/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/220914.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 14, 2022, Vol. 23, No. 178 Headlines B R A Z I L GREAT PANTHER: Brazilian Units File for Judicial Reorganization C H I L E CHILE: Annual Inflation Rate Reaches Highest Level in 30 Years D O M I N I C A N R E P U B L I C [*] DOMINICAN REPUBLIC: Tobacco on Relaunch Countdown E L S A L V A D O R INVERSIONES CREDIQ: Fitch Affirms 'B' IDRs, Outlook Negative M E X I C O ALSEA SAB: Fitch Hikes LongTerm IDR to 'BB', Outlook Stable FINANCIERA INDEPENDENCIA: Moody's Rates $250MM Sr. Unsec. Notes B1 MEXARREND SAPI: Fitch Lowers LongTerm IDRs to 'B', On Watch Neg. P E R U CORPORACION FINANCIERA: Fitch Affirms BB+ Subordinated Debt Rating P U E R T O R I C O IGLESIA CRISTIANA: Taps Orlando Loperena Lopez as Accountant V I R G I N I S L A N D S BLACKSTONE ASIA: Chapter 15 Case Summary BRAZEN SKY: Chapter 15 Case Summary - - - - - =========== B R A Z I L =========== GREAT PANTHER: Brazilian Units File for Judicial Reorganization --------------------------------------------------------------- Great Panther Mining Limited (TSX: GPR) (NYSE-A: GPL) ("Great Panther" or the "Company"), reports a corporate update following the announcement on September 6, 2022, regarding the filing of a notice of intention to seek creditor protection (the "NOI"). Judicial Reorganization (Brazil) Great Panther's Brazilian subsidiary, Mina Tucano Ltda. ("Mina Tucano") and its two shareholders, Beadell (Brazil) Pty Ltd and Beadell (Brazil 2) Pty Ltd, has filed a judicial reorganization proceeding in the judicial district of Rio de Janeiro, State of Rio de Janeiro, Brazil. The judicial reorganization proceeding is a court-supervised arrangement between debtors and their creditors to allow the debtors to attempt to restructure their operations and liabilities and in order to address a situation of financial distress. Under the judicial reorganization proceeding, Mina Tucano and its shareholders will remain in possession of their assets and will continue to control and manage the business as a going concern. They will obtain protection against collection and enforcement actions in order to preserve their liquidity and assets and to effectively negotiate with their creditors a judicial reorganization plan intended to maximize stakeholder value. A list of frequently asked questions related to the filing of the NOI and the judicial reorganization can be found on the Company's website at www.greatpanther.com/corporate/restructuring. Stock Exchange Delisting Actions On September 6, 2022, as a result of the Company filing a notice of intention to make a proposal (the under the Bankruptcy and Insolvency Act ( Canada ), the Toronto Stock Exchange ("TSX") suspended trading of the Company's common shares and advised the Company that a delisting review would be required by the TSX. The TSX is reviewing the eligibility for continued listing on the TSX of the common shares of the Company pursuant to an expedited review process. The delisting review is expected to take place on September 16, 2022. On September 6, 2022, the Company also received notice that the NYSE American (the "NYSE-A") has determined to commence proceedings to delist the Company's common shares from the NYSE-A. The NYSE-A notified the Company that it no longer complies with the continued listing standards set forth in the NYSE American Company Guide. If the Company elects not to appeal the delisting determination within seven calendar days, the delisting determination will become final. The Company is evaluating its options related to the delisting notice. About Great Panther Great Panther Mining is a precious metals producer focused on the operation of the Tucano Gold Mine in Brazil where the Company controls a land package covering nearly 200,000 hectares in the prospective Vila Nova Greenstone belt. Great Panther is listed on the Toronto Stock Exchange under the symbol GPR and on the NYSE American under the symbol GPL. * * * As reported in the Troubled Company Reporter-Latin America on September 12, 2022, NYSE American LLC on Sept. 6 disclosed that the staff of NYSE Regulation has determined to commence proceedings to delist the common shares of Great Panther Mining Limited -- ticker symbol "GPL" -- from the Exchange. ========= C H I L E ========= CHILE: Annual Inflation Rate Reaches Highest Level in 30 Years -------------------------------------------------------------- Juan Martinez at Rio Times Online reports that Chile's Consumer Price Index (CPI) registered a monthly increase of 1.2% in August, growing 14.1% year-on-year, a level not seen since 1992, the National Statistics Institute (INE) announced. "In August, the consumer price index registered a monthly increase of 1.2 percent, making it 9.9 percent higher so far this year and 14.1 percent higher in the last 12 months," the agency said, according to Rio Times Online. According to INE, food and non-alcoholic beverages registered the highest price increases in July, with the most significant increases in meat, bread, and cereal products, the report notes. The transport sector also saw monthly price increases, with the following byproducts rising the most: Diesel oil and gasoline, the report relays. Housing rents, housing repairs, and drinking water services also increased, the report discloses. The Central Bank issued a report stating that the consumer price index has increased this year due to external factors, such as the conflict between Russia and Ukraine, but also internal factors, such as the devaluation of the peso and the decline in investment, and predicted that cumulative inflation would reach 12% by the end of 2022, the report says. The central bank increased the interest rate by 100 basis points to 10.75% to curb inflation, the report adds. =================================== D O M I N I C A N R E P U B L I C =================================== [*] DOMINICAN REPUBLIC: Tobacco on Relaunch Countdown ----------------------------------------------------- Dominican Today reports that President Luis Abinader was recognized by the Association of Cigar Producers of the Dominican Republic, (PROCIGAR), for his support for the tobacco industry guided by the Plan for the Relaunch of the Tobacco Industry. This recognition took place during the celebration of the 30th anniversary of the Association of Cigar Producers of the Dominican Republic, Procigar in the city of Santiago, according to Dominican Today. At the ceremony, the president stressed that the tobacco sector has influenced the growth of the economy and that it has allowed the world to know the quality of what is made in the Dominican Republic, the report discloses. ===================== E L S A L V A D O R ===================== INVERSIONES CREDIQ: Fitch Affirms 'B' IDRs, Outlook Negative ------------------------------------------------------------ Fitch Ratings has affirmed Inversiones CrediQ Business S.A. (ICQB) Long and Short-Term Issuer Default Ratings (IDRs) at 'B'. The Rating Outlook for the Long-Term Rating remains Negative. KEY RATING DRIVERS Good Franchise Position: ICQB's ratings are driven by its consolidated intrinsic profile and are highly influenced by its Business Profile, which is characterized by a niche, though strong and consistent franchise in the auto lending segment. The company is the financial division of Grupo Q, a leading car distributor in Central America. All ICQB's subsidiaries have relevant market shares in their respective markets but are small entities when compared to the banking system, representing less than 1% of assets. Negative Operating Environment (OE): The Negative Outlook corresponds to the downside pressures of El Salvador's OE and the challenges it imposes on ICQB's business, as nearly 26% of the company's earning assets are located there. Despite stable performance by El Salvador's exposures, a significant deterioration of the OE would be challenging for ICQB. Benefits from International Operations: Fitch assessment of ICQB's OE weights the country scores in which it operates by earning assets. Its largest operation is in Costa Rica, with nearly 50% of its earning assets, but it also has significant operations in El Salvador and Honduras. This positively influences Fitch's 'b' assessment, since multiregional operations provide income diversification. Controlled Asset Quality: ICQB's asset quality is consistent and proved resilient during and after the pandemic with impaired loans above 90 days representing only 2.1% as of 2Q22 (average from 2019 to 2021: 2.5%), and Fitch expects the ratio to remain stable during the ratings horizon. Improvements in non-performing loans (NPLs) ratios benefit from efforts to strengthen collection practices since the peak of the pandemic and from a high level of reserves of 124% of NPLs (considering its high portion of secured loans), that reaches a notable 156% with additional voluntary reserves. Recovering Profitability: ICQB's profitability levels increased in 2022, as a result of the good performance on loans, which NPLs has decreased therefore credit costs; however, income generation stability will depend on maintaining its business volumes, challenged by the sector supply, and efficiency control. As of 2Q22, pre-tax income to average assets reached 4.9% (2019-2021: 3.9%). Stable Tangible Leverage: Fitch believes the entity's tangible leverage metric of 4.6x, as of June 2022, is reasonable for its operations and similar to its average in 2019-2021 of 4.8x. The metric benefited from a slightly decrease in the loan portfolio. Due to the minor dynamism expected of the credit portfolio, debt levels might continue remain stable in the short term. Diversified Funding Structure: ICQB's funding profile is somewhat diverse compared to its peers. It is primarily comprised of wholesale funding with banks and development related institutions, which represented nearly 80% of funding as of 2Q22, and confers a lower financing cost (2Q22: 6.3%; 2019-2021: 7.0%), and complemented by deposits and issue programs. ICQB has limited financial flexibility, as unsecured debt represented 23.2% (2019 to 2021: 30.8%) of Interest-Bearing Liabilities but has successfully obtained financing over the cycle. RATING SENSITIVITIES Factors that could, individually or collectively, lead to negative rating action/downgrade: -- A downgrade or material deterioration of the main OEs where ICQB holds its major exposures, in particular El Salvador; -- ICQB's IDR could be downgraded due to a sustained deterioration in its profitability, or a continued pre-tax income to average assets indicator below 2.75%. Factors that could, individually or collectively, lead to positive rating action/upgrade: -- The Outlook could be revised to Stable if the OE trend is revised to stable; -- Ratings can be upgraded if the entity is able to diversify its revenues sources while maintaining its profitability levels, along with meaningful improvement in the scale of its operations without significantly altering ICQB's risk profile. SUMMARY OF FINANCIAL ADJUSTMENTS Prepaid expenses were reclassified as intangible assets and were deducted from equity due to their low loss absorption capacity. REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING The principal sources of information used in the analysis are described in the Applicable Criteria. ESG CONSIDERATIONS Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. =========== M E X I C O =========== ALSEA SAB: Fitch Hikes LongTerm IDR to 'BB', Outlook Stable ----------------------------------------------------------- Fitch Ratings has upgraded the Foreign and Local Currency Long-Term Issuer Default Ratings of Alsea, S.A.B. de C.V. (Alsea) to 'BB' from 'BB-', its senior unsecured notes to 'BB' from 'BB-' and the senior unsecured notes under its subsidiary Food Service Project, S.A. to 'BB' from 'BB-'. In addition, Alsea's National Long-Term rating has been upgraded to 'A+(mex)' from 'A-(mex)', and its National Short-Term rating is being upgraded to 'F1(mex)' from 'F2(mex)'. The Rating Outlook is Stable. The upgrade reflects the improvement of Alsea's operating results, leverage metrics and liquidity position. The ratings also incorporate the company's solid business position as an owner and franchise operator of quick service restaurants, cafeterias and casual dining restaurants in Mexico, Latin America and Europe. Alsea possesses a diversified portfolio of recognized brands, store formats and geographical footprint. KEY RATING DRIVERS EBITDA Rebound: Alsea's operations have shown a successful recovery, with consecutive quarters of continued sales growth after the pandemic. Alsea's 2Q22 YTD results, reported strong sales increase of 41.7%, which led to an EBITDA growth of 76%, from MXN2.2 billion as of 2Q21 YTD, to MXN4 billion as of 2Q22 YTD. Its EBITDA margin went to 12.6% from 10.1% at the same period of time. After having a decline in same store sales (SSS) of around 43% in 2Q20, this indicator has been gradually improving on a quarterly basis, showing a significant increase in 2Q21, and keeping a positive trend until 2Q22, where the SSS increased by 38.7% compared to 2Q21. Fitch expects that Alsea SSS growth to moderate in lower levels in the next 18 months to 24 months as operations recovered. The company will continue executing several commercial and digital strategies to boost its sales, as well as productivity initiatives and costs reductions to improve its results. Alsea's key brands continued to gain market share, thanks to their superior product offering and customer experience. Revenues Improvement in 2022-2023: Fitch projects Alsea's revenues in 2022 will be around 23% above of its 2021 level and EBITDA margin will be close to 13% (pre-IFRS 16). The projection assumes that despite recession fears, the company sales will keep a positive trend, after better-than-expected 2021 YE and 1H22 results and full compliance with Fitch's previous projections (revenue growth above 30%, and EBITDA margin around 11% [pre-IFRS 16]). The projection also includes corporate stores openings (61 so far in 2022), cost and expense efficiencies, product innovation and development of digital applications. Fitch expects company's EBITDA margin for 2023 will continue on the 13% level going forward. Leverage Improvement: Fitch expects Alsea's total debt adjusted for leases to EBITDAR will be around 4.6x, by YE 2022, and then will steadily decline close to 4.3x, by YE 2023. The gradual strengthening in leverage metrics will be supported mainly by EBITDA growth as total debt is projected at around MXN30 to MXN29billion in 2022-2023. For the LTM ended June 30, 2022, Alsea's adjusted leverage, calculated by Fitch, was 4.4x which compares positively with the 6.3x for the same period in 2021. Positive FCF: Alsea's FCF is expected to be positive. Fitch said, "Our expectation is based on the projected EBITDA growth and the several measures the company has implemented to privilege internal cash generation, which includes working capital efficiencies and no dividend payments. Alsea is projected to generate cash flow from operations above MXN5 billion in 2022 and MXN5.6 billion in 2023. With these results, FCF will be close to MXN1 billion annually in 2022 and 2023, after covering capex of an average of MXN4.6 billion per year during that period. For the LTM ended June 30, 2022, Alsea's FCF calculated by Fitch was MXN3.3 billion." Solid Business Position: Alsea's business portfolio is made up of international franchise brands and recognized national and international own brands that lead in the segments in which they participate. Some of these are Starbucks, Burger King, Domino's Pizza, Vips, Foster Hollywood, Chili's, Italianni's, P.F. Changs and Archies, among others. Fitch believes that this portfolio of brands provides it with a significant competitive advantage by covering different demographic segments and consumer preferences. Good Geographic Diversification: Fitch views Alsea's geographic diversification towards territories outside Mexico positively and believes that its operations in Europe allow the company to balance the exposure from Latin American. During LTM ended June 30, 2022, Alsea operations outside Mexico represented around 51% of consolidated revenues and 39% of consolidated EBITDA (38% and 28% in 2014). DERIVATION SUMMARY Alsea's long-term ratings are based on its business profile, which benefits from the portfolio of recognized restaurant brands and formats, positive operating performance, as well as the scale and geographic diversification of its operations. Alsea's business position and diversification compares favorably with other Fitch-rated issuers in the 'BB' category as Arcos Dorados (BB/Stable); however, Alsea's financial profile is weaker than Arcos due to higher leverage. Alsea's successful strategies during and after the pandemic of the coronavirus, resulted in an important recovery in sales and EBITDA, that helped the company to normalize its operations and had a successful recovery after the uncertainty of the pandemic. Its ratings are weaker than international peers such as Starbucks Corporation (BBB/Stable) and Darden Restaurants, Inc. (BBB/Stable) given its weaker business profile in terms of size and scale and diversification. The company also has lower profitability and higher leverage when compared with Starbucks and Darden Restaurants. KEY ASSUMPTIONS Fitch's Key Assumptions Within The Rating Case for the Issuer: -- Increase in revenues of around 23% in 2022 and 10% in 2023; -- EBITDA margin around 13% in 2022-2023; -- Capex of MXN4.6 billion in average for 2022-2023; -- Indicators of total debt to EBITDA and total debt adjusted to EBITDAR around 3.6x and 4.6x, respectively, by YE 2022. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Consistent improvement in its operational performance above Fitch's expectations; -- Robust FCF generation on a sustained basis; -- Total adjusted debt to EBITDAR below 3.5x on a sustained basis; -- Operating EBITDAR to gross interest expense+ leases expenses, above 2.0x on a sustained basis combined with a strong liquidity profile. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- A sustained deterioration on the operational performance of its main markets; -- Negative FCF generation on a sustained basis; -- A weakening in its liquidity profile; -- Total adjusted debt to EBITDAR above 4.5x on a sustained basis. LIQUIDITY AND DEBT STRUCTURE Alsea's liquidity position is robust as of June 30, 2022, as it has an available cash position of MXN5 billion and debt amortizations of MXN1.8 billion in 2022 and 2023. Likewise, the company faces debt maturities in 2024 for MXN3.1 billion. Alsea refinanced its bank debt in December 2021 and January 2022 with a combination of a senior unsecured notes issuance of USD500 million due in 2026 and an unsecured notes issuance of EUR300 million, due in 2027. In addition, as of June 30, 2022, the company successfully ended its waiver period agreement with banks, which extended the suspension of the calculation of certain covenants in its credit agreements (leverage ratio and interest coverage ratio) from April 1, 2021 to June 30, 2022, which also include maintaining a minimum cash balance of MXN3.3 billion at any time. This minimum cash balance was reduced to MXN2.2 billion after the issuances mentioned above (senior unsecured notes issuance of USD500 million due in 2026 and an unsecured notes issuance of EUR300 million, due in 2027.) ISSUER PROFILE Alsea is the leading operator of fast food establishments, coffee shops, casual dining and family restaurants in Latin America and Europe. It operates a broad and diversified portfolio of brands such as Domino's Pizza, Starbucks, Burger King, Chili's Bar & Grill, Foster's Hollywood, among others. REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING The principal sources of information used in the analysis are described in the Applicable Criteria. ESG CONSIDERATIONS Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. RATING ACTIONS ENTITY / DEBT RATING PRIOR ------------- ------ ----- Alsea, S.A.B. de C.V. LT IDR BB Upgrade BB- LC LT IDR BB Upgrade BB- Natl LT A+(mex) Upgrade A-(mex) Natl ST F1(mex) Upgrade F2(mex) senior unsecured LT BB Upgrade BB- senior unsecured Natl LT A+(mex) Upgrade A-(mex) senior unsecured Natl ST F1(mex) Upgrade F2(mex) Food Service Project, SA senior unsecured LT BB Upgrade BB- FINANCIERA INDEPENDENCIA: Moody's Rates $250MM Sr. Unsec. Notes B1 ------------------------------------------------------------------ Moody's Investors Service has assigned a B1 long-term foreign currency senior debt rating to Financiera Independencia, S.A.B. de C.V.'s (Findep) outstanding 2024 $250 million senior unsecured notes issued in 2017. The notes are senior unsecured obligations and will rank pari passu in right of payment with all of Findep's existing and other future unsubordinated obligations. The entity-level outlook on Findep is stable. The following rating was assigned: Financiera Independencia, S.A.B. de C.V. (Findep) $250 million 8.0% senior notes due 2024 Senior Unsecured Regular Bond Rating in Foreign Currency: B1 RATINGS RATIONALE The B1 senior unsecured debt rating incorporates Findep's strong capitalization, at 35% of total assets as of June 2022, high profitability, and the level of ample reserves against credit losses, which helps to mitigate the high risk of its unsecured consumer loan book. The company's liquidity profile is supported by strong cash flow generation provided by the high turnover rates of its loan book over time, with collections accounting for approximately 30% of its total loans on quarterly basis. This portfolio dynamic has allowed Findep to increase debt coverage ratio to 62% in June 2022, from 17% in 2019, while the origination of new loans also moderated in the first six months of 2022. In addition, Findep has been able to maintain good access to local and foreign banking facilities with low reliance on secured debt. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING Upward pressures on Findep's senior unsecured debt rating could result from an upgrade of its issuer ratings. It would be positive for Findep's ratings if the company maintains its conservative origination stance in favor of maintaining high liquidity buffers in times of challenging market conditions, while it continues to enhance funding diversification reducing the short-term profile of its obligations. Sustained improvement in core earnings generation and a stabilization of its asset quality metrics at current levels would also be key credit drivers to support a positive movement. Conversely, Findep's B1 ratings could be downgraded if refinancing risks increase in the short-term, and the company is unable to renew its banking credit lines. The ratings could be downgraded if the company's short-term maturities coverage by liquid assets falls below 40%, coupled with a decrease in its capital, weakening the company's loss absorption and a significant drop in collections. At the same time, a material deterioration of the lessor's asset risks leading to a decline in collections, potentially arising from its concentrations in riskier individuals, that would hurt profitability and ultimately capitalization, could add further pressure to the B1 ratings. The principal methodology used in this rating was Finance Companies Methodology published in November 2019. MEXARREND SAPI: Fitch Lowers LongTerm IDRs to 'B', On Watch Neg. ---------------------------------------------------------------- Fitch Ratings has downgraded Mexarrend, S.A.P.I. de C.V.'s (Mexarrend) Long-Term (LT) Local and Foreign Currency Issuer Default Ratings (IDRs) to 'B' from 'B+', and the senior unsecured LT debt rating to 'B'/'RR4' from 'B+'/'RR4'. Fitch also downgraded Mexarrend's LT National Ratings to 'BBB-(mex)' from 'BBB+(mex)', and the Short-Term (ST) National Ratings and the ST portion of the senior unsecured notes program to 'F3(mex)' from 'F2(mex)'. All ratings have been placed on Rating Watch Negative (RWN). KEY RATING DRIVERS The rating actions reflect elevated pressure on the company's short-term liquidity position arising from near-term debt maturities, combined with recent market events that have further undermined investor confidence in the Mexican non-bank financial institutions sector. The company faces elevated execution risk associated with refinancing its upcoming USD30 million international bond maturity in October 2022. Additional challenges may arise from the company's local bond maturities of MXN118 million and MXN227 million, in September 2022 and October 2022, respectively. Modest Liquidity Position: Mexarrend's cash position, expected collection and expected funding from secured, committed credit lines fully cover the expected payments through October. The company is seeking additional funding sources beyond its existing warehouse facilities in an effort to increase available liquidity, but under such a scenario, Fitch expects secured funding to increase as a proportion of the company's total funding. The company maintains that it will obtain and hold sufficient liquid assets to repay in the coming weeks the upcoming bond maturity. Maturity concentration in 2024: Mexarrend's limited on balance sheet liquidity position is relatively tight in respect to near term maturities and in the context of recent market events. While funding availability from warehouse facilities is sufficient to cover maturities over the next 12 months, significant maturity concentration risk is also present from a 2024 bond maturity of USD300 million, for which the entity is working on refinancing plans. Improved Capitalization and Leverage: Mexarrend's tangible leverage metric of 5.8x as of June 2022 shows a positive trend, driven by low but positive net profits, as well as moderate debt growth. Fitch also calculates an adjusted leverage excluding the temporary impacts on capital through other comprehensive income. On this basis, Fitch calculates leverage to be 5.5x as of June 2022. Fitch expects leverage to be maintained near current levels. Non-Performing Loans Exceed Peers: Non-performing loans remain higher than peers, at 7.2% as of June 2022 on a Fitch-calculated basis. Fitch's calculation includes past due loans and total owned loans as disclosed by the company. This ratio is different from the 6.1% disclosed by Mexarrend because the company includes part of its portfolio under management. Our assessment also considers the company's exposure to non-productive real estate assets registered as investments in properties (11.8% of total assets as of June 2022), a portion of which is expected to be used as collateral. Fitch expects asset quality to remain similar to current levels. Weak Profitability: Since 2021, the company has improved profitability underpinned by portfolio growth, increased net interest income, lower credit costs and the continued development of lending as a service strategy. Nevertheless, profitability remains weak, and as of June 2022, Mexarrend's core profitability metric was 0.3%. In the medium term, profitability prospects are sensitive to growth, asset quality performance, funding costs and potential unforeseen costs related to the announced business combination with Zinobe. RATING SENSITIVITIES Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Failure to address near-term debt maturities within the next 30 days, either through refinancing or maintenance of sufficient liquid resources to fully cover the expected payments. In this scenario, a downgrade may exceed one notch; -- Any breach on the company's debt covenants that increases liquidity and refinancing risk could also trigger a downgrade; -- Debt/tangible equity (adjusted for the temporary effects of derivatives valuations) above 9.0x on a sustained basis. Factors that could, individually or collectively, lead to positive rating action/upgrade: -- The ratings could be removed from RWN if the company is able to address near-term debt maturities, either through refinancing or maintenance of sufficient liquid resources to fully cover expected payments. Under such a scenario, Fitch would likely assign a Negative Rating Outlook, reflecting long-term challenges to funding, liquidity and coverage; -- Ratings could stabilize at their current level, if Mexarrend shows sustained access to diversified funding sources that allow portfolio growth and reduce refinancing risk. DEBT AND OTHER INSTRUMENT RATINGS: KEY RATING DRIVERS The senior unsecured debt program and ST portion of the senior unsecured notes program ratings are at the same level as Mexarrend's IDR and ST national ratings, respectively because the probability of default on the debt is the same as that of the company. The recovery rating of 'RR4' reflects Fitch's expectation of average recovery prospects. DEBT AND OTHER INSTRUMENT RATINGS: RATING SENSITIVITIES -- The ratings of Mexarrend international and local debt issues are sensitive to a change in the company's LT IDRs and National Ratings, respectively, as the likelihood of default of these notes is the same as that of the company; -- The notes' rating may diverge from the IDRs if asset encumbrance increases to the extent that it relevantly subordinates senior unsecured bondholders. In accordance with Fitch's policies, the issuer appealed and provided additional information to Fitch that resulted in a rating action that is different than the original rating committee outcome. SUMMARY OF FINANCIAL ADJUSTMENTS For comparability and analytical purposes, Fitch reclassified certain income statement and balance sheet accounts. Accounts receivable from factoring and cash financing are classified as loans, fixed assets under operating leased contracts were classified as the operating lease portfolio, pre-paid expenses and some other assets were reclassified as intangibles given their low loss absorption capacity, gross operating and finance lease income is composed of interest, operating lease and equipment financing income net of the cost of equipment, and related services and supplies revenue is presented net of cost as other operating income. REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING The principal sources of information used in the analysis are described in the Applicable Criteria. ESG CONSIDERATIONS Mexarrend has an ESG Relevance Score of '4' for or Management Strategy, in contrast with a standard scoring of '3', reflecting risks associated with the execution of refinancing near-term debt maturities, as well as the recently announced business combination with Zinobe, rebranding and the development of additional business lines. This has a negative impact on the rating in conjunction with other factors. Mexarrend has an ESG Relevance Score of '4' for Governance Structure given some concerns regarding board independence which may impact strategic decisions. This has a moderately negative impact on the rating in conjunction with other factors. Mexarrend has an ESG Relevance Score of '4' for Financial Transparency to highlight that the level of detail between audited financial statements and quarterly financial report and the level of disclosure differ. Such differences could limit Fitch's ability to assess the company's financial profile. While financial transparency is improving, these concerns still have a moderately negative impact on the rating in conjunction with other factors. Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. RATING ACTIONS ENTITY / DEBT RATING RECOVERY PRIOR ------------- ------ -------- ----- Mexarrend, S.A.P.I. de C.V. LT IDR B Downgrade B+ ST IDR B Rating Watch On B LC LT IDR B Downgrade B+ LC ST IDR B Rating Watch On B Natl LT BBB-(mex) Downgrade BBB+(mex) Natl ST F3(mex) Downgrade F2(mex) senior unsecured LT B Downgrade RR4 B+ senior unsecured Natl ST F3(mex) Downgrade F2(mex) ======= P E R U ======= CORPORACION FINANCIERA: Fitch Affirms BB+ Subordinated Debt Rating ------------------------------------------------------------------ Fitch Ratings has affirmed the Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) of Corporacion Financiera de Desarrollo S.A. (COFIDE) at 'BBB'. The Rating Outlook Is Stable. The affirmation of COFIDE's IDRs reflects Fitch's unchanged view of potential support, if needed, from the government of Peru. Fitch has withdrawn COFIDE's Support Rating and Support Rating Floor of '2' and 'BBB', respectively, as they are no longer relevant to the agency's coverage following the publication of Fitch's updated Bank Rating Criteria on Nov. 12, 2021. In line with the updated criteria, Fitch has assigned a Government Support Rating (GSR) of 'bbb'. KEY RATING DRIVERS IDRs AND SENIOR DEBT COFIDE's IDRs and senior debt ratings reflect Fitch's expectation that the entity would receive support from the Peruvian government if needed. In Fitch's view, COFIDE is a key policy bank for the government, as it is critical in implementing economic and social development policies. Peru's ability to offer support is reflected in its sovereign rating (BBB/Stable); although the government does not extend an explicit guarantee, ratings are equalized given that the state is the majority shareholder and the bank has operational and financial synergies with the public administration. For the Peruvian government, COFIDE plays a key role as a development bank focused in infrastructure, economic and social welfare. The bank plays a critical role in implementing policies directed at sectors with limited funding access or projects underserved by commercial banks. During the pandemic, the bank had a crucial role in the Peruvian handling of the economy by managing key funds, such as Reactiva or FAE, created to support SMEs, which further supports Fitch's view on the entity's relevant policy role. Although COFIDE's ratings are based purely on Fitch assessment of expected government support, the financial profile is still relevant to the agency's appreciation about the policy role of the entity for the government. COFIDE's financial performance reflects its development bank nature where profitability is not the main goal but the operation is well supported by good capital metrics. Profitability has been typically weak, as reflected in its four-year average ratio of operating profit to risk-weighted assets of 0.5%. Asset quality reflects the risks posed by high per borrower concentrations which drove an average non-performing loan ratio of 7.6% over the past four years, although provision coverage is adequate. The latter, along with a good FCC ratio of around 20% strengthen its loan loss absorption capacity. Given COFIDE's development nature, Fitch does not expect a significant change in financial performance in the foreseeable future. GSRs In Fitch's opinion, the bank's Government Support Rating of 'bbb', in line with the sovereign, reflects the high propensity of the Peruvian government to support, given the bank's ownership structure and policy role. The government's current ability to support is reflected in the sovereign's IDR of BBB. GSR indicates the minimum level to which the entity's Long-Term IDRs could fall if Fitch does not change its view on potential sovereign support. RATING SENSITIVITIES Factors that could, individually or collectively, lead to negative rating action/downgrade: IDRS, GSR AND SENIOR DEBT -- COFIDE's ratings will mirror any potential negative change in Peru's sovereign ratings; -- Although not a baseline scenario, the ratings could change if Fitch perceives a decrease in the bank's strategic importance to the government's public policies. Factors that could, individually or collectively, lead to positive rating action/upgrade: IDRS, GSR AND SENIOR DEBT -- An upgrade is highly unlikely in the near future as the IDRs and GSR are constrained by the sovereign rating, which currently has a Stable Outlook; -- Positive rating actions will mirror any potential positive change in Peru's sovereign rating. OTHER DEBT AND ISSUER RATINGS: KEY RATING DRIVERS Fitch affirmed the senior debt issuances at the same level as its Long-Term IDRs, as the notes' likelihood of default is the same as COFIDE's. COFIDE's subordinated bonds are plain vanilla, and, in Fitch's opinion, their probability of non-performance is equivalent to that of COFIDE's senior bonds, but they would incur a higher loss in case of default due to their subordinated nature. Considering the subordinated debt's features, Fitch does not believe there is a meaningful source of loss severity mitigation for these securities upon default, and so they are rated two notches below the bank's IDR. OTHER DEBT AND ISSUER RATINGS: RATING SENSITIVITIES RATING SENSITIVITIES -- The bank's subordinated notes are sensitive to any positive or negative change in COFIDE's ratings. SUMMARY OF FINANCIAL ADJUSTMENTS All intangible assets were deducted from total equity to obtain the Fitch Core Capital since the agency believes the capacity for these to absorb losses is low. Sources of Information The main sources of information used in the analysis are described in the Applicable Criteria. REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING The principal sources of information used in the analysis are described in the Applicable Criteria. PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS Corporacion Financiera de Desarrollo S.A. ratings are support driven from the Peruvian sovereign rating. ESG CONSIDERATIONS Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. RATING ACTIONS ENTITY / DEBT RATING PRIOR ------------- ------ ----- Corporacion Financiera de Desarrollo S.A. (COFIDE) LT IDR BBB Affirmed BBB ST IDR F2 Affirmed F2 LC LT IDR BBB Affirmed BBB LC ST IDR F2 Affirmed F2 Support WD Withdrawn F2 Support Floor WD Withdrawn BBB Gov't Support bbb New Rating senior unsecured LT BBB Affirmed BBB subordinated LT BB+ Affirmed BB+ ===================== P U E R T O R I C O ===================== IGLESIA CRISTIANA: Taps Orlando Loperena Lopez as Accountant ------------------------------------------------------------ Iglesia Cristiana Hefzi-BA (IS.62), Inc. seeks approval from the U.S. Bankruptcy Court for the District of Puerto Rico to employ Orlando Loperena Lopez, a practicing accountant in Aguadilla, P.R. The accountant will render these services: a. close out the Debtor's books as of date of the filing of this case, and open new books as for the next day; b. establish ne bookkeeping system; c. prepare the periodic statements of the Debtor's operation; d. prepare and file the Debtor's state and federal tax return for the fiscal year; e. prepare general ledger and disbursements register; f. reconcile the account; g. prepare certified interim financial statements as needed; h. prepare annual financial statements and returns; i. provide tax and management counselinhl and j. represent the Debtor during tax investigations. The accountant will bill $150 per month for his services. Orlando Loperena Lopez assured the court that he neither holds nor represents an interest adverse to the estate. The accountant can be reached at: Orlando Loperena Lopez, MBA 7 Calle J Jesus Esteves Aguadilla, PR 00603 Tel: (787) 891-4218 Email: oloperenanwc@yahoo.com About Iglesia Cristiana Hefzi-BA Iglesia Cristiana Hefzi-BA (IS.62) Inc. sought bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.P.R. Case No. 22-02170) on July 26, 2022. In the petition filed by Deborah Magaly Alvarez Alvarez, pastora, the Debtor estimated assets between $1 million and $10 million and liabilities between $100,000 and $500,000. Juan Carlos Bigas Valedon, Esq., is the Debtor's legal counsel while Orlando Loperena Lopez, MBA is the Debtor's accountant. =========================== V I R G I N I S L A N D S =========================== BLACKSTONE ASIA: Chapter 15 Case Summary ---------------------------------------- Chapter 15 Debtor: Blackstone Asia Real Estate Partners Limited Offshore Incorporations Centre P.O. Box 957 Road Town, Tortola VG1110 British Virgin Islands 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.: 22-16805 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 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/YCVODHA/Blackstone_Asia_Real_Estate_Partners__flsbke-22-16805__0001.0.pdf?mcid=tGE4TAMA BRAZEN SKY: Chapter 15 Case Summary ----------------------------------- Chapter 15 Debtor: Brazen Sky Limited Floor 4, Banco Popular Building Road Town, Tortota VG11110 British Virgin Islands Chapter 15 Petition Date: August 31, 2022 Court: United States Bankruptcy Court Southern District of Florida Case No.: 22-16795 Foreign Proceeding: Voluntary Liquidation pending in British Virgin Islands Foreign Representatives: Angela Barkhouse Helen Janes Carl Jackson 142 Seafarer Way George Town, Grand Cayman KY1-9006 Cayman Islands Foreign Representatives' Counsel 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 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/4GSLCEY/Brazen_Sky_Limited__flsbke-22-16795__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. 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