/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/221013.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 Thursday, October 13, 2022, Vol. 23, No. 199 Headlines B A H A M A S BAHAMAS: Moody's Lowers Issuer & Senior Unsecured Ratings to B1 B R A Z I L MATLINPATTERSON GLOBAL: Taps LDCM Advogados as Brazilian Counsel C A Y M A N I S L A N D S E-HOUSE (CHINA): Files for Chapter 15 Bankruptcy Protection D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: Dependence on Imports Delays Inflation Cut H O N D U R A S HONDURAS: IMF Staff Concludes Visit to Honduras J A M A I C A JAMAICA: Economy to Return to Pre-COVID-19 Output Levels by 2023 M E X I C O ASERTA SEGUROS: Moody's Lowers Insurance Fin Strength Rating to Ba3 MEXICO: Inflation Remains Unchanged at 8.7% in September P E R U PERU: Proposes New Approach to Mining to Combat Economic Conflicts P U E R T O R I C O AMERICAN FLAMINGO: Member to Fund Chapter 11 Plan T U R K S A N D C A I C O S I S L A N D S LINDA'S BAKERY: Closes Two Stores - - - - - ============= B A H A M A S ============= BAHAMAS: Moody's Lowers Issuer & Senior Unsecured Ratings to B1 --------------------------------------------------------------- Moody's Investors Service has downgraded the Government of The Bahamas' long-term issuer and senior unsecured ratings to B1 from Ba3. The outlook has been changed to stable from negative. The downgrade to B1 is driven by a higher degree of government liquidity risk. Despite an ongoing economic recovery, driven primarily by tourism activity, and a narrowing fiscal deficit, The Bahamas faces constrained funding options given elevated external borrowing costs. Tighter funding conditions over a prolonged period could undermine the sovereign's ability to meet external repayments, including on its international bonds. The stable outlook reflects balanced risks at the B1 rating level. A high government debt burden and weak debt affordability metrics limit fiscal policy space to respond to future shocks, including climate shocks that will likely come with increasing frequency and intensity, and will remain significantly weaker than similarly rated peers. The Bahamas' relatively strong institutional framework, stable political system and a fiscal policy framework that is responsive to economic and climate shocks will support fiscal consolidation and a downward trend in government debt ratios. The relatively strong institutional framework along with a comparatively high level of GDP per capita support the sovereign's debt-carrying capacity. The Bahamas' local currency ceiling was lowered to Baa3 from Baa2. The four-notch gap to the local currency rating reflects an established track record of predictable and reliable macroeconomic policymaking balanced against a reliance on tourism that represents a common risk for the government and non-government issuers in the country. The Bahamas' foreign-currency ceiling was lowered to Ba1 from Baa3. The one-notch gap between the local and foreign-currency ceilings reflects low transfer and convertibility risk, itself anchored by a history of relatively strong economic institutions supporting exchange rate stability and limited external indebtedness, despite a history of capital controls. RATINGS RATIONALE RATIONALE FOR THE DOWNGRADE TO B1 CONSTRAINED FINANCING OPTIONS AMID TIGHTER GLOBAL FINANCIAL CONDITIONS WILL UNDERMINE THE SOVEREIGN'S ABILITY TO REPAY DEBT The key driver of the downgrade is Moody's assessment that tighter financing conditions over the past year indicate more constrained financing options compared to prevailing conditions at the time of the downgrade to Ba3 in September 2021. Tighter financial conditions come amid still elevated, albeit declining, gross borrowing requirements, which Moody's estimates at around 20% of GDP when including Treasury bills. A narrowing fiscal deficit, which Moody's expects to turn to a surplus by the fiscal year ending June 30, 2025 (fiscal 2025), will reduce gross financing requirements. The government plans to rely more heavily on domestic financing and greater utilization of multilateral funding, including guarantees and other credit enhancements to mobilize private financing. If successful, this would reduce the need to rely on international bond issuances. However, the timing and the amount raised through these transactions is uncertain. The domestic market provides a relatively stable source of financing at affordable rates and with varying tenors. Recent Treasury bill auctions have shown strong demand from the banking sector for government securities and Moody's expects domestic investors to continue to rollover domestic amortization and finance a portion of the government's net financing needs. However, in Moody's view, the capacity of the domestic market to meet larger financing needs, including upcoming external amortizations, is limited. Moody's expects the government to maintain sufficiently broad access to funding to finance narrowing fiscal deficits and upcoming amortizations, including $300 million of international bonds due in 2024. However, the government will face a more challenging repayment period beginning in 2027, when it will need to make principal repayments on international debt of at least $250 million per year until the end of the decade. The government continues to accumulate assets in sinking funds that will be used for future repayments, and intends to deposit the collection of any tax arrears into the sinking funds for future debt repayment. However, amortizations related to international debt and along with other external payments which include loans due to multilateral lenders and commercial bank loans will necessitate the government maintaining access to sufficiently diverse external funding options. International reserves have grown steadily over the three years, driven by international bond issuance, increased multilateral financing, and re-insurance flows related to Hurricane Dorian. International reserves, excluding gold, stood at $3.2 billion as of June 30, 2022, or 45 weeks of import coverage. However, in the context of higher global commodity prices feeding through to higher imports, and more limited access to international capital markets, international reserves will decline unless upcoming external amortizations are offset by other sources of external financing. RATIONALE FOR THE STABLE OUTLOOK The stable outlook denotes balanced risks at the B1 rating level. Upside risks stem from a continued strong rebound in tourism, which supports economic activity and a durable improvement in fiscal accounts. Increased utilization of concessional financing and credit enhancements which improve the government's debt affordability metrics and refinance upcoming maturities would also represent an upside risk compared with Moody's baseline scenario. Downside risks stem from a slowdown in tourism activity in 2023 or a weaker commitment to medium-term fiscal targets. While government debt will remain significantly higher than levels that prevailed prior to Hurricane Dorian in 2019 and higher than similarly-rated peers, the debt burden will remain on a downward trend and debt affordability metrics will improve. The Bahamas' relatively strong institutional framework, stable political system and a fiscal policy framework that is more responsive to economic shocks have supported the credit profile. The relatively strong institutional framework along with a comparatively high level of GDP per capita support the sovereign's debt-carrying capacity. After a 24% contraction in 2020, real GDP growth rebound strongly in 2021, growing 13.7%. Moody's projections a further expansion in economic growth in 2022, with real GDP growth of 7% driven primarily by tourism activity. The Bahamas have benefited from strong pent-up demand for travel, particularly from the United States, its main source market. Despite a worsening global external environment, forward booking and other indicators for travel continue to point to unmet demand for travel. As pent-up demand for travel is satisfied, Moody's expects growth from the tourism sector to moderate. Notwithstanding the rise in debt since 2019, Moody's expects the government's efforts at fiscal consolidation to prove effective in gradually reducing the debt burden over the next two to three years. In fiscal year 2022, stronger-than-budgeted revenue growth contributed to the government outperforming its original budget targets, with the fiscal deficit narrowing to 5.4% of GDP. Moody's projects the fiscal deficit to narrow to 4.4% of GDP in fiscal 2023, with the primary balance turning to a small surplus. Fiscal consolidation will be based on the removal of pandemic-related spending and a gradually increasing revenue base, which will benefit strong growth in VAT collection as well as some modest gains in tax collection through government tax policy. ENVIRONMENTAL, SOCIAL, GOVERNANCE CONSIDERATIONS The Bahamas' ESG Credit Impact Score is moderately negative (CIS-3) reflecting its exposure to environmental risks, moderately negative social risks and a strong institutional framework that supports its governance. The Bahamas' exposure to environmental risks is moderately negative (E-3 issuer profile score). The Bahamas is in the so-called Hurricane Belt and has been affected by more frequent and stronger tropical storms in recent years. Because tourism represents a large share of the economy, disruptions to the sector caused by weather events negatively affect the credit profile. In addition, The Bahamas is exposed to rising sea levels, with 72% of its land being low lying or within five meters above sea level. Exposure to social risks is moderately negative (S-3 issuer profile score). Despite having a high per capita GDP on a purchasing power parity basis, high unemployment levels for the younger segment of the labor force can weigh on the economy. The influence of governance on The Bahamas' credit profile is neutral-to-low (G-2 issuer profile). Aspects of governance strength, including a relatively strong institutional framework, help mitigate some of the E and S risks to which The Bahamas is exposed. GDP per capita (PPP basis, US$): 36,151 (2021) (also known as Per Capita Income) Real GDP growth (% change): 13.7% (2021) (also known as GDP Growth) Inflation Rate (CPI, % change Dec/Dec): 5.5% (2021) Gen. Gov. Financial Balance/GDP: -13.3% (2021) (also known as Fiscal Balance) Current Account Balance/GDP: -21.6% (2021) (also known as External Balance) External debt/GDP: 44.3% (2021) Economic resiliency: baa3 Default history: No default events (on bonds or loans) have been recorded since 1983. On October 03, 2022, a rating committee was called to discuss the rating of the Bahamas, Government of. The main points raised during the discussion were: The issuer has become increasingly susceptible to event risks. Other views raised included: The issuer's economic fundamentals, including its economic strength, have materially increased. The issuer's fiscal or financial strength, including its debt profile, has materially decreased. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The stable outlook reflects the view that risks are balanced at the B1 rating level. A demonstrated ability to access sufficiently diverse funding, which supports an improvement in debt affordability and reduces rollover risk, would put upward pressure on the rating. Implementation of fiscal and economic policies that support a fiscal consolidation process and place government debt on a more durable downward trajectory would, also put upward pressure on the rating. Evidence of more elevated government liquidity risk which threatens the government's ability to meet upcoming external amortizations would likely prompt a downgrade. A slower pace of fiscal consolidation which contributes to tighter financing conditions and weaker debt affordability metrics would lead to a downgrade. Downward pressure on the rating would emerge if The Bahamas were affected by a climate-related shock and the policy response did not present a credible return to the fiscal rule's medium-term targets. The principal methodology used in these ratings was Sovereign Ratings Methodology published in November 2019. =========== B R A Z I L =========== MATLINPATTERSON GLOBAL: Taps LDCM Advogados as Brazilian Counsel ---------------------------------------------------------------- MatlinPatterson Global Opportunities Partners II, L.P. and its affiliates seek approval from the U.S. Bankruptcy Court for the Southern District of New York to hire LDCM Advogados as their special Brazilian counsel. The Debtors require a special counsel to represent them in a lawsuit filed by the administrator of the Brazilian bankruptcy estate of Varig Logistica in Brazil. The administrator sued the Debtors over claims they had abused their control of Varig Logistica and caused its bankruptcy. LDCM's standard hourly rates for its services are as follows: Partners $550 - $780 Associates $450 Interns $300 In accordance with Appendix B-Guidelines for reviewing fee applications filed by attorneys in larger Chapter 11 cases, LDCM Advogados disclosed that: - the firm has not agreed to any variations from, or alternatives to, its standard or customary billing arrangements for this engagement; and - the billing rates and material terms of the pre-bankruptcy engagement are the same as the current rates charged by the firm. As disclosed in court filings, LDCM is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: Leonardo de Campos Melo LDCM Advogados Av. Epitacio Pessoa, 1274 Ipanema, Rio de Janeiro RJ, 22410-090, Brazil Phone: +55 21 3500-3990 Email: leonardo@ldcm.com.br About MatlinPatterson Global MatlinPatterson Global Opportunities Partners II L.P. is a private investment fund structured as limited partnership entity organized in the State of Delaware. MatlinPatterson and its affiliates sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No 21-11255) on July 6, 2021, disclosing total assets of $100 million to $500 million and total liabilities of $10 million to $50 million. The cases are handled by Judge David S. Jones. The Debtors tapped Simpson Thacher & Bartlett, LLP as bankruptcy counsel; Schulte Roth & Zabel, LLP as conflicts counsel; FTS US Inc. as tax consultant; Ernst & Young, LLP as tax services provider; and North Country Capital LLC as restructuring advisor. Matthew Doheny of North Country Capital serves as the Debtors' chief restructuring officer. Kurtzman Carson Consultants, LLC is the claims, noticing and administrative agent. =========================== C A Y M A N I S L A N D S =========================== E-HOUSE (CHINA): Files for Chapter 15 Bankruptcy Protection ----------------------------------------------------------- E-House China Enterprise Holdings Ltd. on Monday, October 3, 2022, filed for Chapter 15 bankruptcy in Manhattan, to obtain protection from creditors in the U.S. while it works out a restructuring in the Cayman Islands. The Debtor is the ultimate parent of a group of 300 companies that provides real estate services in China. The Group's primary business is real estate agency services in the primary market in the People's Republic of China, real estate data and consulting services, and real estate brokerage network services. The Group also provides digital marketing services. $520M in Assets As the ultimate holding company of the Group, the Debtor's principal assets are its ownership interests in its subsidiaries, with a net book value of $520.4 million. The Debtor also has the following assets as of March 31, 2022: (a) receivables due from other Group companies of $743.0 million; (b) other receivables, principally deposits paid to real estate developers in connection with the Group carrying out services for the developers, of approximately $43.2 million; (c) loans to real estate developers and investments in marketable securities with a net book value of approximately $85.3 million; (d) cash and cash equivalents with a value of approximately $2.1 million; and (e) investment in an associate company, CRIC Capital Service Holdings Limited, with a net book value of approximately $13.1 million. E-House China, which counts China Evergrande Group among its key customers, is undergoing a debt restructuring in the Cayman Islands. The Debtor has no material operations other than those required to maintain itself as an exempted holding company in the Cayman Islands and the issuer of certain notes. The Debtor issued senior unsecured, comprising $300,000,000 unsecured notes due April 2022 and notes in an aggregate principal amount of $300,000,000 due in June 10, 2023 (collectively, "Old Notes"). The principal amount outstanding under the Old Notes, at par value, is $598.2 million. Aside from the Old Notes and the Convertible Note, the Debtor owes other Group companies $223.3 million and has other payables of $1.9 million. Alexander Lawson of Alvarez & Marsal Cayman Islands Limited, the scheme supervisor for the restructuring in the Cayman Islands, signed the Chapter 15 petition. Road to Bankruptcy Since mid-2021, sales for residential property in the PRC slowed significantly and prices for residential units suffered a substantial reduction. In the same period, a number of high-profile PRC property developers, including some of the Group's customers, began to experience difficulties in securing external financing from PRC banks as well as the onshore and offshore capital markets. The Group, like many companies in the PRC property sector, has been negatively affected by this downturn in different respects, including difficulty raising onshore and offshore financing; decreased cash flows and liquidity; and tightened supervision of financing activities and cash balances by onshore and offshore banks, which significantly reduced the Group's unrestricted cash. Due to this fall in revenue and net profits caused by the deteriorating real estate market in the PRC, the Debtor was unable to meet its obligations to pay the aggregate principal and accrued but unpaid interest on the maturity date of the 2022 Notes. In particular, on April 18, 2022, the Debtor announced it had failed to repay the 2022 Notes on their maturity date, which failure constituted an event of default under the indenture governing the 2022 Notes (the "2022 Notes Indenture"). This, in turn, cross-defaulted the note instrument (the "Convertible Note Trust Deed") constituting certain convertible notes issued by the Debtor (the "Convertible Note"), and the indenture governing the 2023 Notes. The default under the Convertible Note has now been waived. The Old Notes, however, remain due and payable. On March 31, 2022, the Debtor conducted an exchange offer, offering eligible holders of the Old Notes the opportunity to exchange their Old Notes for new notes with new terms designed to allow the Debtor and the Group to improve their financial condition and continue as a going concern. By the expiration, more than 75% of all Old Notes were tendered in the Exchange Offer. The Debtor, however, did not obtain sufficient (90%) support from the noteholders to effect the Exchange Offer. Cayman Scheme The Debtor also understood that, as an alternative to the Exchange Offer, a restructuring of the Old Notes could also be implemented via a scheme of arrangement under section 86 of the Companies Act. The Debtor entered into the restructuring support agreement dated March 31, 2022, setting out the terms of the Restructuring with certain of the Old Notes Subsidiary Guarantors, and invited holders of the Old Notes to accede to the RSA. On April 14, 2022, the Debtor announced that it had terminated the Exchange Offer and that it was prepared to proceed with the Scheme to exchange all of the Old Notes in accordance with the terms of the RSA. As of Oct. 3, 2022, certain Scheme Creditors holding an aggregate principal amount of approximately $532,808,000 of Old Notes (representing approximately 89.07% of the aggregate outstanding principal amount of all Old Notes) had acceded to the RSA (the "Consenting Creditors"). On June 22, 2022, the Debtor engaged A&M Cayman to act in connection with the Scheme and the Restructuring, and on July 6, 2022, the Debtor's board of directors passed a resolution, which, among other things, formalized such engagement. Alexander Lawson, a Cayman Islands resident and licensed insolvency practitioner of A&M Cayman, is acting as scheme supervisor. On July 28, 2022, the Debtor filed a petition with the Cayman Court commencing the Cayman Proceeding, and a summons seeking an order that, among other things, the Debtor be at liberty to convene a single meeting of the Scheme Creditors for the purpose of considering and, if thought fit, approving the Scheme. The Cayman Court entered an order granting the Debtor permission to convene the Scheme Meeting for October 12, 2022, at 7:00 a.m. (prevailing Cayman Islands time), scheduling the hearing to sanction the Scheme for October 26, 2022, at 9:00 a.m. (prevailing Cayman Islands time), and appointing Alexander Lawson as the Foreign Representative. At the Scheme Meeting, a vote will be held to determine whether the Scheme Creditors who vote approve the Scheme by a greater than 50% majority in number and representing at least 75% in value of the Scheme Creditors present and voting (in person or by proxy) at the Scheme Meeting. The Restructuring shall be implemented through the Scheme, which will affect the rights of the Debtor, the Old Notes Subsidiary Guarantors, and the Scheme Creditors only. Subject to the terms of the Scheme, the Scheme Creditors will release their existing claims under and in connection with the Old Notes in return for receiving (or being entitled to receive) their Scheme Consideration. The Scheme Consideration comprises: (a) a cash payment of $60 per $1,000 in outstanding principal amount of the Old Notes held by each Scheme Creditor at the Record Date; (b) New Notes in an aggregate principal amount of $940 per $1,000 in principal amount of the Old Notes held by each Scheme Creditor at the Record Date; (c) accrued and unpaid interest up to but not including April 18, 2022, on any Old Notes held by each Scheme Creditor at the Record Date, which will be paid in cash; and (d) accrued and unpaid interest from and including April 18, 2022, up to but not including the Restructuring Effective Date on any Old Notes held by each Scheme Creditor at the Record Date, which will be paid in kind in the form of New Notes (to be rounded downward to the nearest $1). On the Restructuring Effective Date, the Old Notes Indentures will be deemed fully satisfied and forever discharged, and the Old Notes will be released, cancelled, fully compromised, and forever discharged. Also on the Restructuring Effective Date, the indenture relating to the New Notes will be executed and delivered by the Debtor on behalf of the parties thereto, pursuant to which the Debtor will be issuing new US$-denominated 8.0% senior unsecured notes due 2025 (the "New Notes") in an aggregate amount equal to the sum of (a) 94% of the aggregate outstanding principal amount of Old Notes held by all Noteholders collectively as of 10:00 a.m. (prevailing Cayman Islands time) on October 7, 2022 (the "Record Date"), plus (b) the interest payable accrued from April 18, 2022, up to but not including the Restructuring Effective Date on any Old Notes held by each Noteholder at the Record Date (to be rounded downward to the nearest $1). Madison Pacific Trust Limited will serve as the trustee for the New Notes (the "New Notes Trustee"). About E-House (China) Enterprise E-House China Enterprise Holdings Ltd., through its subsidiaries, provides real estate services in China. E-House offers a comprehensive online-to-offline (O2O) service platform. On July 28, 2022, the Debtor commenced scheme proceedings in the Cayman Islands to seek a restructuring of its $300 million unsecured notes. Alexander Lawson, a Cayman Islands resident and licensed insolvency practitioner of A&M Cayman, is acting as scheme supervisor. The Scheme Supervisor filed for E-House (China) a petition for protection under Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 22-11326) on Oct. 3, 2022, to seek recognition of its scheme proceedings in the Cayman Islands. The Scheme Supervisor can be reached at: Alvarez & Marsal Cayman Islands Limited c/o Alexander Lawson 2nd Floor, Flagship Building 142 Seafarers Way P.O. Box 2507 George Town Grand Cayman KY1-1104 Cayman Islands Counsel to Scheme Supervisor/Foreign Representative: SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP Lisa Laukitis One Manhattan West New York, New York 10001 Tel: (212) 735-3000 Fax: (212) 735-2000 and Justin M. Winerman Anthony R. Joseph 155 North Wacker Drive Chicago, Illinois 60606-1720 Telephone: (312) 407-0700 Fax: (312) 407-0411 SKADDEN, ARPS, SLATE, MEAGHER & FLOM (UK) LLP Peter Newman 40 Bank Street Canary Wharf London E14 5DS Telephone: +44 20 7519 7000 Fax: +44 20 7519 7070 =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: Dependence on Imports Delays Inflation Cut -------------------------------------------------------------- Dominican Today reports that inflation in the Dominican Republic briefly reached double digits for roughly five months before falling to its lowest point in August since 8.98 in February of this year. The current yearly rate is 8.80 from August 2021 to August 2022, according to Dominican Today. But the International Monetary Fund is not relieved by its steady decrease (IMF). The financial body believes that the less diversified and more import-dependent economies of the Caribbean, Central America, and notably "Panama, the Dominican Republic, combined with Bolivia, Ecuador, Paraguay, and Uruguay" render them more vulnerable to inflation, the report relays. According to sources, early 2022 saw a significant revival in the economy of Latin America and the Caribbean, the report discloses. However, there was a noticeable slowdown in economic activity as a result of the conflict between Russia and Ukraine, the report notes. This translates into prolonged inflation, which, in spite of tightening global financial conditions and a decline in commodity prices, will test the region's resilience, according to the IMF, the report says. Although Panama, Central America, and the Dominican Republic have already surpassed pre-pandemic output levels, this is mostly because of the United States' quick recovery, the report notes. But according to a new IMF research, smaller economies face greater difficulties from rising inflation since "they are less diversified, more dependent on imports, and have fewer policy levers at their disposal," the report says. Henri V. Hebrard, an economist, notes that diversification should be distinguished from dependence on imports in light of this scenario, the report relays. He remarked, "Those are a bit different things, the report notes. He clarified that the Dominican economy is "extremely well diversified" when compared to other countries in the area. The fact that it is an island, he noted, means that it has a "very heavy dependence on imports," which is "an inflation risk element," the report discloses. 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. =============== H O N D U R A S =============== HONDURAS: IMF Staff Concludes Visit to Honduras ----------------------------------------------- An International Monetary Fund (IMF) mission led by Ms. Joyce Wong visited Tegucigalpa from September 26 to October 5. At the end of the mission, Ms. Wong issued the following statement: "The IMF team had very productive discussions in Tegucigalpa with government, private sector, and civil society. We would like to thank all our counterparts for a fruitful and open discussion and for their kind hospitality. Our next visit to continue discussions will take place soon." ============= J A M A I C A ============= JAMAICA: Economy to Return to Pre-COVID-19 Output Levels by 2023 ---------------------------------------------------------------- Jamaica Observer reports that data from the Statistical Institute of Jamaica (Statin) indicate that the country is on track to returning to pre-COVID-19 levels of economic output by 2023. Minister of Finance and the Public Service Dr Nigel Clarke said that achieving the target will place Jamaica "far ahead of our peers in the Caribbean region," according to Jamaica Observer. "We are at 97 per cent of our pre-COVID levels of economic output. We went all the way down to 82 per cent, [but are] back up to about 97 per cent. [This] is related to the fact that we were able to maintain macro stability through the crisis," Dr Clarke said, the report notes. Consequent on the strong economic performance, S&P Global Ratings affirmed Jamaica's 'B+' rating, while maintaining its 'Stable' outlook for the economy, the report relays. Minister Clarke, who was addressing the Rotary Club of Kingston's luncheon at Jamaica Pegasus hotel in New Kingston, said that gross domestic product (GDP) data from the Statin show that the economy is "performing better than planned," the report discloses. Statin reported that the economy grew by 4.8 per cent during the April to June 2022 quarter, relative to the corresponding period last year, the report says. This was attributed to a 7.2 per cent increase in the services industry, despite the goods producing industry contracting by two percentage points, the report notes. The services industry out-turns resulted from improved performances in all eight subsectors, the report relays. 'Hotels and restaurants' led the way with 56 per cent, while 'wholesale and retail trade, repairs, and installation of machinery & equipment' rose by 7.6 per cent, the report discloses. Other notable out-turns were transport, storage and communication, up 5.7 per cent; 'real estate, renting and business activities', up 2.1 per cent; electricity and water supply, up two per cent; and finance and insurance services, up 1.1 per cent, the report notes. Dr. Clarke noted that as persons were able to return to work, consequent on the gradual reopening of the economy, Jamaica commenced experiencing recovery at a "very fast clip", with eight per cent growth in 2021/2022, and a 4.5 per cent projection for this year, the report relays. "As a result of this recovery we are experiencing overperformance, which is always a good thing. We have a lot of work to do. But there is no doubt about our trajectory . . . and [based on] the fact that we have been able to recover so quickly . . . .we can look forward [to] the fruits of the stability that we enjoy," he said, 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 =========== ASERTA SEGUROS: Moody's Lowers Insurance Fin Strength Rating to Ba3 ------------------------------------------------------------------- Moody's Investors Service has downgraded Aserta Seguros Vida, S.A. de C.V. (Aserta Vida) insurance financial strength (IFS) to Ba3 from Ba2 reflecting the company's weakening business profile. The outlook remains negative. RATINGS RATIONALE The downgrade of Aserta Vida's IFS ratings to Ba3 from Ba2 reflects the company's weakened business profile in 2021 and negative performance in the first half of 2022, when the company reported a MXN7.2 million net loss. Return on average capital (ROC) dropped to a 3.4% loss in gross premiums in June 2022, below the loss reported in December 2021 of 64%. The rating downgrade incorporates the insurer's decline of gross premiums and null policy underwriting in the past quarters that affected its scale, with sharp deterioration to the overall financial fundamental of Aserta Vida. In light of this deterioration, Moody's believes that Aserta Vida's IFS ratings are better positioned at Ba3 taking into account the company's narrow business prospects. With regard to the support from Grupo Financiero Aserta, S.A. de C.V., its parent and controller, the recurrent capital injections received from the holding group translate into a high willingness of the parent to support its life insurance subsidiary. Consequently, Aserta Vida's ratings are underpinned by the implicit support from Grupo Financiero Aserta, S.A. de C.V., as well as its affiliation with Aseguradora Aserta, S.A. de C.V., Grupo and Aseguradora Insurgentes, S.A. de C.V., Grupo. Both related companies have a Baa2 IFS with stable outlook, and, therefore, Aserta Vida's ratings benefit from two notches of uplift relative to its standalone credit profile of B2. The negative outlook on Aserta Vida's Ba3 rating reflects the continued pressures on its earnings and capital metrics in the coming quarters, and the continued contraction in the company's business prospects in terms of policy underwriting and premium growth that limits its financial performance to its current weak levels. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING Given the outlook is negative, an upgrade is unlikely at this point. However, factor that could lead to an outlook stabilization are (i) a substantial upgrade to the parent companies, (ii) a multi notch upgrade to the sovereign rating, (iii) and a recovery in the company's expansion plans that would lead to a recovery in profitability while maintaining sound levels of capital and reserve coverage. On the other hand, factors that could lead to further rating downgrades include (i) a continued increase in losses that continue to weaken capital adequacy; (ii) lower integration with and support from Grupo Financiero Aserta, S.A. de C.V. that translate in a lower assessment of affiliate support; (iii) and a downgrade of its surety affiliates. The principal methodology used in this rating was Life Insurers Methodology published in August 2022. MEXICO: Inflation Remains Unchanged at 8.7% in September -------------------------------------------------------- RJR News reports that according to a report released on October 7 by the National Institute of Statistics and Geography (INEGI), Mexico's National Consumer Price Index (NCPI) registered an annual variation of 8.7% in September, the same level as in August. This is the 19th consecutive month inflation exceeded the target range set by Mexico's Central Bank (3%), according to RJR News. Inflation seems to be reaching the peak desired by the authorities, reaching the arithmetic illusion of a possible peak, the report notes. "Headline inflation remains at 8.7%, while core inflation continues to defy the authorities, rising to 8.28%," commented Alfredo Coutino, director of Moody's Analytics, on his Twitter account, the report relays. ======= P E R U ======= PERU: Proposes New Approach to Mining to Combat Economic Conflicts ------------------------------------------------------------------ globalinsolvency.com, citing Reuters, reports that Peru's government proposed "a new approach" for mining companies to end social gaps and avoid conflicts in the sector, a measure taken after several conflicts in the country in recent months. Prime Minister Anibal Torres said during a conference between executives of large mining firms that the new "attitude" aimed to promote local and foreign investment, according to globalinsolvency.com. He added that the government of leftist President Pedro Castillo respects private initiative and wants to promote mining activity, the report notes. "Although the responsibility for closing gaps falls on the state, it is necessary to involve and commit mining companies to greater social investment," Torres said, the report adds. Peru is the world's No. 2 copper producer and mining is vital for the country's economy, representing 60% of all exports. ===================== P U E R T O R I C O ===================== AMERICAN FLAMINGO: Member to Fund Chapter 11 Plan ------------------------------------------------- American Flamingo, L.L.C, submitted a Plan and a Disclosure Statement on Sept. 30, 2022. While operating as a Debtor in possession under Chapter 11 Case, Debtor's member, Ebury RE, LLC has begun to foreclose and/or sell real estate properties in the mainland and is generating income, part of it is to be used for additional capitalization of the Debtor so that fund be available to fund the Chapter 11 Plan. The Class 1 secured claims filed by Luis A. Gutierrez NegrÃ³n & Carmen M. Bermudez Rivera in the amount of $638,596 will be paid in full with 5% interest in 5 years. Class 2 Priority Unsecured Claims total $14,075. Claims filed by PR Treasury Department. The creditor will receive monthly payment of $268.85 beginning on Dec. 2022 and ending on Nov. 2027. Class 2 is unimpaired. There are no general unsecured creditors in this case. Total monthly payments proposed under the Plan amount to $4,268 beginning in December 2022. The sources of funds for payments are rent income and debtor's member, Ebury RE, LLC. Objections to the Disclosure Statement or to the confirmation of the Plan must be filed with the Court by Oct. 30, 2022, unless the period to object is extended by the Court. Attorney for the Debtor: Hector Eduardo Pedrosa-Luna, Esq. P.O. Box 9023963 San Juan, PR 00902-3963 Tel: (787) 756-7880 Tel: (787) 920-7983 Fax: (787) 754-1109 E-mail: hectorpedrosa@gmail.com A copy of the Disclosure Statement dated September 30, 2022, is available at https://bit.ly/3T61PdV from PacerMonitor.com. About American Flamingo American Flamingo LLC is a Single Asset Real Estate (as defined in 11 U.S.C. Sec. 101(51B). It is engaged in the business of leasing office spaces in San Juan, Puerto Rico. At the present time, American Flamingo owns an office located at 644 Fernandez Juncos Avenue, Suite 203, San Juan, PR 00907. American Flamingo sought Chapter 11 bankruptcy protection (Bankr. D.P.R. Case No. 22-01290) on May 5, 2022. In the petition filed by John Hanratty, as member, American Flamingo estimated assets between $500,000 and $1 million and liabilities between $500,000 and $1 million. Hector Eduardo Pedrosa Luna, of The Law Offices of Hector Eduardo Pedrosa Luna, is the Debtor's counsel. =============================================== T U R K S A N D C A I C O S I S L A N D S =============================================== LINDA'S BAKERY: Closes Two Stores --------------------------------- Trinidad Express reports that Linda's Bakery has closed its City Gate and Princes Town locations permanently. Linda's advised customers of the closures in a Facebook post, according to Trinidad Express. The baking company said customers can instead visit other locations at Excellent City Centre, Queen Street or Park Street in Port of Spain, while customers in Princes Town can also visit Marabella, High Street or Gulf City, the report notes. In an interview with the Express, owner Peter George Jnr said it is never easy to close stores, but it was a strategic decision in keeping with the demands of the market, the report relays. George said this new plan will include Linda's reducing its traditional footprint, as it has been significantly impacted by integrated retail models, especially post-pandemic, the report discloses. He explained that City Gate was a challenging store with respect to safety and security, as the establishment was robbed several times, the report relays. With respect to the Princes Town branch, George said it was an under-performer and a decision had to be made on these first two branches, the report says. "Linda's has 18 stores and more are going to close in the coming weeks, but everyone will learn more about it when the time comes, the report notes. The idea is to reduce the traditional footprint and have its fresh bread and bakery products more available throughout the nation," George said, the report discloses. He also said staff from the two closed branches have been absorbed into other locations and "when we close the other locations as well the same absorbing method will happen," the report relays. Many Facebook users said they were saddened both branches had to close their doors, as it was convenient for them to stop and buy their bread and bakery products, the report adds. ********* 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 * * *