/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/220819.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, August 19, 2022, Vol. 23, No. 160 Headlines B A H A M A S BAHAMAS: Relaxing Domestic Credit Rules B R A Z I L JBS SA: Names New Chief Compliance Officer JBS SA: Q2 Profit Falls Almost 10%, but Tops Estimates PATAGONIA HOLDCO: S&P Assigns 'B+' ICR, Outlook Stable E C U A D O R ECUADOR: S&P Affirms B-/B Sovereign Credit Ratings, Outlook Stable J A M A I C A JAMAICA: Gets US$20MM Grant to Boost Spice Production M E X I C O 4E BRANDS: Unsecureds Will Get 9.5% to 11.3% in Liquidating Plan T R I N I D A D A N D T O B A G O TRINIDAD & TOBAGO: Central Bank Concerned Over Private Sector Debt X X X X X X X X LATAM: Vehicle Smuggling Undermines Bolivian, Chilean Economies - - - - - ============= B A H A M A S ============= BAHAMAS: Relaxing Domestic Credit Rules --------------------------------------- Trinidad Express reports that the Central Bank of The Bahamas (CBB) says it is relaxing the guidelines for domestic banks and credit unions around the qualification criteria for provision of credit to the private sector. In a statement, it said this takes account of the domestic economy's increased capacity to sustainably absorb more credit expansion, given the potential for credit growth to stimulate greater imports and increase the net use of foreign exchange, according to Trinidad Express. "The favorable outlook for the external reserves is expected to be maintained. In particular, impact on credit growth, is expected to be very moderate, given continued risks around the elevated average delinquency rate for private sector credit," the CBB said, the report notes. It said effective immediately, lending institutions may, on a case-by-case basis, approve applications for new personal loans, subject to the total debt service ratio for the facility and any pre-existing obligations not exceeding 50 per cent, the report relays. "That is, unless stipulated regulatory requirements have been imposed by the Central Bank on specific banks or credit unions. This increases the total debt service ratio from the current range of 40 to 45 per cent. The total debt service ratio is calculated as the sum of total monthly principal and interest payments divided by the total monthly income of the borrower or borrowers," the report relays. The CBB said that except in the case of mortgages, lending institutions may also tailor the borrower equity or down payment requirement in accordance with their internal credit risk management frameworks, the report notes. "In particular, subject to the total debt service ratio, and other such risk management criteria, lending institutions may grant loans of up to 100 per cent of the borrower's financing requirement. However, the minimum equity requirement for loans secured by residential mortgages remains at 15 per cent. When secured by mortgage indemnity insurance, the equity requirement may be reduced to five per cent," the report says. The CBB said that financial institutions are expected to continue to manage lending risks on both a case-by-case and aggregate basis, to achieve further reductions in the average non-performing loans rate. In this regard, supervisory expectations and requirements around prudential lending standards will remain tailored for institutions which are subject to any specific oversight by the Central Bank, the report notes. "The Central Bank will continue to monitor the impact of credit trends on the outlook for the external reserves and domestic financial stability. The Bank will adjust its monetary and prudential policies as necessary to ensure continued stability and sustainability in the outlook," it added, the report says. IMF: Strong Rebound On May 4, 2022, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation1 with The Bahamas, the report relays. The Bahamas is experiencing a tourism-led rebound, with the economy expanded by almost 14 per cent in 2021, as net tourism receipts tripled relative to 2020, the International Monetary Fund (IMF) said in a statement accompanying its May 2022 Article IV consultation with the country's authorities, the report notes. According to the IMF, the strong recovery of the Bahamian economy is expected to continue in 2022, with real GDP growth projected at 8 per cent, the report discloses. The war in Ukraine, which adds considerable uncertainty to the outlook, is expected to affect The Bahamas primarily through higher commodity prices, the Washington DC-based institution noted, adding that the staff mission expects average inflation to increase to 6.75 per cent in 2022 and to only gradually decrease as supply chain constraints wane, the report notes. "The pandemic has deepened medium-term growth challenges and public finances have deteriorated. The young experienced significant learning losses, and employment will take time to recover. Additionally, there may be lasting effects of the pandemic on travel, shifts in technology and climate risks," said the IMF, the report relays. The new administration has pledged relief through tax cuts and increasing outlays on investment and education, the report says. However, with public debt close to 100 per cent of GDP amid elevated financing costs, there is limited room for maneuver, the institution said, the report discloses. The country's fiscal deficit is expected to halve this year, to about 6.75 per cent of GDP, the report says. The authorities plan to achieve a medium-term fiscal surplus of 15 per cent of GDP, mainly through tax collection enhancements to reduce public debt to the target of 50 per cent over the next ten years, the report adds. =========== B R A Z I L =========== JBS SA: Names New Chief Compliance Officer ------------------------------------------ Richard Vanderford at The Wall Street Journal reports that Brazilian meatpacking giant JBS SA has named a new chief compliance officer and announced the creation of a committee meant to ensure a more consistent compliance program across its global operations, moves that come in the wake of high-profile antitrust and bribery settlements. JBS said it had appointed Michael Koenig its chief ethics and compliance officer, moving him up from his previous role as head of compliance at JBS subsidiary Pilgrim's Pride, according to The Wall Street Journal. The company also announced the creation in June of a global executive compliance committee aimed at creating a more uniform and consistent compliance program across all its units, including Pilgrim's, the report notes. The committee has been tasked with "overseeing continued improvements and enhancements to the compliance program," JBS said, the report relays. Before working at Pilgrim's, Mr. Koenig spent more than 20 years as a defense attorney, and also worked as a federal prosecutor, the report relays. JBS, a globally sprawling meatpacking company with more than 145,000 employees in its Brazilian home base alone, has in recent years been the target of U.S. criminal and civil actions, the report notes. Last year, Greeley, Colo.-based Pilgrim's Pride pleaded guilty to price-fixing in Denver federal court and was ordered to pay a fine of about $108 million. Pilgrim's also agreed to settle related civil claims, the report recalls. After that plea, JBS USA Holdings Inc., another JBS unit, hired former U.S. antitrust enforcer Kevin Arquit as its chief legal officer, the report says. JBS and its parent J&F Investimentos SA in 2020 entered into settlements over alleged violations of the Foreign Corrupt Practices Act. J&F admitted to paying about $150 million in bribes to Brazilian politicians to secure government funding to fuel an ambitious global acquisition spree, the report notes. The Securities and Exchange Commission, one of the agencies involved in the settlements, said the bribes helped facilitate JBS's purchase of Pilgrim's in 2009, the report recalls. Pilgrim's is one of the largest U.S. chicken processors by sales, the report adds. About JBS SA As reported in the Troubled Company Reporter-Latin America in August 2021, S&P Global Ratings revised the global scale outlook on JBS S.A. (JBS) and its fully owned subsidiary JBS USA Lux S.A. (JBS USA) to positive from stable and affirmed its 'BB+' issuer credit rating. The recovery expectations remain unchanged, and S&P affirmed the 'BB+' ratings on the senior unsecured notes and the 'BBB' ratings on the secured term loans. JBS SA: Q2 Profit Falls Almost 10%, but Tops Estimates ------------------------------------------------------ Ana Mano at Reuters reports that JBS SA, the world's largest meatpacker, posted an almost 10% drop in net profits, to $766 million, driven by the relative weakness of its U.S. beef and pork units in the second quarter, according to an earnings statement. Still, it beat analysts forecasts, according to Reuters. JBS reported a 4.6% fall in revenue for its U.S. beef division, which is normally the company's cash cow, while earnings before interest, tax, depreciation and amortization, a measure of operating profitability known as EBITDA, slumped 55% compared with the same year-ago quarter, the report notes. U.S meat processors are now reeling from the effects of lower cattle availability in North America, where a drought is leading ranchers to terminate animals rather than sending them for processing, the report relays. In the second quarter, overall U.S. pork exports fell 17.7% due to a drop in demand from China, Japan and Canada, JBS said citing USDA data, the report notes. As such, results for its U.S. pork division were affected, with JBS sales for that unit dropping 3.2% on an annual basis, to 10.3 billion reais, the report relays. JBS' Pilgrims Pride (PPC.O) poultry united, however, provided a silver lining in the United States, as its chicken sales rose by 18.3% to 22.7 billion reais, the report discloses. In Brazil, likewise, JBS' Seara processed foods division did well, the report says. Seara sells about 47% of its output in Brazil, and that business brought in 5 billion reais ($969.24 million) last quarter, 20% more than a year ago, JBS said, the report relays. To fend off cost inflation, Seara was able to raise prepared products prices by 19% on average, while increasing sales volumes by 5%, the report discloses. At the same time, Seara's export sales reached $1.1 billion, a 27.9% rise from the same quarter a year ago, the report notes. In Brazil, JBS beef products sales rose by almost 11% to 14.1 billion reais, in spite of a 12% fall in cattle processing because China temporarily halted imports from a large plant, the report adds. About JBS SA As reported in the Troubled Company Reporter-Latin America in August 2021, S&P Global Ratings revised the global scale outlook on JBS S.A. (JBS) and its fully owned subsidiary JBS USA Lux S.A. (JBS USA) to positive from stable and affirmed its 'BB+' issuer credit rating. The recovery expectations remain unchanged, and S&P affirmed the 'BB+' ratings on the senior unsecured notes and the 'BBB' ratings on the secured term loans. PATAGONIA HOLDCO: S&P Assigns 'B+' ICR, Outlook Stable ------------------------------------------------------ On Aug. 17, 2022, S&P Global Ratings assigned a 'B+' issuer credit rating to Patagonia Holdco LLC (Patagonia). At the same time, S&P is withdrawing the 'B+' preliminary issue-level rating to the proposed $500 senior secured notes. The stable outlook reflects S&P's view that the company will be separated from Lumen Technologies, achieving significant business growth, increasing its customer base and cash flows, and reducing leverage to below 4.0x in 2023. Stonepeak, through an infrastructure fund, has completed the acquisition of Lumen Technologies' Latin American operations. The transaction was financed with a mix of debt and equity contribution. The debt portion was completely funded with a $1.3 billion term loan and the company decided to redeem the originally planned $500 million senior secured notes. The newly created entity, Patagonia Holdco LLC (Patagonia), will hold and operate an extensive asset base of terrestrial and subsea fiber network and data centers across Latin America. S&P expects Patagonia's debt to EBITDA between 4.0x and 4.5x in 2022 and to drop slightly below 4.0x in 2023. The 'B+' rating primarily reflects on one hand the company's ample and difficult-to-replicate asset base, footprint across Latin America, and long-term relationships with customers that should underpin growth prospects amid favorable industry dynamics in the region. On the other hand, the rating is constrained by an expected aggressive leverage, the company's relatively small scale in a very competitive market, and the execution risk in separating from its former parent, Lumen Technologies. Following its spin-off, Patagonia holds an extensive network of about 86,000 kilometers of fiber across 12 countries including 50,000 kilometers of terrestrial (metro and long haul), 36,000 kilometers of subsea cable, and 18 highly interconnected data centers across Latin America. Additionally, the company has solid customer relationships, with 89% of recurring revenue coming from multiyear contracts that provide revenue visibility. S&P believes Patagonia will leverage on this strength to post sound revenue growth rates in the data center and data services in the next few years. Additionally, the company faces industry tailwinds as Latin America still lags behind more developed regions in terms of internet penetration, data traffic and broadband speed, and growth in these services should be higher than in more mature markets. As a result, S&P forecasts annual revenue growth of about 4% in the next couple of years. Patagonia operates in the enterprise and wholesale market through an offering of lit and dark fiber, data center services (full colocation, storage, interconnection, hosting, cloud back-up, etc.), and voice and other communication services. Patagonia faces stiff competition from smaller local players, large integrated regional operators, and pure infrastructure players. As a result, Patagonia doesn't hold a leading position in the markets. The acquisition was completed on August 1 and Stonepeak paid $2.7 billion. The financing for the transaction included an equity contribution for about $1.56 billion and first-lien term loan for $1.3 billion. S&P said, "Additionally, Stonepeak obtained a $200 million revolving credit facility, which should remain undrawn following the transaction, but should strengthen the company's liquidity position. Given our forecast of Patagonia's EBITDA, we expect it to post aggressive leverage with debt to EBITDA between 4.0x and 4.5x and funds from operations (FFO) to debt between 15% and 18% in 2022. In the next two years amid a more disciplined capex plan and EBITDA expansion of about 12% in 2023 and 6% in 2024, we expect leverage to drop below 4.0x and Patagonia to generate free cash flows of around 6% of total debt. We don't expect Stonepeak to take dividend recapitalization in the next three years, and we assume that Patagonia's free cash flows will be fully used to prepay debt. Although Stonepeak hasn't defined specific leverage targets for Patagonia, it has outlined the company's financial policy that incorporates deleveraging plans over time. Additionally, we expect Stonepeak's investment in Patagonia for a medium term, similar to the firm's other infrastructure investments." While the acquired operations have a track record of more than 30 years, with a tenured management and consistent top-line growth in the past 10 years with a CAGR of more than 6%, Patagonia is a new company. Its business sustainability and growth opportunities will depend on a successful separation from Lumen Technologies. S&P assumes margin expansion and leverage improvements to occur through efficiencies stemming from the separation. Patagonia expects to take advantage of market opportunities, widening its services to higher margin products, improve operations through a more disciplined cost and capex management. Spin-off challenges could hinder deleveraging, a risk S&P has incorporated in its 'B+' rating. This rating is in line with the preliminary rating S&P assigned on July 18, 2022. ESG credit indicators: E-2, S-2, G-3 S&P said, "Governance factors are a moderately negative consideration in our credit rating analysis of Patagonia. Our assessment of the company's financial risk profile as aggressive reflects corporate decision-making that prioritizes the interests of the controlling owners, in line with our view of the majority of rated entities owned by private-equity sponsors. This also reflects their generally finite holding periods and a focus on maximizing shareholder returns." ============= E C U A D O R ============= ECUADOR: S&P Affirms B-/B Sovereign Credit Ratings, Outlook Stable ------------------------------------------------------------------ On Aug. 17, 2022, S&P Global Ratings affirmed its 'B-/B' long- and short-term foreign and local currency sovereign credit ratings on Ecuador. The outlook remains stable. In addition, S&P revised up its transfer and convertibility (T&C) assessment to 'AAA' from 'B-'. Outlook The stable outlook reflects S&P's view that over the next 12 months, Ecuador's administration will remain committed to fiscal and economic policies aimed at reducing the sovereign's imbalances, despite execution risks amid weak support in the National Assembly and fragile socioeconomic conditions. The outlook also assumes continued progress under the IMF Extended Fund Facility (EFF) arrangement, which is expected to be completed by December this year. The latter supports access to official financing, which is key given the small local market and uncertainty about capacity to tap international markets. Downside scenario S&P said, "We could lower the ratings over the next 12 months if unforeseen political dynamics generate a reversal of policies and lead to fiscal and external imbalances beyond our expectations or hamper access to official lending. For example, large increases in permanent spending financed by high oil revenue could increase vulnerability to commodity price shocks. Because access to international markets is still uncertain, larger fiscal deficits could increase reliance on short-term debt, deteriorating the recently improved debt profile and rapidly increasing liquidity pressures. "We could also lower the ratings if legal actions taken against the sovereign following different litigation processes hamper Ecuador's capacity to make timely debt service payments or if we see prospects for a debt management operation that could be considered a distressed debt exchange." Upside scenario S&P said, "We could upgrade Ecuador in the next 12-18 months if execution of fiscal and other policies translates into a faster-than-expected pace of fiscal improvement while current account surpluses are maintained. The combination of stronger fiscal and external flows would improve Ecuador's external debtor position and could support regaining global market access. We could also raise the ratings if real GDP growth strengthens and comes into line with that of peers with a similar level of economic development." Rationale The 'B-' ratings reflect recent progress on the reduction of Ecuador's once-large fiscal deficits and a decline in the net general government debt burden. A stronger fiscal profile following progress under the IMF EFF program is also a key element in S&P's ratings. It has helped reduce the financing gap and secure official financing while access to international debt markets remains uncertain after the 2020 distressed debt exchange. In S&P's view, long-standing institutional weaknesses exacerbated by heightened social tension--such as recent nationwide strikes and political infighting between the executive branch and the National Assembly, including a recent impeachment vote--limit the speed of fiscal adjustment and keep financing needs above 6% of GDP. Moreover, the complex political and social dynamics have prevented an improvement in investor confidence, despite strengthening fiscal and external indicators in the context of high oil prices. This weighs on economic growth prospects, constraining the ratings. GDP per capita and employment have not fully recovered from the severe economic downturn in 2020. Institutional and economic profile: Complex political and fragile socioeconomic conditions limit implementation of the administration's market-friendly agenda -- Supportive oil prices should sustain economic recovery this year at 2.7%, a more moderate pace than in 2021, before growth trends back toward 2.5% in the medium term. -- The fragile social situation, with inadequate employment and higher inflation, has prompted tensions recently. -- Infighting between the Lasso administration and the National Assembly has worsened, likely limiting the government's capacity to implement its agenda. After initial progress made upon assuming office in May 2021, President Guillermo Lasso (Creando Oportunidades [CREO] party) has faced greater difficulties in 2022 in advancing his reform agenda. The president's relationship with the legislature has always proved challenging, given CREO holds only 12 (27 if considering allies) out of 137 seats in the assembly. Still, the approval of tax reform at the end of November 2021 was a key step in lowering Ecuador's fiscal imbalances while reducing the vulnerability of public finances to oil price swings. However, the relationship between the executive and the legislative branches has been in a political standstill since then. The Lasso administration's investment reform bill, which aimed to improve the business environment by establishing a framework for public-private partnerships, stronger legal status for large-scale investment, and tax exemptions for specific sectors, among other things, was rejected by the assembly in March 2022. Thereafter, the assembly initiated a process ("muerte cruzada") in June 2022 to try to oust the president. While that effort failed, the opposition was successful in taking out key leadership positions in the assembly, limiting the president's policy room. These difficulties partly stem from meaningful ideological differences, especially related to the role of the public sector in the Ecuadorian economy, between the parties with the largest representation in the assembly and the executive branch. They also stem from long-standing complexities in relations with the Indigenous population. The June 2022 strikes were led by various Indigenous movements that demanded lower oil prices and a limit to the development of extractive industries, two sensitive issues that have been a historical source of conflict between these communities and different administrations. To tackle the demands, various working groups, mediated by the Catholic Church, were established. These political dynamics cast doubt on the administration's capacity to continue lowering the fiscal deficit. A project to reject the 2021 tax reform is advancing in the assembly, while pressure to raise social and infrastructure spending is rising. However, given that proposed changes to taxation are the prerogative of the executive branch, S&P expects the administration would likely veto any challenges to the tax reform from the legislative branch. Recurrent governability challenges, meaningful changes in policy direction following elections, and a weak track record of meeting sovereign obligations weigh on S&P's institutional assessment of Ecuador. That said, the country has made important progress in strengthening its fiscal framework and data transparency under the IMF program. Since the first EFF started in 2019, Ecuador has complied with benchmarks that aim to institutionalize public finances sustainably. These include the Organic Code of Planning and Public Finance, the monetary code, and tax reform. The EFF program is expected to be completed by December 2022 and would be an important milestone in Ecuador's payment history. In addition, structural growth challenges (an antiquated labor code, low productivity, and stagnated oil production), the weak political capital of the Lasso administration, and policymaking challenges are hurting investor confidence. This limits Ecuador's growth prospects, which remain below those of peers with a similar level of development. S&P expects the economic recovery to decelerate to 2.7% this year, from 4.2% growth in 2021, and it expects GDP per capita to reach $6,240 at year-end--just above the 2018 level. That said, as a net oil exporter, Ecuador is benefiting from high oil prices, with goods exports growing 40% year over year in the first five months of 2022. However, downside risks to our economic projections for this year stem from political uncertainties and potential new episodes of social tension. This fragile social situation, will remain a source of tension in the near term. Flexibility and performance profile: Supportive oil prices are helping fiscal and external dynamics this year -- Fiscal correction should continue in 2022 following strong revenue from oil and tax reform. -- Further consolidation will be challenging amid complex political and social dynamics that will pressure spending. -- Robust oil and mining exports are counterbalancing a rapid recovery of imports, and the current account surplus should remain close to 3% of GDP in 2022. S&P expects the general government deficit to fall to 2.2% of GDP in 2022, from 2.5% in 2021 and 7.2% in 2020. The deficit is likely to be 2.2% of GDP on average in 2023-2025. It assumes strong revenue performance this year will mitigate budgetary erosion from additional spending pressures following the nationwide strike in June. Supportive oil prices have underpinned a fast recovery in royalties, whose contribution to central government revenue was over 35% in 2021. The high prices should raise central government oil revenue to $11.7 billion in 2022 from $8.7 billion in 2021. Moreover, non-oil revenues are benefiting from the 2021 tax reform. The reform bill included an exceptional wealth tax to be collected in 2022 and 2023, which should bring over 1% of GDP in additional revenue. The reform was an important step in reducing the budget's vulnerability to commodity price swings; however, dependence on royalties is still significant. S&P expects general government revenues to peak at 35.7% of GDP in 2022 and then fall to 31% in 2025, consistent withour expectations for international oil prices. In line with S&P Global Ratings' forecasts for oil prices to decline over the next two years, oil production to at best hold steady, and spending pressure to rise, S&P expects Ecuador's change in net general government debt to hover around 2.2% in 2023-2025. Expenditure reduction was key to engineering the deficit reduction before the pandemic. However, this reduction, combined with the impact of the pandemic, has hurt the quality of public services. In addition, there are demands to raise social and infrastructure spending, which, added to the agreed increase in oil subsidies, would limit capacity to adjust the size of the public sector. That said, the Lasso administration's commitment to fiscal sustainability should prevent meaningful setbacks to current deficit levels. Nonetheless, downside risk stems from potential higher spending resulting from the ongoing dialogue with Indigenous groups or a setback in tax reform. S&P's base case assumes the tax reform will remain in place because the administration would likely veto any challenges from the legislative branch. Under S&P's base case, it expects financing needs to remain around 6% of GDP and net general government debt to stabilize below 60% of GDP through 2022-2025. At the same time, interest payments should remain below 6% of total revenue, following the improvement in the debt profile after the 2020 debt restructuring and the growing importance of official borrowing as the main source of financing. Contingent liabilities are limited in size, and transparency has improved with recent statistics revisions. However, there are currently different litigation processes against Ecuador, and a commercial dispute has recently resulted in a freeze of Ecuadorian assets in Luxembourg. This has not affected Ecuador's capacity to make timely debt service, as Ecuador holds no assets in Luxembourg. Moreover, the administration is taking steps to resolve the dispute in the near term. That said, a ruling that interrupts the government's ability to service its commercial debt service obligations could result in a default. S&P expects narrow net external debt to average 105% of current account receipts (CARs) in 2022-2025--below the 135% average of 2018-2021. Stronger CAR performance would help reduce external debt and ultimately improve Ecuador's external profile. Better exports performance could result from a prolonged period of supportive oil prices or stronger non-oil exports. Mining exports have in fact become more important in the past three years and currently represent 8% of good exports, up from an average of 1.4% in 2017-2019. However, mining growth beyond 2023 would hinge on approval of new projects, which would require agreement from local communities. Gross external financing needs are likely to remain stable above 100% of CAR plus usable reserves through 2022-2025. The country's monetary policy flexibility is limited because of the unilateral adoption of the dollar as its currency in 2000. However, the exchange rate regime has supported low inflation and financial system stability, even amid periods of severe stress, such as the 2008 and 2020 defaults. The approval of the monetary code in 2021 will help strengthen the fundamentals of the regime, especially with a stronger central bank balance sheet. S&P views all these factors as contributing to a low likelihood of a change in the currency regime in the near term, which is why it revised up the T&C assessment to 'AAA', in line with that of other dollarized economies, such as Panama and El Salvador. In accordance with S&P's relevant policies and procedures, the Rating Committee was composed of analysts that are qualified to vote in the committee, with sufficient experience to convey the appropriate level of knowledge and understanding of the methodology applicable. At the onset of the committee, the chair confirmed that the information provided to the Rating Committee by the primary analyst had been distributed in a timely manner and was sufficient for Committee members to make an informed decision. After the primary analyst gave opening remarks and explained the recommendation, the Committee discussed key rating factors and critical issues in accordance with the relevant criteria. Qualitative and quantitative risk factors were considered and discussed, looking at track-record and forecasts. The committee's assessment of the key rating factors is reflected in the Ratings Score Snapshot above. The chair ensured every voting member was given the opportunity to articulate his/her opinion. The chair or designee reviewed the draft report to ensure consistency with the Committee decision. The views and the decision of the rating committee are summarized in the above rationale and outlook. The weighting of all rating factors is described in the methodology used in this rating action. Ratings List RATINGS AFFIRMED ECUADOR Sovereign Credit Rating B-/Stable/B ECUADOR Senior Unsecured B- UPGRADED TO FROM ECUADOR Transfer & Convertibility Assessment Local Currency AAA B- ============= J A M A I C A ============= JAMAICA: Gets US$20MM Grant to Boost Spice Production ----------------------------------------------------- RJR News report that the US Department of Agriculture has offered a US$20 million grant to boost spice production in Jamaica. The funds will be disbursed over the course of five years, under the 'Food for Progress' program, according to RJR News. The initiative will target the marketing and development of products and will promote sustainable and climate-friendly farming, the report notes. Spices such as turmeric, ginger and pimento are being targeted, the report relays. Jamaica is one of 10 countries this year to be selected for the grant, which will be awarded this month, 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. =========== M E X I C O =========== 4E BRANDS: Unsecureds Will Get 9.5% to 11.3% in Liquidating Plan ---------------------------------------------------------------- 4E Brands Northamerica LLC filed with the U.S. Bankruptcy Court for the Southern District of Texas a Combined Disclosure Statement and Joint Plan of Liquidation dated August 15, 2022. The Debtor is a Texas limited liability company formed on May 19, 2014. It is the wholly owned subsidiary of 4E Global, which is a subsidiary of Kimberly-Clark de Mexico, S.A.B. de C.V, and was created to act as the distribution arm in the United States for personal care and hygiene products manufactured by 4E Global. At the onset of the COVID-19 pandemic in early 2020, the demand for hand-sanitizer products drastically increased. As a result of the increased demand for hand sanitizer during the COVID-19 pandemic and the FDA's temporary policy, like many other hand sanitizer distributors, the manufacturer of the hand sanitizer distributed by the Debtor, 4E Global, was impelled to source some of its raw ingredients from supplier(s) who, whether intentionally or mistakenly, provided methanol instead of ethyl alcohol. As of the Petition Date, the Debtor had entered into settlement agreements totaling approximately $20.9 million, of which $15.7 million (or over 75%) has been paid, leaving a remaining balance of approximately $5.1 million. Promptly following filing the Chapter 11 Case, the Debtor also held conversations with certain larger vendors to discuss the background of the case, cause of bankruptcy, the goals of the bankruptcy process, and to understand their concerns. Following arm's-length negotiations over the course of approximately two months, the Debtor and 4E Global reached an agreement to settle, with no admission of liability on the part of 4E Global, the potential causes of action. The 4E Global Settlement brings into the Estate approximately $3.7 million in additional cash to satisfy Claims and administer the wind down of the Estate and forgives approximately $27.7 million in debt. The Plan is a liquidating plan. The Debtor ceased operating its business prior to the Petition Date and is winding down, including, first and foremost, by facilitating the destruction of adulterated hand sanitizer as required by federal regulations following a voluntary recall pursuant to the Order Authorizing the Debtor's Destruction Process. The Plan provides that the Plan Agent will administer and liquidate all remaining property of the Debtors, including the proceeds of a compromise pursuant to Bankruptcy Rule 9019 that the Debtor negotiated with its parent and DIP Lender, 4E Global S.A.P.I. de C.V. ("4E Global") to settle any and all claims the Debtor holds against 4E Global, (the "4E Global Settlement"). Class 3 consists of all Covered Personal Injury Claims. Each Holder of an Allowed Covered Personal Injury Claim will receive (a) limited modification of the automatic stay and the injunction imposed by the Plan, as applicable, solely to liquidate the Allowed amount of the Covered Personal Injury Claim as of the Petition Date and to recover from available insurance proceeds and the Insurance Deductible Pool their pro rata share of (i) the total coverage available under the Debtor's Insurance Policies to compensate Covered Personal Injury Claims, which shall be paid directly by the applicable Insurer(s) under the applicable Insurance Policies and (ii) the Insurance Deductible Pool, up to the per-claim deductible applicable to such Allowed Covered Personal Injury Claim. This Class will receive a distribution of of up to 100% of their allowed claims. Class 4 consists of all General Unsecured Claims. On the applicable Distribution Date, each Holder of an Allowed General Unsecured Claim will receive (i) its Pro Rata share of the GUC Pool and (ii) a waiver of any Avoidance Action against such Holder. Claims in Class 4 are Impaired. Holders of Claims in Class 4 are entitled to vote on this Plan. This Class will receive a distribution of 9.5% - 11.3% of their allowed claims. Class 6 consists of all Equity Interests in the Debtor. On the Effective Date, all Equity Interests in the Debtor shall be canceled. No Distribution shall be made on account of Equity Interests in the Debtor. Class 6 is conclusively deemed to have rejected the Plan pursuant to section 1126(g) of the Bankruptcy Code. Class 6 is not entitled to vote to accept or reject the Plan. The Assets shall revest in the Estate for the purpose of liquidating the Estate, free and clear of all Liens, Claims, charges, or other encumbrances. On and after the Effective Date, the Debtor may, at the direction of the Plan Agent, and subject to the Confirmation Order, use, acquire, or dispose of property, and compromise or settle any Claims, Interests, or Causes of Action without supervision or approval by the Bankruptcy Court and free of any restrictions of the Bankruptcy Code or Bankruptcy Rules. On and after the Effective Date, the Debtor shall continue in existence for purposes of (a) resolving Disputed Claims, (b) making distributions on account of Allowed Claims as provided hereunder, (c) establishing and funding the Disputed Claims Reserves, (d) filing appropriate tax returns, (e) liquidating all assets of the Debtor and winding down the Estate, and (f) otherwise administering the Plan. The Bankruptcy Court entered an order conditionally approving the Disclosure Statement on August 9, 2022. A hearing to consider the final approval of the Disclosure Statement and confirmation of the Plan is scheduled for September 26, 2022, at 2:00 p.m. (the "Confirmation Hearing"). Objections to the final approval of the Disclosure Statement or objections to Confirmation of the Plan must be filed and served on or before September 15, 2022. A full-text copy of the Combined Disclosure Statement and Plan dated August 15, 2022, is available at https://bit.ly/3pruInW from STRETTO, claims agent. Counsel for the Debtor: Matthew D. Cavenaugh Veronica A. Polnick Genevieve M. Graham Javier Gonzales JACKSON WALKER L.L.P. 1401 McKinney Street, Suite 1900 Houston, Texas 77010 Telephone: (713) 752-4200 Facsimile: (713) 752-4221 Email: mcavenaugh@jw.com Email: vpolnick@jw.com Email: ggraham@jw.com Email: jgonzales@jw.com About 4E Brands North America 4E Brands North America manufactured personal care and hygiene products. Its brand name products include Blumen Hand Sanitizer, Assured Hand Sanitizer, and various other hand sanitizers and hand soaps. It is no longer operating. 4E Brands North America sought Chapter 11 bankruptcy protection (Bankr. S.D. Tex. Case No. 22-50009) on Feb. 22, 2022. In the petition filed by David Dunn as chief restructuring officer, 4E Brands North America estimated assets up to $50,000 and liabilities between $10 million and $50 million. The case is handled by Honorable Judge David R. Jones. Matthew D. Cavenaugh, Esq., of JACKSON WALKER, is the Debtor's counsel, and STRETTO is the claims agent. ===================================== T R I N I D A D A N D T O B A G O ===================================== TRINIDAD & TOBAGO: Central Bank Concerned Over Private Sector Debt ------------------------------------------------------------------- Trinidad Express reports that the Central Bank of T&T continues to be concerned about the debt held by the local private sector and the impact that higher interest rates could have on both individuals and companies. The Central Bank expressed its concern in the Financial Stability Report (FSR) for 2021, which was released August 16, 2022. The report identifies three main risks faced by T&T's financial sector: rising international interest rates; increasing cyberattacks and sovereign concentrations in the banking and insurance sectors, according to Trinidad Express. The FSR report noted two of the risks in the 2020 report -increasing cyberattacks and sovereign concentrations among banks and insurance companies- remained relevant in the 2021 report, Trinidad Express notes. The 2021 report said financial stability risks in Trinidad and Tobago were tempered as the effects of the pandemic appeared to subside over 2021 and early 2022, Trinidad Express relays. On the issue of private sector debt, the Central Bank said: "While credit risk stabilized in 2021 due in large measure to regulatory forbearance and government assistance, private sector debt loads remain a key source of concern given the unwinding of policy support measures and lurking inflationary pressures," Trinidad Express discloses. The report states that the private sector refers to consumers (households) and businesses (corporates) and that credit is inclusive of loans and short-term funding, Trinidad Express relays. The report says increased domestic interest rates to counter higher inflation "could present a near-term threat to financial stability and may be triggered by a new risk - rising international interest rates," Trinidad Express notes. The 2021 Financial Stability Report points out that higher global interest rates could have an adverse impact on the financial sector via financial institutions' investment portfolios due to asset revaluations, though the impact on pension sector asset returns may be net positive, Trinidad Express says. "Moreover, the possibility of an increase in domestic interest rates to quell inflation could improve bank profitability due to higher loan rates," the Central Bank report states, Trinidad Express discloses. "However, negative implications for households and corporates include higher borrowing costs, reduced disposable income, and delayed recovery in credit growth," the report says, Trinidad Express says. The report notes that the resurgence of economic activity in the latter half of 2021, led to estimated household debt-to-GDP falling to 35.1 per cent in 2021 from 40.8 per cent in 2020. Corporate sector credit-to-GDP fell to 46.5 per cent in 2021 from 54.1 per cent in 2020, Trinidad Express notes. "Nonetheless, credit risks appear contained as the commercial banking sector's consumer and corporate non-performing loan (NPL) ratios remained low and stable. "However, debt-servicing challenges may have been alleviated by loan payment moratoria, loan restructuring, and government support measures," according to the report, Trinidad Express notes. Addressing the issue of increasing cyberattacks, the Central Bank report says the continued drive for digitalisation to improve access to financial services has also expanded the attack surface for cyber threats in the short term, Trinidad Express discloses. "A rise in cyber incidents domestically and regionally was noted over 2021. Further, recent cyberattacks on regional conglomerates draw attention to the potential for systemic liquidity risk arising from interconnections within mixed conglomerates and among domestic financial institutions," according to the Financial Stability Report, Trinidad Express says. The report states that domestic sovereign concentrations in the major financial industries intensified in 2021 as a result of lower fiscal revenue, budget financing needs, and debt repayment, Trinidad Express relays. It states that while the need for direct fiscal support for the Covid-19 pandemic has abated with the reopening of the economy and improvements in the outlook for domestic activity, "sizable sovereign exposures on financial institutions' balance sheets remain a source of vulnerability." =============== X X X X X X X X =============== LATAM: Vehicle Smuggling Undermines Bolivian, Chilean Economies --------------------------------------------------------------- EFE News reports that vehicle smuggling is a long-standing problem that affects the economies of both Bolivia and Chile, the latter of which is the port of entry for cars and trucks that continue their journeys via illegal routes into Bolivian territory, some of them coming from overseas and others stolen in northern Chile. Between January and July of this year 1,687 undocumented vehicles valued at some $35.5 million were seized in Bolivia, most of them in the Andean Oruro region (515) and in La Paz (494), according to a tally provided to EFE by the National Customs Office. ********* 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 * * *