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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

          Wednesday, June 29, 2022, Vol. 23, No. 123

                           Headlines



A R G E N T I N A

ARGENTINA: President Calls Incorporation Into the BRICS Group


D O M I N I C A N   R E P U B L I C

[*] DOMINICAN REPUBLIC: Will Start Exporting Sargassum to Finland


E C U A D O R

ECUADOR: IMF Concludes Reviews of the Extended Fund Facility


H A I T I

HAITI: Lack of Chicken and Eggs Drives Locals to Despair


J A M A I C A

CREDITO REAL: To Fight Involuntary Chapter 11 Petition
JAMAICA: Cayman Imports $1 Billion in Food From Country


P E R U

UNACEM CORP: S&P Affirms 'BB' ICR & Alters Outlook to Positive

                           - - - - -


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A R G E N T I N A
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ARGENTINA: President Calls Incorporation Into the BRICS Group
-------------------------------------------------------------
Buenos Aires Times reports that President Alberto Fernandez asked
the BRICS group of emerging economies to incorporate Argentina as a
full member as he joined the bloc's 14th summit via
videoconference.

The Peronist leader said Argentina wanted to join talks over "an
agenda for the future" and used his platform to call for changes in
the way in which the Special Drawing Rights (SDRs) of the
International Monetary Fund (IMF) are allocated, according to
Buenos Aires Times.

"We are honored by the invitation to this expanded BRICS meeting.
We aspire to become full members of this group of nations that
already represents 42 percent of the world's population and 24
percent of the global gross domestic product," said the president,
the report notes.

The BRICS members, made up of Brazil, Russia, India, China and
South Africa, account for over 40 percent of the global population
and nearly a quarter of the world's gross domestic product, the
report discloses.

Participating virtually in the summit, Argentina's head of state
said that the group "constitutes a platform with enormous
capacities to discuss and implement an agenda for the future that
will lead to a better and fairer time," the report notes.

"Argentina wants to join this space and offer its contributions as
a member of it," insisted the president, the report relays.

In addition to the countries that give their name to the bloc, also
taking part in the meeting were the leaders of Algeria, Abdelmadjid
Tebboune; of Egypt, Abdel Fattah El-Sisi; of Indonesia, Joko
Widodo; of Kazakhstan, Kassym-Jomart Tokayev; of Senegal, Macky
Sall; of Uzbekistan, Shavkat Mirziyoyev; of Cambodia, Hun Sen; of
Ethiopia, Abiy Ahmed Ali; of Fiji, Josaia Qoreque Bainimarama; of
Malaysia, Ismail Sabri Yaakob; and of Thailand, Prayut Chan-o-Cha,
the report says.

Before the heads of state, Fernandez asked members to "agree on a
common agenda" that would allow this group of countries to convey
their "concerns more effectively at the next G20 meeting," set to
be held in Indonesia next November, the report discloses.

He also stressed that "the institutional and economic weight of the
BRICS can become a factor of financial stability" and considered
that "the expansion of [the bloc's] New Development Bank can be a
useful instrument to strengthen national infrastructures," the
report relays.

"It is time to explore cooperation mechanisms, such as the currency
swap that Argentina signed with China," continued the president.
"It is time to promote the creation of an International Risk Rating
Agency, which would put in public hands what today is in the hands
of private interests," the report says.

Addressing IMF reform, Argentina's leader called for a "debating
[of] the guidelines that determine the general allocation of
Special Drawing Rights," describing them as "essential tools" for
the "necessary capitalization of regional development banks," the
report notes.

                       War in Ukraine

In a statement issued at the end of the two-day summit, which has
been held against the backdrop of Russia's war in Ukraine, the
BRICS nations called for new talks between Moscow and Kyiv, the
report relays.

Three members - China, India and South Africa - have abstained from
voting on a United Nations resolution condemning Russia's invasion,
and President Vladimir Putin has urged them to snub Western
countries appalled by the attack on a European neighbor, the report
discloses.

The five countries said in a declaration issued that they "support
talks between Russia and Ukraine" but did not lay out a pathway
towards ending the war, the report notes.

The countries said they had "discussed our concerns over the
humanitarian situation in and around Ukraine" and expressed support
for international agencies "to provide humanitarian assistance,"
the report says.

The United States and the European Union have slapped Russia with a
barrage of sanctions since it invaded Ukraine on February 24. But
China and India have attempted to stay above the fray, wary of
damaging strong military and commercial links with Moscow, the
report relays.

South Africa, one of the few African countries wielding diplomatic
influence outside the continent, has also refused to condemn Russia
to safeguard important economic ties, the report discloses.

China and Russia have also touted a "no-limits" partnership with
President Xi Jinping sending Putin a message of support on
"sovereignty and security" issues, the report notes.

The Russian President on Thursday called on BRICS leaders to work
together to offset "selfish actions" from the West and push for a
"truly multipolar system of inter-government relations."

Xi said Wednesday on the eve of the forum that the "Ukraine crisis
is . . . a wake-up call" and branded sanctions a "boomerang and a
double-edged sword," the report relays.

Addressing the conflict in his own speech, President Fernandez said
it is "imperative that the hostilities in Ukraine cease," the
report notes.

"We want to be part of the search for a solution that brings all
those involved closer together, in order to achieve a lasting peace
that definitively leaves behind the dynamics unleashed by the
escalation of war," said the Argentine leader, 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.

                     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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D O M I N I C A N   R E P U B L I C
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[*] DOMINICAN REPUBLIC: Will Start Exporting Sargassum to Finland
-----------------------------------------------------------------
Dominican Today reports that the origin by Ocean, a Finnish algae
refining company, began its operations in the country with its
first export of sargassum from Punta Cana to its bioprocessing
plant in Finland, thus converting it into raw material for the
cosmetic and food industries.

The company, in collaboration with strategic partners such as SOS
Carbón, Grupo Puntacana, and Nodo Logistics, seeks an ecologically
sustainable solution to the sargassum problem in the Dominican
Republic, according to Dominican Today.

The operations began in a first phase, where 100 trucks full of
sargassum will be sent to Finland, and then a second, in which a
bioprocessing plant will be installed in the country, the report
notes.

Origin by Ocean seeks to stimulate entrepreneurship in the country,
to support and work hand in hand with companies that are dedicated
to the collection of sargassum and committed to the environment and
the preservation of the oceans, the report relays.

Marcos Diaz, representative of Origin by Oceans in the DR,
highlighted that the company seeks to grow hand in hand with its
strategic partners to solve the sargassum problem and provide an
ecologically sustainable product, the report discloses.

"We intend to create economic dynamics and job creation on the
coasts of the Dominican Republic," he stressed, the report notes.

                     What Has Been Done?

To mitigate this phenomenon that affects the country's beaches
every year, mainly at the beginning of summer, some hotels have
chosen to place barriers that limit their arrival towards the
coast, the report relays.  Others have used the harvesting method
with machinery, the report says.

In 2020, the Ministry of Tourism, the Inter-American Development
Bank, and Asonahores signed an agreement to rescue 35 beaches and
construct barriers to manage sargassum, 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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E C U A D O R
=============

ECUADOR: IMF Concludes Reviews of the Extended Fund Facility
------------------------------------------------------------
The Executive Board of the International Monetary Fund (IMF)
concluded the combined fourth and fifth reviews of the extended
arrangement under the Extended Fund Facility (EFF) for Ecuador. The
Board's decision allows for an immediate disbursement of SDR 710
million (about US$1 billion). The Ecuadorian authorities plan to
use the disbursement for budget support.

Ecuador's 27-month EFF arrangement was approved by the Executive
Board on September 30, 2020 (see Press Release No. 20/302) for SDR
4.615 billion (about US$6.5 billion or around 661 percent of
Ecuador's quota). The program aims to support Ecuador's economic
recovery from the pandemic, restore fiscal sustainability with
equity, and generate sustainable and inclusive growth with high
quality jobs.

The Executive Board approved the authorities' request for a waiver
of non-observance of the end-December 2021 performance criterion on
the overall balance of the budgetary central government (PGE) and
the oil derivatives financing account (CFDD) based on the
corrective actions the authorities have already taken and have
committed to take. The Executive Board also reviewed a report from
the Managing Director on the provision of inaccurate data on the
overall balance of the budgetary central government (PGE) and the
domestic derivatives financing account (CFDD), which led to a
noncomplying purchase by Ecuador in September 2021 and a breach of
obligation under Article VIII, Section 5 of the IMF's Articles of
Agreement. The under-recording of PGE pension and healthcare
transfer obligations to the social security fund (IESS) gave rise
to the noncomplying purchase.

Following the Executive Board discussion on Ecuador, Ms. Antoinette
Sayeh, Deputy Managing Director and Acting Chair, issued the
following statement:

"The economy rebounded with a 4.2 percent growth in 2021, supported
by a successful vaccination campaign and good macroeconomic
management. Macroeconomic and financial stability have been
preserved. While the ongoing war in Ukraine is adversely affecting
some export sectors, higher oil prices are improving Ecuador's
external and fiscal balances.

"Social assistance to low-income families continues to be expanded.
8 in 10 low-income families now receive government support, up from
3 in 10 only two years ago. This increased support is helping
cushion the adverse impact of rising inflation on the most
vulnerable.

"The enactment of a progressive tax bill last year marked an
important milestone in improving fiscal sustainability with equity.
While fuel subsidy reform has been suspended, the authorities
remain committed to improving fiscal sustainability and equity and
rebuilding buffers, demonstrated by the recently enacted decrees to
improve spending efficiency, and plans to prioritize
growth-enhancing investment in physical and human capital.

"The financial sector appears liquid and ready for crisis measures
to be gradually rolled back, with continued vigilance to promote
stability. Gradually closing the regulatory gaps between banks and
cooperatives will enhance the sector's resilience.

"Stronger governance and accountability will help bolster trust in
government institutions. In this regard, the authorities'
commitments to enhance asset declarations of politically exposed
people, strengthen the AML/CFT framework, and provide further
transparency on ultimate beneficiary ownership for procurement
contracts are welcome. Following delays, the authorities are moving
forward with bringing more transparency to state-owned oil
companies and remain committed to working with the Fund in this
regard in the future. Improving timeliness, reliability, and
consistency of fiscal statistics remains a priority.

"The authorities have already undertaken strong corrective actions
to address institutional and technical shortcomings that gave rise
to the inaccurate information. These included: (i) publishing
revised historical data with explanations for revisions; (ii)
recording of a conservative estimate for the PGE healthcare
transfer obligations to the IESS for 2017-22, while healthcare
audits are pending; and (iii) signing an agreement between the
Ministry of Economy and Finance (MEF) and the IESS to initiate a
procurement process for firm(s) to undertake the medical audits.

"In addition, the authorities committed to undertake the following
remedial measures in the coming months: (i) hiring of an
independent medical audit firm(s); (ii) identifying and sharing
with staff the existing stock of PGE potential obligations; (iii)
publication of the revised historical PGE and NFPS data back to
2013; (iv) finalizing medical audits for 2020 and 2021; (v)
including PGE pension and estimated healthcare obligations to the
IESS in both the 2023 budget and the medium-term fiscal framework;
(vi) establishing a dedicated statistics unit at MEF headed by a
senior Chief Statistician and updating the training curriculum in
government finance statistics; (vii) developing a time-bound action
plan to undertake legal reform and administrative actions aimed at
strengthening the legal framework of the state obligations on
healthcare expenditures and related audits.

"In view of the corrective actions the authorities have already
undertaken and remedial measures they have committed to undertake
to strengthen the quality of fiscal statistics, the Executive Board
decided to waive the nonobservance of the performance criterion,
and determined that no further remedial action is required in
connection with the breach of obligations under Article VIII,
Section 5."




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H A I T I
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HAITI: Lack of Chicken and Eggs Drives Locals to Despair
--------------------------------------------------------
Dominican Today reports that Haitians who participated in the
binational market expressed their concern over the shortage of
chickens and eggs in their country.

They say that when agricultural products appear in public stores
and markets in their country, they command prices unattainable for
the poor, according to Dominican Today.

The merchant Dianny Pierre said that the Customs authorities in
Ounaminthe (Haiti) charged them very high taxes and added that when
they find live chickens in Dominican territory, they buy them at an
acceptable price, the report notes.  Still, with the tariffs
charged by the Haitian customs collectors, the pound is sold in
their country for an equivalent of 200 pesos, and that is why most
Haitian traders and buyers prefer to buy these farm-raised birds
alive, the report relays.

                             Bankruptcy

Some Haitian traders claim that a shortage of chickens drives them
out of business and that people frequently order the product, the
report discloses.

While in the Dominican Republic, the tripe (intestines), the
feathers, and the beak are wasted, Haiti uses the former to sell
fried and make stews, the report relays.

The feathers for decorations and the beak to complete handicrafts
are sold in tourist centers, the report notes.  The legs, the
gizzards, and offal (livers) are sold apart from the meat, the
report relays.

The shells of the eggs are used to decorate certain plants in the
gardens of houses owned by the lower and upper-middle class, the
report says.

Meanwhile, the small Haitian merchant Natanny Mera Louis comments
that the Dominicans throw away the chicken tripe as waste, but that
in Haiti, some fritters and cafeterias sell them fried, stewed, and
in soups, but that now there is a crisis in the commercialization
of live chickens, the report adds.




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J A M A I C A
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CREDITO REAL: To Fight Involuntary Chapter 11 Petition
------------------------------------------------------
Credito Real, Mexico's biggest payroll lender, said in a filing
with the Mexican stock exchange it was aware of claims of a filing
of an involuntary Chapter 11 bankruptcy petition, which it would
fight once the petition was served.

On June 22, 2022, three holders of unsecured bond debt totaling $8
million filed a petition to initiate Chapter 11 proceedings in New
York against Credito Real.  The bondholders -- Institutional
Multiple Investment Fund LLC, of Boston, Massachusetts; Banco
Monex, S.A., of Mexico, and Solitaire Fund, of Liechtenstein -- are
represented by U.S.-based firm Akin Gump Strauss Hauer & Feld LLP.

"The Involuntary Petition has not been served on the Company.  The
Company believes the Involuntary Petition is improper and was filed
as a litigation tactic in the U.S. by certain alleged minority
creditors to gain leverage in negotiations with the Company,"
Credito Real said June 22.

According to a June 23 filing in New York bankruptcy Court, Credito
Real has been summoned and required to submit a motion or answer to
the petition within 21 days after the service of the summons.

As previously reported, Credito Real had been weighing a Chapter 11
filing after defaulting on a repayment of a Swiss franc bond.
Bloomberg News later reported June 10 that the Mexican company has
scrapped its U.S. bankruptcy plans and is instead planning to
pursue insolvency proceedings in Mexico known as concurso
mercantil.

Credito Real fell into default earlier this year after it failed to
repay holders of a maturing Swiss franc bond.  It had been looking
to line up financing from existing creditors.

Credito Real has $1.9 billion in global notes out of a total debt
of MXN53.3 billion ($2.72 billion).

                    About Credito Real SAB

Credito Real SAB de CV SOFOM ENR is a Mexico-based company that
provides consumer financing.  Credito is Mexico's biggest payroll
lender and second largest non-bank lender after Real Unifin.

Credito Real provides loans, either by providing direct financing
to consumers or by establishing financing programs with consumer
financing dealers that sell to Credito Real the collection rights
from consumer financing products.  It also provides financing
directly to individuals that are employed by corporations with
payroll deduction agreements with consumer financing dealers
authorized by Credito Real.  Credito Real operates through a number
of subsidiaries, including AFS Acceptance LLC.

Three alleged creditors signed a petition to send Credito Real to
Chapter 11 bankruptcy on June 22, 2022 (Bankr. S.D.N.Y. Case No.
22-10842).  Institutional Multiple Investment Fund LLC, of Boston,
Massachusetts; Banco Monex, S.A., of Mexico, and Solitaire Fund, of
Liechtenstein, who claim to own an aggregate $8 million of
unsecured bond debt, signed the involuntary Chapter 11 petition.
David H. Botter, Esq., at Akin Gump Strauss Hauer & Feld LLP is
advising the three bondholders.


JAMAICA: Cayman Imports $1 Billion in Food From Country
-------------------------------------------------------
Jamaica Observer reports that the Cayman Islands sources large
amounts of food supplies from Jamaica, with the Statistical
Institute of Jamaica (Statin) indicating that food imports by the
island nation from Jamaica are valued at over $1 billion annually.

Recently, Jamaica and the Cayman Islands inked a fresh arrangement
under which a broadened list of agricultural produce can be
imported from Jamaica, according to Jamaica Observer.  New products
on the list are plantain, breadfruit and soursop, as well as
blanched and frozen ackees, the report notes.

The Cayman Islands is a British overseas territory with its GDP far
in excess of Jamaica's, the report relays.  It is home to an
offshore banking sector with assets in excess of US$500 billion,
the report discloses.

With a GDP per capita of US$91,392, the Cayman Islands has the
highest standard of living in the Caribbean, the report notes.
Comparitively, GDP per capita in Jamaica is US$4530, the report
says.

The Cayman Islands are located 438km or 272 miles to Jamaica's
north-west and is less than half an hour away by direct airlift,
the report relays.

The proximity of the Cayman Islands to Jamaica has led to many
economic linkages, including food imports, the report discloses.

Cayman Minister of Agriculture Jay Ebanks engaged in bilateral
talks during his visit which were aimed at improving food security
for the island, the report notes.

The new arrangement with Jamaica, he said, will allow the Cayman
Islands direct access to fresh produce in the context of global
food pressures, the report relays.

In a report on the outcome of his visit, Ebanks said, Jamaica
offers a good alternative as it is closer than other countries from
which the island usually imports, the report says.

Preliminary data from Statin indicate that the Cayman Islands
imported food valued at $1.44 billion in 2020, the report relays.
In 2019 the total value of food imported from Jamaica was $1.24
billion, the report discloses.  Data for 2021 are not available.

The range of food items sourced in Jamaica include not only fresh
produce, but also meat of every kind, the report notes.  On
Statin's list of 170 products for 2020 were frozen cuts of meat,
meat of fowl, chicken leg quarters, canned chicken sausages,
chicken paste, corned beef and boneless beef trimmings, the report
says.

The Cayman Islands also imports sugar, milk and skimmed and whole
milk powder, other milk and cream, condensed milk, infant formula,
cheeses, mackerel, cod, other fish, lobster, shrimp, prawns, brown
rice, other rice, flour (wheat), cornmeal, cereal products, wheat
products, sugar, waffles, wafers and biscuits, cake mix, bammies,
legumes, carrots, hot pepper, pumpkin and much more, the report
notes.

Fruit imported include bananas, oranges, lemons, watermelons,
grapes and more.  Added are coffee, spices, nuts, pastry and other
baked products, the report relays.

Ebanks indicated the aim in the recent agreement was to boost the
island's food and nutrition security, the report notes.  The Cayman
Islands and Jamaica have a longstanding trading relationship
spanning two decades, facilitating the export of agricultural
commodities, the report relays.  From 1863 to 1958 the Cayman
Islands was administered as part of the colony of Jamaica.  It went
its separate way to become a British overseas territory at the time
when Jamaica joined the short-lived West Indies Federation in 1958,
the report adds.




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P E R U
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UNACEM CORP: S&P Affirms 'BB' ICR & Alters Outlook to Positive
--------------------------------------------------------------
S&P Global Ratings, on June 27, 2022, revised its outlook on
Peruvian cement group UNACEM Corp S.A.A. (UNACEM), to positive from
stable and affirmed its long-term issuer credit rating at 'BB'.

The positive outlook reflects a potential upgrade of UNACEM in the
next 6-12 months if the company maintains its prudent financial
policy with net debt to EBITDA below 2.5x and discretionary cash
flow (DCF) to debt above 10% amid a global economic deceleration
and inflationary pressures.

S&P said, "After the pandemic broke out in 2020, the strong demand
for building materials across UNACEM's key markets led not only to
a faster-than-expected recovery in its credit metrics by mid-2021,
when we revised our outlook on the company to stable from negative,
but UNACEM continued to benefit from the momentum and surpassed our
expectations in the past two quarters. The double-digit increase in
UNACEM's sales and EBITDA, as well as a drop in gross debt led to a
quick reduction in leverage metrics, with net debt to EBITDA of
2.2x at the end of 2021 and March 2022. We expect the momentum to
moderate in the next 12 months due to a global economic
deceleration and persistent inflationary pressures on key input
costs, coupled with a complex political landscape in Latin America.
This would result in UNACEM's slightly lower volume sales in Peru
and the U.S., and sluggish volume growth in Ecuador. However,
higher selling prices, coupled with the consolidation of assets
acquired at the end of 2021 in Chile, and mid- to high-revenue
growth in other businesses, should result in consolidated revenue
growth of 6%-8% in 2022 and 4%-5% in 2023. On the other hand, we
estimate UNACEM's EBITDA margin to decline about 200 basis points
from 2021 levels to 29% in 2022, due to high input costs, such as
raw materials, gas, and fuel, and to a lesser extent, electricity
because the company's vertical integration and its hydroelectric
plants in Peru with 337 megawatts in installed capacity should
protect its profitability. As a result, EBITDA and cash flows
should remain steady in the next few years, maintaining net debt to
EBITDA near 2.0x.

"We expect UNACEM to generate between PEN1.0 billion and PEN1.1
billion in operating cash flows in 2022 and 2023, and to allocate
them towards capital expenditures (capex), debt repayment, and
dividend distributions. The company's main projects for the next
five years relate to improving profitability and reducing its
carbon footprint. Although we estimate higher capex in the next
years, PEN400 million - PEN500 million annually, we consider UNACEM
has flexibility to delay or postpone investments, because they're
multiannual projects, if cash flows soften. On the other hand,
UNACEM revised its dividend distribution policy at the end of 2021,
which will raise annual dividends to $35 million - $70 million from
$30 million - $40 million previously. We believe that solid cash
flows will be sufficient to cover higher investments and dividend
distributions, reflected in DCF to debt of 8%-15% in 2022-2023,
while the remaining excess cash will be used to continue to repay
debt."

ESG Credit Indicators: E-3, S-2, G-2

S&P said, "Environmental factors are a moderately negative
consideration in our credit rating analysis of UNACEM. Although
environmental-related regulatory scrutiny is progressing slower in
Peru and Latin America than in developed markets, we consider that
the company's U.S. operations could be exposed to regulatory
tightening, potentially requiring greater investments in the medium
term, although its assets are relatively new. The bulk of UNACEM's
operations are in Peru, accounting for 65% of sales, while 14% are
in the U.S. and 21% in other Latin American countries. Therefore,
we expect potential regulatory requirements to be relatively mild
for UNACEM and its cash generation to provide sufficient cushion.
On average, the company has deployed about PEN30 million annually
for environmental investments; about 13% of its total capex. In
2021, it emitted 628 kg of CO2e per ton of cement produced in Peru,
similar to those of regional peers. Moreover, the company has a
commitment to reach carbon neutrality by 2050."



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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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