/raid1/www/Hosts/bankrupt/TCRLA_Public/220907.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
Wednesday, September 7, 2022, Vol. 23, No. 173
Headlines
A R G E N T I N A
ARGENTINA: Next Round of IMF Talks Complicated by Weak Reserves
B R A Z I L
BRAZIL: Current Account Surplus Continues to Rise
C H I L E
CHILE: IMF Board OKs Two-Year US$18.5BB Flexible Credit Line
D O M I N I C A N R E P U B L I C
DOMINICAN REPUBLIC: Begins Sept. with DOP460M++ in Fuel Subsidies
DOMINICAN REPUBLIC: Seek Developer Participation in Housing Project
M E X I C O
MEXICO: Airlines Using City Hub Ok to Temporary 15% Cut in Flights
V I R G I N I S L A N D S
AABAR INVESTMENTS: Chapter 15 Case Summary
- - - - -
=================
A R G E N T I N A
=================
ARGENTINA: Next Round of IMF Talks Complicated by Weak Reserves
---------------------------------------------------------------
Buenos Aires Times reports that it's a question of accountancy but
also real-life banknotes - namely whether the incoming dollars
obtained come from exports, advances or linked to a debt which will
have to be paid at some point.
Those are the famous debates over whether the reserves are net or
liquid or not, according to Buenos Aires Times. It might seem like
just semantics at this point, although it could perfectly well be
the core of the discussion and the decisive point when Argentina's
economic team sits down with officials responding to Kristalina
Georgieva at the International Monetary Fund (IMF), the report
notes.
In a few weeks, the IMF will begin its second review of Argentina's
US$44.5-billion debt deal, on whose approval will depend the
remittance to meet the next debt payment of over US$6 billion, the
report discloses. Even if there is finally fumata bianca, the
battle ahead is not to be underestimated, the report relays.
The government is already taking it for granted that there will be
plenty of tension although it has one ace in its favour - being
concentrated on the second quarter when Martin Guzman was steering
the economy and will not be around to take all the blame, the
report relays. Instead the negotiator will be Economy Minister
Sergio Massa who will be taking all the responsibility for the
third review (covering a period still in progress) and where there
will be far more tension, the report notes.
As from September the IMF will be aiming its missiles at runaway
inflation but especially at the feeble reserves of the Central Bank
under Miguel Pesce, who has been engaging in creative accountancy
and betting on the Chinese currency swap, harvest dollars being
cashed and reduced energy spending now at a monthly US$2.4 billion,
the report discloses. And also the Repos (repurchase agreements)
which the government hopes to be signing soon with European, Asian
and North American Banks to repurchase debt and boost reserves, the
report relays. It would be a mechanism (still under discussion)
similar to that used in 2016 but aiming at a longer term, the
report discloses.
It is further hoped that tranches from international organizations
pending from the first half of the year can be accelerated to the
tune of a few billion dollars, the report relays. The Central Bank
also looks to maintain a position to buy which it claims to have
sustained since this government took power in late 2019 although if
inflation were lower, the capital controls could be more solidly
applied, the report says.
The economic cabinet sees data which it considers encouraging in
the balance of trade, the report notes. For example, in the second
week of this month the soy harvest began to be cashed with the new
special 70/30 exchange rate, permitting these agricultural
transactions to be maintained at a daily average of US$160 million
this month, the report notes.
From the perspective of the economic cabinet, the trump card will
be the signals as to fiscal austerity, promising to reduce the red
ink to 2.5 percent of gross domestic product by the end of the
year, the report relays. But it is precisely there where the
tensions within the ruling coalition come into play because not all
sectors want to be tied down to cuts in funding, the report
relays.
The other indicator under IMF scrutiny will be without doubt
inflation, the report notes. As in the case of Central Bank
reserves, that future scrutiny stands to be more complex than the
review of second quarter accounts beginning next month although
when it comes to prices, they are likely to take a more benevolent
view, given the global surge in inflation due to the pandemic and
the energy costs of the ongoing war in Europe, the report says.
In reality that international context would give the IMF more scope
for benevolence in its final statement, the report notes. But when
it comes to the reserves, more than in the case of double-digit
inflation (a national phenomenon), that rhetorical clemency would
become more difficult to sustain domestically in terms of political
endorsements and internal audits, 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
Aug. 12, 2022, S&P Global Ratings affirmed its foreign and
local-currency sovereign credit ratings of 'CCC+/C' on the
Republic of Argentina. The outlook remains stable. S&P also
affirmed its national scale 'raBBB-' rating and its 'CCC+' transfer
and convertibility assessment. S&P said the stable outlook reflects
the challenges in managing pronounced economic imbalances ahead of
the 2023 national elections given disagreement on policy within the
government coalition and financing pressures in the local market.
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.
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.
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: Current Account Surplus Continues to Rise
-------------------------------------------------
Rocco Caldero at Rio Times Online reports that the Brazilian trade
balance registered a US$4.2 billion surplus in August, slightly
above financial market estimates.
The result is formed by exports (US$30.8 billion) minus imports in
foreign trade (US$26.7 billion), according to Rio Times Online.
The Ministry of Economy released the data on September 1, the
report notes.
About Brazil
Brazil is the fifth largest country in the world and third largest
in the Americas. Jair Bolsonaro is the current president, having
been sworn in on Jan. 1, 2019.
As reported in the Troubled Company Reporter-Latin America on
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.
DBRS Inc. confirmed Brazil's Long-Term Foreign and Local Currency
Issuer Ratings at BB (low) on Aug 12, 2022. At the same time,
DBRS Morningstar confirmed the Federative Republic of Brazil's
Short-term Foreign and Local Currency Issuer Ratings.
=========
C H I L E
=========
CHILE: IMF Board OKs Two-Year US$18.5BB Flexible Credit Line
------------------------------------------------------------
The Executive Board of the International Monetary Fund (IMF)
approved a two-year arrangement for Chile under the Flexible Credit
Line (FCL) in the amount of SDR 13.954 billion (about US$18.5
billion [1] ; 800 percent of quota). The Chilean authorities intend
to treat the FCL as precautionary. Given that the FCL can address
all types of balance of payment needs, the Chilean authorities also
notified the Fund of their decision to cancel the existing
Short-term Liquidity Line (SLL) of SDR 2.529 billion (about US$3.3
billion; 145 percent of quota), an approach that is consistent with
current Fund policies.
The FCL was established on March 24, 2009, as part of a major
reform of the Fund's lending framework (see Press Release No.
09/85). The FCL allows its recipients to draw on the credit line at
any time and is designed to flexibly address both actual and
potential balance of payments needs. Drawings under the FCL are not
phased nor tied to ex-post conditionality as in regular
IMF-supported programs.
The FCL will augment Chile's precautionary reserve buffers on a
temporary basis and provide substantial insurance against a broad
range of risks, including from a possible abrupt global slowdown;
commodity price shocks; spillovers from Russia's war in Ukraine; or
a sharp tightening of global financial conditions.
Chile qualifies for the FCL given its very strong economic
fundamentals and institutional policy frameworks, a sustained track
record of implementing very strong policies, and the authorities'
continued commitment to maintaining very strong policies in the
future. Qualification criteria for an arrangement under the FCL are
the same as for the SLL.
Following the Executive Board's discussion on Chile, Ms. Kristalina
Georgieva, Managing Director, issued the following statement:
"After an impressive recovery from the fallout of the Covid-19
pandemic, Chile is facing a marked increase in global risks.
"Against the backdrop of a challenging external environment, the
authorities have continued to implement very strong policies to
mitigate risks, preserve macroeconomic stability, and support
vulnerable groups, while advancing ambitious reforms. The FCL with
access of 800 percent of quota will provide a substantial
precautionary buffer against a broad range of risks. The
authorities intend to treat the arrangement as precautionary and
exit the arrangement when external conditions allow.
"Chile has very strong fundamentals and a sustained track record of
implementing very strong policies, anchored in a long-standing
structural fiscal balance rule, credible inflation targeting with a
flexible exchange rate, and a sound financial system supported by
effective regulation and supervision. These very strong
fundamentals and policy frameworks continue to support the
country's resilience and capacity to respond to shocks."
===================================
D O M I N I C A N R E P U B L I C
===================================
DOMINICAN REPUBLIC: Begins Sept. with DOP460M++ in Fuel Subsidies
-----------------------------------------------------------------
Dominican Today reports that the closing of operations of the price
of a barrel of WTI (West Texas Intermediate) oil in the markets
oscillated between US$89.55 as the minimum value and US$97.01 as
the highest value, averaging US$92.76, for which the Dominican
Government announced that for the first week of September the
extraordinary subsidy would be maintained. Therefore, the prices of
all fuels will be frozen.
The Vice-Minister of Domestic Trade, Ramon Perez Fermin, informed
that more than DOP460 million were allocated, thus avoiding the
increases that continue to be caused by the recovery of the
post-pandemic demand, aggravated by the Russian invasion of
Ukraine, with strong sanctions against Russia, one of the main oil
producers in the world, according to Dominican Today.
"The Government of President Luis Abinader maintains its policy of
not transferring increases to the population, assuming a debt of
460 million dollars, thus avoiding increases ranging from 10 pesos
per gallon to almost 80 pesos per gallon in the case of Gasoil
Optimo", pointed out Perez Fermin, the report notes.
Dominican Today reports that these are the prices until September
9, 2022:
Premium gasoline will be sold at RD$293.60 per gallon, maintaining
its price.
Regular Gasoline RD$274.50 per gallon maintains its price.
Regular Gasoil RD$221.60 per gallon maintains its price.
Gasoil Optimo RD$241.10 per gallon maintains its price.
Avtur RD$298.91 per gallon maintains its price.
Kerosene RD$338.10 per gallon maintains its price.
Fuel Oil #6 RD$192.11 per gallon maintains its price.
Fuel Oil 1%S RD$211.77 per gallon maintains its price.
Liquefied Petroleum Gas (LPG) RD$147.60 per gallon maintains its
price.
Natural Gas RD$28.97 per cubic meter (m3) maintains its price.
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: Seek Developer Participation in Housing Project
-------------------------------------------------------------------
Dominican Today reports that the Minister of the Presidency, Joel
Santos Echavarria, received, at the National Palace, the visit of
the Dominican Association of Builders and Housing Developers
(Acoprovi).
During the meeting, Santos Echavarria highlighted the importance of
developers for constructing low-cost housing, especially those
aimed at beneficiaries of the National Plan of Happy Family
Housing, according to Dominican Today.
"It is important to continue encouraging the participation of
developers and promoters in the construction of low-cost housing,
due to the importance that the development of this type of housing
has for the Dominican Republic," he said, the report notes.
The National Happy Family Housing Plan is implemented through a
public-private alliance in which, in addition to State institutions
and developers, builders of low-cost housing solutions participate,
the report relays.
The official indicated that the State provides the general
infrastructure guidelines for the project, and the developers carry
out the internal construction, the report notes.
The meeting was attended by the president of Acoprovi, Jorge
Montalvo; the second vice-president, Annerys Melendez; the
director, Santiago Colome; and the executive vice-president, Evelyn
Rodriguez, the report discloses.
Minister Santos Echavarria was accompanied by the Vice-Minister of
Investment Projects, Camel Curi, 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.
===========
M E X I C O
===========
MEXICO: Airlines Using City Hub Ok to Temporary 15% Cut in Flights
------------------------------------------------------------------
Kylie Madry at Reuters reports that Airlines using the Benito
Juarez International Airport in Mexico City have agreed to
temporarily reduce flights at the hub from 61 per hour to 52 during
peak hours, starting Oct. 31, the country's transportation ministry
said.
The cut, which is almost a 15% reduction and still pending final
approval, follows previous flight caps at the airport announced
earlier this year, as the country alters the capital's airspace in
an attempt to reduce flight saturation at the hub, according to
Reuters.
The ministry said in a statement, the measure - affecting flights
from 7 a.m. to 10:59 p.m. local time (1200 GMT to 1559 GMT) - would
be implemented for the winter season, without specifying a closing
date, the report notes.
In May, authorities announced a measure in which some flights would
be moved to the newly constructed Felipe Angeles Airport (AIFA) on
the outskirts of Mexico City, while commercial flight slots at the
Benito Juarez Airport would be capped, the report relays.
The move came after a video showing two planes belonging to Mexican
carrier Volaris almost crashing at the Benito Juarez Airport (AICM)
went viral in May, the report discloses.
In recent months, some airlines have increased their flight
offerings at the AIFA and the Toluca International Airport to the
west of Mexico City, the report relates.
The agreement was reached at a meeting attended by a majority of
the airlines using the AICM, the ministry said, the report relays.
Mexican airline Viva Aerobus was among those present and agreed to
reduce flights, a spokesperson said, the report notes.
"The AICM's infrastructural conditions require the temporary relief
to (carry out repairs)," Viva Aerobus said, the report adds.
A Volaris spokesperson did not immediately respond to a Reuters
request for comment. An executive of the airline said Volaris would
reduce flights at the AICM by 10% in August and 10% in September,
without mentioning a further reduction, the report says.
An Aeromexico spokesman also did not respond to a request for
comment, but said in June the airline had "submitted to judicial
review aspects related to saturation and studies on the operational
capacity" of the AICM, the report notes.
===========================
V I R G I N I S L A N D S
===========================
AABAR INVESTMENTS: Chapter 15 Case Summary
------------------------------------------
Chapter 15 Debtor: Aabar Investments PJS
Offshore Incorporations Centre
P.O. Box 957
Road Town, Tortola, VG1110
British Virgin Islands
Business Description: Aabar Investments PJS, a United Arab
Emirates company, owns 100% of the equity
interest in Debtor Aabar-BVI, a BVI company.
Foreign Proceeding: Eastern Caribbean Supreme Court, High Court
of the BVI, Commercial Division
Chapter 15
Petition Date: August 31, 2022
Court: United States Bankruptcy Court
Southern District of Florida
Case No.: 22-16802
Foreign
Representatives: Angela Barkhouse
Helen Janes
Carl Jackson
142 Seafarers Way
George Town, Grand Cayman KY1-9006
Cayman Islands
Foreign
Representatives'
Counsel: Gregory S. Grossman, Esq.
Juan J. Mendoza, Esq.
Jennifer Mosquera, Esq.
SEQUOR LAW, P.A.
1111 Brickell Avenue, Suite 1250
Miami, FL 33131
Tel: (305) 372-8282
Fax: (305) 372-8202
Email: ggrossman@sequorlaw.com
jmendoza@sequorlaw.com
jmosquera@sequorlaw.com
Estimated Assets: Unknown
Estimated Liabilities: Unknown
A full-text copy of the Chapter 15 petition is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/EH4UTBY/Aabar_Investments_PJS__flsbke-22-16802__0001.0.pdf?mcid=tGE4TAMA
*********
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 * * *