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T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Wednesday, August 3, 2022, Vol. 23, No. 148
Headlines
A R G E N T I N A
ARGENTINA: Experiencing Severe Exchange Rate Crisis
ARGENTINA: IDB OKs $75M Loan for Buenos Aires Drinking Water System
ARGENTINA: Protesters Demand Universal Living Wage
B R A Z I L
BRAZIL: US$ Drops to BRL5.25, Closes at Lowest Value in a Month
D O M I N I C A N R E P U B L I C
JETBLUE: Pro Consumidor Says "No More Warnings"
T R I N I D A D A N D T O B A G O
CL FIN'L: Antiguan PM Says ECCU Can Sue T&T Gov't. for Monies Owed
X X X X X X X X
LATAM: IMF Says Shifting Global Winds Pose Challenges for Region
- - - - -
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A R G E N T I N A
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ARGENTINA: Experiencing Severe Exchange Rate Crisis
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Rio Times Online reports that Argentina is experiencing a severe
exchange rate crisis that has brought back memories of previous
economic debacles in a country that seems to be always in financial
instability.
Amid a context of political tensions, the devaluation of the
Argentine peso against the dollar in the informal market has
skyrocketed, and the consequences of the economic weakness and the
management of the foreign debt are reflected in aspects such as
very high inflation, fiscal imbalance, higher country risk -about
investment- and production, according to Rio Times Online.
When current President Alberto Fernandez took office, the economic
situation was already bad: after falling 2.6% in 2018, that year
GDP contracted by 2% again before Fernandez's inauguration in
December, the report notes.
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.
ARGENTINA: IDB OKs $75M Loan for Buenos Aires Drinking Water System
-------------------------------------------------------------------
The Inter-American Development Bank (IDB) approved a $75 million
loan to Argentina to enhance the quality of life of people in the
Province of Buenos Aires by improving the drinking water services.
The IDB Group remains committed to supporting Argentina's
development agenda with projects that have a direct impact on
development. The Province of Buenos Aires will also invest $18.75
million of its own funds in the program, for a total of $92.75
million to be disbursed over the course of five years.
From 2010 to 2019, the province significantly expanded its
sanitation services and also slightly broadened its drinking water
coverage. However, the province still has access gaps and lingering
water quality problems, especially in cities and suburban areas
with fewer than 100,000 inhabitants, where poverty levels are
higher.
The program will invest in overhauling and building distribution
systems, wells, purification plants and complementary
infrastructure that will help improve the quality and operational
capacity of drinking water systems.
The program will also focus on reinforcing Aguas Bonaerenses S.A.'s
management of water and sanitation services. These aspects will
include equipment for operating and maintaining infrastructure, a
plan for upgrading technology, equipment for enhancing water
quality laboratories and studies and projects. It will also fund
the implementation of AquaRating, a system for evaluating water and
sanitation utilities based on an international standard.
The program will also help different areas of the province develop
water and sanitation master plans, which will include criteria for
managing climate change risk and ways to help reduce greenhouse gas
emissions. There are also plans for hydrogeological studies,
equipment, training and consulting to reinforce new projects;
technical, environmental and social oversight for water and
sanitation projects; and support for policies for gender equity and
inclusion of people with disabilities.
The program is expected to benefit approximately 1.1 million people
(256,509 households) in the Province of Buenos Aires by delivering
higher-quality drinking water.
This operation aligns with Vision 2025 - Reinvest in the Americas:
A Decade of Opportunities, in which the IDB maps out the path to
recovery and inclusive growth in Latin America and the Caribbean.
Of the various pillars of the Vision 2025, this specific program
focuses on economic integration; micro, small, and medium
enterprises; gender and inclusion; and climate change..
The IDB's $75 million loan to the Province of Buenos Aires has a
repayment term of 24.5 years, a grace period of six and a half
years, and an interest rate based on the SOFR.
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.
ARGENTINA: Protesters Demand Universal Living Wage
--------------------------------------------------
Buenos Aires Times reports that thousands of people demonstrated in
Buenos Aires on Thursday, July 28, demanding a "universal salary"
in crisis-ridden Argentina.
Protesters congregated outside the presidential palace, where
centre-left President Alberto Fernandez was meeting his then
economy minister Silvina Batakis, who is opposed to such an idea,
as rumours abound that a cabinet reshuffle was in the works,
according to Buenos Aires Times.
"Poverty has taken control of the country," Monica Sulle, a leader
of the Socialist Workers' Movement (MST), told AFP, the report
notes.
Argentina is gripped by an economic crisis marked by soaring
inflation and rapid currency devaluation, the report relays.
Radical leftist groups close to the Frente de Todos (Everyone's
Front) ruling coalition have for weeks been demanding a universal
living wage, the report discloses.
They are angry at the government for the deteriorating social
conditions faced by ordinary Argentineans, the report relays.
Protesters want a minimum living wage worth ARS67,000 (around
US$490 at the official exchange rate), which amounts to the cost of
two basic food baskets, for the country's lowest earners, the
report discloses.
Some 37 percent of Argentina's 45-million population live in
poverty, while inflation for the first half of the year topped 36
percent, the report says.
"This unstoppable inflation is taking a seat at the family dinner
table at every level of society, but in the poorest sectors it's a
catastrophe," Vilma Ripoli, a Workers' Leftist Front (FIT) leader,
told AFP, the report notes.
Argentina, which earlier this year renegotiated repayments on a
$44-billion loan with the International Monetary Fund, has
committed to reducing its public deficit from three percent in 2021
to 0.9 percent by 2024, the report relays.
At that time, Batakis has just returned to the country from
Washington, where she met IMF managing director Kristalina
Georgieva, the report discloses.
It was announced that afternoon that Batakis will be replaced as
economy minister by Sergio Massa, 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.
===========
B R A Z I L
===========
BRAZIL: US$ Drops to BRL5.25, Closes at Lowest Value in a Month
---------------------------------------------------------------
Rocco Caldero at Rio Times Online reports that the US central
bank's decision to raise interest rates on schedule relieved the
global financial market. The dollar fell below BRL5.30 and closed
at the lowest level in almost a month, according to Rio Times
Online's July 28 report.
The Brazilian stock exchange recovered 101,000 points and reached
the highest level since June, according to Rio Times Online.
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.
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D O M I N I C A N R E P U B L I C
===================================
JETBLUE: Pro Consumidor Says "No More Warnings"
-----------------------------------------------
Dominican Today reports that the National Institute for the
Protection of Consumer Rights (Pro Consumidor) warned through a
publication on its social networks that it will no longer issue
warnings to the airline JetBlue and will respond to all consumers
according to the magnitude of the non-compliance.
The entity, which must protect the rights of consumers, expressed
that the airline's non-compliances have been reiterative, as well
as the complaints and claims of consumers, and called on the latter
to approach the entity, according to Dominican Today.
"Pro Consumidor will not issue any more warnings to JetBlue
Airlines," said the entity in one of two publications. Pro
Consumidor's reaction is motivated by the constant complaints from
Dominicans regarding the airline's mistreatment, the report notes.
Earlier, the president of the Chamber of Deputies, Alfredo Pacheco,
criticized JetBlue for its behavior and "abuses" against Dominicans
who travel with this company, the report relays.
Pacheco recounted his inconvenience with the airline during a
commercial flight to Puerto Rico and how he observed that they only
committed outrages against Dominicans, for which he asked the
Dominican Government to cancel their license, the report
discloses.
"They are abusers, the way they treat Dominicans, it's a little
creepy," Pacheco began his story, he went on to say that he had to
attend an activity in Puerto Rico, and they sent him the ticket
with a flight for 2:00 in the afternoon and only at 5:30 in the
afternoon did the plane take off, the report adds.
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T R I N I D A D A N D T O B A G O
=====================================
CL FIN'L: Antiguan PM Says ECCU Can Sue T&T Gov't. for Monies Owed
------------------------------------------------------------------
RJR News reports that Antigua and Barbuda Prime Minister Gaston
Browne says countries in the Eastern Caribbean affected by the 2009
collapse of the Trinidad-based Colonial Life Insurance Company
(CLICO) could file a lawsuit against the government in Port of
Spain to recover funds owed to policy holders.
Mr Browne says Trinidad and Tobago had made a commitment to pay
US$100 million to the countries of the Eastern Caribbean Currency
Union (ECCU), but has not kept the promise, according to RJR News.
US$40 million has already been paid, the report notes.
Mr. Browne says the ECCU will again write to the Trinidad and
Tobago Government to put a system in place to cover the rest of the
liability, the report adds.
About CL Financial/CLICO
CL Financial was one of the largest privately held conglomerate in
Trinidad and Tobago. It was originally founded as an insurance
company and has since expanded to be the holding company for a
diverse group of companies and subsidiaries.
CL Financial is the parent company of Colonial Life Insurance
Company (Trinidad) Limited (Clico). CLICO is now the Company's
insurance division.
CL Financial however experienced a liquidity crisis in 2009 that
resulted in a "bail out" agreement by which the government of
Trinidad and Tobago loaned the company funds ($7.3 billion as of
December 2010) to maintain its ability to operate, and obtained a
majority of seats on the company's board of directors.
The companies to be bailed out were: CL Financial Ltd (CLF);
Colonial Life Insurance Company Ltd (CLICO); Caribbean Money
Market Brokers Ltd (CMMB); Clico Investment Bank (CIB) and British
American Insurance Company (Trinidad) Ltd (BAICO).
As reported in the Troubled Company Reporter-Latin America in July
2017, CL Financial Limited shareholders vowed to pay back a TT$15
billion (US$2.2 billion) debt to the Trinidad Government.
===============
X X X X X X X X
===============
LATAM: IMF Says Shifting Global Winds Pose Challenges for Region
----------------------------------------------------------------
The International Monetary Fund (IMF) says the economies of Latin
America and the Caribbean have continued their strong post-pandemic
rebound.
However, the IMF says the winds are shifting, as global financial
conditions tighten, commodity prices reverse upward trend and
inflationary pressures persist.
In its report, the Bank said the reopening of contact-intensive
sectors, especially hospitality and travel, the unwinding of
pandemic pent-up demand and still favorable external financial
conditions, supported a solid expansion in the first half of the
year.
This allowed services to catch up with manufacturing and employment
to reach pre-pandemic levels.
The bank said year-on-year growth reached 2.8% in the first
quarter, compared to an average of 1.7% in the years preceding the
pandemic, and that high-frequency indicators point to continued
momentum in the second quarter.
*********
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 * * *