/raid1/www/Hosts/bankrupt/TCRLA_Public/221116.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, November 16, 2022, Vol. 23, No. 223
Headlines
A R G E N T I N A
AGUA Y SANEAMIENTOS: Fitch Affirms LongTerm IDRs at 'CC'
GAUCHO GROUP: Effects 1-for-12 Reverse Common Stock Split
GENERACION MEDITERRANEA: Moody's Affirms Caa3 Corp. Family Rating
B R A Z I L
ALTERA INFRASTRUCTURE: Brookfield to Keep Control After Emergence
ANDRADE GUTIERREZ: Coutinho's Bid for Provisional Relief Granted
BRAZIL: IDB Approves $36 Million to Improve Healthcare in Sergipe
D O M I N I C A N R E P U B L I C
DOMINICAN REPUBLIC: Restrictive Monetary Policy Considered Positive
E L S A L V A D O R
EL SALVADOR: Seeks to Avoid Default; China May Buy Foreign Debt
M E X I C O
PLAYA RESORTS: Moody's Ups CFR to B2 & Rates New Sec. Term Loan B2
T R I N I D A D A N D T O B A G O
TRINIDAD & TOBAGO: Mentors Key to SME Listing on T&T Stock Exchange
X X X X X X X X
LATAM: Exports Grow More than World Trade Despite Slowdown
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A R G E N T I N A
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AGUA Y SANEAMIENTOS: Fitch Affirms LongTerm IDRs at 'CC'
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Fitch Ratings has affirmed Agua y Saneamientos Argentinos S.A.'s
(AySA) Long-Term Local and Foreign Currency Issuer Default Ratings
(IDRs) at 'CC'. In addition, Fitch has affirmed AySA's USD500
million senior unsecured 6.625% notes due 2023 at 'CC'/'RR4'. The
Standalone Credit Profile (SCP) has been assessed at 'cc'.
The 'CC' rating and SCP assessment of 'cc' reflects Fitch's
expectation that the company will announce some type of liability
management exercise, to remain in compliance with the Central Bank
of the Argentine Republic's restrictions, on a hard-currency debt
refinancing that will likely be deemed a Distressed Debt Exchange
(DDE).
The company's readily available cash and cash equivalents of
approximately USD715 million as of June 30, 2022 are insufficient
to support ongoing operations and capex in 2022 and the USD500
million of debt coming due in February 2023. It is uncertain what
support, if any, the government will offer AySA; however, it is not
expected to be material, given that government support has been
insufficient to cover operating losses over the past few years.
AySA is capped at an average Recovery Rating of 'RR4' since
Argentina is characterized within Group D with a soft cap of 'RR4',
per Fitch's "Country-Specific Treatment of Recovery Ratings
Criteria." This assumes a recovery in the range of 31% to 50%.
KEY RATING DRIVERS
Default Appears Probable: Fitch expects that AySA will announce a
liability management exercise that mirrors its Argentine peers,
which Fitch deemed DDEs, as they were done to avoid payment
defaults, and the exchange offers resulted in a material reduction
in the terms. The company faces a USD500 million bond maturity in
February 2023 that must comply with Argentina's 60/40 rule (A7230).
This means that at least USD300 million of the outstanding
principal will need to be refinanced.
However, AySA may not have adequate liquidity to repay the
remaining USD200 million in principal. Therefore, the company will
likely need the support of the government either through an equity
injection or other measures to help it fund a portion of an
exchange.
Unsustainable Leverage: AySA is expected to continue reporting
negative EBITDA estimated at ARS65 billion at FYE 2022; thus,
leverage is also expected to remain negative. AySA's FCF is also
expected to remain negative, projected at ARS215 billion at FYE
2022 due to increasing negative operating cash flow generation and
higher capex. The base case scenario assumes tariff growth of 32%
in 2022 (plus inflation), and in line with inflation rates
thereafter.
Government Related Entity: AySA's ratings now reflect its
likelihood of default, but the company's GRE assessment score was
recently downgraded to 22.5 from 35 as a result of the downward
revision of the Support Track Record from 'very strong' to
'moderate' and Financial Implications of a Default from 'strong' to
'moderate.' These factors coupled with an up to three notch
differential between the SCP and that of the sovereign rating,
resulted in a 'CC' IDR and rating.
The downgrade of the Support Track Record reflects the lack of
financial support from the government through either an equity
injection or adjustment in tariffs and/or subsidies to improve the
company's credit profile.
The Status, Ownership and Control designation remained as 'very
strong.' AySA is 90% government-owned and is subject to the
Argentine government's water/wastewater policy with operations and
financing activities controlled by the government, which also
validates its budget, debt issuances and investments. The
socio-political implications of default also remained 'moderate'
based on private-sector players' probable ability to provide
substitutes, and that a financial default would not materially
affect the provision of services.
Weak Regulatory Environment: The regulatory environment for AySA is
weak given a demonstrated track record of reduced enforceability,
with annual tariff increase ultimately a political decision from
the federal government, which poses uncertainty about future
regulatory mechanisms to adjust tariffs.
KEY ASSUMPTIONS
- Continued support from government through capital injections;
- Tariff segmentation and removal of subsidies as of Nov. 1, 2022;
- A tariff increase in 2022 of 32% in 2022 and increase in line
with inflation estimates thereafter;
- Additional revenue growth in 2022 and thereafter in line with the
four-year historical annual average growth in connections;
- Average annual capex of around ARS437 billion over the 2022-2025
period;
- Operating losses, capex, and financial obligations backed by
government transfers.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Upgrade of Argentine sovereign IDR of more than three notches;
- Improved and consistent overall government support through
capital injections or a guarantee of debt, improving the overall
credit profile of the company;
- Successful refinancing of outstanding debt without a material
reduction of the original terms, such as but not limited to, a
reduction of principal and/or interest or fees.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Inability to refinance maturity coming due in February 2023 and a
default or default-like process has begun, which would be
represented by a 'CC' or 'C' rating
LIQUIDITY AND DEBT STRUCTURE
Weak Liquidity: AySA's liquidity fully relies on cash injections
from the shareholder given its inability to generate internal cash
and its restricted access to debt and capital markets on a
standalone basis. The company's refinancing risk is currently being
tested as its bullet maturity comes due in February 2023.
ISSUER PROFILE
AySA is the water/wastewater concessionaire of Buenos Aires and 26
municipalities of the metropolitan region. The company is a service
provider to an estimated 15 million people through a 20-year,
extendable concession agreement.
ESG CONSIDERATIONS
Agua y Saneamientos Argentinos S.A. has an ESG Relevance score of
'4' for Governance Structure, due to its nature as a majority
government-owned entity and the inherent governance risk that
arises with a dominant state shareholder, which has a negative
impact on the credit profile, and is relevant to the ratings in
conjunction with other factors.
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3' - 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.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
Agua y
Saneamientos
Argentinos S.A. LT IDR CC Affirmed CC
LC LT IDR CC Affirmed CC
senior
unsecured LT CC Affirmed RR4 CC
GAUCHO GROUP: Effects 1-for-12 Reverse Common Stock Split
---------------------------------------------------------
Gaucho Group Holdings, Inc. said in a press release that its Board
of Directors has approved a 1-for-12 reverse stock split of the
Company's common stock. The reverse stock split became effective
at 12:01 a.m. (Eastern Time) on Nov. 4, 2022.
The reverse stock split is primarily intended to bring the Company
into compliance with the minimum bid price requirements for
maintaining its listing on the Nasdaq Capital Market. The new
CUSIP number following the reverse stock split will be 36809R305.
As a result of the reverse stock split, every 12 shares of the
Company's common stock issued and outstanding or held by the
Company as treasury stock will be automatically reclassified into
one new share of common stock. The reverse stock split will not
modify any rights or preferences of the shares of the Company's
common stock. Proportionate adjustments will be made to the
exercise prices and the number of shares underlying the Company's
outstanding equity awards, as applicable, and warrants, as well as
to the number of shares issued and issuable under the Company's
equity incentive plans. The common stock issued pursuant to the
reverse stock split will remain fully paid and non-assessable. The
reverse stock split will not affect the number of authorized shares
of common stock or the par value of the common stock. The reverse
stock split was approved by the Company's stockholders at a special
meeting of stockholders held on Aug. 30, 2022 at a ratio in the
range of 1-for-2 and 1-for-20, such ratio to be determined by the
Board of Directors and included in a public announcement. On Nov.
3, 2022, the Company's Board of Directors approved the reverse
stock split at the ratio of 1-for-12.
No fractional shares will be issued in connection with the reverse
stock split and no cash or other consideration will be paid in
connection with any fractional shares. Stockholders who would
otherwise would have held a fractional share after giving effect to
the reverse stock split will instead own one whole share of the
post-reverse stock split common stock.
Continental Stock Transfer and Trust Company, the Company's
transfer agent, will act as the exchange agent for the reverse
stock split. Stockholders of record holding certificates
representing pre-split shares of the Company's common stock will
receive a letter of transmittal from Continental with instructions
on how to surrender certificates representing pre-split shares.
Stockholders should not send in their pre-split certificates until
they receive a letter of transmittal from Continental.
Stockholders with book-entry shares or who hold their shares
through a bank, broker or other nominee will not need to take any
action. Stockholders of record who held pre-split certificates
will receive their post-split shares book-entry and will be
receiving a statement from Continental regarding their common stock
ownership post-reverse stock split.
About Gaucho Group
Headquartered in New York, NY, Gaucho Group Holdings, Inc. --
http://www.algodongroup.com-- was incorporated on April 5, 1999.
Effective Oct. 1, 2018, the Company changed its name from Algodon
Wines & Luxury Development, Inc. to Algodon Group, Inc., and
effective March 11, 2019, the Company changed its name from Algodon
Group, Inc. to Gaucho Group Holdings, Inc. Through its
wholly-owned subsidiaries, GGH invests in, develops and operates
real estate projects in Argentina. GGH operates a hotel, golf and
tennis resort, vineyard and producing winery in addition to
developing residential lots located near the resort. In 2016, GGH
formed a new subsidiary and in 2018, established an e-commerce
platform for the manufacture and sale of high-end fashion and
accessories. The activities in Argentina are conducted through its
operating entities: InvestProperty Group, LLC, Algodon Global
Properties, LLC, The Algodon - Recoleta S.R.L, Algodon Properties
II S.R.L., and Algodon Wine Estates S.R.L. Algodon distributes its
wines in Europe through its United Kingdom entity, Algodon Europe,
LTD.
Gaucho Group reported a net loss of $2.39 million for the year
ended Dec. 31, 2021, a net loss of $5.78 million for the year ended
Dec. 31, 2020, and a net loss of $6.96 million for the year ended
Dec. 31, 2019. As of June 30, 2022, the Company had $25.01 million
in total assets, $10.25 million in total liabilities and $14.75
million in total stockholders' equity.
GENERACION MEDITERRANEA: Moody's Affirms Caa3 Corp. Family Rating
-----------------------------------------------------------------
Moody's Investors Service has affirmed Generacion Mediterranea S.A.
(Gemsa)'s corporate family and senior unsecured ratings and changed
the outlook to stable from negative.
Affirmations:
Issuer: Generacion Mediterranea S.A
Corporate Family Rating, Affirmed Caa3
Senior Unsecured Regular Bond/Debenture, Affirmed Caa3
Outlook Actions:
Issuer: Generacion Mediterranea S.A
Outlook, Changed To Stable From Negative
RATINGS RATIONALE
The Caa3 ratings and stable outlook incorporates Gemsa's improved
asset positioning and extended contract life resulting from the
company's recent investments to convert its Ezeiza and Maranzana
power plants to combined cycles. Gemsa has secured during 2022 the
financing to complete these projects, for an amount of US$270
million. Although it entails higher leverage, the expansion will
extend the company's contractual position, allowing for a gradual
debt reduction once those projects start operations in 2023 amd
2024.
The company will continue to benefit from fixed capacity payments
from its portfolio of assets that are mostly contracted under
long-term power purchase agreements (PPAs), that will be enhanced
with the start of operations of the two latest expansions. In this
regard, the company has also demonstrated a good track record with
its previous expansions, with no major delays or cost overruns. On
the negative side, all of its revenues under the PPAs rely on
payments from CAMMESA, the agency controlled by the Government of
Argentina (Ca, Stable) that manages the wholesale electricity
market and Gemsa's main off-taker. Given the recent history of
government intervention in the electricity market and CAMMESA's
increased reliance on government transfers, Moody's believe other
downside risks persist, including the potential risk of unilateral
change to the PPA contract's terms and conditions and additional
delays in cash settlements.
Gemsa's credit metrics are currently weaker than peers, as
illustrated by a debt to EBITDA (D/E) ratio of over 6 times and
interest coverage of 1.5 times, mainly because it still expanding
its installed capacity without generating additional revenues;
however, Moody's expects Gemsa's leverage will start to decline in
2024 to approximately 4.5 times and interest coverage will improve
above 2.5 times, once the projects Ezeiza and Maranzana are
completed. The ratings also incorporate a high probability of
default, given the Argentine Central Bank foreign currency
restrictions that limits the company access to US dollars to make
debt payments on outstanding notes. As a result, Gemsa will likely
need to perform additional exchanges to refinance its upcoming debt
maturities of US$187 million in 2023 and US$193 million in 2024,
which also constrains the credit profile.
Nevertheless, Moody's acknowledge Gemsa's track record to access
the debt and banking markets to rollover its short-term debt, in
spite of unfavorable market conditions. For example, the company
recently issued the equivalent of US$45 million in the local market
to enhance its liquidity position at an average cost of 5.5% per
year.
Moody's considers ESG attributes to have an overall low-neutral
impact on Gemsa's rating because it is already constrained by that
of the Government of Argentina. However, Governance risks are
highly negative (G-4 issuer profile score) to Gemsa's credit
quality because of the adverse financing conditions prevailing in
Argentina, including Central Bank foreign currency controls and
restrictions, and the relative weak financial policy evidenced by
the significant concentration of debt maturities in the short term.
Gemsa's social risk is also highly negative (S-4 issuer profile
score), because of the high risk that public concern over social
and in particular affordability issues could lead to adverse
regulatory or political intervention. Further deterioration in the
country's social indicators could exert additional pressure on the
regulator's ability to sustain energy prices to keep pace with the
company's operational and investment needs.
RATING OUTLOOK
The stable outlook anticipates that the company will be able to
complete its expansion without material delays or cost overruns,
while it continues to maintain high availability of its operational
fleet. The stable outlook also incorporates continued access to
capital and banking markets and that any refinancing of upcoming
debt maturities will be performed at market conditions and/or to
comply with the Central Bank regulations.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Given the company's exposure to Cammesa, coupled with weak
liquidity and high leverage, an upgrade of the ratings is unlikely.
A rating upgrade would require an upgrade of the sovereign coupled
with improved liquidity and a lower leverage such that the ratio of
debt to EBITDA (D/E) is lower than 4.0 times, and CFO pre working
capital to debt consistently above 15%.
The rating can be downgraded if the company's expansion faces a
material delay or cost overruns leading to an increase in leverage
for longer than expected; specifically, if D/E remains above 6
times over a sustained period of time.
PROFILE
Generacion Mediterranea S.A is an operating-holding company that
owns and operates 1.5GW of power capacity, on its own and through
its subsidiaries, Central Termica Roca S.A., Solalban Energia SA
and Generacion Rosario SA. Generacion Mediterranea become the
holding company for the Albanesi's group after the corporate
reorganization in 2021 by which it absorbed Albanesi S.A.
The principal methodology used in these ratings was Unregulated
Utilities and Unregulated Power Companies published in May 2017.
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B R A Z I L
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ALTERA INFRASTRUCTURE: Brookfield to Keep Control After Emergence
-----------------------------------------------------------------
Altera Infrastructure won court approval of its bankruptcy plan,
which allows Brookfield Asset Management to retain ownership of the
company by swapping debt for equity.
According to Bloomberg, US Bankruptcy Judge Marvin Isgur in a
hearing said he would sign off on the plan pending creditor review
of some last-minute additions to the underlying documents.
The Debtors won approval Nov. 4, 2022, of a Plan that will
deleverage the Debtors' balance sheet by equitizing more than $1
billion in junior debt obligations, pay administrative and priority
claims in full, and render general unsecured claims at subsidiary
debtors unimpaired.
The Debtors sought Chapter 11 protection after reaching an
agreement with Brookfield (in its capacity as equity sponsor and
holder of 100% of the IntermediateCo Obligations) and 71% of the
bank lenders on terms of the Debtors' restructuring. Brookfield
agreed to equitize $769 million of IntermediateCo Obligations in
exchange for 100% of the common equity in reorganized Altera
Parent. Holders of Altera Parent unsecured notes were to receive
5-year warrants convertible into a portion of 7.6% of new common
stock.
The Plan was later amended to provide for the unsecured bondholders
to share up to 13% of the post-bankruptcy stock in Altera as well
as rights to buy additional stock, part of a compromise struck in
mediation late last September 2022. Brookfield, as holder of the
IntermediateCo Notes, will receive (x) 87% of the new common stock
of Altera, subject to dilution on account of the management
incentive plan, the new warrants, and the rights offering, and (y)
100% of the new GP common stock.
The Debtors will conduct a rights offering for new common stock in
an aggregate amount up to $96.51 million. The new common stock
purchased pursuant to the rights offering will be at a 40% discount
to settlement plan equity value of $363 million.
About Altera Infrastructure L.P.
Westhill, United Kingdom-based Altera Infrastructure L.P. (NYSE:
ALIN-A) is a global energy infrastructure services partnership
primarily focused on the ownership and operation of critical
infrastructure assets in the offshore oil regions of the North Sea,
Brazil and the East Coast of Canada. Altera has consolidated assets
of approximately $3.8 billion comprised of 44 vessels, including
floating production, storage and offloading (FPSO) units, shuttle
tankers, floating storage and offtake (FSO) units, long-distance
towing and offshore installation vessels and a unit for maintenance
and safety (UMS). The majority of Altera's fleet is employed on
medium-term, stable contracts.
After agreeing to a debt-for-equity plan with bank lenders and
owner Brookfield, Altera Infrastructure LP and 37 affiliates sought
Chapter 11 protection (Bankr. S.D. Texas Lead Case No. 22-90130) on
Aug. 12, 2022. Judge Marvin Isgur oversees the cases.
As of the petition date, the Debtors were liable for approximately
$1.6 billion in aggregate principal amount of funded debt.
Kirkland & Ellis LLP, Jackson Walker LLP, and Quinn Emanuel
Urquhart & Sullivan LLP serve as the Debtors' lead counsel, local
counsel, and special counsel, respectively. The Debtors also
tapped Evercore Group LLC as investment banker and
PricewaterhouseCoopers LLP as tax compliance, tax consulting, and
accounting advisory services provider. David Rush, senior managing
director at FTI Consulting, Inc., serves as restructuring advisor
to the Debtors. Stretto is the claims agent.
The DIP Lenders are represented by Paul, Weiss, Rifkind, Wharton &
Garrison LLP, as counsel to the DIP Lenders, Ducera Partners LLC,
as financial advisor, and Porter & Hedges LLP, as their Texas
counsel.
The U.S. Trustee for Region 7 appointed an official committee of
unsecured creditors on Aug. 22, 2022. The unsecured creditors
committee tapped Friedman Kaplan Seiler & Adelman, LLP and
Pachulski Stang Ziehl & Jones, LLP as legal counsel; and
AlixPartners, LLP as financial advisor.
A committee of coordinators was appointed under and as defined in
the appointment letter originally dated May 6, 2022, among Altera
Infrastructure LP and each member of the CoCom. The CoCom is
represented by Norton Rose Fulbright US, LLP and Norton Rose
Fulbright, LLP as legal counsel and PJT Partners (UK) Ltd. As
financial advisor.
The Noteholder Ad Hoc Group tapped Vinson & Elkins LLP and
Wachtell, Lipton, Rosen & Katz as its attorneys.
ANDRADE GUTIERREZ: Coutinho's Bid for Provisional Relief Granted
----------------------------------------------------------------
Chief Bankruptcy Judge Martin Glenn grants the motion of Gustavo
Braga Mercher Coutinho for provisional relief pending the final
determination on the pending Motion for Recognition of foreign
proceeding and foreign representative.
Gustavo Braga Mercher Coutinho is the authorized foreign
representative the recuperao extrajudicial proceeding" the
Brazilian EJ Proceeding" of Andrade Gutierrez Engenharia S.A.
("AGE") and its affiliated debtors.
The Debtors, along with other related entities and affiliates ("AG
Group"), are part of a larger Brazilian corporate group. The AG
Group is one of the largest engineering and heavy construction
companies in Brazil and Latin America. As of Sept. 29, 2022, the
Debtors directly employed approximately 1,657 employees, all of
whom are based in Brazil, and the broader AG Group (including the
Debtors) directly and indirectly employed approximately 13,200
employees worldwide, with approximately 89% of such employees
based
in Brazil. The AG Group (including the Debtors) is overseen by
corporate management in Brazil.
The Brazilian EJ Proceeding
On Sept. 29, 2022, the Debtors filed the Brazilian EJ Proceeding
with the Brazilian Court. The Brazilian EJ Proceeding seeks
confirmation of a consensual restructuring transaction reflected in
a Brazilian restructuring plan ("EJ Plan") that is already on file
with the Brazilian Court and has been signed and supported by the
holders of a majority of the Notes" the requisite majority
required under Brazilian law. The EJ Plan, and the transactions
contemplated thereby, are designed to preserve the Debtors'
going-concern value and provide the Debtors with an additional
liquidity runway. Under Brazilian Bankruptcy Law, the filing of
the Brazilian EJ Proceeding triggered an initial automatic stay
(lasting no less than 180 days) applicable to all claims subject
to the Brazilian EJ Proceeding, including all claims for
default or non-payment of the Notes.
The Trustee Litigation
There is a suit pending against the Debtors, which was filed by UMB
Bank N.A., as trustee for a portion of the Notes subject to the
Brazilian EJ Proceeding ("2021 Trustee") in the Supreme Court of
the State of New York. The Trustee Litigation is a debt enforcement
proceeding arising because of the nonpayment of the 2021 Notes. At
times, the Trustee Litigation has been stayed by court order
pursuant to the mutual agreement of the parties. However, the most
recent stay of such proceedings expired on Sept. 30, 2022. The New
York Trial Court has not ordered any further stay of proceedings,
so the matter is currently unstayed. Further, briefing on a motion
for summary judgment concluded on March 3, 2022, and it is possible
that the New York Trial Court would proceed promptly to a ruling,
which might result in the issuance of a judgment.
In a September 30 Statement, the Debtors' requested that the New
York Trial Court (a) refrain from further proceedings at that time
and (b) grant comity to the Brazilian Court with respect to the
initial automatic stay triggered by the filing of the Brazilian EJ
Proceeding until it is recognized in the United States, in light of
the filing of the Brazilian EJ Proceeding, the onset of the
Brazilian EJ Stay, and their intent to commence the Chapter 15
Cases as a condition to ultimately consummating the Debtors'
restructuring.
The Court finds that the Brazilian EJ Proceeding satisfies each of
the elements of a "foreign proceeding" pursuant to Section 101(23)"
the Brazilian EJ Proceeding is (a) a "collective proceeding"
because the Brazilian Court has exclusive jurisdiction over all
matters relating to the claims being restructured and administers
all such claims; (b) pending in a foreign country which is Brazil;
(c) under the supervision of the Brazilian Court, which must
confirm any restructuring plan; and (d) for the purpose of
reorganization of the Debtors' Notes. Further, the Brazilian EJ
Proceeding is a "main proceeding" since it is the center of main
interests is likely in Brazil, as the Debtor AGE, who manages the
operations of the AG Group, is headquartered in Brazil and each of
their executive officers is based in Brazil. Additionally, Coutinho
is a Foreign Representative within the meaning of the Bankruptcy
Code, duly authorized by the Chapter 15 Debtors' board.
Because summary judgment in the Trustee Litigation has been fully
briefed since March, and the action is not currently stayed,
Coutinho believes that a decision could come down at any time in
favor of the Trustee 2021. In addition, because New York state law
permits attachment on an ex parte basis, Coutinho also believes
that the 2021 Trustee could seek attachment to the Debtors'
property without notice, which could endanger the pre-negotiated EJ
Plan. Coutinho points out that said attachment could undermine the
pari passu treatment for affected creditors in the Brazilian EJ
proceeding and potentially kill the Brazilian E.J. Plan.
The Court agrees Coutinho that "granting the Provisional Relief is
consistent with the policy goals of chapter 15 by avoiding
individual creditor actions, dissipation of the Debtors' estates,
and the resulting inequitable distribution of property among
creditors, the public interest also favors granting the relief
sought herein." The Court rules that staying the Trustee Litigation
will ensure that the Brazilian EJ Plan has the best chance of
succeeding, which aligns with Chapter 15's goal to foster the "fair
and efficient administration of cross-border insolvencies that
protects the interests of all creditors
The Court rules that "the rights of the 2021 Trustee are
sufficiently protected because the 2021 Trustee will be able to
participate in the Brazilian EJ Proceeding and that proceeding will
provide for a comprehensive restructuring of all notes claims. As
to other creditors besides the 2021 Trustee, because the EJ Plan..
requires an order granting effect in the United States, the
Brazilian EJ Proceeding will necessarily be subject to further
proceedings in this Court. Accordingly, parties affected by the
Provisional Relief will have access to courts in both Brazil and
the United States and are thus sufficiently protected."
Coutinho also asks for a waiver of Bankruptcy Rule 1007(a)(4)(b)"
which requires a list of all entities against whom provisional
relief is being sought. The Court finds that these disclosures seem
sufficient and a waiver of Rule 1007(a)(4)(b), to the extent
necessary, is proper considering that Coutinho cannot be expected
to anticipate every potential party that could seek to bring claims
against the Debtors in the United States.
A full-text copy of the Memorandum Opinion dated Nov. 3, 2022, is
available at https://tinyurl.com/45rbd2u8 from Leagle.com.
About Andrade Gutierrez
Andrade Gutierrez Engenharia S.A., and its affiliated debtors,
along with other related entities and affiliates (the "AG Group"),
are part of a larger Brazilian corporate group. The AG Group is one
of the largest engineering and heavy construction companies in
Brazil and Latin America. As of the EJ Petition Date, as defined
below, the Debtors directly employed approximately 1,657 employees,
all of whom are based in Brazil, and the broader AG Group
(including the Debtors) directly and indirectly employed
approximately 13,200 employees worldwide, with approximately 89% of
such employees based in Brazil. The AG Group (including the
Debtors) is overseen by corporate management in Brazil.
On Sept. 29, 2022 (the "EJ Petition Date"), Andrade Gutierrez
Engenharia S.A. ("AGE") and its affiliated debtors, AG
Construçoes e Serviços S.A. ("AGCS"), Andrade
Gutierrez
Investimentos em Engenharia S.A. ("AGIE"), Andrade Gutierrez
International S.A. ("AGI"), and Zagope Sgps, S.A. ("Zagope") filed
recuperação extrajudicial proceeding in Brazil (the
"Brazilian EJ Proceeding"). On Oct. 5, 2022, the Brazilian Court
entered an order formally accepting the Debtors into the Brazilian
EJ Proceeding
The Brazilian EJ Proceeding seeks confirmation of a consensual
restructuring transaction reflected in a Brazilian restructuring
plan (the "EJ Plan") that is already on file with the Brazilian
Court and has been signed and supported by the holders of a
majority of the Notes -- the requisite majority required under
Brazilian law.
Andrade Gutierrez Engenharia S.A., et al., filed for Chapter 15
bankruptcy (Bankr. S.D.N.Y. Lead Case No. 1:22-bk-11425) on Oct.
31, 2022, to seek U.S. recognition of the Brazilian EJ Proceeding.
Mercher Coutinho, the authorized foreign representative, signed the
petitions.
Counsel to the Foreign Representative:
DAVIS POLK & WARDWELL LLP
450 Lexington Avenue
New York, NY 10017
Timothy Graulich, Esq.
James I. McClammy, Esq.
David Schiff, Esq.
Joshua Sturm, Esq.
Counsel to UMB Bank, N.A., as Indenture Trustee
FAEGRE DRINKER BIDDLE & REATH LLP
1177 Avenue of the Americas, 41st Floor
New York, NY 10036
James H. Millar, Esq.
Laura E. Appleby, Esq.
Kyle R. Kistinger, Esq.
Counsel to Ad Hoc Group of Holders of 2021 and 2024 Notes:
CLEARY GOTTLIEB STEEN & HAMILTON LLP
One Liberty Plaza
New York, NY 10006
Richard J. Cooper, Esq.
Jane VanLare, Esq.
Counsel to U.S. Bank as Indenture Trustee:
MASLON LLP
3300 Wells Fargo Center, 90 South Seventh Street
Minneapolis, MN 55402
Clark Whitmore, Esq.
BRAZIL: IDB Approves $36 Million to Improve Healthcare in Sergipe
-----------------------------------------------------------------
The Inter-American Development Bank (IDB) approved this month a $36
million loan to improve the quality of health services for the
population of Sergipe, Brazil. The project will also modernize
healthcare management and expand access to health services.
The project will support the purchase of materials for the oncology
hospital that is being built and the construction of a maternity
hospital for high-risk pregnancies. It will also finance
renovations to the children's hospital, the Central Public Health
Laboratory, the building for the Diagnostic Imaging Care Center
(CADI), and the school of public health. In addition, it includes
the acquisition of ambulances for the network and purchasing
equipment for these health centers and three other maternity
hospitals in Sergipe.
All new works and expansions financed with IDB resources will
incorporate energy efficiency measures, water savings, and
low-emission construction materials.
The operation also provides for the digital transformation of
health services. Among other things, the project will finance the
acquisition of computer equipment and software; the acquisition of
an interoperable Electronic Health Record System; the purchase of a
hospital management system and an outpatient services management
system, and the development of a web portal for patients,
professionals, and managers.
The initiative will benefit the 2.3 million residents of Sergipe
state, especially the 84% who depend exclusively on the public
health system, which covers 100% of the most vulnerable groups.
The IDB loan of $36 million has a disbursement term of 5 years, a
grace period of 6 years, and an interest rate based on the SOFR.
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.
In July 2022, Fitch Ratings affirmed Brazil's Long-Term Foreign
Currency Issuer Default Rating at 'BB-' and revised the Rating
Outlook to Stable from Negative. In June 2022, S&P Global Ratings
also affirmed its 'BB-/B' long- and short-term foreign and local
currency sovereign credit ratings on Brazil. Moody's, in April
2022, affirmed Brazil's long-term Ba2 issuer ratings and senior
unsecured bond ratings, (P)Ba2 senior unsecured shelf ratings, and
maintained the stable outlook. On the other had, DBRS, in August
2022, confirmed Brazil's Long-Term Foreign and Local Currency
Issuer Ratings at BB (low).
===================================
D O M I N I C A N R E P U B L I C
===================================
DOMINICAN REPUBLIC: Restrictive Monetary Policy Considered Positive
-------------------------------------------------------------------
Dominican Today reports that the Dominican Central Bank (BC)
recently decided to raise the policy interest rate monetary policy
(TPM) by 25 basis points, moving it from 8.25% to 8.50% annually in
October of this year. Economists rated these restrictive monetary
measures as "good and valid," but with "shy" results.
The government's goal is to reduce the nation's 8.24% annual rate
of inflation, which was the final reading. The MPR was generally
raised by the Central Bank in 2022, rising from 4.50% in January to
8.50% in November, a 400 basis point increase, according to
Dominican Today. The rates for permanent facilities also
increased, from 5% to 9% for liquidity expansion and from 4% to 8%
for remunerated deposits, the report notes.
According to Miguel Collado Di Franco, executive vice president of
the Regional Center for Sustainable Economic Strategies (CREES),
central banks must implement contractionary measures to smooth out
cycles when various factors, particularly external ones, have an
impact on inflation after applying expansionary measures to provide
liquidity to the productive sectors in a pandemic context, the
report relays. Collado continued, "Unwanted effects of inflation
have also emerged, which are now being corrected with the monetary
contraction," after "creating the conditions to stimulate the
economy in 2020 and 2021," the report notes.
Since the consumer price index (CPI) showed a downward trend, he
maintains that these measures internally contributed, the report
relays. Reduced inflation results in "higher lending rates as well
as additional active and passive rates," the author notes, the
report notes.
Henri Hebrard, an economist, noted that other central banks also
took similar actions to reduce inflation in their economies,
indicating that these measures were not unique to the Dominican
Republic and were, in fact, unavoidable, the report relays.
"The policy has been sound, but I believe the results have been
underwhelming. The good news is that they are declining,
especially the most significant one at the bottom," he said, the
report discloses.
The business consultant emphasized that just because inflation is
declining does not automatically translate into rising prices for
goods, the report relays.
"People must be made aware that prices are still rising, albeit
more slowly. Even though inflation is currently declining, prices
are still rising, albeit more slowly. We must not confuse people
there," Hebrard added.
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 To 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.
=====================
E L S A L V A D O R
=====================
EL SALVADOR: Seeks to Avoid Default; China May Buy Foreign Debt
---------------------------------------------------------------
Phil Rosen at BusinessInsider reports that China offered to buy El
Salvador's large amount of distressed foreign debt, President Nayib
Bukele's second-in-command told Bloomberg.
"China has offered to buy all our debt, but we need to tread
carefully," Vice President Felix Ulloa said, according to
BusinessInsider. "We are not going to sell to the first bidder, we
need to see the conditions," he added.
A spokesperson for the Chinese Foreign Ministry said he was not
aware of the matter, according to BusinessInsider.
While details on a potential detail remain sparse, it signals that
the Central American nation is seeking ways to alleviate pressure
within its bond market, and avoid defaulting on its
dollar-denominated debt, the report notes. S&P Global Ratings has
given El Salvador a debt rating of CCC+, which is seven levels
below investment grade.
According to Bloomberg, Ulloa said El Salvador has already been
buying some of its bonds, and plans to repurchase more in January,
the report relays. That same month, roughly $667 million in bonds
come due, so the buyback would likely happen before that, the
report relays. The government could use so-called special drawing
rights, Ulloa said, or reserve assets held at the International
Monetary Fund, the report notes.
El Salvador's debt due in January has pared losses to about 91
cents on the dollar, but most of the country's notes remain in
distress, the report says. On average, investors demand a yield
premium of 18.77 percentage points above US Treasuries to hold El
Salvador's sovereign debt, data from JPMorgan shows, the report
relays.
Meanwhile, led by bitcoin-bull Bukele, El Salvador has largely
become known for its bitcoin advocacy, and has touted plans for a
bitcoin bond after adopting bitcoin as legal tender in 2021, the
report notes.
But in January, Moody's warned that El Salvador's bitcoin buying
spree may boost the country's credit risk if it continues, the
report discloses. The country's government, has had liquidity
issues in the past, making trading bitcoin "quite risky," Moody's
analyst Jaime Reusche told Bloomberg in an interview, the report
adds.
===========
M E X I C O
===========
PLAYA RESORTS: Moody's Ups CFR to B2 & Rates New Sec. Term Loan B2
------------------------------------------------------------------
Moody's Investors Service upgraded Playa Resorts Holding B.V.'s
corporate family rating to B2 from B3. At the same time Moody's
assigned a B2 rating to the company's proposed senior secured term
loan and revolving credit facility, and affirm B3 ratings on its
existing rated bank credit facilities debt. Moody's also changed
the outlook to stable from positive.
The proposed senior secured debt consists of a $1.1 billion 6-year
first lien term loan and a $225 million five-year first lien
revolving credit facility. Proceeds from the planned term loan will
be used to refinance its existing capital structure, which includes
a $68 million Revolving Credit Facility, $909 million Term Loan B,
and $203 million of Term Loans A-1, A-2, A-3 & Property Loan,
collectively the "DK Debt". The full amount of the planned
revolving credit facility is expected to be undrawn at close.
The action assumes that the refinance will be successfully executed
and the existing rated debt will be withdrawn at closure. The
ratings assigned to new debt instruments also assume that the final
transaction documents will not be materially different from draft
legal documentation reviewed by Moody's to date and assume that
these agreements are legally valid, binding and enforceable.
The upgrade to B2 reflects Playas' improved credit metrics -- For
the LTM ended in 9/22 Playa's debt/EBITDA and interest coverage at
5.1x and 2.5x, respectively reflected significant improvements, not
only from 2020 and 2021, when the pandemic induced property
closures, but from 2019 levels of 7.3x and 0.7x, respectively.
Going forward, Moody's expect Playa will sustain current metrics as
it continues to recover both occupancy and room rates. The timely
debt refinance provides runway through recovery, further supporting
the action.
Upgrades:
Issuer: Playa Resorts Holding B.V.
Corporate Family Rating, Upgraded to B2 from B3
Ratings assigned:
New $1.1 billion Senior Secured 1st Lien Term Loan due 2028,
Assigned B2
New $225 million Senior Secured 1st Lien Revolving Credit Facility
due 2027, Assigned B2
Ratings affirmed:
$1.01 billion Senior Secured Term Loan due 2024, Affirmed B3
$68 million Senior Secured Revolving Credit Facility due 2024,
Affirmed B3
Outlook Actions:
Issuer: Playa Resorts Holding B.V.
Outlook, Changed to Stable from Positive
RATINGS RATIONALE
The B2 CFR is underpinned by the continued robust demand and speed
recovery in Caribbean and Latin American tourism that led to an
acceleration of Playa's average daily rates (ADR) growth since
2021. Moody's expects Playa to sustain ADRs at the $364 already
achieved in the nine months ended in September 30, 2022 during the
rest of the year and to improve to $386 in 2023, up from $310 at
the end of 2021 and $285 a year earlier. Playa's portfolio of
all-inclusive luxury and upscale Caribbean and Pacific coastal
resorts benefits from strong US travel demand, which is ahead of
the global travel recovery. The company's booked position combined
with increased flight capacity to its destinations, support
sustainable pricing gains in 2023. Conversely, the rating reflects
Moody's view that through 2024, Playa would face increasing
challenges to pass cost pressures to the end consumer. Inflation in
Mexico, -- Playa's largest market -- was 8.7% in September 2022,
well above the Central Bank's target range of 2%-4%. Moody's
expects inflation to reach 7.8% in 2022 and 4.5% in 2023. In terms
of demand, the boost resulting from pent-up demand during 2021 and
2022 will be phased out through 2023. Moreover, the US, -- main
origin of Playa's customers—will experience significant growth
slowdown. Moody's recently lowered its 2022-23 economic growth
forecasts to 1.9% in 2022 and 1.3% in 2023, while forecasting
unemployment rate to rise slightly above 4.0% in 2023 from the
current low level of 3.6%, owing to a combination of slower hiring
and further increases in labor force participation. Even under the
current environment, Moody's base case considers that through 2022,
Playa will be able to sustain EBITDA, including Moody's standard
adjustments in a $220 - $260 million range, sustaining leverage
(measured as gross debt to EBITDA including Moody's standard
adjustments) at a 4.6x – 5.5x range.
Structural Considerations
The senior secured credit facilities will benefit from a first
priority interest in all equity interests in the Borrower, Playa
H&R Holdings, and any Material Subsidiary that owns a hotel
property, and a first priority interest in each hotel property of
the borrower and guarantors located in Mexico and all other
tangible and intangible assets owned by the grantors. The
previously spun-out Hyatt Ziva & Zilara Cap Cana and Hilton Rose
Hall properties will be moved into the Restricted Group and
included in the equity pledge collateral package.
Liquidity is strong following the timely refinance of the bulk of
its debt. Proceeds from the planned first lien term loan amounting
$1.1 billion will be used to refinance $1.01 billion under Playa's
senior secured term loan due 2024. Therefore, the company will
extend maturities six years, with the next important debt
commitment scheduled until 2028. Moreover, the planed facilities
include a $225 million five-year revolving credit facility,
expected to be fully undrawn at close. Playa's liability management
adds up to prudent risk practices that allowed it to endure the
Coronavirus crisis, that was particularly harmful for the
hospitality sector. Such measures include a public offering of
common shares through which Playa raise $125 million at the
beginning 2021. Playa was also able to raise $89 million through
asset sales. As a result, Playa reported cash of $294 million in
December 2021, well above the $173 million in 2020. As of September
30, 2022, Playa's cash in hand continued to strengthen reaching
$372 million mainly fueled by internal cash generation. The company
generated cash from operations (CFO) of $180 million for the LTM
ended in September 2022, already above Moody's expectations of $153
million in 2022 and $135 million in 2023, and well above the $30
million in 2021 and -$100 million in 2020.
The stable outlook reflects the company's very good liquidity and
Moody's expectation that despite operating challenges envisioned
ahead Playa will be able to sustain its current credit metrics and
to generate cash. Despite Moody's expectations of a strong
operating performance, the outlook also considers that leverage
will remain high, close to 5.0x, through the next 18-months.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if cash generation accelerates along
with travel recovery allowing Playa to improve credit metrics.
Specifically, with debt/EBITDA below 5.0x and interest coverage
above 2.5x on a sustained basis.
Ratings could be downgraded if operations deteriorated resulting in
debt/EBITDA sustained above 6.0x or EBIT/interest coverage below
1.5x.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
Playa Resorts Holding B.V. (Playa) owns and/or manages a portfolio
of 25 all-inclusive resorts (9,352 rooms) in beachfront locations
in Mexico, the Dominican Republic and Jamaica. For the last twelve
months ended September 2022, revenues were $822 million. The
company is publicly listed with a market capitalization of around
$977.9 million. Major shareholders are: Davidson Kempner
Management, LLC which owns 9.3%, AIC Holdings Group 7.3%, The
Goldman Sachs Group, Inc. 7.3%, Rubric Capital Management LP 7.0%
and Sagicor 6.5%.
=====================================
T R I N I D A D A N D T O B A G O
=====================================
TRINIDAD & TOBAGO: Mentors Key to SME Listing on T&T Stock Exchange
-------------------------------------------------------------------
Trinidad Express reports that last month, on October 25, the
Trinidad and Tobago Stock Exchange launched the Small and Medium
Enterprises (SME) Mentorship Programme and SME Market Place at a
function held at the Hyatt Regency Hotel, Port of Spain.
In delivering the feature address, Minister of Finance, Colm Imbert
said the Government has recognised the "inherent challenges" faced
by the SME sector, primarily in the area of acquiring financing due
to a lack of proper and up-to-date documentation, poor debt
repayment records, non-adherence to statutory obligations and an
inability to meet corporate governance standards," according to
Trinidad Express.
These factors lead to higher financing rates and a natural adverse
impact on the profit position of the business, the report notes.
The report relays that in his feature address, an excerpt of which
is published below, Imbert outlined the importance of mentors to
the successful listing of SMEs on the Jamaica Stock Exchange:
SME Mentorship Program
It is noteworthy that Jamaica has been very successful with its
Junior Stock Exchange, the report notes. Where we have just two
companies on the SME Tier of our market, both of which have
struggled in recent times, Jamaica has 46 active companies listed
on its Junior Market, the report relays.
So, we decided to see what was different in Jamaica that we could
incorporate here, the report says. The key difference was the
presence of mentors, the report relays. In Jamaica, by
strategically developing their competencies, and acting as a
compliance advisor, mentors directly contribute to a company’s
growth, innovation, and overall strategy, thus improving customer
and investor confidence in the company, the report notes.
The report relays that these mentors are expected to act with due
skill and care and be responsible for advising the board of the
junior market company on the establishment of adequate procedures,
systems and controls, in order to comply with good standards of
corporate governance, including:
-- The holding of regular Board meetings
-- The establishment of appropriate committees of the Board
including an Audit Committee and a Compensation Committee
-- The carrying out of appropriate due diligence before it enters
into any material transaction
-- Good fiscal discipline, such as the keeping of proper accounts
and records
-- Good human resource and industrial relations practices
-- Compliance with statutory obligations.
Complementary to the tax incentives and to ease the operational
burden of listing, the Government in collaboration with the Central
Bank and the Stock Exchange has thus designed a similar Mentorship
Programme that would provide the necessary support to the SMEs and
close the gaps of insufficient documentation, as well as ensure
adherence to compliance and corporate governance standards, the
report relays, the report discloses. Proposed SME Mentorship Rules
were thus published by the TTSE in June 2022 and approved by the
Securities and Exchange Commission in August 2022, the report
notes.
This SME Mentorship Programme demonstrates the willingness of the
TTSE to work with the Government to invest the time and resources
necessary to assist companies to operate efficiently on the stock
market, the report relays.
SME mentorship programme
"It is noteworthy that Jamaica has been very successful with its
Junior Stock Exchange. Where we have just two companies on the SME
Tier of our market, both of which have struggled in recent times,
Jamaica has 46 active companies listed on its Junior Market.
"So, we decided to see what was different in Jamaica that we could
incorporate here. The key difference was the presence of mentors.
In Jamaica, by strategically developing their competencies, and
acting as a compliance advisor, mentors directly contribute to a
company’s growth, innovation, and overall strategy, thus
improving customer and investor confidence in the company.
"These mentors are expected to act with due skill and care and be
responsible for advising the board of the junior market company on
the establishment of adequate procedures, systems and controls, in
order to comply with good standards of corporate governance,
including:
* The holding of regular Board meetings
* The establishment of appropriate committees of the Board
including an Audit Committee and a Compensation Committee
* The carrying out of appropriate due diligence before it enters
into any material transaction
* Good fiscal discipline, such as the keeping of proper accounts
and records
* Good human resource and industrial relations practices
* Compliance with statutory obligations.
"Complementary to the tax incentives and to ease the operational
burden of listing, the Government in collaboration with the Central
Bank and the Stock Exchange has thus designed a similar Mentorship
Programme that would provide the necessary support to the SMEs and
close the gaps of insufficient documentation, as well as ensure
adherence to compliance and corporate governance standards.
Proposed SME Mentorship Rules were thus published by the TTSE in
June 2022 and approved by the Securities and Exchange Commission in
August 2022.
"This SME Mentorship Programme demonstrates the willingness of the
TTSE to work with the Government to invest the time and resources
necessary to assist companies to operate efficiently on the stock
market.
SME Market Place
"Furthermore, with the operationalisation of the SME Mentorship
Programme, the Government aims to integrate the other support
services provided to SMEs by government agencies in an effort to
promote a stable and accessible environment for the growth of
SMEs.
"To this end, a single entry portal -- SME Market Place was
developed on the Ministry of Finance website which will provide
access to information on the SME Market and procedure for listing
on the Stock Exchange; the SME Mentorship Programme inclusive of
the criteria required to become a mentor and the application
process; as well as, provide access to other support services
offered by government agencies.
"The portal will also provide 24/7 online access, connecting SMEs
with business support products and services currently offered by
various public and private sector entities.
"Aside from the 24-hour access, the portal will provide public and
private entities with the opportunity to engage new SME clients.
"The overall objective of the Government is to create an
environment via various programmes, inter alia, to grow and expand
the SME sector by:
* Increasing access to traditional and new export markets;
* Enhancing the capacity and competitiveness of firms in the
nonenergy manufacturing sector;
* Attracting investors through the creation of new economic spaces
and the development of a modern regulatory framework;
* Continuing to facilitate improvements on the ease of doing
business in Trinidad and Tobago; and
* Promoting a dedicated digital transformation regarding
e-commerce to increase the participation of Micro, Small & Medium
Enterprises (MSMEs) and female entrepreneurs in the economy.
"The entire suite of programmes geared towards the SME sector will
strengthen its governance structure, sharpen its competitiveness,
and continue to contribute to the expansion of the non-energy
sector.
"I believe that a strong focus on SMEs’ strategic objectives will
aid in more engagement, compliance and operational effectiveness
and efficiency for the overall benefit of the economy of Trinidad
and Tobago."
===============
X X X X X X X X
===============
LATAM: Exports Grow More than World Trade Despite Slowdown
----------------------------------------------------------
The value of goods exports from Latin America and the Caribbean
continued to grow in the first half of 2022 but at a slower pace
than in the same period of the previous year, according to a new
report from the Inter-American Development Bank.
After growing 27.9% in 2021, the value of the region's exports
increased by 20.6% in the first half of 2022. This growth rate
exceeds that of world trade, which fell from 25.8% to 17.5% in the
same period.
Exports slowed in response to a series of global shocks: the
conflict in Ukraine, China’s zero-COVID policy, and the
tightening of monetary policies.
According to the latest issue of the Trade and Integration Monitor
(English version coming soon), which analyzes the evolution of
trade flows in Latin America and the Caribbean, the projections for
the rest of the year confirm a change in trend in the region’s
exports, which are moving into a marked slowdown.
In contrast, service exports—which had rallied by 26.8% in
2021—continued to grow steadily in the first quarter of 2022.
They grew at an exceptionally high rate (53.6%), outstripping the
world average, driven by the recovery in international travel and
transportation.
"Although trade in Latin America and the Caribbean rallied more
than the global average, prices explained most of the growth in
export values. The trend toward a slowdown has now been
consolidated," said Paolo Giordano, Principal Economist at the
IDB’s Integration and Trade Sector, who coordinated the report.
Rising export prices accounted for almost 70% of the year-on-year
increase in the value of external sales from Latin America and the
Caribbean in the first half of 2022. The report highlights the
price dynamics of the region’s main export goods: for instance,
the price of oil increased by 69.1%, coffee by 60.6%, and sugar by
14.4%.
Export volumes were less dynamic than prices: growth slowed
somewhat in the first half of 2022, but volumes increased by 5.3%.
This growth was slightly higher than the world average (4.5%),
although performances varied significantly by subregion.
Imports slowed from 36.8% to 29.4% but continued to grow more than
exports, driven mainly by energy prices. As a consequence, the
region’s terms of trade and trade balances deteriorated.
The report underlines that although sales to the United States
contributed most to the trade recovery in Latin America and the
Caribbean, trade within the region was more dynamic than to the
rest of the world (33.5% vs. 18.5%, respectively). As a
consequence, the share of intraregional trade rose by 1.4
percentage points in comparison with 2021, accounting for 15.8% of
the total in the first half of 2022.
The report concludes that the recurring global shocks that have
affected the region’s trade performance point to a trend of
instability in the medium term. Over the last 10 years, exports
from Latin America and the Caribbean have been less dynamic and
more volatile. Aside from a few exceptions, the region’s
economies have become less competitive externally, particularly in
the intraregional market. Against this backdrop, there is a need to
breathe new life into international integration strategies,
emphasizing regional integration agendas.
The 2022 Trade and Integration Monitor was produced by the IDB’s
Integration and Trade Sector and its Institute for the Integration
of Latin America and the Caribbean (INTAL.)
*********
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 * * *