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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
Thursday, July 7, 2022, Vol. 23, No. 129
Headlines
A R G E N T I N A
[*] ARGENTINA: Economy Grew 5.1% Year-On-Year in April
C O L O M B I A
COLOMBIA: IDB Approves $300-Mil Loan for Sustainable Growth
D O M I N I C A N R E P U B L I C
DOMINICAN REPUBLIC: Prices of Basic Food Basket are Stable
E C U A D O R
ECUADOR: Tourism Sector Lost US$70 Million Due to Protests
E L S A L V A D O R
AES EL SALVADOR II: Moody's Withdraws Caa2 Corporate Family Rating
H A I T I
HAITI: Lack of Chicken and Eggs Causes Despair
H O N D U R A S
INVERSIONES ATLANTIDA: S&P Cuts LT Issuer Credit Rating to 'B'
J A M A I C A
JAMAICA: Gas Prices Down $0.25 Last Week
P U E R T O R I C O
PUERTO RICO: PREPA Bondholders Critic Mediation, Litigation Efforts
PUERTO RICO: PREPA Debt-Plan Deadline Pushed to August 1
- - - - -
=================
A R G E N T I N A
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[*] ARGENTINA: Economy Grew 5.1% Year-On-Year in April
------------------------------------------------------
Juan Martinez at Rio Times Online reports that economic activity in
Argentina grew 5.1% year-on-year last April compared to the same
month in 2021, marking the 14th consecutive month of year-on-year
growth, official sources said.
The data released by the National Institute of Statistics and
Censuses (Indec), which serves as a preliminary advance to measure
the quarterly change in the gross domestic product (GDP), signifies
an acceleration from the pace of growth recorded in March last year
(4.5%), according to Rio Times Online.
According to the report, economic activity increased by 0.6% in
April, the report notes.
Indec data shows that of the 16 sectors of the economy included in
the indicator, 15 production sectors recorded year-on-year
improvements in the fourth month of the year, the report relays.
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.
===============
C O L O M B I A
===============
COLOMBIA: IDB Approves $300-Mil Loan for Sustainable Growth
-----------------------------------------------------------
The Inter-American Development Bank (IDB) approved a $300 million
loan to help Colombia manage and fund climate action, develop
economic opportunities based on natural capital and the circular
economy, and quicken its energy transition. The ultimate goal is to
support the country on its path to sustainable and resilient
economic growth.
The program focuses on updating and instituting regulatory and
policy measures to cut greenhouse gas emissions in various sectors
of the economy and create around 4,000 new green jobs.
This operation is the second in a series under the Loans for Policy
Reform initiative. The first operation provided $800 million in IDB
funding and resulted in the approval of 44 measures to strengthen
the government's capacity to incorporate climate action and
sustainable economic recovery into national policy frameworks. The
series was also co-financed by partners such as the French
Development Agency, the KfW Development Bank of Germany, the
Export-Import Bank of Korea, the Swedish International Development
Cooperation Agency, the Development Bank of Latin America, the
Central American Bank for Economic Integration, and the UKSIP
Program of the British Government.
As part of the program, Colombia unveiled its Long-Term Climate
Strategy at the COP 26. It also approved the Climate Action Law
(Law 2169 of 2021), and issued the first sovereign green bonds (TES
verdes) in the domestic market. The Ministries of Treasury and
Environment spearheaded these actions. The country also overhauled
its climate funding strategy and industry- and region-specific
climate change plans as part of the program. In agriculture, for
example, the program promotes regulatory changes to monitoring and
reporting systems, carbon markets, and the transfer of knowledge
about climate-smart farming and best practices for resilience. Up
to the 2 million farmers and 30% of rural women could benefit from
this knowledge transfer.
For the energy and transportation industries, the measures aim to
reduce air pollution from internal combustion engine vehicles and
develop a diversified energy mix that is cleaner, more resilient,
and generates 20 GW from non-conventional renewable energy
sources.
This loan will also be used to bolster nature-based solutions,
forest management, and the circular economy. New regulations will
foster sustainable use of forest resources and contribute to the
goal of net-zero deforestation by 2030.
Another aim is to enhance protected area management to better
safeguard the biodiversity of Colombia, which is the second-most
biodiverse country in the world after Brazil. The country's goal is
to protect and conserve 30% of its lands by 2030 and, together with
the governments of Costa Rica, Ecuador, and Panama, it has issued a
declaration to conserve and manage the Eastern Tropical Pacific
Marine Corridor.
With the first IDB operation, Colombia was able to raise its
targets for reducing greenhouse gas emissions from 20% to 51% in
2030, as part of its commitments under the Paris Agreement. It
combined this measure with other policies like the National Policy
for Controlling Deforestation, the Sustainable Tourism Law (Law
2068 of 2020), and the Energy Transformation Law (Law 2099 of
2021).
This program aligns with Vision 2025, the IDB Group's roadmap for
accelerating recovery and inclusive and sustainable growth in Latin
America and the Caribbean. Climate action is a fundamental pillar
of Vision 2025, and 100% of the loan's resources were considered
climate funding, bringing the IDB closer to achieving its ambitious
goals in this area.
===================================
D O M I N I C A N R E P U B L I C
===================================
DOMINICAN REPUBLIC: Prices of Basic Food Basket are Stable
----------------------------------------------------------
Dominican Today reports that the Minister of Industry, Commerce,
and Mypimes, Victor "Ito" Bisono, said that the Dominican Republic
should value the stable maintenance of the prices of the products
that make up the basic basket and fuels.
"The result is in the numbers, and the prices are stable,"
expressed the official, according to Dominican Today.
According to the minister, the subsidy offered by the Government
after the elimination of tariffs on 67 foodstuffs, thanks to the
application of the Zero Rate Law, has contributed to the
stabilization of the prices of these products in the market,
despite the atmosphere of crisis and inflation that permeates all
the economies of the world, the report notes.
"The markets flow in a country like ours where the raw material is
imported, thank God the market has been yielding (. . . ) However,
I believe that at this moment, that is what we must value where the
whole world is convulsed, with the impact of the war it is going
through a process of inflation," he expressed, the reort relays.
Bisono also pointed out that products such as bread, pasta, wheat,
corn, and soybean have decreased costs. Likewise, he indicated that
this measure also helps to encourage cultivation, and therefore,
the demand is covered, 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.
=============
E C U A D O R
=============
ECUADOR: Tourism Sector Lost US$70 Million Due to Protests
----------------------------------------------------------
Rio Times Online reports that the protests in Ecuador, which began
last June 13, have left millions of dollars in losses for several
sectors, including the tourism sector.
According to the Minister of Tourism, Niels Olsen, the more than 15
days of demonstrations have left losses, the report relays.
Tourism-related businesses closed their doors in Quito for security
reasons, the report notes.
=====================
E L S A L V A D O R
=====================
AES EL SALVADOR II: Moody's Withdraws Caa2 Corporate Family Rating
------------------------------------------------------------------
Moody's Investors Service has withdrawn all the ratings assigned to
AES El Salvador Trust II bis (Trustco II). At the time of
withdrawal, there was no instrument outstanding.
The following ratings are affected by the action:
Ratings Withdrawn:
Issuer: AES El Salvador Trust II bis
Corporate Family Rating, Withdrawn, previously rated Caa2
Gtd. Senior Unsecured Regular Bond/Debenture, Withdrawn,
previously rated Caa2
Outlook Actions:
Issuer: AES El Salvador Trust II bis
Outlook, Changed to Rating Withdrawn from Negative
RATINGS RATIONALE
Moody's has withdrawn all of Trustco II's ratings following the
company's complete redemption of all its outstanding senior global
notes due 2023.
Trustco II is the issuer of the 10-year $310 million senior global
notes due in 2023 that was fully redeemed in June 27. The issuance
was unconditionally and severally guaranteed by four affiliated
electric distribution companies in El Salvador: Compania de
Alumbrado Electrico de San Salvador, SA de CV (CAESS), Empresa
Electrica de Oriente, S.A. de C.V. (EEO), AES CLESA S. en C. de
C.V. (CLESA) and Distribuidora Electrica de Usulutan (DEUSEM),
which are majority owned by The AES Corporation (Baa3, stable).
=========
H A I T I
=========
HAITI: Lack of Chicken and Eggs Causes 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 notes.
The feathers for decorations and the beak to complete handicrafts
are sold in tourist centers, the report relays. The legs, the
gizzards, and offal (livers) are sold apart from the meat, the
report discloses.
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 notes.
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.
===============
H O N D U R A S
===============
INVERSIONES ATLANTIDA: S&P Cuts LT Issuer Credit Rating to 'B'
--------------------------------------------------------------
S&P Global Ratings lowered its long-term issuer credit rating (ICR)
and issue-level rating on Honduran financial group Inversiones
Atlantida (Invatlan) to 'B' from 'B+'. S&P also affirmed its global
scale 'BB-' long- and 'B' short-term ICRs on Banco Atlantida, which
is the group's core subsidiary. The outlook on both entities is
stable.
The rating incorporates Invatlan's status as a non-operating
holding company (NOHC). The rating is now two notches below the
credit quality of the group's consolidated operating subsidiaries
(group credit profile or GCP of 'bb-'). One notch of this
subordination reflects the NOHC's dependence on dividends from
Banco Atlantida and other subsidiaries, which are required to
service debt and other financial obligations. S&P said, "We
deducted a second notch due to Invatlan's rising double-leverage
ratio, which has, in recent years, remained constantly above 120%,
our trigger for an additional notch of subordination. We believe a
ratio above this 120% threshold reflects a more vulnerable credit
risk profile, due to an increased dependency on subsidiaries'
liquidity."
Banco Atlantida
ESG Credit Indicators: E-2, S-2, G-2
=============
J A M A I C A
=============
JAMAICA: Gas Prices Down $0.25 Last Week
----------------------------------------
RJR News reports that a litre of 87 and 90 gasoline in Jamaica sold
$0.25 less on June 30.
Diesel, ultra low sulphur diesel and kerosene also declined by
$0.25, according to RJR News.
However, propane increased by $0.20 while the cost of butane went
up by $0.50, the report notes.
As reported in the Troubled Company Reporter-Latin America in March
2022, Fitch Ratings has affirmed Jamaica's Long-Term Foreign
Currency Issuer Default Rating (IDR) at 'B+'. The Rating Outlook is
Stable.
=====================
P U E R T O R I C O
=====================
PUERTO RICO: PREPA Bondholders Critic Mediation, Litigation Efforts
-------------------------------------------------------------------
Robert Slavin of The Bond Buyer reports that Puerto Rico Electric
Power Authority bondholders told the bankruptcy court they oppose a
move to litigation although they do not agree with the board that
mediation is "constructive" and being conducted in good faith.
"Litigation will only distract from the parties' attempts to reach
an agreement," the bondholders said in reply to an Unsecured
Creditors Committee filing. "As the PREPA bondholders noted in
their May 27 informative motion, the time for litigation in this
case may yet arrive."
The UCC's proposed litigation schedule is "fundamentally flawed,"
the bondholders said. The UCC would first consider a challenge of
bondholders' lien against rate payments. "A potential motion to
dismiss PREPA's Title III [bankruptcy] case should be heard prior
to any other litigation," the bondholders said.
About Puerto Rico
Puerto Rico is a self-governing commonwealth in association with
the United States. The chief of state is the President of the
United States of America. The head of government is an elected
Governor. There are two legislative chambers: the House of
Representatives, 51 seats, and the Senate, 27 seats. The
governor-elect is Ricardo Antonio "Ricky" Rossello Nevares, the son
of former governor Pedro Rossello.
In 2016, the U.S. Congress passed PROMESA, which, among other
things, created the Financial Oversight and Management Board and
imposed an automatic stay on creditor lawsuits against the
government, which expired May 1, 2017.
The members of the oversight board are: (i) Andrew G. Biggs, (ii)
Jose B. Carrion III, (iii) Carlos M. Garcia, (iv) Arthur J.
Gonzalez, (v) Jose R. Gonzalez, (vi) Ana. J. Matosantos, and (vii)
David A. Skeel Jr.
On May 3, 2017, the Commonwealth of Puerto Rico filed a petition
for relief under Title III of the Puerto Rico Oversight,
Management, and Economic Stability Act ("PROMESA"). The case is
pending in the United States District Court for the District of
Puerto Rico under case number 17-cv-01578. A copy of Puerto
Rico's PROMESA petition is available at
http://bankrupt.com/misc/17-01578-00001.pdf
On May 5, 2017, the Puerto Rico Sales Tax Financing Corporation
(COFINA) commenced a case under Title III of PROMESA (D.P.R. Case
No. 17-01599). Joint administration has been sought for the Title
III cases.
On May 21, 2017, two more agencies -- Employees Retirement System
of the Government of the Commonwealth of Puerto Rico and Puerto
Rico Highways and Transportation Authority (Case Nos. 17-01685 and
17-01686) -- commenced Title III cases.
U.S. Chief Justice John Roberts has named U.S. District Judge Laura
Taylor Swain to preside over the Title III cases.
The Oversight Board has hired as advisors, Proskauer Rose LLP and
O'Neill & Borges LLC as legal counsel, McKinsey & Co. as strategic
consultant, Citigroup Global Markets as municipal investment
banker, and Ernst & Young, as financial advisor.
Martin J. Bienenstock, Esq., Scott K. Rutsky, Esq., and Philip M.
Abelson, Esq., of Proskauer Rose LLP; and Hermann D. Bauer, Esq.,
at O'Neill & Borges LLC are onboard as attorneys.
Prime Clerk LLC is the claims and noticing agent. Prime Clerk
maintains a case web site at:
https://cases.primeclerk.com/puertorico
Jones Day is serving as counsel to certain ERS bondholders.
Paul Weiss is counsel to the Ad Hoc Group of Puerto Rico General
Obligation Bondholders.
PUERTO RICO: PREPA Debt-Plan Deadline Pushed to August 1
--------------------------------------------------------
Michelle Kaske of Bloomberg News reports that Puerto Rico's
Electric Power Authority and its creditors will have until Aug. 1,
2022 to strike a deal on how to reduce the utility's nearly $9
billion of debt after the judge overseeing the agency's
bankruptcy postponed the deadline by a month.
The US commonwealth's financial oversight board, which is managing
the bankruptcy, must file by Aug. 1, 2022 a term sheet for a
potential debt-cutting plan, a litigation schedule or a memorandum
of law showing why the court shouldn't dismiss the electric
utility's case, according to an order US District Court Judge Laura
Taylor Swain filed Wednesday, June 29, 2022.
About Puerto Rico
Puerto Rico is a self-governing commonwealth in association with
the United States. The chief of state is the President of the
United States of America. The head of government is an elected
Governor. There are two legislative chambers: the House of
Representatives, 51 seats, and the Senate, 27 seats. The
governor-elect is Ricardo Antonio "Ricky" Rossello Nevares, the son
of former governor Pedro Rossello.
In 2016, the U.S. Congress passed PROMESA, which, among other
things, created the Financial Oversight and Management Board and
imposed an automatic stay on creditor lawsuits against the
government, which expired May 1, 2017.
The members of the oversight board are: (i) Andrew G. Biggs, (ii)
Jose B. Carrion III, (iii) Carlos M. Garcia, (iv) Arthur J.
Gonzalez, (v) Jose R. Gonzalez, (vi) Ana. J. Matosantos, and (vii)
David A. Skeel Jr.
On May 3, 2017, the Commonwealth of Puerto Rico filed a petition
for relief under Title III of the Puerto Rico Oversight,
Management, and Economic Stability Act ("PROMESA"). The case is
pending in the United States District Court for the District of
Puerto Rico under case number 17-cv-01578. A copy of Puerto
Rico's PROMESA petition is available at
http://bankrupt.com/misc/17-01578-00001.pdf
On May 5, 2017, the Puerto Rico Sales Tax Financing Corporation
(COFINA) commenced a case under Title III of PROMESA (D.P.R. Case
No. 17-01599). Joint administration has been sought for the Title
III cases.
On May 21, 2017, two more agencies -- Employees Retirement System
of the Government of the Commonwealth of Puerto Rico and Puerto
Rico Highways and Transportation Authority (Case Nos. 17-01685 and
17-01686) -- commenced Title III cases.
U.S. Chief Justice John Roberts has named U.S. District Judge Laura
Taylor Swain to preside over the Title III cases.
The Oversight Board has hired as advisors, Proskauer Rose LLP and
O'Neill & Borges LLC as legal counsel, McKinsey & Co. as strategic
consultant, Citigroup Global Markets as municipal investment
banker, and Ernst & Young, as financial advisor.
Martin J. Bienenstock, Esq., Scott K. Rutsky, Esq., and Philip M.
Abelson, Esq., of Proskauer Rose LLP; and Hermann D. Bauer, Esq.,
at O'Neill & Borges LLC are onboard as attorneys.
Prime Clerk LLC is the claims and noticing agent. Prime Clerk
maintains a case web site at:
https://cases.primeclerk.com/puertorico
Jones Day is serving as counsel to certain ERS bondholders.
Paul Weiss is counsel to the Ad Hoc Group of Puerto Rico General
Obligation Bondholders.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Latin America is a daily newsletter
co-published by Bankruptcy Creditors' Service, Inc., Fairless
Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C.,
USA, Marites O. Claro, Joy A. Agravante, Rousel Elaine T.
Fernandez, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A.
Chapman, Editors.
Copyright 2022. All rights reserved. ISSN 1529-2746.
This material is copyrighted and any commercial use, resale or
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of the same firm for the term of the initial subscription or
balance thereof are US$25 each. For subscription information,
contact Peter A. Chapman at 215-945-7000.
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