/raid1/www/Hosts/bankrupt/TCRLA_Public/220729.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Friday, July 29, 2022, Vol. 23, No. 145
Headlines
A N T I G U A A N D B A R B U D A
LIAT: Antigua Says Investors Shouldn't Own Majority of Shares
A R G E N T I N A
ARGENTINA: IMF Sees Country Committed to Program, w/ Downside Risks
B R A Z I L
BR PROPERTIES: S&P Affirms 'BB-' ICR, Outlook Stable
BRAZIL: Posts Narrowest Current Account Deficit for March in 5Yrs
RIO OIL: Fitch Affirms BB- Notes Rating, Alters Outlook to Stable
D O M I N I C A N R E P U B L I C
DOMINICAN REPUBLIC: Haiti's Delayed Payments Affect Fuel Transfer
DOMINICAN REPUBLIC: Pension System in Peril
JETBLUE: Dominican Republic Top Deputy Wants License Canceled
P U E R T O R I C O
IGLESIA CRISTIANA: Voluntary Chapter 11 Case Summary
PUERTO RICO: Oversight Board Brings Public Records Suit to SCOTUS
- - - - -
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A N T I G U A A N D B A R B U D A
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LIAT: Antigua Says Investors Shouldn't Own Majority of Shares
-------------------------------------------------------------
RJR News reports that Antigua and Barbuda Prime Minister Gaston
Browne says he does not support a proposal for the majority
shareholding in a new regional airline to be placed in the hands of
foreign investors.
Mr. Browne disclosed that investors from Nigeria have expressed an
interest in purchasing 75% of LIAT shares, according to RJR News.
He says governments in the region are also interested in
re-investing in LIAT Ltd., formerly known as Leeward Islands Air
Transport or LIAT, the report notes.
CARICOM leaders are to meet to discuss the future of the
cash-strapped airline, the report adds.
About LIAT
LIAT Ltd., formerly known as Leeward Islands Air Transport
or LIAT, is an airline headquartered on the grounds of V. C. Bird
International Airport in Antigua. It operates high-frequency
inter-island scheduled services serving 15 destinations in the
Caribbean. The airline's main base is VC Bird International
Airport, Antigua and Barbuda, with bases at Grantley Adams
International Airport, Barbados and Piarco International Airport,
Trinidad and Tobago.
The airline is owned by seven Caribbean governments, with three
being the major shareholders: Barbados, Antigua & Barbuda and St.
Vincent and the Grenadines along with Dominica(94.7 %); other
Caribbean governments, private shareholders and employees (5.3%).
In the last few years, LIAT has been challenged with financial
difficulties, often needing additional funding as the airline dealt
with the high cost of operations. In November 2016, the Barbados
government defended LIAT's operations, even as opposition
legislators called for a cessation of the business. In early 2015,
LIAT offered early retirement packages to employees in efforts to
downsize. In 2014, LIAT knew it had to deal with unprofitable
routes to make operations viable. In the third quarter of 2013,
the airline's top management was shaken, with news Chief Executive
Officer Captain Ian Brunton's sudden resignation.
LIAT's current chief executive officer is Julie Reifer-Jones,
chairman is Jean Holder, and chief financial officer is Rojer
Inglis.
Dr. Ralph Gonsalves, prime minister of St. Vincent & the
Grenadines, serves as chairman of LIAT shareholders.
=================
A R G E N T I N A
=================
ARGENTINA: IMF Sees Country Committed to Program, w/ Downside Risks
-------------------------------------------------------------------
Patrick Gillespie and Eric Martin at Reuters report that the
International Monetary Fund said Argentine officials reaffirmed the
nation's commitment to its $44 billion program, although all risks
are on the downside as South America's second-largest economy falls
deeper into crisis.
Argentine Economy Minister Silvina Batakis "agreed on the
importance of decisive program implementation," IMF Managing
Director Kristalina Georgieva tweeted after meeting the new
minister, who retweeted the comment, according to Reuters.
For its part, the Economy Ministry said Batakis laid out the
country's economic challenges to IMF officials in extensive
meetings without reference to any discussions about executing on
the program, the report notes. Batakis also met with US Treasury
staff, including David Lipton, senior counselor to Treasury
Secretary Janet Yellen, the report discloses.
It was the IMF's first major meeting with Argentine officials since
Batakis's predecessor, Martin Guzman, abruptly resigned July 2,
blowing a long-simmering political crisis wide open, the report
relays. Since Guzman departed, political uncertainty has seen
prices soar and the peso plunge in unofficial markets, clouding the
outlook for the IMF program, the report says.
While Georgieva showed support for Batakis, IMF officials raised
concerns about Argentina's economy and the program, the report
relays.
"All of the risks are really on the downside," Petya Koeva Brooks,
the IMF's deputy director of the research department, said at a
press conference. IMF Chief Economist Pierre-Olivier Gourinchas
added "the situation in Argentina is quite preoccupying," the
report relays.
One of Argentina's last remaining international creditors, the
Inter-American Development Bank, shared those concerns, the report
discloses. Its leader suggested he won't approve new funding to
the country until the government gets its house in order, the
report relays. Conversely, the World Bank approved a new $200
million loan to Argentina on the same day, the report notes.
Batakis has insisted on complying with the agreement Guzman
negotiated and has even imposed a public sector hiring freeze as a
fiscal measure, the report discloses. However, she's also said in
separate comments that some targets in the IMF program will change
at each review, the report notes.
Given the challenges she faces, some former IMF officials expect
that Batakis will be pushed to devalue the peso at a faster pace
and align multiple exchange rates in order for the program to
continue, the report notes.
"Without that, I doubt that the IMF will be willing to continue
supporting Argentina -- a devaluation and simplification of the
exchange system," said Claudio Loser, an Argentine economist who
served as the IMF's western hemisphere director in the 2000s. "They
really will have to do certain things because I have the impression
that patience with Argentina is running out," the report relays.
Other former policy makers note the political divide in Argentina's
ruling coalition that may undermine Batakis's ability to stick with
the IMF deal, the report notes. The program calls for spending
cuts, less money printing and building up the central bank's
reserves, the report discloses.
Lefist Bloc
Vice President Cristina Fernandez de Kirchner and her far-left bloc
within the coalition voted against the IMF deal in congress last
March. Officials close to Kirchner, who was president from 2007 to
2015, impeded Guzman's ability to implement spending cuts too,
ultimately leading to his resignation, the report notes.
Kirchner hasn't yet said anything about the new minister, raising
questions about whether Batakis has any more authority than Guzman
had to comply with the IMF deal, the report says.
Those same political divisions in Argentina's government will weigh
heavily over her ability to execute the program and win concessions
from the IMF, former officials say, the report relays.
"This a political crisis that's compounding all the deep economic
problems that Argentina has," says Hector Torres, a former IMF
executive board member who represented Argentina, the report
relates. "If I was at the IMF board, I would be watching what they
do and say 'well, this your mess, it's not our mess, we're not
triggering this crisis, you're triggering this crisis because of
your political crisis and your lack of competence,'" 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
July 19, 2022, Fitch Ratings placed Argentina's Long-Term Foreign
Currency Issuer Default Rating (IDR) and Long-Term Local Currency
IDR Under Criteria Observation (UCO) following the conversion of
the agency's Exposure Draft: Sovereign Rating Criteria to final
criteria. The UCO assignment indicates that ratings may change as
a direct result of the final criteria. It does not indicate a
change in the underlying credit profile, nor does it affect
existing Rating Outlooks.
Last 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 has also confirmed Argentina's Long-Term Foreign Currency
Issuer Rating at CCC and Long-Term Local Currency Issuer Rating at
CCC (high) on July 21, 2022.
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B R A Z I L
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BR PROPERTIES: S&P Affirms 'BB-' ICR, Outlook Stable
----------------------------------------------------
On July 27, 2022, S&P Global Ratings affirmed its 'BB-' global
scale and 'brAA+' national scale issuer credit ratings on Brazilian
real estate operator BR Properties S.A. S&P also affirmed the
issue-level ratings.
The outlook remains stable, reflecting S&P's expectation that
vacancy across BR Properties' assets will continue to fall, and
profitability and credit metrics to improve in the next few years,
despite the reduced scale and diversification.
BR Properties completed the sale of a portfolio of assets that
accounted for more than a half of its former gross leasable area
(GLA). S&P expects the company to now operate at a significantly
smaller scale than its peers. But the remaining assets report much
lower vacancy, which should help improve profitability.
The recently completed transaction comprises the sale of 12 office
properties totaling 385,412 square meters (sq. m) of delivered GLA
in the states of Sao Paulo and Rio de Janeiro, and the Federal
District. This represents a significant reduction in BR Properties'
total GLA, given that it will now operate seven properties totaling
315,555 sq. m: two office buildings and five warehouses, including
the Centauri and Cajamar warehouses, construction of which was
completed this year. In S&P's view, the sale slashes the company's
market share and scale amid increasing competition from both
domestic and international peers. On the other hand, the remaining
portfolio is almost fully occupied by tenants with relatively new
and long-term rents, which combined with a leaner expense structure
should help improve profitability on a consistent basis.
S&P said, "In such a scenario, we expect BR Properties to post an
average vacancy rate of 18%-20% by the end of this year, mainly
still reflecting seven months of the results from the former
portfolio that had higher vacancy. But we forecast this ratio to
decline to 8%-10% in 2023 and 2%-4% in 2024, as the company starts
renting out Cajamar in the next 12 months amid the strong momentum
in the Brazilian warehouse segment. Consequently, we expect EBITDA
margin to remain pressured in 2022 at 60%-63%, but rise to 70%-74%
in the next two years from 58.6% in the 12 months ended March 31,
2022."
BR Properties will generate R$5.9 billion in sales proceeds, of
which R$4.1 billion (70% of the total) it already received at the
closing of the deal, and will get the remaining R$1.8 billion 12
months afterwards. The company disclosed that it will use part of
the proceeds it already received to repay all of its debt, which
totaled R$2.9 billion on March 31, 2022. Out of total debt, BR
Properties already repaid R$1.1 billion--linked to the assets
sold--and S&P expects the company to redeem the remaining portion
in the next one to two months, ending the year with no debt.
Moreover, S&P's base-case scenario assumes no additional debt in
the next few years, given that the company should continue to
operate at a smaller scale in the short to intermediate term.
S&P said, "BR Properties didn't disclose any potential uses for the
proceeds of about R$1.8 billion that it will receive next year. As
a result, we forecast this amount to be maintained as cash on hand.
We believe that its cash position, solid cash generation, and
zero-debt balance sheet provide financial flexibility to engage in
new projects or acquisitions without returning leverage to
historical levels. We would reassess the ratings once it decides to
resume its investment plan, whether through greenfield projects or
acquisitions.
"BR Properties is currently controlled by the Abu Dhabi Investment
Authority (ADIA) through GP Capital Partners VI L.P. with a 60.2%
stake, which is administrated by GP Investments (not rated). We
continue to limit our assessment of BR Properties' financial risk
profile due to the financial sponsor's presence, but we believe the
company will maintain significantly lower leverage than historical
figures, which prompted us to revise our assessment of BR
Properties' financial risk profile to significant from aggressive.
In our opinion, the sponsor could relinquish control of the company
over the medium term, with its recent portfolio sale and R$1.1
billion capital reduction as indications of divestments in the
short to medium term."
BRAZIL: Posts Narrowest Current Account Deficit for March in 5Yrs
-----------------------------------------------------------------
Marcela Ayres at Reuters reports that Brazil posted a current
account deficit of $2.764 billion in March, the lowest shortfall
for the period in five years, amid a solid performance in foreign
trade, central bank data showed.
This was the best reading for March since 2017, when the country
recorded a current account surplus of $185.5 million, according to
Reuters.
The performance was backed by an improvement in the trade balance,
which showed a surplus of $6.109 billion against a $514 million
deficit in March 2021, the report notes.
The publication of data resumed after the end of a strike by
central bank officials, which had suspended the release of central
bank indicators for months, the report relays.
A strong commodity exporter, Brazil benefited from a surge in
international prices earlier this year triggered by the
Russian-Ukraine war, the report notes.
In 12 months, the current account deficit reached 1.41% of GDP, the
central bank said, the report discloses.
Foreign direct investment in March totaled $7.581 billion, and
reached 3.08% of GDP in the 12 months, the report relays.
According to the central bank, investors made a net redemption of
$5.489 billion from Brazilian portfolio markets in March. While
there was a net inflow of $1.103 billion in stocks, outflows in
bonds totaled $6.592 billion, the report adds.
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
July 18, 2022, Fitch Ratings has affirmed Brazil's Long-Term
Foreign Currency Issuer Default Rating at 'BB-' and revised the
Rating Outlook to Stable from Negative.
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.
Moody's Investors Service also affirmed on April 15, 2022,
Brazil's long-term Ba2 issuer ratings and senior unsecured bond
ratings, (P)Ba2 senior unsecured shelf ratings, and maintained the
stable outlook.
RIO OIL: Fitch Affirms BB- Notes Rating, Alters Outlook to Stable
-----------------------------------------------------------------
Fitch Ratings has affirmed the long-term series 2014 and 2018-1
notes issued by Rio Oil Finance Trust at 'BB-' and revised the
Rating Outlook to Stable from Negative. These actions mirror
Fitch's revision of Petroleo Brasileiro S.A.'s (Petrobras) Outlook
on July 18, 2022 and Banco do Brasil S.A.'s Outlook on June 1,
2022.
The ratings are not directly linked to the originator's credit
quality. The ratings are based on potential production and
generation risk and are ultimately linked to Petrobras' Issuer
Default Rating (IDR), as it is the main source of cash flow
generation. The ratings are capped by Petrobras' rating
(BB-/Stable), as the largest obligor of royalties and special
participations payments. The ratings are also capped by Banco do
Brasil's rating (BB-/Stable), since it cannot be replaced as the
collection account bank.
Rio Oil Finance Trust's ratings address timely payment of interest
and principal on a quarterly basis.
Rating Action
Rio Oil Finance Trust
Debt Rating Prior
---- ------ -----
2014-1 76716XAA0 LT BB- Affirmed BB-
2014-1 REGS USU76673AA72 LT BB- Affirmed BB-
2014-3 76716XAB8 LT BB- Affirmed BB-
2014-3 regs USU76673AB55 LT BB- Affirmed BB-
2018-1 76716XAC6 LT BB- Affirmed BB-
TRANSACTION SUMMARY
The notes issued by Rio Oil Finance Trust, a Delaware-based special
purpose vehicle (SPV) constituted for the sole purpose of this
transaction are backed by the royalty flows owed by oil
concessions, predominantly operated by Petrobras, to the government
of the state of Rio de Janeiro (RJS). RJS has assigned 100% of the
flows to RioPrevidencia (RP). For the purpose of this transaction,
RP sold its rights to Rio Oil Finance Trust.
KEY RATING DRIVERS
Ratings Not Directly Linked to Originator's: RP is an autonomous
government agency that is part of the Secretary of State for
Planning and Management of RJS (BB-/Stable). Performance of the
originator will not affect the collateral as the generation of the
cash flow needed to meet timely debt service is not dependent on
either RP or RJS.
Largest Obligor Rating Cap: Petrobras' rating is the ultimate cap
for the proposed transaction, as it is the main source of cash flow
generation. Petrobras carries Local and Foreign Currency (LC/FC)
IDRs of 'BB-'/Outlook Stable and 'AA(bra)'/Outlook Stable. The
company is majority controlled by the federal government of Brazil
and has the rights to E&P of the vast majority of Brazil's oil
fields.
Future Production Risk: The transaction benefits from growth in
production levels as it increases the total royalty flows.
Depressed oil prices have led Petrobras to reduce production
targets on multiple occasions. Nevertheless, Petrobras recently
increased their 2022-2026 capex projection from 2021-2025, and
increasing production levels would benefit the transaction in the
near to medium term.
Cash Flows Support Rating: The expected levels of annualized
average debt service coverage ratios (AADSCRs) over 2.0x partially
mitigate the transaction's exposure to fluctuations in oil prices
and production levels at the current rating level. Fitch expects
AADSCRs to be over 2.0x for the life of the transaction, assuming
Law 12,734 is implemented after 2020.
Oil Revenues Dedicated Account Modification Mitigates Redirection
Risk: Pursuant to the Oil Revenues Dedicated Account Modification
Legislation, the RioPrevi Oil Revenues initially deposited to the
RJS Oil Revenues Dedicated Account are no longer required by
legislation to be deposited into a state-owned account. Oil
revenues assigned to this transaction are instead deposited into an
account under the name of the issuer. This change in the account
mitigates potential redirection of flows to RJS. As Banco do Brasil
(BdB) cannot be replaced as a collection bank, the transaction is
directly linked to the credit quality of BdB (BB-/Stable).
Ample Liquidity for Timely Payment: The transaction benefits from
liquidity, in the form of a Debt Service Reserve Account (DSRA) and
a Liquidity Reserve Account. Funds in deposit in these two accounts
must at all times be sufficient cover three principal and interest
(P&I) payments, which is considered sufficient to keep debt service
current on the notes under different stress scenarios.
Potential Exposure Political Risk Partially Mitigated: The state's
liquidity constraints, evidenced by various delays in commercial
and other payments, have heightened the transactions political risk
exposure. However, provisions included in the sixth rescission
waiver and amendment, such as the rescission of the trapping of
excess cash and of the early amortization period, will increase the
cash flows returned to the state, and, in turn, decrease the
transaction's exposure to potential political risk.
Legal Changes May Affect Collateral Stability: To date, no
amendments affecting the distribution of royalties for the existing
concession regime have been implemented. However, provisions
regarding the change in allocation percentages incorporated in Law
12,734 are currently under review. The transaction was analyzed
assuming the law will change and DSCRs remain sufficiently robust
and commensurate with the expected ratings.
True Sale Valid under Brazilian Law: Collateral backing this
transaction was transferred to RP by RJS through a state decree,
making RP the legal owner of the royalties. This transfer gives RP
the right to sell the collateral into the trust.
Transfer and Convertibility Risk: Series 2014-1, 2014-3 and 2018-1
notes are exposed to transfer and convertibility risk as royalty
flows are paid in an account in Brazil in reais. This exposure caps
the rating of the transaction at the country ceiling of Brazil,
which is currently 'BB'. To partially mitigate operational risk
that may arise from transferring and converting flows on a daily
basis to an off-shore account, the transaction contemplates reserve
funds that covers three P&I payment.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- The transaction is exposed to oil price and production volume
risks. Sustained low prices or declines in prices or
production levels significantly below expectations may
trigger downgrades.
-- The ratings are capped by the credit quality of Petrobras,
the main obligor generating cash flows to support the
transaction, and to the sovereign rating and country ceiling
assigned to Brazil. A downgrade of Petrobras or the sovereign
would trigger a downgrade on the notes.
-- The ratings are sensitive to the rating of BdB given the
excessive counterparty exposure to the transaction;
therefore, a downgrade of BdB would trigger a downgrade on
the notes.
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- An upgrade of both Petrobras and BdB, together with sustained
high oil prices, which in turn supports growth in production
levels, could trigger a positive rating action.
-- Fitch has revised global economic outlook forecasts as a
result of the Ukraine War and related economic sanctions.
Downside risks have increased and it 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 sub-sectors
("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 "Virtually No
Impact" indicating a low risk for rating changes.
PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS
The future flow ratings are ultimately capped by the credit risk of
Banco do Brasil S.A. and Petroleo Brasileiro S.A. (Petrobras) as
measured by their Long-Term IDR.
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D O M I N I C A N R E P U B L I C
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DOMINICAN REPUBLIC: Haiti's Delayed Payments Affect Fuel Transfer
-----------------------------------------------------------------
Dominican Today reports that the transfer of fuel from the country
to Haiti is influenced by the delay in the payment of the oil bill
that that nation has with its fuel suppliers.
To this situation is added a rise in the prices of crude
derivatives that exacerbates the shortage crisis, to the point that
fuel costs have experienced a rise of more than 100%, according to
Dominican Today.
All this occurs in a scenario in which the Dominican Republic has
controlled prices that are attractive to Haitian businessmen, the
report notes.
Another factor that deepens the crisis, and encourages Haitian
nationals to go to the border areas to acquire these products, is
that the Haitian gangs have control of several areas, which
restricts the movement of some tank trucks, the report relays.
Even these gangs have placed limits on Dominican tankers who used
to irregularly sell petroleum derivatives to the market, said
international trade expert Juan Del Rosario, who explained that the
consumption of petroleum derivatives in that territory is 25
million gallons of monthly fuel, about six times less than what the
Dominican Republic consumes, which is around 143 million gallons
per month, the report relays.
"These differences in imports correspond to the growth of the gross
domestic product (GDP) of both nations," said the professor, 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.
DOMINICAN REPUBLIC: Pension System in Peril
-------------------------------------------
Dominican Today reports that while a report published by the
Economic Commission for Latin America and the Caribbean (ECLAC)
considers that the Dominican pension system is lagging behind in
essential aspects, to guarantee a worthy average of quotas per
pension fund for contributors, the Administrators of Pension Funds
(AFP) indicated that for two years they have proposed modifying Law
87-01 to strengthen the system in order to make it more efficient
and supportive.
The ECLAC report analyzed the pension system in general and the
Individual Capitalization Account, according to Dominican Today.
It was concluded that there is a fragmentation of the sector in the
country, and some problems are highlighted in order to guarantee a
decent economic fund for contributors at the time of their
retirement, 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.
JETBLUE: Dominican Republic Top Deputy Wants License Canceled
-------------------------------------------------------------
Dominican Today reports that the president of the Chamber of
Deputies, Alfredo Pacheco, asked the Government to cancel the
license of the airline JetBlue, due to "the abuse" to which
hundreds of Dominicans are subjected when traveling with that
company.
He assured that he was the victim of the abuses committed by the
airline and that he realized that it is a serious problem that has
affected many Dominicans, according to Dominican Today.
He said that, although he had been listening to complaints about
the mistreatment the company had been committing for some time, he
realized the magnitude of the problem when he was affected on his
own, the report relays.
=====================
P U E R T O R I C O
=====================
IGLESIA CRISTIANA: Voluntary Chapter 11 Case Summary
----------------------------------------------------
Debtor: Iglesia Cristiana Hefzi-Ba (IS.62) Inc.
200 Ave Interamericana
Aguadilla, PR 00603
Business Description: The Debtor is a tax-exempt religious
organization.
Chapter 11 Petition Date: July 26, 2022
Court: United States Bankruptcy Court
District of Puerto Rico
Case No.: 22-02170
Debtor's Counsel: Juan C. Bigas-Valedon, Esq.
JUAN C. BIGAS
PO Box 7011
Ponce, PR 00732-7011
Email: cortequiebra@yahoo.com
Total Assets: $2,059,792
Total Liabilities: $405,332
The petition was signed by Deborah Magaly Alvarez Alvarez as
pastora.
The Debtor stated it has no creditors holding unsecured claims.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/4ZANPTY/IGLESIA_CRISTIANA_HEFZI-BA_IS62__prbke-22-02170__0001.0.pdf?mcid=tGE4TAMA
PUERTO RICO: Oversight Board Brings Public Records Suit to SCOTUS
-----------------------------------------------------------------
The Financial Oversight and Management Board of Puerto Rico urged
the US Supreme Court to review its right to sovereign immunity
from a media organization's lawsuit seeking financial disclosures
and "various sensitive documents."
The oversight board, created by federal law in 2016 to lead Puerto
Rico through its debt crisis, is asking the nation's highest court
to review a lower court's order that it turn over documents
requested by Centro de Periodismo Investigativo Inc., a Puerto
Rico investigative news organization.
According to a statement posted on the Oversight Board's Web site,
under PROMESA, the Oversight Board filed a petition for a writ of
certiorari with the U.S. Supreme Court to review a recent decision
by the First Circuit decision.
Congress expressly created the Oversight Board as an entity within
the territorial government, and as such enjoys sovereign immunity
under the Eleventh Amendment of the US Constitution. However, the
May 17, 2022, decision by the U.S. Court of Appeals for the First
Circuit holds that Congress intended in passing PROMESA to abrogate
such immunity.
This decision is the first of its kind under PROMESA and runs
contrary to established precedent. It is a bedrock principle of
federalism that a federal statute does not abrogate sovereign
immunity under the Eleventh Amendment of the U.S. Constitution
unless Congress's intent to abrogate is "unmistakably clear"
in the statutory text.
Centro de Periodismo Investigativo Inc. (CPI) had sued the
Oversight Board pursuant to Article II, Sec. 4 of the Puerto Rico
Constitution, which has been interpreted to impose on the Puerto
Rico government broad obligations to reveal documents in its
possession. The Oversight Board moved to dismiss CPI's complaint
on sovereign-immunity and other grounds.
A divided First Circuit panel affirmed the decision by the U.S.
District Court for the District of Puerto Rico denying the
Oversight Board's motion to dismiss the complaint, effectively
lowering the standard for courts to find abrogation. In doing so,
the court introduced uncertainty into this area of law and risked
nullifying a basic protection in situations where Congress did not
intend to do so.
The Oversight Board filed a petition for a writ of certiorari with
the U.S. Supreme Court to review the First Circuit decision.
About Puerto Rico
Puerto Rico is a self-governing commonwealth in association with
the United States that's facing a massive bond debt of $70 billion,
a 68% debt-to-GDP ratio and negative economic growth in nine of the
last 10 years.
The Commonwealth of Puerto Rico has sought bankruptcy protection,
aiming to restructure its massive $74 billion debt-load and $49
billion in pension obligations.
The debt restructuring petition was filed by Puerto Rico's
financial oversight board in U.S. District Court in Puerto Rico
(Case No. 17-01578) on May 3, 2017, and was made under Title III of
2016's U.S. Congressional rescue law known as the Puerto Rico
Oversight, Management, and Economic Stability Act ('PROMESA').
The Financial Oversight and Management Board later commenced Title
III cases for the Puerto Rico Sales Tax Financing Corporation
(COFINA) on May 5, 2017, and the Employees Retirement System (ERS)
and the Puerto Rico Highways and Transportation Authority (HTA) on
May 21, 2017. On July 2, 2017, a Title III case was commenced for
the Puerto Rico Electric Power Authority ("PREPA").
U.S. Chief Justice John Roberts has appointed U.S. District Judge
Laura Taylor Swain to oversee the Title III cases. The Honorable
Judith Dein, a United States Magistrate Judge for the District of
Massachusetts, has been designated to preside over matters that may
be referred to her by Judge Swain, including discovery disputes,
and management of other pretrial proceedings.
Joint administration of the Title III cases, under Lead Case No.
17-3283, was granted on June 29, 2017.
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; and Hermann D. Bauer, Esq., at
O'Neill & Borges are on-board as attorneys.
McKinsey & Co. is the Board's strategic consultant, Ernst & Young
is the Board's financial advisor, and Citigroup Global Markets Inc.
is the Board's municipal investment banker.
Prime Clerk LLC is the claims and noticing agent. Prime Clerk
maintains a case web site at
https://cases.primeclerk.com/puertorico
Epiq Bankruptcy Solutions LLC is the service agent for ERS, HTA,
and PREPA.
O'Melveny & Myers LLP is counsel to the Commonwealth's Puerto Rico
Fiscal Agency and Financial Advisory Authority (AAFAF), the agency
responsible for negotiations with bondholders.
The Oversight Board named Professor Nancy B. Rapoport as fee
examiner and to chair a committee to review professionals' fees.
* * *
The two Title III plans of adjustment have been confirmed to date,
for the Commonwealth and COFINA debtors.
*********
S U B S C R I P T I O N I N F O R M A T I O N
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