/raid1/www/Hosts/bankrupt/TCRLA_Public/220718.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
Monday, July 18, 2022, Vol. 23, No. 136
Headlines
A R G E N T I N A
ARGENTINA: Inflation Hits 64% Year-On-Year
B R A Z I L
BRAZIL: Chamber Postpones Vote on Crypto Bill
BRAZIL: Economic Activity Index Falls 0.11% in May
BRAZIL: Fitch Affirms LT FC IDR at 'BB-', Outlook Altered to Stable
LOCALIZA RENT: S&P Affirms 'BB+' ICR on Unidas Merger Completion
SIMPAR SA: Fitch Raises LongTerm Issuer Credit Ratings to 'BB'
D O M I N I C A N R E P U B L I C
DOMINICAN REPUBLIC: Gov't. Approves Import of 2M Chickens
DOMINICAN REPUBLIC: Sees Obstacles to Providing Jobs for Over-35s
E C U A D O R
ECUADOR DPR: Fitch Rates USD300MM Series 2022-1 Notes 'BB-'
E L S A L V A D O R
AES EL SALVADOR II: Fitch Affirms & Then Withdraws' CCC+' IDRs
J A M A I C A
JAMAICA: Fuel Prices Decline for Second Straight Week
P A N A M A
MMG BANK CORPORATION: Fitch Affirms & Withdraws 'BB+' & 'B' IDRs
P E R U
ORAZUL ENERGY: Fitch Affirms 'BB' LongTerm IDRs, Outlook Stable
X X X X X X X X
[*] BOND PRICING: For the Week July 11 to July 15, 2022
- - - - -
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A R G E N T I N A
=================
ARGENTINA: Inflation Hits 64% Year-On-Year
------------------------------------------
Buenos Aires Times reports that Argentina's runaway inflation rate
stole the headlines once again last week when the INDEC statistics
bureau revealed that consumer prices rose at the fastest pace in
more than three decades in June.
Prices jumped 5.3 percent last month, fractionally up on May's 5.1
percent and making for an annual inflation of 64 percent, according
to government data released July 14.
Argentines are suffering from one of the worst inflation rates in
the world and this was the highest figure for June since 1990,
notes the report. Prices have now risen 36.2 percent in the first
half of the year, according to INDEC, notes Buenos Aires Times.
Analysts fear worse to come from the second half of the year in the
aftermath of the market jitters following the resignation of
economy minister Martin Guzman early this month and growing
political tensions within the ruling Frente de Todos coalition, the
report notes.
The REM survey of market expectations carried out by the Central
Bank is already projecting 2023 inflation at 76 percent, with one
of the economists consulted forecasting 79.2 percent, the report
discloes. Some private analysts are now openly forecasting a rate
peaking at 90 percent this year, the report says.
Complaints against the economic policies of President Alberto
Fernandez's government are growing, the report relays. The
inflation figure was released on a day of demonstrations by popular
organizations and picketers, with thousands of people marching from
Congress to the gates of the Casa Rosada to demand increases in
social benefits and the creation of a universal basic income
payment for the most disadvantaged, the report discloses.
"What we see is the worsening day-by-day, year-after-year, of the
conditions of the neighbors, of the workers in each neighborhood,
both the unemployed and the employed, who also see their conditions
worsening," said Gabriela Calarco, a member of the Teresa Rodriguez
Movement, as she protested, the report notes.
On Alert
The basic food basket for a family of four hit 100,000 pesos in May
(US$813 at the official exchange rate at the time), but the minimum
wage that same month was 39,000 pesos US$(317 dollars), according
to INDEC, the report discloses.
Poverty affects 37 percent of the population and unemployment is
seven percent, the report relays.
Union leaders are on alert and last week called for the early
opening of wage renegotiation talks in lieu of falling purchasing
power, the report relays.
Trade unions seen as close to President Alberto Fernandez worry
that a reopening would weaken the ruling coalition even more, while
the Union Obrera Metalurgica (UOM), Argentina's main industrial
union which is seen as closer to Vice-President Cristina Fernandez
de Kirchner, is calling for an increase of 65 percent per workers
after a change of leadership, the report discloses.
Shop workers union leader Armando Cavalieri said that the situation
facing workers was severe, the report notes.
"The increases we got are already gone. People are already
practically wanting to resolve collective bargaining agreements,"
he said, the report adds. "We have the opening [of bargaining] next
month."
Main Culprits
Healthcare, utilities and alcoholic beverages led all categories in
price increases on a monthly basis, the report discloses.
The main culprit was health with a 7.4 percent increase in costs,
followed by public services and fuels with 6.8 percent and
restaurants and hotels 6.2 percent, the report relays.
The most sensitive item, food and beverages, weighed in below
average at 4.6 percent but continued to be the centre of concerns,
the report notes. Core inflation (leaving aside seasonal and
regulated prices) was 5.1 percent, the report relays.
Parallel estimates for June inflation averaged around 5.5 percent,
which was also the INDEC estimate for Greater Buenos Aires, the
report says. Northeastern provinces averaging price increases of
4.9 percent fared best in INDEC's regional rankings, the report
notes.
Earlier this month, the new Economy Minister Silvina Batakis had
ducked making a projection of inflation for this year: "It would be
very unprofessional on my part to risk projecting inflation in this
unprecedented situation of global imbalance," the report relays.
In last week's press conference, she again highlighted that due to
the Russian invasion of Ukraine and the surge in commodity prices,
"we are totally removed from any situation where one could project
inflation," the report discloses.
Earlier this week, presidential spokesperson Gabriela Cerruti
appealed to food companies "not to play around with the food and
tables of Argentines if there were mark-ups due to speculation,
greed or uncertainty," the report relays.
"They are not playing around with this government but the food of
Argentines," she insisted, dismissing fears of devaluation, the
report relays. Ahead of INDEC announcement, she also expressed
hopes that the June figure would be lower than May, the report
notes.
Finally, she assured that the government would work towards
guaranteeing that there was no hoarding in shops and supermarkets
although she admitted that supplies might fall short in some cases,
the report discloses.
Financial Concerns
Argentina has been suffering from high inflation for years,
recording an annual rate of 50.9 per cent in 2021, the report
discloses. But price increases have accelerated in 2022, in part
sparked by the global crisis caused by the war in Ukraine, the
report relays.
Along with soaring inflation the nation's currency, the peso, is
under strong pressure, despite the tightening of exchange controls
since 2019, the report recalls.
The official exchange rate stood at 135 pesos per greenback on July
14, but the peso traded at around 290 pesos for each 'blue' dollar
(parallel, black market exchange) and on the debt bond market - a
gap of around 130 percent between the two rates, the report notes.
As well as social organisations, demands are also being voiced by
agricultural producers, who halted the sale of grain and livestock
for 24 hours and demonstrated on major roads across the country to
demand tax relief and increased fuel supplies, the report relays.
Argentina is one of the largest food producers in the world.
Agribusiness exports are estimated to reach a record US$41 billion
in 2022, some US$3 billion more than in 2021, 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.
Last March 25, 2022, Argentina finalized agreement with the IMF
for a new USD44 billion Extended Funding Facility (EFF) intended
to fund USD40 billion in looming repayments of the defunct
Stand-By Arrangement (SBA), with an extra USD4 billion in
up-front net financing. This has averted the risk of a default to
the IMF and is facilitating a parallel rescheduling of Paris
Club debt.
As reported by The Troubled Company Reporter - Latin America on
April 14, 2022, Fitch Ratings affirmed Argentina's Long-Term
Foreign and Local Currency Issuer Default Ratings (IDR) at 'CCC'.
Fitch said Argentina's 'CCC' ratings reflect weak external
liquidity and pronounced macroeconomic imbalances that undermine
debt repayment capacity, and uncertainty regarding how much
progress can be made on these issues under a new IMF program.
Fitch added that it is uncertain whether the EFF will be a
strong anchor for macroeconomic stabilization. Its policy
requirements are fairly unambitious relative to other IMF
programs and in light of the economy's deep imbalances, but it
faces heightened risk nonetheless from weak political support and
spill-overs from the Russia-Ukraine war, says Fitch.
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. DBRS' credit rating for Argentina is CCC, given
on Sept. 11, 2020.
===========
B R A Z I L
===========
BRAZIL: Chamber Postpones Vote on Crypto Bill
---------------------------------------------
Rocco Caldero at Rio Times Online reports that the Brazilian Senate
approved, in plenary in April this year, the bill regulating
cryptocurrencies.
The bill then had to pass through the Chamber of Deputies for its
approval, and, as a closing, it had to have the signature of the
current president of the Republic, Jair Bolsonaro, whose term
closes soon, according to Rio Times Online.
Deputies were going to consider the crypto bill before the
congressional recess, which is from next week, but there were other
priorities: the treatment of a budget guidelines law and a
constitutional reform proposal for the medical sector, both of
which have dominated the legislative agenda, the report relays.
About Brazil
Brazil is the fifth largest country in the world and third largest
in the Americas. Jair Bolsonaro is the current president, having
been sworn in on Jan. 1, 2019.
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.
On April 15, 2022, Moody's Investors Service affirmed Brazil's
long-term Ba2 issuer ratings and senior unsecured bond
ratings, (P)Ba2 senior unsecured shelf ratings, and maintained the
stable outlook.
Fitch Ratings' credit rating for Brazil stands at 'BB-' with a
negative outlook (November 2020). Fitch's 'BB-' Long-Term Foreign
and Local Currency Issuer Default Ratings (IDRs) has been affirmed
in December 2021. DBRS's credit rating for Brazil is BB (low) with
stable outlook (March 2018).
BRAZIL: Economic Activity Index Falls 0.11% in May
--------------------------------------------------
globalinsolvency.com, citing Reuters, reports that Brazil's
economic activity fell for the second month in a row in May, a
central bank index showed.
The IBC-Br economic activity index, a leading indicator of gross
domestic product, fell a seasonally adjusted 0.11% in May from the
previous month, according to globalinsolvency.com.
The April drop was revised to 0.64% from the previously reported
0.44%, the report notes.
Services activity rose much more than expected in May, while retail
sales and industrial output growth came below market estimates, the
report relays.
The IBC-Br index increased 3.74% on a non-seasonally adjusted basis
from May 2021, while in the 12 months through May the index was up
2.66%, the central bank said, the report discloses.
Lower than expected unemployment and the normalization of a range
of activities after the blow from the pandemic have supported
stronger activity so far, the report notes. This has occurred
despite an aggressive monetary policy cycle to tame double-digit
inflation in Latin America's largest economy, the report relays.
In the second half of the year, analysts predict that the economy
will gain additional steam from tax cuts on key goods, such as fuel
and energy, and a spending aid package approved by Congress to
increase income transfers to the poorest and benefit specific
groups, such as taxi and truck drivers, the report notes.
About Brazil
Brazil is the fifth largest country in the world and third largest
in the Americas. Jair Bolsonaro is the current president, having
been sworn in on Jan. 1, 2019.
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.
On April 15, 2022, Moody's Investors Service affirmed Brazil's
long-term Ba2 issuer ratings and senior unsecured bond
ratings, (P)Ba2 senior unsecured shelf ratings, and maintained the
stable outlook.
Fitch Ratings' credit rating for Brazil stands at 'BB-' with a
negative outlook (November 2020). Fitch's 'BB-' Long-Term Foreign
and Local Currency Issuer Default Ratings (IDRs) has been affirmed
in December 2021. DBRS's credit rating for Brazil is BB (low) with
stable outlook (March 2018).
BRAZIL: Fitch Affirms LT FC IDR at 'BB-', Outlook Altered to Stable
-------------------------------------------------------------------
Fitch Ratings has affirmed Brazil's Long-Term (LT) Foreign Currency
(FC) Issuer Default Rating (IDR) at 'BB-' and revised the Rating
Outlook to Stable from Negative.
KEY RATING DRIVERS
Outlook Stabilized: The revision of Brazil's rating Outlook to
Stable from Negative reflects the better-than-expected evolution of
public finances amid successive shocks in recent years since Fitch
assigned the Negative Outlook in May 2020. Last year, Brazil
recorded its first primary fiscal surplus since 2013, highlighting
revenue outperformance and the authorities' commitment to withdraw
stimulus implemented during the pandemic.
A sharp reduction in the public debt ratio in 2021 is projected to
be followed by another mild fall in 2022, considerably improving
the starting point before a gradual projected rise in 2023 and
beyond. Near-term growth dynamics have outperformed Fitch's prior
expectations, and incremental progress on reforms could benefit
medium-term investment prospects. The central bank's decisive
monetary policy tightening, supported by its new formal autonomy,
highlights its commitment to addressing inflation.
Fiscal and growth challenges persist, and October 2022 elections
pose uncertainty around how these will be addressed. Nevertheless,
these challenges are already captured in Brazil's 'BB-' ratings,
and Fitch expects broad macroeconomic policy continuity after
elections.
Credit Fundamentals: Brazil's ratings are supported by its large
and diverse economy, relatively high per-capita income, and
capacity to absorb external shocks underpinned by its flexible
exchange rate, robust international reserves, sovereign net
external creditor status and deep local debt market. This is
counterbalanced by high government financing needs and
indebtedness, a rigid fiscal structure, weak growth potential and a
difficult political landscape hampering policy predictability and
timely progress on reforms.
Fiscal Outperformance, Risks: Brazil's general government deficit
(federal, social security, and subnational) fell to 4.2% of GDP in
2021 from 13.8% in 2020, below its 2019 level of 6.1%. Revenue
outperformance, withdrawal of most of the large Covid-19 support
package, and wage restraint drove the improvement. These trends
continued in early 2022, but Fitch expects the deficit to rise to
7.5% of GDP this year on sharply higher interest costs (namely on
floating-rate and inflation-indexed securities that represent most
domestic debt) and tax and spending measures being approved by
congress. Fitch expects the fiscal deficit to remain large in 2023
due to softer growth and commodity prices, wage pressures and the
expanded coverage of the 'Auxilio Brasil' social benefit, with
further risk should temporary tax/spending measures be extended.
Uncertain Fiscal Anchor: The pace of medium-term fiscal
consolidation remains uncertain given looming elections and
possible changes to the spending cap, which facilitated a reduction
in primary spending in recent years by squeezing investment,
discretionary spending and wages. Fiscal maneuvering last year to
expand space for social spending casts doubt on the effectiveness
of the cap. The next administration may ease the cap somehow, and
it is unclear if it could accompany any such attempt with tax
increases and other credible reforms to facilitate consolidation.
These uncertainties partly explain high long-term domestic bond
yields.
Lower Debt In 2022: Fitch expects general government debt to fall
to 78.8% of GDP in 2022 from 80.3% in 2021 and 88.6% in 2020,
bringing the ratio close to its 2019 level (74.4%). In the absence
of sustained primary surpluses, Fitch expects debt to rise
gradually after 2022 due to an unfavorable real growth-interest
rate differential, highlighting persisting structural fiscal
challenges. A healthy currency composition of debt (below 10% is
foreign-currency-denominated) and the Treasury's ample liquidity
cushion (12% of GDP in May) help mitigate risks.
Growth Resilience in 2022: Economic activity has been more
resilient than Fitch's earlier expectations. Fitch projects 1.4%
growth in 2022, up from 0.5% previously, reflecting a
better-than-expected 22Q1 outturn, post-pandemic re-opening of
lagging sectors, a solid job recovery, augmented social transfers
and higher commodity prices. Fitch expects that the lagged impact
of the significant monetary policy tightening and domestic
election-related and global uncertainties should constrain growth
going forward and into 2023, despite the resilience thus far.
Downside risks persist to Fitch's 1% growth projection for 2023.
Reform Progress: The medium-term growth and investment outlook will
hinge on the policy stance of the next administration that will
take office in January 2023. The Bolsonaro administration has made
incremental progress on reforms -- according formal autonomy to the
central bank, improving the regulatory environment in utilities
sectors, and advancing concessions and privatizations (including
Electobras) -- though tax and public administration reforms have
not advanced. Upside from these efforts could take time to yield
results and depend on implementation and support under the next
government. Brazil's investment rate rose to 19% in 2021 from an
average 15% in 2016-2020, albeit partly due to reclassification of
oil rigs under the "Repetro" program that has ended.
Proactive Monetary Tightening: Inflation remains high at 11.9% as
of June 2022, as a surge driven by food and energy prices starting
last year has become increasingly broad-based more recently, namely
in services. The legislature has approved tax cuts to cushion the
blow of high energy and other prices, which Fitch expects could
lower the headline rate to 7.8% by yearend, but their expiration
could push pressures into 2023 (Fitch projects 5.2%). The central
bank has continued one of the world's most assertive policy
tightening cycles, bringing its Selic rate to 13.25% as of June
2022 from a nadir of 2% in March 2021, and signaling it could keep
rates high for longer to anchor expectations given risks of
inertia.
Robust External Position: Fitch projects the current account
deficit to moderate to 0.6% of GDP in 2022 from 1.7% in 2021 and to
be fully funded by FDI inflows. Despite healthy external finances,
global and domestic uncertainties have kept the BRL volatile and
under pressure recently. International reserves remain ample at
USD347 billion in April, having fallen somewhat due to valuation
effects in US Treasuries.
Elections Loom: Current President Bolsonaro and ex-President Lula
are the front-runners in October 2022 elections, which is likely to
go to a second-round runoff. Fitch's base case assumes broad
macroeconomic policy continuity after the elections, though
microeconomic policy may differ depending on the winner. The fate
of the spending ceiling, the influence of the state in public
companies and investment, and environmental policy relevant for
foreign relations are key issues at stake.
ESG -- Governance: Brazil has an ESG Relevance Score (RS) of '5'
for both Political Stability and Rights and for the Rule of Law,
Institutional and Regulatory Quality and Control of Corruption.
Theses scores reflect the high weight that the World Bank
Governance Indicators (WBGI) have in Fitch's proprietary Sovereign
Rating Model. Brazil has a medium WBGI ranking at 44, reflecting a
recent track record of peaceful political transitions, a moderate
level of rights for participation in the political process,
moderate institutional capacity, established rule of law and a high
level of corruption.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Public Finances: Material policy shifts that undermine fiscal
credibility and threaten medium-term public debt
sustainability;
-- Public Finances: A severe deterioration in the sovereign's
domestic and/or external market borrowing conditions; for
example, due to economic policy mismanagement and/or a
political shock;
-- Macro: Policies that increase macroeconomic instability and
damage growth prospects; for example, a weakening of monetary
policy credibility or increased state interventionism.
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Public Finances: Progress on fiscal consolidation that
increases confidence that government debt/GDP will stabilize
over the medium term;
-- Macro: Evidence of improvement in investment and economic
growth prospects in the context of macroeconomic stability and
contained inflation;
-- Structural: Improved governability that enhances policy
predictability and facilitates timely passage of market-
friendly economic reforms.
SOVEREIGN RATING MODEL (SRM) AND QUALITATIVE OVERLAY (QO)
Fitch's proprietary Sovereign Rating Model (SRM) assigns Brazil a
score equivalent to a rating of 'BBB-' on the LT FC IDR scale.
Fitch's sovereign rating committee adjusted the output from the SRM
to arrive at the final LT FC IDR by applying its Qualitative
Overlay (QO), relative to SRM data and output, as follows:
-- Structural: -1 notch, to reflect Brazil's fragmented congress,
periodic frictions among the different branches of the
government and corruption-related issues that have reduced
visibility and hampered timely progress on reforms to improve
the medium-term trajectory of public finances. In addition,
high income inequality adds to social pressures;
-- Macro: -1 notch, to reflect to reflect weak growth prospects
and potential, largely held back by a low investment rate and
structural impediments such as a difficult business
environment, which make it more challenging to consolidate
public finances and address social pressures;
-- Public Finances: -1 notch, to reflect Brazil's high GG debt
burden that is projected to rise further in the medium term.
In addition, fiscal flexibility is hampered by the highly
rigid spending profile and a heavy tax burden that makes
adjustment to economic shocks difficult.
Fitch's SRM is the agency's proprietary multiple regression rating
model that employs 18 variables based on three-year centered
averages, including one year of forecasts, to produce a score
equivalent to a LT FC IDR. Fitch's QO is a forward-looking
qualitative framework designed to allow for adjustment to the SRM
output to assign the final rating, reflecting factors within
Fitch's criteria that are not fully quantifiable and/or not fully
reflected in the SRM.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Sovereigns, Public Finance
and Infrastructure 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 three 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
Brazil has an ESG Relevance Score of '5' for Political Stability
and Rights as WBGIs have the highest weight in Fitch's SRM and a
highly fragmented congress has made timely passage of corrective
policy adjustments difficult; this is highly relevant to the rating
and a key rating driver with a high weight. As Brazil has a
percentile rank below 50 for the respective Governance Indicator,
this has a negative impact on the credit profile.
Brazil has an ESG Relevance Score of '5' for Rule of Law,
Institutional & Regulatory Quality and Control of Corruption as
WBGIs have the highest weight in Fitch's SRM and the corruption
related issues exposed in recent years have severely hit political
dynamics and economic activity; this is highly relevant to the
rating and a key rating driver with a high weight. As Brazil has a
percentile rank below 50 for the respective Governance Indicators,
this has a negative impact on the credit profile.
Brazil has an ESG Relevance Score of '4' [+] for Human Rights and
Political Freedoms as the Voice and Accountability pillar of the
WBGIs is relevant to the rating and a rating driver. As Brazil has
a percentile rank above 50 for the respective Governance Indicator,
this has a positive impact on the credit profile.
Brazil has an ESG Relevance Score of '4' [+] for Creditor Rights as
willingness to service and repay debt is relevant to the rating and
is a rating driver for Brazil, as for all sovereigns. As Brazil has
track record of 20+ years without a restructuring of public debt
and captured in Fitch's SRM variable, this has a positive impact on
the credit profile.
Except for the matters discussed above, the highest level of ESG
credit relevance, if present, is a score of '3'. This means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity(ies), either due to their nature or to the way in which
they are being managed by the entity(ies).
DEBT RATING PRIOR
---- ------ -----
Brazil
LT IDR BB- Affirmed BB-
ST IDR B Affirmed B
LC LT IDR BB- Affirmed BB-
LC ST IDR B Affirmed B
Country Ceiling BB Affirmed BB
senior unsecured LT BB- Affirmed BB-
LOCALIZA RENT: S&P Affirms 'BB+' ICR on Unidas Merger Completion
----------------------------------------------------------------
On July 14, 2022, S&P Global Ratings affirmed its 'BB+' issuer
credit rating on Localiza Rent a Car S.A. (Localiza) and its
'brAAA' ratings on Localiza and Companhia de Locacao das Americas
S.A. (Unidas). S&P also affirmed all the companies' issue-level
ratings at 'brAAA' and kept recovery ratings for senior unsecured
debentures unchanged at '3'.
The stable outlook on both entities reflects the one on Brazil,
given the cap of two notches above the sovereign rating.
Localiza and Unidas recently received approval from the Brazilian
antitrust authority to sell some assets, which was the requirement
for their merger. The closing occurred on July 1, 2022.
The business combination of the first- and second-largest players
in the Brazilian car rental industry increases the scale that
should bolster competitive advantages.
Localiza and Unidas are in the final stages to complete the merger
of their operations, through which Unidas is now fully consolidated
under Localiza. S&P said, "In our view, the merger will further
strengthen Localiza's leading position in Brazil's car rental
industry, with the larger asset base (about 450,000 cars,
considering 49,000 cars to be sold soon) given that Unidas had the
second-largest car fleet in Brazil. The merger will also allow for
a more balanced mix of rental revenues: Localiza's rent-a-car (RaC)
business represented about 75% of its fleet prior to the merger,
and will now fall to 55%-60% because Unidas was the leading player
in fleet management. This should elevate cash-flow predictability
and lessen volatility. Also, the combined company should obtain
synergies across various areas, such as in negotiations with
original equipment manufacturers (OEMs), fleet allocation,
maintenance costs, used-car sales. We still exclude these synergies
from our combined base-case forecasts, given uncertainties over
them including timing to materialize (likely starting in 2023)."
As the merger involved the exchange of shares, there's no
substantial effect on the combined company's leverage. Localiza had
lower leverage than Unidas, so the combined credit metrics are now
somewhat weaker than Localiza's historical levels. S&P said,
"Still, we expect Localiza to maintain a prudent approach to
leverage, as seen in the past, and cash flows could rise on likely
synergy gains. EBIT interest coverage is now weaker, given higher
debt and a sharp increase in Brazil's base interest rates because
most of group's debt has floating rates. We forecast EBIT interest
coverage at 2.0x-2.4x and funds from operations (FFO) to debt of
15%-20% in 2023, but improving significantly in 2024 through
expected lower interest rates and stronger cash generation."
S&P also expects the combined company to benefit from synergies in
terms of debt costs (Localiza generally issues at a lower cost than
Unidas). These would likely be achieved through debt refinancing
over the years by issuing new debt at lower costs to prepay Unidas'
more expensive debt.
Localiza now completely owns Unidas, representing close to 40% of
consolidated fleet and EBITDA, and important to the overall group's
strategy. Localiza will manage Unidas in an integrated manner, in
terms of negotiation with suppliers, debt, and cash management. As
a result, S&P expects support to Unidas from Localiza in all
foreseeable scenarios, therefore, it now equalizes the ratings on
Unidas with those on Localiza.
ESG credit indicators: E-2, S-2, G-2
S&P said, "ESG factors have an overall neutral influence on our
credit rating analysis of Localiza. In 2020, the company was the
first in Brazil's car rental industry to be included in the B3
Carbon Efficient Index, an arm of the Brazilian Stock Exchange, to
encourage monitoring of GHG emissions. Recently, Localiza joined
the ELLAS11 B3 index, which recognizes companies in which women
occupy at least 50% of leadership positions. Both Localiza and
Unidas have several environmental initiatives, including rainwater
capture for reuse, solar power usage, dry cleaning vehicles,
reverse logistics programs for vehicle spare parts to mitigate
waste. Also, both companies already offer electric vehicle
rentals."
SIMPAR SA: Fitch Raises LongTerm Issuer Credit Ratings to 'BB'
--------------------------------------------------------------
Fitch Ratings has upgraded Simpar S.A. (Simpar), JSL S.A. (JSL) and
Movida Participacoes S.A.'s (Movida) Long-Term Foreign and Local
Currency Issuer Default Ratings (IDRs) to 'BB' from 'BB-', and
Simpar, JSL, Movida e Vamos Locacao de Caminhoes, Maquinas e
Equipamentos S.A.'s (Vamos) Long-Term National Scale Ratings to
'AAA(bra)' from 'AA-(bra)'. The Rating Outlooks for Simpar's, JSL's
and Movida's LC IDR and for the National Scale Rating is Stable.
The Rating Outlook for Simpar, JSL and Movida's FC IDR is Negative.
At the same time, Fitch has upgraded the senior unsecured and
secured debt issuances of all companies accordingly.
The upgrade reflects the continued strengthening of Simpar group
scale, business profile and competitive position within the
Brazilian rental and logistics industries coupled with a growing
EBITDA and adequate financial profile. Simpar group benefits from a
diversified service portfolio and long-term contracts for a
significant part of its revenues, resulting in a resilient
operating performance. The ratings incorporate the group's strong
growth strategy. Fitch rates Simpar and its subsidiaries on a
consolidated basis, considering the legal, operational and
strategic incentives of the holding to support its companies. The
Negative Outlook for the FC IDR reflects the Outlook of the
Brazilian sovereign.
KEY RATING DRIVERS
Stronger Business Profile: Simpar increased scale has strengthened
its leading position in the Brazilian rental and logistics industry
with a diversified service portfolio and presence in multiple
sectors of the economy. The group's strategic and operational
nature of the service it provides, its competitive cost structure -
being at the lowest marginal cost in the industry - and a revenue
stream based on long-term contracts for most of its rental and
logistic businesses, minimize its exposure to more volatile
economic cycles in Brazil.
The group benefits from its diversified services and significant
operating scale, that has made it an important purchaser of light
vehicles (second biggest buyer) and trucks (biggest buyer) in the
country, giving it significant bargaining power relative to peers.
Movida (41% of net revenue and 50% of EBITDA - second biggest
player) focuses on light vehicles and fleet rental; JSL (30% of net
revenue and 20% of EBITDA - market leader) concentrates on supply
chain management and transportation; and Vamos (20% of net revenue
and 25% of EBITDA - market leader) focuses on heavy vehicles and
equipment rentals.
Robust EBITDA: Rating case scenario presents strong and growing
consolidated EBITDA based on recent acquisitions, organic growth
and improving margins. Healthy demand dynamics should continue to
allow tariffs increase, which is crucial to face cost inflation,
higher asset purchase prices and increasing cost of capital. Simpar
should reach consolidated net revenue of BRL23.3 billion (+69% over
2021) and EBITDA at BRL6.9 billion (29% margin and +76% over 2021)
in 2022 and BRL31 billion and BRL8.4 billion (27% margin) in 2023,
from BRL14 billion and BRL3.9 billion (28% margin), respectively,
in 2021.
Adequate Leverage: Margin expansion at the rental and logistics
business resulting in higher return on invested capital (ROIC) and
a ROIC spread over the cost of debt at levels in line with
historical should enable Simpar to couple with high interest rates
and asset inflation - allowing the company to conciliate its growth
strategy with a sound capital structure. Simpar's consolidated net
leverage (IFRS-16 adjusted), measured by total net debt/EBITDA,
should be around 3.5x from 2022 to 2024, comparing with an average
of 4.0x in the last three years.
Manageable Negative FCF: The capital-intensive nature of the rental
industry (73% of Simpar's EBITDA), which demands sizable and
regular investments to grow and renew the fleet, pressures the
group's cash flow. FCF should remain negative, on average, at
BRL4.9 billion from 2022 to 2024, pressured by annual average
growth capex of BRL5.6 billion. Funds from operations (FFO) should
increase from BRL580 million in 2022 to BRL1.5 billion in 2023 and
BRL2.5 billion in 2024, benefitting from growing EBITDA. FFO was
BRL1.9 billion in 2021, while FCF was negative at BRL6.4 billion
after growth capex of BRL8.3 billion. The group has some room to
postpone fleet renewal and reduce expansion capex, if needed.
Parent and Subsidiary Linkage: Movida, JSL and Vamos' ratings
reflect Simpar medium legal and strong operational and strategic
incentives to support them, according to Fitch's Parent and
Subsidiary Rating Linkage Criteria, which equalizes the ratings of
the four companies. In addition to cross-default on Simpar's debt
and relevant ownership, the operating companies benefit from strong
growth potential and important commercial synergies, such as
greater bargaining power when buying vehicles and negotiating with
customers. Additionally, the subsidiaries Board of Directors have a
majority of Simpar's shareholders or executives as members.
DERIVATION SUMMARY
Simpar's business profile is above that of Localiza Rent a Car S.A.
(Localiza, FC IDR BB/Negative and LC IDR BB+/Stable), and much
stronger than that of Ouro Verde Locacao e Servico S.A. (Ouro
Verde, FC and LC IDRs BB-/Stable). Compared with Localiza, Simpar
has bigger scale, a much more diversified service portfolio but a
weaker financial profile - with higher leverage and more pressured
FCF. Compared with Ouro Verde, Simpar has a much stronger business
profile, higher liquidity, better access to credit market and
similar leverage.
Compared to CEMEX, S.A.B. de CV. (LC and FC BB+/Stable), Simpar has
a more diversified business profile, higher profitability, less
volatile cash flow generation and a more liquid/tradable asset
base. On the other hand, Cemex has higher scale, a historic of
positive cash flow generation and slightly lower leverage on the
rating horizon.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for Simpar:
-- Average consolidated annual revenue growth at 40% from 2022 to
2024;
-- Consolidated EBITDA margin at 28%, on average, from 2022 to
2024;
-- Consolidated net capex at around BRL5.6 billion, on average,
from 2022 to 2024;
-- Cash balance remains strong compared with short-term debt;
-- Dividends at 25% net income.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Consolidated net adjusted debt/EBITDA below 3.5x on a
sustainable basis;
-- Strengthening of the company's scale and profitability,
without further deterioration of its' capital structure.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Limits to Simpar's unrestricted ability to access the
operating companies' cash;
-- Failure to preserve liquidity and inability to access adequate
funding;
-- Prolonged decline in demand coupled with company inability to
adjust operations;
-- Consolidated net adjusted leverage above 4.5x on a sustainable
basis;
-- Material deterioration on the group's fleet rental and
logistics businesses.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate
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.
LIQUIDITY AND DEBT STRUCTURE
Strong Liquidity: Simpar's robust consolidated liquidity position
is a key credit consideration, with cash covering short-term debt
by an average of 3.2x during the last four years. The group's
expected negative FCF, a result of its growth strategy, will be
financed by debt in the rating scenario and the group benefits from
ample access to different sources of funding. Simpar had BRL10.4
billion of cash and equivalents and BRL30 billion of total adjusted
consolidated debt (2% secured), with final maturity at 2031. BRL2.2
billion is due in the short term (4.7x cash coverage ratio) and an
additional BRL4.7 billion is due at the end of 2024 - as of March
2022.
At the holding level, Simpar had BRL2.8 billion of cash and
equivalents and BRL5.7 billion of total adjusted debt, being BRL247
million due in the short term and additional BRL1.9 billion
maturing up to 2030. Simpar board control and relevant ownership
stakes in its operating companies mitigate the structural
subordination of its debt, with no upstream dividends or
intercompany loans restrictions that a majority board vote cannot
overcome.
The group's consolidated debt profile is mainly comprised of local
debentures (49%) and fully hedged U.S. denominated bonds (22%).
Simpar's financial flexibility is also supported by the group's
ability to postpone growth capex to adjust to the economic cycle
and to the considerably number of the group's unencumbered assets,
with a book value of fleet over net debt over 1.5x.
ISSUER PROFILE
Simpar is a non-operational holding company that controls and
manages seven independent companies that provide mainly rental,
logistics and mobility services, focused on long-term contracts.
The company is listed on Brazilian stock exchange and its main
shareholder is JSP Holding S.A. (57.3%), the Simoes family holding
company.
ESG CONSIDERATIONS
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
---- ------ -----
Movida Europe
senior LT BB Upgrade BB-
unsecured
Simpar S.A. LT IDR BB Upgrade BB-
LC LT IDR BB Upgrade BB-
Natl LT AAA(bra) Upgrade AA-(bra)
senior LT BB Upgrade BB-
unsecured
senior Natl LT AAA(bra) Upgrade AA-(bra)
unsecured
Simpar Europe
senior LT BB Upgrade BB-
unsecured
Simpar Finance S.a.r.l.
senior LT BB Upgrade BB-
unsecured
Vamos Locacao de
Caminhoes, Maquinas
e Equipamentos S.A.
Natl LT AAA(bra) Upgrade AA-(bra)
senior Natl LT AAA(bra) Upgrade AA-(bra)
unsecured
Movida Participacoes S.A.
LT IDR BB Upgrade BB-
LC LT IDR BB Upgrade BB-
Natl LT AAA(bra) Upgrade AA-(bra)
senior Natl LT AAA(bra) Upgrade AA-(bra)
unsecured
senior Natl LT AAA(bra) Upgrade AA-(bra)
secured
JSL S.A. LT IDR BB Upgrade BB-
LC LT IDR BB Upgrade BB-
Natl LT AAA(bra) Upgrade AA-(bra)
senior Natl LT AAA(bra) Upgrade AA-(bra)
unsecured
===================================
D O M I N I C A N R E P U B L I C
===================================
DOMINICAN REPUBLIC: Gov't. Approves Import of 2M Chickens
---------------------------------------------------------
Dominican Today reports that the Ministry of Agriculture reported
that the approval of chicken imports with a zero tariff rate was
for two million in the first stage, but that another stage is being
evaluated if necessary.
"We approved about two million units of chickens in a first stage,
because remember that it is six months (the release of the tariff),
according to Dominican Today.
The import commission for agricultural products has been granting
some permits, but we also granted the import permit for fertile
eggs, which have already arrived in the country and there are
already hatched chickens," said Cruz, 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.
DOMINICAN REPUBLIC: Sees Obstacles to Providing Jobs for Over-35s
-----------------------------------------------------------------
Dominican Today reports that the Association of Human Management
Administrators (Adoarh) assures that it is a reality that Dominican
professionals and talent over 35 and 45 years of age find it
difficult to get a job in the Dominican Republic even though this
is prohibited by law and by the International Labor Organization
(ILO).
He says that this is "a bias" from which those responsible for
Human Resources are not going to take responsibility, and that is
why the new management of Adoarh in a changing world like the
current one is not going to avoid it and has as a point of interest
within its strategic plan to work with companies that have to be
aware of senior talent, according to Dominican Today.
Emmanuel Blanc, president of Adoarh, said that he does not
understand why such a demand is made if it is prohibited by law,
the report notes. He reiterated that the real discrimination is
with age rather than by religion and politics, the report relays.
"It is a reality that the professional, the talent over 45 years
old has a hard time accessing job opportunities. Age is the biggest
discrimination in the Dominican market and that is illegal," he
emphasized, the report discloses.
In the country, there are companies that, among the requirements
and demands to fill a job vacancy, ask that the person who applies
must not be older than 35 years old, the report relays.
This position does not correspond to Dominican laws such as the
Constitution of the Republic in Articles 39, 57, and 62, the Labor
Code in Principle VII, and ILO Convention 111, the report says.
However, the situation continues, even though the country was
denounced for this and other issues before the ILO, and in 2008
this resignation was stamped in the Trade Policy Report of the
World Trade Organization (WTO), the report discloses.
The president of Adoarh explained that some companies rely on the
fact that senior talent may be less adaptable to new changes and to
learn and find it obsolete in the digital issue, the report relays.
Still, some studies show that intergenerational teams are more
creative and productive, the report notes.
HR Managers
For the guild's president, "some companies" transgress, putting age
as a requirement, the report discloses. However, he assures that
studies show senior talent is more committed and that
intergenerational teams are more creative and productive, the
report says.
This is happening because companies are losing employees who are
more committed to the company, with greater emotional intelligence,
and people who already know how to handle many situations, the
report notes. He said that Adoarh's priority is to help companies
to avoid this type of discrimination, which is a priority so that
senior talent continues to work, the report relays.
He agreed that many senior talents are undertaking and doing
business, the report says. With this, they are swelling the ranks
of the labor informality because if before 45 years of age they
lose their job, they do not accumulate for their retirement, and
they remain outside the social security, the report relays.
Liston Diario published the subject in view of the multiple claims
of workers over 35 years old and not admitted to a job because of
their age, the report discloses.
In this regard, the Dominican Employers Confederation (Copardom), a
union that groups the formal employers, explained that the Labor
Code and the normative framework of the Dominican Republic are
clear in establishing that discrimination at work for any reason is
not allowed, regardless of the reason, the report relays.
Pedro R. Rodriguez Velazquez, executive vice-president of Copardom,
reacted by stating that from the employer sector, we promote
compliance with the ILO norms and conventions ratified, as is the
case of Convention 111 on non-discrimination, the report notes.
Likewise, the executive vice-president of the National Council of
Private Enterprise (Conep), Cesar Dargam, said that more than age,
the business community focuses on the profiles of workers .
Editorial; An Unacceptable Discrimination
In its editorial, "Unacceptable discrimination," Listin Diario
exposed that although legally it is not allowed, complaints abound
that there are companies that openly and expressly discriminate
against those over 35 years of age when offering new jobs, without
ruling out that a bias of discrimination also prevails, the report
discloses.
He says that this is a problem being verified in modern society,
which is undergoing a dynamic process of changes or changes in the
work paradigms, 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 DPR: Fitch Rates USD300MM Series 2022-1 Notes 'BB-'
-----------------------------------------------------------
Fitch Ratings has assigned a 'BB-' issue-specific rating to the
$300 million series 2022-1 notes issued by Ecuador DPR Funding and
affirmed the rating on the existing series 2020-1 loans at 'BB-'.
The Rating Outlook is Stable.
DEBT RATING PRIOR
---- ------ -----
Ecuador DPR Funding
2020-1 LT BB- Affirmed BB-
2022-1 27928YAA5 LT BB- New Rating BB-(EXP)
TRANSACTION SUMMARY
The future flow program is backed by existing and future U.S.
dollar-denominated diversified payment rights (DPRs) originated by
Banco Pichincha C.A. (BP) in Ecuador. The majority of DPRs are
processed by designated depository banks (DDBs) that have signed
acknowledgement agreements (AAs), irrevocably obligating them to
make payments to an account controlled by the transaction trustee.
Upon issuance of the series 2022-1 notes, the total program size is
approximately $425.0 million.
Fitch's ratings address timely payment of interest and principal on
a quarterly basis.
KEY RATING DRIVERS
Originator's Credit Quality: BP has a Long-Term Issuer Default
Rating (IDR) of 'B-' with a Stable Rating Outlook. The bank's
ratings are highly influenced by its operating environment and were
reviewed by Fitch on Dec. 6, 2021. Fitch affirmed Ecuador's IDR at
'B-' with a Stable Rating Outlook on Aug. 31, 2021. The Stable
Rating Outlook assigned to BP reflects Fitch's operating
environment assessment for the Ecuadorian banking system as Fitch
expects a favorable environment for economic and credit growth, as
well as for the Ecuadorian banks' financial performance recovery.
Going Concern Assessment: Fitch uses a Going Concern Assessment
(GCA) score to gauge the likelihood that the originator of a future
flow transaction will stay in operation through the transaction's
life. Fitch assigns a GCA score of 'GC1' to BP based on the bank's
systemic importance and standing as the largest bank in the
Ecuadorian banking system in terms of assets and deposits. The
score allows for a maximum of six notches above the Local Currency
(LC) IDR of the originator; however, additional factors limit the
maximum uplift.
Factors Limit Notching Uplift from LC IDR: The 'GC1' score allows
for a maximum six-notch rating uplift from the bank's IDR, pursuant
to Fitch's future flow methodology. However, uplift is tempered to
three notches from BP's IDR given certain factors including no
lender of last resort in Ecuador and high future flow debt relative
to BP's balance sheet.
High Future Flow Debt: Fitch estimates future flow debt will
represent 3.5% of BP's total funding and 43.9% of non-deposit
funding based on March 2022 nonconsolidated financials and
adjusting to include the new issuance of $300 million and the
current outstanding balance on the program today ($125.0 million).
Fitch does not allow the maximum uplift for originators that have
future flow debt greater than 30% of the overall non-deposit
funding; nevertheless, given the benefits of the structure and
quality of flows, the agency allows for some differentiation (three
notches) from BP's LT LC IDR. Fitch is comfortable with this level
at the assigned rating and expects these levels to continue to be
high given the program remains a main source of funding for the
bank.
Coverage Levels Commensurate with Rating: Considering average
rolling quarterly DDB flows over the past five years (May 2017 -
April 2022) and the maximum periodic debt service over the life of
the program, including the new issuance amount of $300 million,
Fitch's projected quarterly debt service coverage ratio (DSCR) is
63.8x. The program can withstand a reduction in flows of
approximately 97.9% and still cover the maximum quarterly debt
service obligation. Nevertheless, Fitch will continue to monitor
the impact of macroeconomic pressures on the performance of the
flows as this could potentially affect the assigned rating.
No Lender of Last Resort: Ecuador is a dollarized economy without a
true lender of last resort. While certain mechanisms are in place
to help fend off a banking system crisis, this limits the notching
differential of the transaction.
Reduced Redirection/Diversion Risk: The structure mitigates certain
sovereign risks by collecting cash flows offshore until collection
of the periodic debt service amount, allowing the transaction to be
rated over the sovereign country ceiling. Fitch believes payment
diversion risk is partially mitigated by the AAs signed by the five
correspondent banks processing the vast majority of U.S. dollar DPR
flows originating in the U.S.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- The transaction ratings are sensitive to changes in the credit
quality of BP. A deterioration of the credit quality of BP by
one notch could pose a further constraint to the rating of the
transaction from its current level;
-- The transaction ratings are sensitive to the ability of the
DPR business line to continue operating, as reflected by the
GCA score, and a change in Fitch's view on the bank's GCA
score can lead to a change in the transaction's rating.
Additionally, the transaction rating is sensitive to the
performance of the securitized business line. The expected
quarterly DSCR is approximately 63.8x, and should therefore be
able to withstand a significant decline in cash flows in the
absence of other issues. However, significant further declines
in flows could lead to a negative rating action. This new
issuance will also result in high future flow debt relative to
BP's balance sheet. If these ratios were to increase further
this could also lead to a negative rating action. Any changes
in these variables will be analyzed in a rating committee to
assess the possible impact on the transaction ratings.
No company is immune to the economic and political conditions of
its home country. Political risks and the potential for sovereign
interference may increase as a sovereign's rating is downgraded.
However, the underlying structure and transaction enhancements
mitigate these risks to a level consistent with the assigned
rating.
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- The main constraint to the program rating is the originator's
rating and BP's operating environment. If upgraded, Fitch will
consider whether the same uplift could be maintained or if it
should be further tempered in accordance with criteria;
-- Fitch has revised global economic outlook forecasts as a
result of the Ukraine war and related economic sanctions.
Downside risks have increased and Fitch has published an
assessment of the potential rating and asset performance
impact of a plausible, but worse than expected, adverse
stagflation scenario on Fitch's major SF and CVB subsectors
(What a Stagflation Scenario Would Mean for Global Structured
Finance). Fitch expects LatAm's Global Cross-Sector's
financial future flow transactions in the assumed adverse
scenario to experience a "Virtually No Impact" indicating a
low risk for rating changes.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Structured Finance
transactions have a best-case rating upgrade scenario (defined as
the 99th percentile of rating transitions, measured in a positive
direction) of seven 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 seven notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAAsf' to 'Dsf'. Best- and worst-case scenario credit ratings
are based on historical performance.
USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10
Form ABS Due Diligence-15E was not provided to, or reviewed by,
Fitch in relation to this rating action.
ESG CONSIDERATIONS
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.
=====================
E L S A L V A D O R
=====================
AES EL SALVADOR II: Fitch Affirms & Then Withdraws' CCC+' IDRs
--------------------------------------------------------------
Fitch Ratings has affirmed the Long-Term Local and Foreign Currency
Issuer Default Ratings (IDRs) of AES El Salvador Trust II at
'CCC+', with a Stable Outlook. Fitch has simultaneously withdrawn
all ratings as the bonds were refinanced under another entity, and
AES El Salvador Trust II no longer has any public bonds
outstanding.
Fitch is withdrawing the ratings because the issuer has refinanced
all its debt under a new entity and no longer has any public bonds
outstanding.
KEY RATING DRIVERS
Exposure to Government Subsidies: Fitch expects the government to
continue to support the electricity sector as critical
infrastructure despite its short-term debt uncertainty. Subsidies
from the Salvadoran government will account for roughly half of
AESL's EBITDA going forward, underscoring the importance of
government transfers to the company's cash flow. As of 2021, the
government subsidizes USD5 per year for users consuming a monthly
average of up to 105KWh over a six-month period, which the company
believes equates to roughly USD45 million annually. Under the
current regulatory scheme, the company believes it could pass on
the costs to end users should the subsidies be curtailed or
ceased.
Leverage to Moderate Over Time: Fitch believes AESL will have ample
leverage headroom going forward as new users grow at a rapid pace
and energy demand showed a strong rebound in 2021, compared with
the year prior. AESL's total debt with equity credit/EBITDA and
EBITDA interest coverage are both estimated to steadily improve
over time as growing cash flow is used to pay off maturing debt.
Fitch assumes the company's tariff rates will be largely unchanged
in 2023, the year in which the regulator is set to review the
tariff.
Political Uncertainty Lingers Surrounding Subsidies: President
Nayib Bukele's government has suggested that subsidies will be up
for review, although no details of a proposed change to the current
system have been forthcoming. Given their size relative to AESL's
EBITDA, Fitch believes continued timely subsidy payments to be
important for the company's liquidity and working capital and that
the electricity subsidies could be targeted in the future should
the government's finances become strained.
Strong Market Position: While the company's distribution service
territories are non-exclusive, Fitch believes the risk of new
competition is low given that significant economies of scale make
it inefficient for more than one distribution company to operate in
any particular geographic area. AESL's four companies combine to
serve almost 1.5 million clients, or nearly 80% of the market, and
provided over 70% of energy distributed, up from 60% in 2014.
AESL's customer base has consistently grown at an average rate of
around 2% per year in recent years. Due to AESL's extensive asset
base, territory and number of clients, Fitch considers the
company's market position to be strong.
Rising Losses and Reduction Efforts: Energy losses have exhibited a
slightly upward trend over the past several years, largely driven
by non-technical losses as the country continues to grapple with
high crime and instability. Total losses as of 2Q21 were 12.69%, up
from 10.96% in 2020. Fitch estimates that nearly 3% of total energy
costs are losses absorbed by AESL and that a 1% change in losses
equates to about a USD5.5 million change in energy margin,
depending on prevailing energy prices. Fitch's base case assumes
losses should reduce over time due to AESL's investment in new
technology and community outreach efforts.
Low Business Risk Profile: As an electricity distribution company,
AESL is allowed to pass on to end users, or the government in the
form of subsidies, the full cost of energy purchased, thereby
limiting its commodity price exposure. The company's gross margin
is determined by the regulator every five years and adjusts year to
year depending on factors such as growth in user base and
consumption as well as local inflation. The current tariff period
lasts until the end of 2022. While its concession is non-exclusive,
the capital-intensive nature of its business is inherently
monopolistic and limits competition. Fitch believes these factors
add to AESL's cash flow stability and low business risk.
DERIVATION SUMMARY
A derivation summary is no longer relevant as the ratings have been
withdrawn.
RATING SENSITIVITIES
Rating sensitivities are no longer relevant as the ratings have
been withdrawn.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate
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.
Sources of Information
The principal sources of information used in the analysis are
described in the Applicable Criteria.
ESG CONSIDERATIONS
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.
Following the withdrawal of ratings for AES El Salvador Trust II,
Fitch will no longer be providing the associated ESG Relevance
Scores.
DEBT RATING PRIOR
---- ------ -----
AES El
Salvador Trust II LT IDR CCC+ Affirmed CCC+
LT IDR WD Withdrawn CCC+
LC LT IDR CCC+ Affirmed CCC+
LC LT IDR WD Withdrawn CCC+
senior unsecured LT WD Withdrawn CCC+
=============
J A M A I C A
=============
JAMAICA: Fuel Prices Decline for Second Straight Week
-----------------------------------------------------
RJR News reports that all categories of fuel was to see a second
straight week of declines, effective last July 14.
A litre of 87 and 90 gasoline was to sell for $0.25 less, according
to RJR News.
These finished product categories have fallen by a $1.25 over the
last few weeks, the report discloses.
Diesel, ultra low sulphur diesel and kerosene was to also sell for
$0.25 less, the report says.
Propane was to go down by $2 while propane was to sell for $2.50
less, the report adds.
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 A N A M A
===========
MMG BANK CORPORATION: Fitch Affirms & Withdraws 'BB+' & 'B' IDRs
-----------------------------------------------------------------
Fitch Ratings has affirmed and withdrawn MMG Bank Corporation's
(MMG or the bank) Long-Term and Short-Term Issuer Default Ratings
(IDRs) at 'BB+' and 'B', respectively, Viability Rating (VR) at
'bb+' and the Government Support Rating (GSR) at 'ns'. At the time
of the withdrawal the Rating Outlook on MMG's Long-Term IDR was
Stable.
Fitch will continue providing national ratings for this bank, which
currently are rated at 'AA(pan)' with a Stable Outlook, and
'F1+(pan)' for Long-Term and Short-Term, respectively, as well as
the senior unsecured debt issue rating of 'F1+(pan)'.
The international ratings were withdrawn for commercial reasons.
KEY RATING DRIVERS
MMG 's IDRs were driven by its intrinsic creditworthiness,
reflected in its VR. The VR was influenced by the bank's operating
environment, due to a stronger-than-expected economic recovery and
declining risk that fiscal or economic pressures will affect the
recovery prospects of the bank's financial performance.
Well-Stablished Niche Operation: The bank registers a consistent
and well-diversified business model with stable earnings over time
from its core activities in asset management, as well as investment
and commercial banking. While the bank's four-year average total
operating income is around USD28 million it consistently ranks as
one of the largest asset managers (through its brokerage house) in
Panama, managing 4.6% of total assets under management (AUM). Also,
as of May 2022, MMG was also the fourth largest participant (out of
30 participants) in Panama's stock exchange primary market by
business volume ranking.
Sound Risk Management: Fitch considers that MMG's risk profile
exhibits sound risk management practices that enable it to register
an adequate financial performance. The bank's investment guidelines
and underwriting standards are well-defined and updated regularly
while registering formalized risk limits. This is especially
required for its AUM business line as well as its lending
operation.
Good Asset Quality: Fitch foresees a maintenance of low impaired
loans for the foreseeable future given its low amount of
impairments, mostly deriving from 'modified' loans before returning
to its historical track record of no impairments. As of 1Q 2022,
the bank maintains a low impaired low ratio of 0.92% while total
loan portfolio presents ample collaterals made up mainly of cash
and investments albeit with high concentrations by debtor due to
its niche business model which entails a carefully selected client
base. On another hand, the bank's securities portfolio is mostly of
high quality, with the majority being investment-grade securities
and soundly diversified by geographical region.
High Profitability: Fitch foresees that profitability metrics will
remain high mainly due to MMG's strategy and its very diversified
business lines and high-quality loans and investments, alongside
its AUM. As of its mid-fiscal year results (1Q 2022), the bank's
operating profitability continues to exhibit healthy profitability
metrics, albeit slightly lower than previous years. The operating
profit over risk-weighted assets was 3.5% at 1Q 2022, but still
below the 2018-2021 average of 4.6%. Income line diversification is
high. As of March 2022, non-interest income represented 57.2% of
total gross revenues, higher than the 2018-2021 average of 55.2%.
Asset management fees predominate, alongside investment banking
ones.
Strong Capitalization: Fitch believes MMG's capitalization metrics
will remain strong in the foreseeable future due its growth and
profitability prospects and despite its consistent dividend policy.
As of March 2022, common equity Tier 1 ratio is a strong 20% which
in the agency's opinion also provides it a with a healthy cushion
against potential losses, although the latter is not a base case
scenario. On another hand, size of capital base in absolute terms
is considered small as total equity amounts to USD68.4 million.
Ample Liquidity but High Concentrations by Depositor: MMG registers
a historically high liquidity, which Fitch considers favorable due
to its banking and asset management business model. As of March
2022, the loans-to-deposit ratio is a strong 52.8%, showing the
ample liquidity the bank has and comparing well above the
Panamanian banking industry which focuses on traditional commercial
banking (84%).
However, high concentrations by depositors constitute a risk that
is partially offset by the high stability of its customer base. One
of MMG's strengths is the ample coverage of short-term liabilities
by its unencumbered liquid assets. In accordance to its liquidity
risk management policies, as of 1Q 2022, liquid assets (cash and
due, loans and advances and AFS securities) represented 60% of
total customer deposits.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
Rating sensitivities are not applicable as the international
ratings have been withdrawn.
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
Rating sensitivities are not applicable as the international
ratings have been withdrawn.
MMG Bank's GSR of 'No Support' (ns) was based on Fitch's opinion
that external support for the bank, while possible, could not be
relied upon, given banking system's large size regarding economy
and weak support stance due to Panama's lack of a lender of last
resort.
VR ADJUSTMENTS
The Business Profile Score of 'bb' has been assigned above the 'b'
category implied score due to the following adjustment reasons:
Business Model (positive) and Market Position (positive).
The Capitalization & Leverage Score of 'bb+' has been assigned
below the 'bbb' category implied score due to the following
adjustment reason: Size of Capital Base (negative).
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.
SUMMARY OF FINANCIAL ADJUSTMENTS
Pre-paid expenses and other deferred assets were reclassified as
intangible in order to calculate a consistent tangible common
equity/tangible assets ratio in relation to previous periods.
ESG CONSIDERATIONS
Following the withdrawal of MMG's international ratings, Fitch will
no longer be providing the associated ESG Relevance Scores.
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
---- ------ -----
MMG Bank LT IDR BB+ Affirmed BB+
Corporation
LT IDR WD Withdrawn BB+
ST IDR B Affirmed B
ST IDR WD Withdrawn B
Viability bb+ Affirmed bb+
Viability WD Withdrawn bb+
Government ns Affirmed ns
Support
Government WD Withdrawn ns
Support
=======
P E R U
=======
ORAZUL ENERGY: Fitch Affirms 'BB' LongTerm IDRs, Outlook Stable
---------------------------------------------------------------
Fitch Ratings affirms Orazul Energy Peru S.A.'s (Orazul) Long-Term
Foreign and Local Currency Issuer Default Ratings at 'BB' with a
Stable Rating Outlook. Fitch also affirms the USD363.2 million
senior unsecured notes at 'BB'.
Orazul's ratings reflect the company's predictable cash flows
supported by an adequate contractual position, historically
efficient and reliable hydroelectric generation assets, and cost
structure flexibility. Historically elevated leverage levels have
tempered in the last fiscal year due to asset sales and debt
reduction, and leverage is projected to remain commensurate with
the rating category over the medium-term.
KEY RATING DRIVERS
Adequate Market Position, Reliable Generation: Orazul's ratings
primarily reflect its position as the fourth largest hydroelectric
provider in Peru, despite limited asset diversification and a
relatively small business scale. As of FYE 2021, the company
completed a multi-year asset divestment, and transitioned to become
an entirely hydroelectric (hydro) power company. Orazul's hydro
assets include two runs of river hydro plants, Cañón del Plato
(266MW) and Carhuaquero (110MW), that operate a combined 11
turbines in two separate rivers and have a total installed capacity
of 376MW.
The plants are considered efficient generators with a strong
average capacity factor of around 68%, and are considered baseload
in the Peruvian system, prioritized within the country's order of
dispatch. Flows from the two rivers have yielded minimal historical
hydrological variation over time, enabling the company to
contribute a consistent 4% of Peru's energy generation
year-on-year.
Predictable, Contracted Cash Flows: Orazul's ratings primarily
reflect its stable and predictable cash flows, supported by
revenues generated through capacity (availability) payments and
generation requirements, each contracted through U.S.
dollar-denominated power purchase agreements (PPAs) with full cost
pass-through provisions. The company's medium-term PPAs account for
91% of total the company's firm energy, and have a solid 7.1 years
of remaining life with strong credit quality off-takers. During
2021, approximately 2.2GWh was generated in 2021, with 1.5GWh sold
through its PPAs. The balance was both sold and purchased through
Peru's dynamic spot market.
Moderated Leverage Profile: Leverage, measured as total debt to
EBITDA, materially declined in fiscal 2021 to 5.5x from 8.0x the
prior year due a sharp yoy reduction in total debt following the
sale of the company's gas to power and transmission assets, and
subsequent debt repayment with sale proceeds. Fitch expects
leverage to sustain at around 4.8x going forward, consistent with
the 'BB' rating category, assuming total debt of USD363 million and
EBITDA averaging USD74 million (a 70.5% margin) over the next four
years.
Having divested from the transmission and gas to power assets, the
company expects a much more stable and predictable capex program
for the hydro plants going forward. Including near-term, scheduled
upgrades at Canon del Pato, medium-term capital spending will
average around USD5.2 million per year, and otherwise address
standard, ongoing maintenance. All capex is expected to be funded
through free cash flow, with no additional debt contemplated.
Increased Spot Prices; Minimal Impact: Spot prices in Peru
increased twofold in July 2021 due to a regulatory change to
incorporate the fixed portion of utilities' cost structure. Orazul
has been a consistent, albeit marginal, net seller of electricity
to the spot market, mitigating any adverse financial implications
of the spot price increases. The company anticipates remaining a
net seller to the spot market, marginally benefitting from the
higher injection prices going forward.
DERIVATION SUMMARY
Orazul's closest peers are generation companies in the region, such
as Kallpa Generacion S.A. (BBB-/Stable), Fenix Power Peru S.A.
(BBB-/Stable) and AES Andes S.A. (BBB-/Stable). Their ratings
reflect stable, diversified asset bases and predictable cash flows
supported by solid contractual positions embodied in medium- to
long-term PPAs with financially strong counterparties, and
manageable volume exposure or strong shareholder support.
Orazul is rated two notches below Kallpa. Kallpa benefits from a
diversified generation mix and has a stronger market position as
the largest private generator in Peru. Orazul is rated two notches
below Fenix as a result of Fenix's strong shareholder support from
Colbun S.A. (BBB+/Stable), despite its higher leverage of 7.2x in
2020. Orazul is rated two notches below AES Gener as a result of
its diversified asset base and deleveraging expectations of around
4.0x over the medium term.
KEY ASSUMPTIONS
-- Spot injection prices averaging USD28/MWh, and withdrawal
prices averaging USD35 through 2025;
-- Optimal contracting level fully contracted until 2024;
-- Average PPA prices at USD39/MWh in the next four years;
-- Average annual dividends of USD42 million, while maintaining a
minimum YE cash balance of USD10 million;
-- Capex and option on PPA extensions averaging USD5.7 million in
the next four years;
-- Ongoing capacity factor averaging 68% between the two plants,
and future hydrological conditions consistent with low
historical volatility.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Gross leverage, measured by total debt/EBITDA, falling below
4.0x on a sustained basis;
-- Maintain an adequate contracted position with similar terms
contributing to cash flow predictability.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Total debt/EBITDA substantially exceeding 5.0x on a sustained
basis;
-- Excessive cash distribution to shareholders;
-- A material rebalancing of the contractual base, resulting in
significant cash flow volatility.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate
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.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity: Orazul's liquidity is adequate and supported by
sufficient cash flows, a comfortable debt amortization profile, an
adequate cash position and a USD25 million undrawn committed credit
line . At March 31, 2022, Orazul's cash position was USD33 million,
and it had no short-term debt. Fitch expects the company to
maintain its liquidity policy of a YE minimum cash balance of USD10
million following distributions of excess cash to shareholders.
Orazul's total debt of USD363 million is solely composed of its
senior unsecured notes due in 2027.
ISSUER PROFILE
Orazul Energy Peru S.A.'s (Orazul) owns and operates two
hydroelectric power plants in northern Peru with a combined
capacity of 376 MW, and represents the fourth largest hydroelectric
complex within the Peruvian system. The company generates and sells
electricity to regulated customers (Discos) and unregulated
customers under short-term and long-term PPAs, as well as is a net
seller to the spot market. Orazul contracts for over 91% of its
firm energy and has an average PPA life of 7.1 years.
SUMMARY OF FINANCIAL ADJUSTMENTS
Contract extension costs in the amount of USD7.7 million was
subtracted from EBITDA in 2021.
ESG CONSIDERATIONS
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
---- ------ -----
Orazul Energy
Peru S.A. LT IDR BB Affirmed BB
LC LT IDR BB Affirmed BB
senior LT BB Affirmed BB
unsecured
===============
X X X X X X X X
===============
[*] BOND PRICING: For the Week July 11 to July 15, 2022
-------------------------------------------------------
Issuer Name Cpn Price Maturity Country Curr
----------- --- ----- -------- ------- ---
Polarcus Ltd 5.6 71.8 7/1/2022 AE USD
Automotores Gildemeist 6.8 54.9 1/15/2023 CL USD
Argentine Republic Gov 0.5 27.6 12/31/2038 AR JPY
Odebrecht Finance Ltd 6.0 16.4 4/5/2023 KY USD
Cia Latinoamericana de 9.5 74.3 7/20/2023 AR USD
Noble Holding Internat 6.2 62.2 8/1/2040 KY USD
Provincia del Chaco Ar 4.0 0.0 12/4/2026 AR USD
Province of Santa Fe 6.9 75.2 11/1/2027 AR USD
Noble Holding Internat 5.3 60.5 3/15/2042 KY USD
Provincia de Cordoba 7.1 72.7 8/1/2027 AR USD
Avadel Finance Cayman 4.5 55.0 2/1/2023 US USD
Sylph Ltd 2.4 65.1 9/25/2036 KY USD
Argentine Republic Gov 4.3 70.0 12/31/2033 AR JPY
Provincia de Buenos Ai 7.9 75.3 6/15/2027 AR USD
Province of Santa Fe 6.9 74.7 11/1/2027 AR USD
Metrogas SA/Chile 6.0 41.6 8/1/2024 CL CLP
Province of Santa Fe 6.9 75.2 11/1/2027 AR USD
Provincia de Cordoba 7.1 74.7 8/1/2027 AR USD
Esval SA 3.5 49.9 2/15/2026 CL CLP
Argentine Republic Gov 6.9 75.2 1/11/2048 AR USD
Argentine Republic Gov 8.3 74.5 12/31/2033 AR USD
Provincia del Chubut A 4.5 2208 3/30/2021 AR USD
Argentina Bonar Bonds 5.8 75.2 4/18/2025 AR USD
Noble Holding Internat 6.1 62.0 3/1/2041 KY USD
Automotores Gildemeist 6.8 54.9 1/15/2023 CL USD
Argentine Republic Gov 8.3 72.9 12/31/2033 AR USD
Provincia de Rio Negro 7.8 70.3 12/7/2025 AR USD
Argentine Republic Gov 8.3 72.9 12/31/2033 AR USD
Odebrecht Finance Ltd 6.0 16.4 4/5/2023 KY USD
AES Tiete Energia SA 6.8 1.2 4/15/2024 BR BRL
Odebrecht Finance Ltd 6.0 16.4 4/5/2023 KY USD
Province of Santa Fe 6.9 74.7 11/1/2027 AR USD
Fospar S/A 6.5 1.2 5/15/2026 BR BRL
Cia Latinoamericana de 9.5 73.9 7/20/2023 AR USD
Argentine Republic Gov 6.3 74.1 11/9/2047 AR EUR
Argentina Bonar Bonds 7.6 74.4 4/18/2037 AR USD
Argentine Republic Gov 8.3 74.5 12/31/2033 AR USD
Provincia de Rio Negro 7.8 70.4 12/7/2025 AR USD
City of Cordoba Argent 7.9 73.1 9/29/2024 AR USD
Argentine Republic Gov 8.3 72.9 12/31/2033 AR USD
Argentine Republic Gov 7.1 75.7 6/28/2117 AR USD
Provincia del Chaco Ar 9.4 74.8 8/18/2024 AR USD
Provincia de Rio Negro 7.8 70.3 12/7/2025 AR USD
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Latin America is a daily newsletter
co-published by Bankruptcy Creditors' Service, Inc., Fairless
Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C.,
USA, Marites O. Claro, Joy A. Agravante, Rousel Elaine T.
Fernandez, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A.
Chapman, Editors.
Copyright 2022. All rights reserved. ISSN 1529-2746.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.
Information contained herein is obtained from sources believed to
be reliable, but is not guaranteed.
The TCR Latin America subscription rate is US$775 per half-year,
delivered via e-mail. Additional e-mail subscriptions for members
of the same firm for the term of the initial subscription or
balance thereof are US$25 each. For subscription information,
contact Peter A. Chapman at 215-945-7000.
.
* * * End of Transmission * * *