl ST B(bra) Affirmed B(bra)
Natl ST WD(bra) Withdrawn B(bra)
Viability b- Affirmed b-
Viability WD Withdrawn b-
Government Support ns Affirmed ns
Government Support WD Withdrawn ns
BRAZIL: Central Bank Focused on Inflation Below 4% in 2023
----------------------------------------------------------
Rio Times Online reports that the president of Brazil's Central
Bank, Roberto Campos Neto, said monetary policymakers are aiming
for inflation below 4% in 2023 to bring it toward their 3.25%
target.
"For us, around the target means less than 4%," he said at an
interview, according to Rio Times Online.
Bank officials have said they expect their rate hikes to
substantially affect the economy starting in the second half of
this year, the report notes.
As reported in the Troubled Company Reporter-Latin America on June
17, 2022, S&P Global Ratings affirmed its 'BB-/B' long- and
short-term foreign and local currency sovereign credit ratings on
Brazil.
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C H I L E
=========
CODELCO: Chile to Close Smelter After Environmental Emergency
-------------------------------------------------------------
EFE News reports that Chile President Gabriel Boric said the
state-owned copper producer would begin the closure of the troubled
Ventanas smelter after dozens fell ill due to an environmental
emergency in the vicinity of the plant.
Codelco decided to close the facility after a peak in sulfur
dioxide emissions in the area affected hundreds of high school
students and teachers in the region in recent weeks, according to
EFE News.
"Codelco's board of directors has decided to move toward the
closure of operations at the Ventanas Smelter," the president said,
the report notes.
INVERSIONES LATIN AMERICA: S&P Lowers ICR to 'BB-', on Watch Neg.
-----------------------------------------------------------------
S&P Global Ratings, on June 24, 2022, lowered its rating on Chilean
power company Inversiones Latin America Power Limitada's (ILAP or
the project) senior secured notes due 2033 to 'BB-' from 'BB' and
placed it on CreditWatch with negative implications.
The CreditWatch negative placement reflects the risk of a further
downgrade in the next 90 days if volatility doesn't cease or
decrease in the short term. In such a scenario, ILAP's DSCR would
consistently remain below 1x, which in S&P's view, would be too low
for a 'BB' rating.
In the past 12 months, industry condition eroded and electricity
spot prices in Chile's national electricity system have jumped.
This is mainly due to intense drought, inefficient planning for
buying natural gas, aggressive decarbonization program, and
scheduled plant shutdowns for maintenance. Although ILAP is almost
fully contracted, it sells electricity on the spot market at the
point of generation (the Punta Colorada node for the San Juan plant
and the Las Palmas node for the Totoral facility). At the same
time, the project buys energy required to meet its PPAs (with
Polpaico as the most largest node for withdrawal). The electricity
price disparity between the injection and withdrawal nodes (also
known as the "decoupling effect") was $15 per megawatt hour (MWh)
in 2021, which widened to $24 per MWh in the first quarter of 2022.
That caused the project's CFADS plummet close to 30%.
Despite signs of a potential reduction in the decoupling effect
during the second half of 2022 (improving hydrology and higher
dispatch of coal and gas power assets, instead of costlier
diesel-powered facilities), a considerable amount of uncertainty
remains. Moreover, the drop in the decoupling effect in the next
few years would also depend on the increase of transmission lines,
as more renewable projects start to operate in the country. As
Chile continues its decarbonization program, about 8 gigawatt of
solar and wind capacity was added to the system in the past year,
which contributed to congestion on the transmission lines in SEN.
This is because new assets are located either in the country's
north or south, while most of the consumption is in the center,
closer to Santiago. As unconventional renewable capacity will
continue expand, we expect transmission capacity pressure to remain
until the Kimal-Lo to Aguirre transmission line is completed by the
end of 2028. Meanwhile, S&P expects the regulator to implement
initiatives to alleviate the transmission congestion, for example,
through additional transmission capacity between the southern and
central parts of the country.
S&P said, "As a result, we updated our forecast and now incorporate
greater volatility in ILAP's cash flows, stemming from the still
relatively wide spot price differential for the next few years.
This is even though ILAP is currently holding contracts for most of
its energy generation under a P90 scenario. Our view of more
volatile cash flows prompted us to revise our operations phase
business assessment -- our overall view of relative cash flow
variability -- to '7' from '6' (on a scale of '1' to '12', with '1'
as the strongest score) for the initial stage of our analysis,
which extends until the notes' legal maturity in 2033.
"As a result of the drop in CFADS, we now expect the project's DSCR
to be slightly below 1x as of July 3, 2022 (the next scheduled debt
payment date) and to rise slightly above 1x towards the year-end.
Such numbers would be below our previous expectations of close to
1.2x, and in our view, too low for the previous 'BB' rating.
Nevertheless, in case of any cash shortfall at the next payment
date, ILAP expects to cover it with the proceeds from a
subordinated intercompany loan from its sponsor, instead of using
its existing DSRA."
===================================
D O M I N I C A N R E P U B L I C
===================================
DOMINICAN REPUBLIC: FSIS Says Process Missing for Beef Export
-------------------------------------------------------------
Dominican Today reports that the Food Safety and Inspection Service
(FSIS) of the United States Department of Agriculture (USDA)
reported that it completed its review of the Dominican Republic's
documented inspection system for meat products, raw and intact
beef. However, some processes are missing to be able to export this
type of meat.
To complete the certification process for establishments that will
be authorized to export raw and intact beef products derived from
slaughtered cattle, the country must implement specific tasks that
strengthen the logistics process for export, according to Dominican
Today.
Some of the details to complete the process are completing the
import requirements, labeling requirements, individual sanitary
measures, and the Self-Report Tool, 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.
===============
H O N D U R A S
===============
HONDURAS: IMF Says Employment Remains Below Pre-Pandemic Levels
---------------------------------------------------------------
An International Monetary Fund (IMF) team led by Joyce Wong and
supported by resident representative Christian Henn visited
Tegucigalpa, Honduras, on June 20-24, 2022 to deepen discussions on
the authorities' vision and their policy priorities. At the
conclusion of the visit, Ms. Wong issued the following statement:
"The team discussed with the authorities recent economic
developments and the outlook for Honduras. Despite a strong rebound
in economic activity, employment remains below pre-pandemic levels.
High and rising inflation, driven by commodity prices and
subsequent economic shocks amid strong remittances, is exposing the
most vulnerable Hondurans.
"In the face of these challenges, the team discussed with the
authorities their policy priorities within their social program,
which they would like to be supported by deeper engagement with the
Fund. The authorities emphasized the priority to reduce poverty,
protect the most vulnerable, and foster inclusive growth. They also
plan to tackle corruption and strengthen governance and
transparency, including by improving public financial management.
To this end, they have passed legislation to eliminate trust funds
and are in the process of reviewing tax exemptions to make the tax
system more equitable. This would create fiscal space to boost
much-needed investment and support social spending.
"The authorities reiterated their commitment to honor the country's
debts and to maintain debt sustainability. They are improving debt
management with international assistance and aim to gradually
improve the debt service profile. The government highlighted the
importance of implementing energy reforms to improve the
functioning of the national electricity company (ENEE) and the
electricity sector.
"The IMF team would like to thank the authorities for their kind
hospitality and candid discussions."
===========
M E X I C O
===========
ENGENCAP HOLDING: S&P Affirms 'BB-' LongTerm ICR, Outlook Stable
----------------------------------------------------------------
S&P Global Ratings affirmed its 'BB-' long-term issuer credit
rating on Mexico-based leasing company Engencap Holding S. de R.L.
de C.V.. The outlook remains stable.
Engencap's strategy has been cautious, given the economic
difficulties that stemmed from the pandemic. Management decided to
slow down origination to preserve asset quality, while increasing
rates to boost profitability and take advantage of the banks'
reduced lending pace. In 2020 and 2021, Engencap's loan portfolio
contracted around 8.5% each year. However, Engencap's operating
revenue have risen consistently. During 2021, it increased 13% year
over year, reaching its highest point mainly thanks to higher net
interest margins (NIMs). The latter rose to 6.2% from 5.3% in 2020,
given higher lending rates and lower funding costs following debt
refinancing. S&P said, "We expect Engencap's operating revenue to
continue rising because of a projected NIM of 6.5% for the next two
years. Also, we expect Engencap's lending to resume growth at a 5%
rate. We also forecast Engencap's combined business with TIP Mexico
to maintain its broad presence in Mexico's leasing market."
S&P said, "We expect solid internal generation to continue
strengthening Engencap's capital base thanks to higher
profitability and lower provisions. Also, we forecast a modest
growth in risk-weighted-assets, given conservative origination
policies. Nevertheless, we project capitalization levels to drop
from previous years' figures if Engencap acquires a larger share of
TIP. During 2021, Engencap purchased additional 17.3% of TIP's
equity, raising its share to 68.3% from 51%, which dented
Engencap's total adjusted capital (TAC). Our base-case scenario for
2022-2023 assumes the purchase of additional 20%, raising the
ownership of TIP to about 88%. This would further hamper the
company's TAC, but not enough to trigger a revision of the
company's capital and earnings, which we view as adequate. We
forecast Engencap's risk-adjusted capital (RAC) ratio to average
7.6% for the next two years.
"Engencap's conservative risk appetite, well-diversified portfolio,
and its exposure to clients with higher credit quality than those
of other nonbank financial institutions (NBFIs) support our
expectation of manageable asset quality metrics. As of March 2022,
Engencap's nonperforming asset (NPA) ratio slightly edged up to
4.5% from 4.1% in December 2021. The stemmed from several borrowers
that haven't completely recovered from the pandemic-induced
downturn and from Mexico's slow economic rebound. Also, the net
charge-offs (NCOs) ratio peaked at 3.3% in the first quarter of
2022, because Engencap wrote off some loans it considered as
irrecoverable. For 2022-2023, we expect the NPAs ratio to remain
below 5%, while NCOs to gradually return to less than 2%, given
that the company expects its troubled loans to recover. We consider
these metrics in line with a moderate risk position assessment.
Moreover, we expect reserves coverage to remain below 1x, given
that Engencap primarily operates in the leasing segment and it owns
the leased asset. Our projection of asset quality metrics
incorporates a modest growth in the company's portfolio. Otherwise,
asset quality could weaken beyond our expectations and those of
peers.
"Engencap's funding sources are diversified and consist of public
and private securitizations (76%) and credit lines (24%) from
several financial institutions. Despite difficult operating
conditions for Mexican NBFIs, Engencap has been able to refinance
its liabilities and obtain new funding sources, including the
issuance of public securitizations in November 2021 and the April
2022 debt add-on of MXN4.5 billion. The company used most of the
new funding for debt refinancing, which has improved Engencap's
maturity profile and debt costs. As a result, the company doesn't
have any considerable debt maturities in the next 12 months,
leaving sufficient liquidity to fund operations. This is reflected
in a liquidity coverage metric (LCM) of 0.68x which is above the
three-year average of 0.27x. On the downside, 87% of Engencap's
total debt is secured, so a large share of its loan portfolio is
pledged as collateral. This number is higher than those of other
NBFIs and could crimp financial flexibility in a stressed
scenario."
=====================
P U E R T O R I C O
=====================
EMPACADORA Y PROCESADORA: Aug. 11 Plan Disclosures Hearing Set
--------------------------------------------------------------
Judge Maria de Los Angeles Gonzalez has entered an order within
which August 11, 2022 at 9:30 AM via Microsoft Teams is the hearing
on approval of disclosure statement of Empacadora y Procesadora del
Sur, Inc.
In addition, objections to the form and content of the disclosure
statement should be in writing and filed with the court and served
upon parties in interest at their address of record not less than
14 days prior to the hearing. Objections not timely filed and
served will be deemed waived.
A copy of the order dated June 21, 2022, is available at
https://bit.ly/3OAKdo4 from PacerMonitor.com at no charge.
Counsel for the Debtor:
Alexis Fuentes-Hernandez, Esq.
Fuentes Law Offices, LLC
PO BOX 9022726
San Juan, PR 009022726
Phone: +1 787 722 5216
Fax: +1 787 722 5206
Email: fuenteslaw@icloud.com
About Empacadora Y Procesadora Del Sur
Empacadora Y Procesadora Del Sur, Inc., is engaged in the business
of packaging and manufacturing meats and chicken, and its income is
derived essentially from amounts collected from sales of such
inventories to business clients in Puerto Rico and the U.S.
mainland.
Empacadora Y Procesadora Del Sur sought protection under Chapter 11
of the U.S. Bankruptcy Code (Bankr. D.P.R. Case No. 22-00354) on
Feb. 15, 2022. In the petition signed by Carlos C. Rodriguez
Alonso, president, the Debtor disclosed $11,604,565 in assets and
$10,598,204 in liabilities. Alexis Fuentes Hernandez, Esq., at
Fuentes Law Office, is the Debtor's counsel.
TRIPLE-S BLUE: A.M. Best Cuts Financial Strength Rating to B(Fair)
------------------------------------------------------------------
AM Best has removed from under review with developing implications
and downgraded the Financial Strength Rating to B (Fair) from B+
(Good) and the Long-Term Issuer Credit Rating to "bb" (Fair) from
"bbb-" (Good) of Triple-S Blue. Inc., I.I. (TSB) (Puerto Rico). The
outlook assigned to these Credit Ratings (ratings) is stable.
Concurrently, AM Best has withdrawn the ratings as the company has
requested to no longer participate in AM Best's interactive rating
process.
The ratings reflect TSB's balance sheet strength, which AM Best
assesses as adequate, as well as its marginal operating
performance, limited business profile, and appropriate enterprise
risk management.
The rating downgrade follows the completed sale of TSB's Costa Rica
asset in early May 2022. TSB still maintains business in the
British Virgin Island and Anguilla. Furthermore, the ratings also
reflect a reduction in rating enhancement, due to the impact of
reduced strategic importance of this entity to Triple-S and its
ultimate parent, GuideWell Mutual Holding Corporation (GuideWell).
AM Best views the strategic position of TSB within the broader
GuideWell concern to be diminished due to the sale of the assets of
the Costa Rica business of TSB. TSB's business profile remains
limited as a majority of the company's accident and health business
generated from Costa Rica has now been sold.
Given the reported gain from the sale of the assets, TSB's absolute
capital and surplus may improve, and help stabilize the volatility
experienced by this entity from the historic losses reported. The
revision of the TSB's outlook to stable is attributed to AM Best's
expectation of strengthened risk-adjusted capitalization and
material improvement in underwriting leverage in 2022 and assumes
that capital will not be removed from this entity.
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S U B S C R I P T I O N I N F O R M A T I O N
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