/raid1/www/Hosts/bankrupt/TCRLA_Public/221124.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, November 24, 2022, Vol. 23, No. 229
Headlines
A R G E N T I N A
ARGENTINA: Annual Inflation Spikes to 88%, Topping G20 Countries
PROVINCE OF JUJUY: S&P Affirms 'CCC+' LT Issuer Credit Rating
B A H A M A S
BAHAMAS: S&P Affirms 'B+' Long-Term SCRs, Outlook Stable
C O L O M B I A
COLOMBIA: Civil Aviation Authority Opposes Avianca Merger
C O S T A R I C A
COSTA RICA: IMF OKs Request for a Deal Under RSF for US$725M
E C U A D O R
BANCO DE LA PRODUCCION: Fitch Affirms 'B-' IDR, Outlook Now Stable
BANCO DEL AUSTRO: Fitch Affirms CCC+ LongTerm Issuer Default Rating
BANCO GUAYAQUIL: Fitch Affirms LongTerm IDR at 'B-', Outlook Stable
BANCO PICHINCHA: Fitch Affirms LongTerm IDR at 'B-', Outlook Stable
BANCO PROCREDIT: Fitch Affirms LongTerm IDR at 'B-', Outlook Stable
P E R U
PERU: Trade Exchange With APEC Economies Exceeds US$59 Billion
P U E R T O R I C O
CEDIPROF INC: Seeks Approval to Hire C. Conde & Assoc. as Counsel
CEDIPROF INC: Seeks Approval to Hire RSM Puerto Rico as Accountant
T R I N I D A D A N D T O B A G O
CL FIN'L: Government Gets Four More CLICO Properties
V E N E Z U E L A
VENEZUELA: Seeks to Resolve Territorial Dispute with Guyana
V I R G I N I S L A N D S
ZHONGYUAN DAYU: Fitch Assigns 'BB+' Rating to New US Dollar Notes
X X X X X X X X
LATAM: IDB Aids Central America, Dominican Republic Over Hurricanes
- - - - -
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A R G E N T I N A
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ARGENTINA: Annual Inflation Spikes to 88%, Topping G20 Countries
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Patrick Gillespie at Bloomberg News reports that Argentina's annual
inflation surged last month as the government implements price
freezes on over a thousand consumer goods in an attempt to cool
cost-of-living increases.
Consumer prices rose 88 percent in October from a year ago,
surpassing Turkey's 85.5 percent rate for the highest among Group
of 20 nations, according to Argentine government data published
Nov. 15, according to Bloomberg News. Inflation accelerated 6.3
percent on a monthly basis, less than the 6.7 percent median
estimate from economists surveyed by Bloomberg.
Bloomberg News relays that Argentina's annual inflation rate is
expected to surpass 100 percent in coming months, the highest level
since South America's second-largest economy battled hyperinflation
over 3,000 percent in the early 1990s. President Alberto Fernandez
relaunched temporary price freezes on 1,700 consumer items last
week in a bid to cool prices, though the policy hasn't proved
sustainable before, Bloomberg News discloses.
A key official in Fernandez's government conceded on Nov. 15 that
the coalition isn't unified over a big-picture plan to cool
inflation and grow the economy, Bloomberg News notes.
"There's no consensus over a stabilisation plan," Economic Planning
Secretary Gabriel Rubinstein said in a conference. Ahead of next
year's presidential election, he added that "there isn't political
consciousness on lowering spending," Bloomberg News says.
Galloping inflation affects everyone in Argentina. Powerful labour
unions are pushing companies for triple-digit pay increases,
foreign tourists are paying restaurants bills with huge stacks of
cash and consumers don't know how much basic items should cost,
Bloomberg News adds.
About Argentina
Argentina is a country located mostly in the southern half of
South America. Its capital is Buenos Aires. Alberto Angel
Fernandez is the current president of Argentina after winning
the October 2019 general election. He succeeded Mauricio
Macri in the position.
Argentina has the third largest economy in Latin America. The
country's economy is an upper middle-income economy for fiscal
year 2019, according to the World Bank. Historically, however,
its economic performance has been very uneven, with high economic
growth alternating with severe recessions, income maldistribution
and in the recent decades, increasing poverty.
Last March 25, 2022, Argentina finalized agreement with the IMF
for a new USD44 billion Extended Funding Facility (EFF) intended
to fund USD40 billion in looming repayments of the defunct
Stand-By Arrangement (SBA), with an extra USD4 billion in up-front
net financing. This has averted the risk of a default to the IMF
and is facilitating a parallel rescheduling of Paris Club debt.
As reported in the Troubled Company Reporter-Latin America on
Nov. 18, 2022, S&P Global Ratings affirmed its 'CCC+/C' foreign
currency sovereign credit ratings on Argentina. S&P lowered the
long-term local currency sovereign credit rating to 'CCC-' from
'CCC+' and the national scale rating to 'raCCC+' from 'raBBB-'.
S&P also affirmed its 'C' short-term local currency rating.
The outlook on the long-term ratings is negative. S&P's 'CCC+'
transfer and convertibility assessment is unchanged.
Last April 14, 2022, Fitch Ratings affirmed Argentina's Long-Term
Foreign and Local Currency Issuer Default Ratings (IDR) at 'CCC'.
Fitch said Argentina's 'CCC' ratings reflect weak external
liquidity and pronounced macroeconomic imbalances that undermine
debt repayment capacity, and uncertainty regarding how much
progress can be made on these issues under a new IMF program.
On July 19, 2022, Fitch Ratings placed Argentina's Long-Term
Foreign Currency Issuer Default Rating (IDR) and Long-Term Local
Currency IDR Under Criteria Observation (UCO) following the
conversion of the agency's Exposure Draft: Sovereign Rating
Criteria to final criteria. The UCO assignment indicates that
ratings may change as a direct result of the final criteria. It
does not indicate a change in the underlying credit profile, nor
does it affect existing Rating Outlooks.
Moody's credit rating for Argentina was last set at Ca on
Sept. 28, 2020.
DBRS has also confirmed Argentina's Long-Term Foreign Currency
Issuer Rating at CCC and Long-Term Local Currency Issuer Rating at
CCC (high) on July 21, 2022.
PROVINCE OF JUJUY: S&P Affirms 'CCC+' LT Issuer Credit Rating
-------------------------------------------------------------
On Nov. 22, 2022, S&P Global Ratings affirmed its 'CCC+' foreign
and local currency long-term issuer credit ratings on the province
of Jujuy. The outlook is stable. S&P also revised upward the
province's stand-alone credit profile (SACP) to 'b-' from 'ccc+'.
Outlook
S&P said, "The stable outlook reflects our expectation of operating
surpluses and moderate deficits after capital expenditures (capex)
in the next 12-18 months, as well as stable cash flows from the
Cauchari solar farm that will help maintain Jujuy's liquidity
buffers. Our base-case scenario also assumes capex can be flexible
if needed." These factors are counterbalanced by continued
macroeconomic and financial challenges in Argentina that could
pressure the provincial budget and its capacity to service debt.
Downside scenario
S&P said, "We could downgrade the province of Jujuy in the next 12
months if we downwardly revise our T&C assessment of Argentina
because of tighter foreign exchange restrictions amid scarce
reserves that could dent the local and regional governments' (LRGs)
ability to service debt. In addition, we could lower the long-term
ratings on the province if a sharply weaker-than-expected fiscal
performance or liquidity position increases the risk of default or
the likelihood of a distressed debt exchange in the next 12
months."
Upside scenario
S&P said, "While the province's 'b-' SACP is stronger than the
current 'CCC+' ratings, we cap our ratings at the 'CCC+' T&C
assessment. As a result, we could only upgrade Jujuy if we upwardly
revise the T&C assessment. This would likely have to be accompanied
by an improvement in the creditworthiness of Argentina (foreign
currency: CCC+/Negative/C, local currency: CCC-/Negative/C) amid
clarity on how policy, post-elections, will ease financing
challenges in the local market and provide a road map to correct
Argentina's major structural macroeconomic imbalances."
S&P said, "We revised upward the province's SACP to 'b-' from
'ccc+', reflecting our expectation that the recently accumulated
cash and continued cash flows for $48 million annually from the
Cauchari solar farm should enable Jujuy to cover its debt service
payments in 2022-2024. Debt service in U.S. dollars will increase
to $100 million-$120 million annually in 2023-2025 from $30 million
in 2022, which we expect will be manageable under our base-case
scenario. However, risks will stem from uncertainty about the
province's capacity to access sufficient foreign currency to bulk
up needed sums to service debt in U.S. dollars, as well as
potential economic instability that could strain its fiscal flows
and cash position. This is reflected in our T&C assessment for the
country and our 'CCC+' ratings on Jujuy.
"Balanced fiscal results and flows from the Cauchari solar farm
should allow Jujuy to cover its debt service payments in
2022-2024.
"We expect Jujuy to post operating surpluses averaging 12% of
operating revenue in 2022-2025 and moderate deficits after capex as
the province executes its ambitious capex plans. After many years
of operating deficits, results turned positive in 2020 and remained
strong in 2021 and 2022 partly due to efforts from the
administration toward fiscal consolidation through personnel
adjustment (personnel payments lowered to 51% from 56% of total
spending over 2017-2021), as well as some improvement in tax
administration. In 2021 and 2022, the strong results stemmed from
revenue recovery in line with nominal GDP growth while spending
remained under control.
"Our forecast assumes Jujuy's own-source revenue and transfers from
the national government (transfers account for 85% of total
revenue) will increase to be broadly in line with nominal GDP
growth. We incorporate potential pressures on operating spending,
particularly payroll amid high inflation and because public-sector
salaries haven't recovered in real terms since the wage freeze in
2020. In our view, changing economic conditions and the province's
high dependence on national government transfers could make fiscal
performace volatile. At the same time, further consolidation of
payroll could prove difficult given the worsening purchase power of
salaries and given Jujuy's socioeconomic profile--public
administration plays a key role as an employer.
"Jujuy's infrastructure needs remain significant and will keep
capex above 10% of total spending and deficits after capex. After
finalizing the construction of the Cauchari solar farm, the
province has an ambitious development plan for the next two years
that includes improving education, health, and transportation
infrastructure. The province also plans to expand the solar farm,
although financing sources aren't yet defined.
"We assume international debt markets will remain closed to
Argentine LRGs and Jujuy will cover funding needs with preapproved
loans from multilateral lending agencies, as well as with the
financing from the national government. The province doesn't have
outstanding short-term notes, which could be a funding source in
the future (up to 2.5% of the budgeted revenues for the year).
"The recent enhancement in Jujuy's finances has improved its
liquidity position. We estimate available cash will be sufficient
to cover 2023 debt service, while the cash flow from the Cauchari
solar farm will also support debt service coverage. Cauchari's
contract with local energy distributor CAMMESA is in U.S. dollars
with payments made in Argentine pesos at the official rate, which
is also the rate at which the province acquires U.S. dollars to pay
debt, thus limiting currency risk on these flows. Nevertheless, the
coverage ratio could fluctuate due to expected increases in
infrastructure spending and because higher debt service will likely
dent recently accumulated cash. Given limited access to credit
markets, building cash buffers and maintaining their value in real
terms is a key challenge for Argentine provinces.
"The province's debt stock dropped to 73% of its operating revenue
in 2021 from a peak of 100% in 2019. Still, Jujuy's debt burden is
among the highest of the Argentine provinces. About 78% of the debt
is denominated in U.S. dollars, making it very vulnerable to
exchange rate fluctuations. We expect the debt burden to fall in
upcoming years to below 60% and for interest payments to be below
5% of operating revenue, largely because financing conditions will
remain limited. The province's debt service profile will tick up in
2023 as payments for the international bond and to the Exim bank
become heftier."
Financial planning in Jujuy is limited by low institutional
predictability and subdued economic growth
S&P said, "We forecast Jujuy's economic growth will remain feeble,
in line with that of the sovereign. Following a 10% rebound in
Argentina's GDP growth, we expect it to slow to about 2% per year
in 2022-2025. Meanwhile, inflation is still likely to stay close to
90% year-over-year in 2023 and will continue to pressure the
country's already weak socioeconomic indicators. We estimate
Jujuy's GDP per capita will be $7,600 for 2022, which is well below
the national average of $13,600.
"Jujuy has a broad green agenda that includes energy transition
activities in solar and lithium, as well as initiatives to enhance
the carbon market (carbon credits). Located in the so-called
"lithium triangle," the province's mineral industry has significant
potential. There is currently one company producing lithium and we
expect there to be an additional one in 2023. Lithium could help
boost the economy in the next few years, but we don't expect any
large immediate impact on the budget. Royalties are very
limited--only 3%--and the tax base for these companies is low due
to tax benefits per mining law.
"Amid limited access to borrowing sources, we think careful
financial planning will be key to avoiding liquidity pressure when
amortization payments come due in 2023-2025.
"Finally, we assess the institutional framework for Argentina's
LRGs as very volatile and underfunded, reflecting our perception of
the sovereign's very weak institutional predictability and volatile
intergovernmental system that has been subject to various
modifications to fiscal regulations and lack of consistency over
the years. This jeopardizes the LRGs' financial planning and
consequently their credit quality."
In accordance with S&P's relevant policies and procedures, the
Rating Committee was composed of analysts that are qualified to
vote in the committee, with sufficient experience to convey the
appropriate level of knowledge and understanding of the methodology
applicable. At the onset of the committee, the chair confirmed that
the information provided to the Rating Committee by the primary
analyst had been distributed in a timely manner and was sufficient
for Committee members to make an informed decision.
After the primary analyst gave opening remarks and explained the
recommendation, the Committee discussed key rating factors and
critical issues in accordance with the relevant criteria.
Qualitative and quantitative risk factors were considered and
discussed, looking at track-record and forecasts.
The committee's assessment of the key rating factors is reflected
in the Ratings Score Snapshot above.
The chair ensured every voting member was given the opportunity to
articulate his/her opinion. The chair or designee reviewed the
draft report to ensure consistency with the Committee decision. The
views and the decision of the rating committee are summarized in
the above rationale and outlook. The weighting of all rating
factors is described in the methodology used in this rating
action.
Ratings List
RATINGS AFFIRMED
JUJUY (PROVINCE OF)
Issuer Credit Rating CCC+/Stable/--
JUJUY (PROVINCE OF)
Senior Unsecured CCC+
=============
B A H A M A S
=============
BAHAMAS: S&P Affirms 'B+' Long-Term SCRs, Outlook Stable
--------------------------------------------------------
On Nov. 22, 2022, S&P Global Ratings affirmed its long-term foreign
and local currency sovereign credit ratings on the Commonwealth of
The Bahamas at 'B+'. The outlook is stable.
Outlook
S&P said, "The stable outlook reflects our view that economic
growth will support government revenues and reduce pressure on
government expenditures, leading to smaller fiscal deficits over
the next 12 months. The stable outlook also assumes no material
adverse impact on The Bahamas, including to the local banking
sector, from the recent bankruptcy of FTX, a crypto-currency
exchange with a presence in the country. We expect continued, but
decelerating, growth in the national debt. We expect the country's
relatively large financing needs will be met by the domestic market
and multilateral lenders."
Downside scenario
S&P said, "We could lower the ratings over the next 12 months
should economic performance lag, pointing to GDP per capita
remaining below our expectations. We could also lower the ratings
if we believe that The Bahamas' access to external liquidity will
deteriorate sharply and suddenly."
Upside scenario
S&P could raise the ratings over the next 12 months if the
government advances faster than we expect to establish a track
record of enacting meaningful financial reform, demonstrating an
ability to raise revenues and leading to sustained near-balanced
financial results and improved economic prospects.
Rationale
There has been a meaningful improvement in The Bahamas' economy
over the past 12-18 months, spurred by the important tourism
sector, although it remains below pre-pandemic levels. The
expanding economy is supporting government revenues, which
increased almost 29% in the most recent fiscal year, while higher
employment is shrinking the government's social expenditures.
Deficits have fallen to 6% of GDP in fiscal year 2022 from 13.7% in
fiscal 2021, and are expected to fall even further in the current
fiscal year. Although The Bahamas's debt burden rose following
Hurricane Dorian and the onset of the COVID-19 pandemic, a growing
economy and smaller deficits have resulted in slower growth in
debt. Interest expenses are higher than pre-pandemic levels and S&P
expects the country's interest burden will remain above 15% of
revenues over the next one-two years. The government's external
liabilities are increasing, and we believe the country remains
vulnerable to external shocks, while the fixed exchange rate limits
its monetary policy flexibility.
Institutional and economic profile: Slowing economic growth
expected over next one-two year, no material institutional changes
expected.
-- The economy is expected to increase by 8% in 2022, with slower
growth expected in 2023.
-- S&P does not expect significant public finance reforms in the
next one-two years.
-- Instead, the economic recovery is expected to be the main cause
of improving deficits.
S&P said, "As expected, The Bahamas is experiencing a strong
recovery in the tourism sector; the country is benefiting from its
proximity to its largest tourism source market and pent-up demand.
Stayover arrivals for 2022 are expected to exceed 80% of 2019
levels. Furthermore, we understand there is a pipeline of
tourism-related projects planned and underway over the next few
years. Although we expect these projects will continue to support
growth, they reinforce the economy's dependence on the volatile
tourism sector. The Bahamas' economy remains concentrated in
tourism , which typically contributes at least 40% of GDP.
"We expect global economic challenges in 2023 will slow The
Bahamas' real GDP growth next year to 1.1%. We expect GDP per
capita will be $33,740 in 2023. The pandemic, low historical
growth, and repeated natural disasters have weighed on the
country's economy. Despite good growth over the next two-three
years, our assessment of the sovereign's creditworthiness reflects
its below-average long-term growth performance compared with that
of others at a similar level of development."
Although tourism remains the driver of the local economy, The
Bahamas also has a sizable financial sector estimated to be 10%-15%
of GDP. To foster the local fintech sector and open the country to
opportunities in the digital asset space, the government recently
introduced the Digital Assets and Registered Exchange Act. The
local economy benefited from the activities of a digital exchange
over the past year; however, this sector may face setbacks as FTX,
a digital asset exchange headquartered in The Bahamas, recently
filed for bankruptcy.
The Bahamas is a stable parliamentary democracy with regular
changes in government. Political leadership has alternated between
the Free National Movement and the Progressive Liberal Party (PLP)
over several decades. The current government, led by Philip Davis
of the PLP, was elected in September 2021 and enjoys a majority in
parliament.
The Bahamas has faced two large negative shocks in three years,
placing significant pressure on government finances and testing the
government's resolve to put the nation's finances on a sustainable
path. The rapid increase in debt over the past few years means The
Bahamas' previous fiscal consolidation plans will likely be
insufficient to meet the country's debt targets without material
new revenues, significant cost cutting, or economic growth well
above historical averages. Furthermore, the country remains
vulnerable to environmental risks.
S&P believes the country's track record of slow progress in
reforming public finances and key sectors of the economy has
contributed to the weakening of its financial profile over many
years and hurt its economic performance. Most notably, failure to
advance public financial reform has led to a marked increase in the
sovereign's debt burden.
Flexibility and performance profile: Growing economy supports
smaller deficits and slowing debt accumulation, but the country's
external position remains vulnerable.
-- The growing economy is supporting the government fiscal
position and slowing increases in The Bahamas' gross debt stock.
-- The country has significant financing and refinancing needs.
-- External borrowing and high current account deficits will
continue to pressure The Bahamas' external position.
The growing economy is helping to reduce the government's fiscal
deficits to levels more consistent with those seen pre-pandemic.
S&P said, "We expect the deficit this fiscal year (ending June 30,
2023) will be 2.8% of GDP and that the change in general government
net debt will average 2.4% of GDP during 2022-2024. In the short
term, we do not anticipate material new revenue-generating tax
measures; instead, we expect the government will continue pursuing
improvements to tax collections via a dedicated revenue enhancement
unit, among other initiatives." In the past fiscal year, the
government rolled out its updated real property tax roll, which
added new properties, and it expects it will generate $120 million
per year.
S&P said, "The government has announced its intention to collect
revenue of 25% of GDP, while shrinking expenses and capital
spending to 20% and 3.5% of GDP, respectively, by fiscal 2025-2026.
This would result in a fiscal surplus; however, we believe the
government's goals will be hard to achieve absent new taxes or
material spending cuts. The government has announced two new
committees to review revenue policies and public debt strategy. Any
recommendations and new policies arising from these committees will
take several years before they have a meaningful impact on public
finances.
"We expect declining deficits and a growing economy will lead to a
slow decline in The Bahamas' net debt burden and incremental
financing needs. However, the country remains vulnerable to
refinancing risks based on its significant short-term debt, with
almost 24% of debt maturing in the next year.
"We expect The Bahamas will refinance existing domestic debt
internally, but will rely on external sources to meet its
incremental borrowing needs. We understand the government plans to
avoid external bond markets in 2023; instead it will use a
combination of bank loans and multilateral funding to meet its
external financing needs. Domestic commercial banks' exposure to
the public sector accounts for a material size of their assets,
which we believe lessens their ability or appetite to absorb
additional exposure. The country's external debt has risen in
recent years, and foreign currency-denominated debt is now 46% of
total debt, underscoring the importance of generating sufficient
foreign exchange to meet debt service needs.
"We expect The Bahamas' net debt burden will fall to about 72.3% of
GDP by the end of 2023 from 83.1% in 2020, while interest payments
will remain above 15% of government revenues for the next three or
more years. The government's interest payments, at 19% of revenues,
reduce its flexibility to meet economic and social spending goals.
We net some of the country's social security investment assets from
our measure of net debt. These assets have declined over the past
five years, which we expect will continue, absent social security
reform. Efforts going back many years have failed to reform the
country's state-owned enterprises (SOEs), which remain a drain on
government finances. The government typically spends about 15% of
its total expenditures on ongoing subventions, while it has also
been called on to support guaranteed debt of SOEs.
"We expect the external debt of the public and financial sectors,
net of usable reserves and financial sector external assets, will
be about 49% of current account receipts in 2022. These figures
include the government's $2.86 billion in external bonds, but do
not include external debt and foreign direct investment in the
islands' substantial tourism sector.
"Based on the gross external liabilities of the country's large
banking sector, we expect the gross external financing needs of the
public and financial sectors will average 290% of current account
receipts in 2022-2025, down from about 520% in 2020. This also
reflects both our forecast of an improving current account deficit
next year, as tourism receipts increase, and the financial sector's
high rollover needs. However, we consider the financial sector's
external assets highly liquid, which diminishes liquidity risk
somewhat. Errors and omissions have historically been high and tend
to fluctuate, and contribute to a weak external profile.
"The Bahamas' limited monetary and exchange rate flexibility
constrains its ability to respond to external shocks. The Bahamian
dollar is fixed at par with the U.S. dollar. Lower demand for
foreign exchange and the government's external borrowing bolstered
foreign exchange reserves, which remain above $3.2 billion. We
expect that the central bank will continue to rely primarily on a
combination of interest rates, moral suasion, and macroprudential
tools to influence domestic credit growth.
"We consider the banking sector's contingent liabilities to be
limited. The financial sector is dominated by foreign subsidiaries
of Canadian banks, which comprise a substantial portion of domestic
assets. On the whole, the commercial banking sector has strong
capital and liquidity ratios. Total bank assets are estimated to be
about 186% of GDP."
In accordance with S&P's relevant policies and procedures, the
Rating Committee was composed of analysts that are qualified to
vote in the committee, with sufficient experience to convey the
appropriate level of knowledge and understanding of the methodology
applicable. At the onset of the committee, the chair confirmed that
the information provided to the Rating Committee by the primary
analyst had been distributed in a timely manner and was sufficient
for Committee members to make an informed decision.
After the primary analyst gave opening remarks and explained the
recommendation, the Committee discussed key rating factors and
critical issues in accordance with the relevant criteria.
Qualitative and quantitative risk factors were considered and
discussed, looking at track-record and forecasts.
The committee's assessment of the key rating factors is reflected
in the Ratings Score Snapshot above.
The chair ensured every voting member was given the opportunity to
articulate his/her opinion. The chair or designee reviewed the
draft report to ensure consistency with the Committee decision. The
views and the decision of the rating committee are summarized in
the above rationale and outlook. The weighting of all rating
factors is described in the methodology used in this rating
action.
Ratings List
RATINGS AFFIRMED
BAHAMAS
Sovereign Credit Rating B+/Stable/B
Transfer & Convertibility Assessment
Local Currency BB-
BAHAMAS
Senior Unsecured B+
===============
C O L O M B I A
===============
COLOMBIA: Civil Aviation Authority Opposes Avianca Merger
---------------------------------------------------------
Reuters reports that Colombia's civil aviation authority formally
opposed a planned merger between Avianca, the country's flag
carrier, and budget airline Viva, saying the transaction
represented a risk to competition.
Avianca and Viva in April signed a deal to merge into one group and
unify their economic rights as part of a strategy to strengthen
both airlines after the global aviation industry was battered by
the COVID-19 pandemic, according to the report.
The civil aviation authority's decision tentatively blocks the
merger, but it said the airlines can appeal. If the merger were to
complete, the combined group would control 100% of the services
offered on 16 routes, the authority said, the report notes.
Potential competitors would face new challenges for growth or
expansion into markets affected by the bigger barriers to entry
resulting from the control that the new entity would hold following
the merger, the authority added, the report relates.
===================
C O S T A R I C A
===================
COSTA RICA: IMF OKs Request for a Deal Under RSF for US$725M
------------------------------------------------------------
The Executive Board of the International Monetary Fund (IMF)
completed the third review of Costa Rica's economic reform program
supported by the IMF's extended arrangement under the Extended Fund
Facility (EFF). Completion of this review makes available SDR
206.23 million (about US$ 270 million), bringing total
disbursements under the arrangement to SDR 618.8 million (about US$
810 million).
The Executive Board also approved today Costa Rica's request for an
arrangement under the Resilience and Sustainability Facility (RSF)
for SDR 554.1 million (about US$ 725 million or 150 percent of
quota). Costa Rica is the first country to access the RSF. The RSF
duration will coincide with the period remaining under the EFF,
disbursements under the RSF being contingent on the conclusion of
relevant reviews under the EFF and implementation of scheduled
reform measures.
Costa Rica's three-year extended arrangement under the EFF was
approved on March 1, 2021, in the amount of SDR 1.23749 billion
(US$1.778 billion or 335 percent of quota in the IMF at the time of
approval of the arrangement, see Press Release No. 21/53 ) and
extended by five months on March 25, 2022 (see Press Release No.
22/91 ).
Following the Executive Board's discussion on Costa Rica, Mr. Kenji
Okamura, Deputy Managing Director and Acting Chair of the Board,
issued the following statement:
"I am pleased that today Costa Rica will become the first user of
the Resilience and Sustainability Facility (RSF), a testament to
the country's commitment to tackle climate change and pursue green
growth.
"The Costa Rican authorities are taking important steps to
strengthen their economic reform program. Nevertheless, global
headwinds have started to slow economic activity amid elevated
inflationary pressures, and the outlook remains subject to downside
risks.
"The Central Bank of Costa Rica (BCCR) has responded proactively to
the shocks facing the economy, adjusting monetary policy in line
with its data-dependent and forward-looking approach. Against a
difficult external environment, the BCCR is taking appropriate
steps to strengthen its reserve position and deepen the FX market,
while promoting exchange rate flexibility. Important legal
amendments are underway to strengthen the BCCR's governance,
autonomy, and operational framework.
"Building on the strong fiscal performance to date, continued
fiscal consolidation efforts is key, supported by planned reforms
to increase the fairness and progressivity of taxes, improve the
equity and efficiency of spending, and strengthen debt management.
There is scope to re-examine the fiscal rule, while ensuring its
essential role in containing spending and reducing debt is
preserved.
"The authorities have appropriately provided targeted support to
alleviate the impact of inflation on the most vulnerable. Advancing
planned reforms to strengthen social protection alongside actions
to incentivize formal employment, improve the quality of education,
and boost female labor force participation will foster a more
dynamic and equitable economy.
"The supervisory authorities' continuous proactive monitoring of
the financial system is important, accompanied by critical reforms
to strengthen bank supervisory and regulatory powers, enhance the
legal framework for bank resolution and deposit insurance and
foster bank competition.
"The RSF arrangement will support Costa Rica's ambitious agenda to
build climate resilience and transition to a zero-carbon economy.
The authorities' access request under the RSF arrangement is
underpinned by a strong reform package and will support ongoing
initiatives to catalyze further financing from official and private
partners. "
=============
E C U A D O R
=============
BANCO DE LA PRODUCCION: Fitch Affirms 'B-' IDR, Outlook Now Stable
------------------------------------------------------------------
Fitch Ratings has affirmed Banco de la Produccion S.A. Produbanco y
Subsidiarias's (Produbanco) Long-Term Issuer Default Rating (LT
IDR) at 'B-', Viability Rating (VR) at 'b-' and Short-Term IDR at
'B'. The Rating Outlook on the LT IDR is revised to Stable from
Negative.
The Outlook revision reflects Fitch's expectations of
capitalization evaluation to remain commensurate to its rating
category in the medium term and will be sustained by improved
internal capital generation as a result of reduction of the cost of
credit, and a more conservative dividend strategy. As of September
2022 and over the last two years, the bank proved its capacity to
maintain the Fitch Core Capital (FCC) ratio consistently above
Fitch's downside sensitivity of 9%.
KEY RATING DRIVERS
Produbanco's VR drives its Long-Term IDR.
Sound Asset Quality: Produbanco's asset quality has historically
been sound and supported by its portfolio composition, focused
heavily on large corporations. At 3Q21, the bank's NPL ratio
reached a level of 1.6%, positioning favorably amongst its peers
and also compared to entity's pre-pandemic levels mainly due to
more conservative underwriting assessments and as a result of the
systemic regulatory flexibility to delay NPLs up to 60 days as a
measure to cushion coronavirus pandemic impact.
Furthermore, Produbanco continues to present deferrals and
restructures lower than its peers along with a sound loan coverage.
At 3Q22, total restructured and refinanced loans accounted for 3.5%
of the total, compared to 5.3% for the total financial system at
the same period and loan loss allowances to impaired loans ratio
remained conservative at 266% at the same period. Regulatory
forbearance is expected to end at YE 2022. Nonetheless, Fitch
expects Produbanco's assets assessment to maintain within the same
rating category, backed by its adequate and timely payment behavior
and its robust coverage.
Improved Profitability: At 3Q22, Produbanco's profitability
performance improved mainly as a result of the significant
reduction of the loan impairment charges supported by sound asset
quality and the conservative approach of creating voluntary
provisions in the initial stages of the pandemic. This was
reflected in an operating profit to risk weighted assets (RWA)
ratio of 1.55% compared to 0.5% at YE 2021 and similar to
pre-pandemic levels. Although Produbanco will remain conservative
in terms of provisioning, according to its strategy, Fitch expects
further improvement in the core profitability metric sustained by
double digit loan growth, with a bigger focus in more profitable
segments such as consumer and credit cards, while maintaining asset
quality metrics.
Pressured Capitalization: Produbanco's FCC has remained slightly
above Fitch's downside sensitivity of 9% since YE 2018 (some
quarterly deviations have taken place, but these being associated
with loan portfolio composition seasonality). Moreover, capital
adequacy ratio under local regulation benefits from the usage of
subordinated debt, which is not included in FCC calculation (3Q22
and four-year average [2018-2021] of 13.1% and 13.4%,
respectively). Fitch believes this results in a modest capacity to
absorb unexpected losses despite adequate loan loss reserve
coverage. Nevertheless, Fitch anticipates capitalization evaluation
to remain commensurate to its rating category in the medium term,
sustained by improved internal capital generation, the improved
asset quality, and a more conservative dividend strategy.
Stable Funding: Fitch believes that Produbanco maintains a stable
funding structure and adequate liquidity levels. The bank's funding
relies mainly on customer deposits, accounting for 89% of the loan
book, while the remaining 11% in financial and subordinated debt
composed mostly by funds from multilateral agencies. At 3Q22,
Produbanco presented a loan to deposits ratio of 95.3% and a growth
of 1.5% in customer deposits; Produbanco is still benefiting from
high liquidity in Ecuadorian banking system but to a lesser extent
than in 2020 and 2021 and more visible during last quarter of due
to cyclicity.
SHAREHOLDER SUPPORT RATING (SSR)
Produbanco's SSR of 'ccc' reflects Fitch's view of possible
external support from its majority shareholder Promerica Financial
Corporation rated at 'b'/Outlook Positive (PFC; 62.2% ownership).
The three notches discount assessment considers the limited
capacity of PFC to provide support due to the relative size of
Produbanco (32% of consolidated assets) and the size of ownership
given the existence of other relevant minority shareholders,
although it plays a key role for PFC.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
IDRs and VR
- The VR and IDR would be downgraded if the Fitch Core Capital to
RWA ratio is sustained below 9% without a credible plan to
strengthen and restore capitalization metrics along with a
deterioration in its profitability performance;
- The ratings are also sensitive to changes in the sovereign
rating, or further deterioration on the local operating
environment.
SSR
- A downgrade of the SSR would come from a deterioration of PFC's
creditworthiness.
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
IDRs and VR
- Upside potential is limited. However, in the long term, a rating
upgrade would require improved prospects for the operating
environment and a meaningful and sustained improvement of capital
metrics and core profitability, combined with improvements in the
bank's asset quality.
SSR
- Produbanco's SSR has limited upgrade potential over the rating
horizon, given its size and relevance relative to PFC.
VR ADJUSTMENTS
Fitch has assigned an Operating Environment score of 'ccc+' that is
below the 'b' category implied score due to the following
adjustment reason: Macroeconomic Stability (negative).
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
Entity/Debt Rating Prior
----------- ------ -----
Banco de la Produccion
S.A. Produbanco y
Subsidiarias LT IDR B- Affirmed B-
ST IDR B Affirmed B
Viability b- Affirmed b-
Shareholder Support ccc Affirmed ccc
BANCO DEL AUSTRO: Fitch Affirms CCC+ LongTerm Issuer Default Rating
-------------------------------------------------------------------
Fitch Ratings has affirmed Banco del Austro S.A.'s (Austro)
Long-Term Issuer Default Rating (IDR) at 'CCC+' and Viability
Rating (VR) at 'ccc+'.
KEY RATING DRIVERS
High Risk Appetite: Austro's VR is one notch below its implied 'b-'
VR. Fitch believes that Austro's risk profile is a high influence
factor, since the bank plans to growth its assets at double digits
in four years (2020-2024). Although the bank has strengthened its
risk policies to grow safe, Fitch considers this growing appetite
as riskier than its peers due to the bank's impaired loans ratio of
the last four-year average (3.8%), which is higher than the banking
system average. Fitch believes Austro's risk controls are yet to be
tested as new and future loans mature amid a challenging operating
environment.
Improvements in Asset Quality: Austro's NPL ratio decreased to 2.4%
in 3Q22 from 3.5% in YE21 due to risk and monitoring policies
improvements and high loan growth. However, the four-year average
impaired loans ratio continues to compare unfavorably in comparison
with peers and the banking system's average (4y avg. Austro: 3.8%;
System: 2.5%). Fitch expects a deterioration of the NPL ratio to
4.0% in YE22 as loans placed during the year mature and the
regulatory flexibility to delay the recognition of deteriorated
loan ends. Nonetheless, given the improvements in the bank's risk
management and collection policies, Fitch expects the NPL ratio to
improve in the midterm.
Stable Profitability: Austro's profitability metrics are stable. At
3Q22 the operating profit to risk weighted assets (RWAs) ratio
improved to 1.8% (YE21: 1.3%), primarily due to lower loan
impairment charges (LICs), representing 28.5% of pre-impairment
operating profit (YE21: 40.3%) and a stable interest margin. Fitch
expects slight pressures in profitability due to higher LICs;
however, the core metric has room to deteriorate and still remain
commensurate with its current rating category.
Adequate Capitalization: Austro's Fitch Core Capital to RWA ratio
of 11.7% and the regulatory capital ratio of 11.0% as of 3Q22
remains adequate compared to its peers and the system's average
(11.9%). Fitch does not expect further pressure on capitalization
ratios over the medium term, given the bank's commitment to
capitalizing a minimum of 80% of profits over the next five years
to sustain its expected high growth.
Stable Funding Structure: Austro's funding structure is adequate,
although less diversified than that of the largest banks, with
customer deposits representing 90.5% of total funding as of 3Q22.
The loans-to-deposits ratio remains sound at 78.1% as of 3Q22 as it
continues to compare favorably among its peers and the system's
average (91.9%). The bank's strategy to reduce funding costs amid a
high-interest rate environment resulted in a low growth of
deposits.
GOVERNMENT SUPPORT RATING
Austro's Government Support Rating (GSR) is 'ns'. There is no
reasonable assumption that such support will be available since it
is not considered a domestic systemically important bank (D-SIB).
Ecuador has limited financial flexibility to support Austro, and
the bank does not have a lender of last resort. As of 3Q22,
Austro's deposits represented 4.8% of the Ecuadorian banking
system's deposits.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
IDRs and VR
- The IDRs are sensitive to changes in the sovereign rating or
further deterioration in the local operating environment.
- The IDRs and VRs could be downgraded if deterioration in asset
quality or profitability leads to a sustained decrease in Fitch
Core Capital to RWAs.
- The Government Support Rating (GSR) has no downgrade potential,
as it is at the lowest possible level.
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
IDRs and VR
- Improvements in the operating environment and sustained
profitability, combined with improvements in the bank's asset
quality and capitalization amid high growth.
- Ecuador's low propensity or ability to provide timely support to
Austro is not likely to change given the sovereign's low
sub-investment-grade IDR. As such, the GSR has no upgrade
potential.
VR ADJUSTMENTS
The VR of 'ccc+' has been assigned below the 'b-' implied VR due to
the following adjustment reason: Risk Profile (negative). Fitch has
assigned an Operating Environment score of 'ccc+' that is below the
'b' category implied score due to the following adjustment reason:
Macroeconomic Stability (negative).
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
Entity/Debt Rating Prior
----------- ------ -----
Banco del Austro
S.A. LT IDR CCC+ Affirmed CCC+
ST IDR C Affirmed C
Viability ccc+ Affirmed ccc+
Government Support ns Affirmed ns
BANCO GUAYAQUIL: Fitch Affirms LongTerm IDR at 'B-', Outlook Stable
-------------------------------------------------------------------
Fitch Ratings has affirmed Banco Guayaquil S.A. y Subsidiarias'
(Guayaquil) Long-Term Issuer Default Rating (IDR) at 'B-' and
Viability Rating (VR) at 'b-'. The Rating Outlook on the IDR is
Stable.
KEY RATING DRIVERS
Operating Environment High Influence: Guayaquil's 'b-' VR is one
notch below implied 'bb' VR. Fitch believes Ecuador's Sovereign
Rating and broader operating environment considerations highly
influence Guayaquil's VR, as it limits the financial profile
score.
Strong Market Position and Diversified Business Model: Guayaquil is
the third largest bank in Ecuador. Its market share was 12.2% by
assets as of 3Q22. Guayaquil's loan portfolio is fairly
diversified, with commercial loans accounting for 54.3% of total
loans, 40.6% consumer and 5.1% mortgages. Business model has been
stable through time; Guayaquil has a long track record of earnings
stability, which has proven resilient amid the economic cycles.
Sound Asset Quality: Guayaquil has maintained sound and stable
asset quality metrics. As of 3Q22, the 60-days NPL ratio remained
stable at 1.3% as of 3Q22 (YE21: 1.1%), comparing favorably with
the banking system average (3Q22: 2.3%). Reserve coverage of
impaired loans remains sound at 327.1% and enhances the bank's loss
absorption capacity. The bank's adequate asset quality ratios
reflect a lower risk appetite and more resilience than its peers,
as well as the selective relief programs amid the pandemic. Fitch
expects some deterioration in the NPL ratio with the unwinding of
the regulatory flexibility to delay the recognition of deteriorated
loan ends; however, it will remain commensurate to its rating
category.
Improved Profitability: Guayaquil's profitability has improved due
to lower impairment charges and a higher net interest income. The
operating profit to Risk Weighted Assets (RWA) ratio improved to
2.0% at 3Q22 from 1.6% at YE 2021. Fitch expects further
profitability improvement as of YE 2022 as loan impairment charges
remain stable while income generation increase due to higher
business volumes.
Adequate Capitalization: Guayaquil's Fitch Core Capital (FCC) to
RWA ratio declined to 11.7% as of 3Q22 (YE 2021: 13.5%), reflecting
an increase in RWA of 9.6% due to a loan's growth of 11.9% at the
same date. The regulatory capital ratio of 14.2% as of 3Q22 is well
above the regulatory minimum of 9.0% and mainly consists of Tier I
capital (approximately 77% of regulatory capital). Fitch expects
the FCC ratio to remain adequate in 2023, driven by moderate asset
growth and higher income generation, while sound reserve coverage
will continue to enhance loss absorption capacity.
Conservative Liquidity: Guayaquil's liquidity position is
conservative. The loans-to-deposits ratio remains sound at 93.4% as
of 3Q22. Historically, customer deposits have covered most of the
bank's funding needs (87.4% as of3Q22). The bank's liquidity
position has strengthened thanks to a customer deposits growth
above the system's average. The bank maintains good access to
capital debt markets and wholesale funding. The bank benefits from
high quality available funds that represented 20.7% of short-term
deposits as of 3Q22, which is considered adequate by Fitch.
GOVERNMENT SUPPORT RATING
The GSR of 'ns' reflects that despite Guayaquil's important market
share and local franchise, Fitch believes that there is no
reasonable assumption of support forthcoming from the sovereign due
to Ecuador's limited financial flexibility and the lack of a lender
of last resort.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
IDRs and VR
- The IDRs are sensitive to changes in the sovereign rating or
further deterioration within the local operating environment;
- The IDRs and VR could be downgraded if the pandemic-induced
economic disruption results in a relevant deterioration of asset
quality or profitability lead into a sustained decline in the
bank's FCC-to-RWA ratio below 9%.
GSR
- The GSR has no downgrade potential, as it is at the lowest
possible level.
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
IDRs and VR
- Upside potential is limited. In the long term, a rating upgrade
would require improved prospects for the operating environment and
a meaningful and sustained improvement of core profitability,
combined with improvements in the bank's credit quality and
capitalization.
GSR
- Ecuador's propensity or ability to provide timely support to
Guayaquil is not likely to change given the sovereign's low
sub-investment-grade IDR. As such, the GSR has no upgrade
potential.
VR ADJUSTMENTS
The VR of 'b-' has been assigned below the 'b' implied VR due to
the following adjustment reason: Operating Environment (negative).
Fitch has assigned an Operating Environment score of 'ccc+' that is
below the 'b' category implied score due to the following
adjustment reason: Macroeconomic Stability (negative).
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
Entity/Debt Rating Prior
----------- ------ -----
Banco Guayaquil,
S.A. LT IDR B- Affirmed B-
ST IDR B Affirmed B
Viability b- Affirmed b-
Government Support ns Affirmed ns
BANCO PICHINCHA: Fitch Affirms LongTerm IDR at 'B-', Outlook Stable
-------------------------------------------------------------------
Fitch Ratings has affirmed Banco Pichincha C.A. y Subsidiarias'
(Pichincha) Long-Term Issuer Default Rating (IDR) at 'B-' and its
Viability Rating (VR) at 'b-'. The Rating Outlook on the IDR is
Stable.
KEY RATING DRIVERS
IDRs AND VR
Operating Environment High Influence: The bank's VR or standalone
creditworthiness drive the IDR of Pichincha. Fitch believes
Ecuador's Sovereign Rating and broader operating environment
considerations highly influence the VR of Pichincha as it impacts
it's the sustainability of its financial profile. Fitch projects
Ecuador's economy to grow by 3.2% in 2022 (from 4.2% in 2021),
reflecting strong private consumption supported by high credit
growth, but restrained by investment that is recovering but far
below pre-pandemic levels. Fitch expects growth to slow to 2.5% in
2023 and 1.9% in 2024, around its trend pace.
VR Adjustments: The VR of 'b-' has been assigned above the 'b'
implied VR due to the following adjustment reason: Operating
Environment (Negative).
Adequate Asset Quality: At 3Q22, the 60-day NPL ratio slightly
deteriorated to 2.9% from 2.6% at YE 2021, however compared better
than the latest four-year average of 3.2%. The recent deterioration
was mainly due to civil society groups protest that took place in
past June. Loan loss allowances for impaired loans remained
conservative at 313% as of 3Q22 (YE 2021: 354%), reflecting the
bank's conservative approach to maintain a cushion for absorbing
potential losses. Fitch expects the seasoning of restructured and
refinanced loans (5.7% as of 3Q22) and the unwinding of the delayed
recognition of deteriorated loans to result in a deterioration of
the NPL ratio, but for the ratio to remain commensurate to its
rating category.
Improved Profitability: Pichincha's operating profit to
risk-weighted assets (RWA) ratio improved to 1.0% in 3Q22 (YE 2021:
0.6%), reflecting higher net income generation due to increased
business volumes. However, it is below the Ecuadorian banking
system average (1.6%) due to the high cost of credit. Fitch
anticipates pressures on profitability in 2023, reflecting lower
economic and credit growth and higher loan impairment charges to
absorb any further deterioration, given that cushions built up amid
the initial years of the pandemic supported the 2022 loan growth.
Lower Capitalization: Pichincha's Fitch Core Capital ratio reduced
to 9.5% at 3Q22 from 11.5% at YE 2021, reflecting higher RWAs due
to higher capital requirements for credit risk. The regulatory
capital ratio of 12.8% at end-September 2022 is well above the
regulatory minimum of 9%, and is mostly Tier I (about 75% of
regulatory capital). Fitch expects the FCC ratio to remain under
pressure in 2023, driven by lower profitability, however, mitigated
by the lower expected assets and credit growth.
Lower Liquidity: Liquidity reduced due to aggressive credit and
asset growth in 2022, not compensated by deposits growth, which
reflects lower liquidity in the banking system, particularly as of
3Q22. Accordingly, the loan-to-deposit ratio deteriorated to 91.2%
at 3Q22 from 79.8% at YE 2021. However, Pichincha's funding
structure benefits from a successful franchise and a wide
distribution network, which allows the bank to have a
well-diversified, stable, and relatively low-cost funding base.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
IDRs and VR
- The IDRs are sensitive to changes in the sovereign rating or
further deterioration within the local operating environment;
- The IDRs and VR could be downgraded if the pandemic-induced
economic disruption results in a relevant deterioration of asset
quality or profitability lead into a sustained decline in the
bank's FCC-to-RWA ratio below 9%.
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
IDRs and VR
- Upside potential is limited. In the long term, a rating upgrade
would require improved prospects for the operating environment and
a meaningful and sustained improvement in the bank's core
profitability, along with improvement in the bank's credit quality
and capitalization.
GOVERNMENT SUPPORT RATING
The Government Support Rating (GSR) of 'ns' reflects that despite
Pichincha's important market share and local franchise, Fitch
believes that there is no reasonable assumption of support being
forthcoming from the sovereign due to Ecuador's limited financial
flexibility and the lack of a lender of last resort.
- There is no room for downgrade in the GSRs as it is at the lowest
possible level;
- Ecuador's propensity or ability to provide timely support to
Pichincha is not likely to change given the sovereign's low
sub-investment-grade IDR. As such, the GSR has no upgrade
potential.
VR ADJUSTMENTS
Fitch has assigned an Operating Environment score of 'ccc+' that is
below the 'b' category implied score due to the following
adjustment reason: Sovereign Rating (negative)
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
Entity/Debt Rating Prior
----------- ------ -----
Banco Pichincha C.A. y
Subsidiarias LT IDR B- Affirmed B-
ST IDR B Affirmed B
Viability b- Affirmed b-
Government Support ns Affirmed ns
BANCO PROCREDIT: Fitch Affirms LongTerm IDR at 'B-', Outlook Stable
-------------------------------------------------------------------
Fitch Ratings has affirmed Banco ProCredit S.A.'s (ProCredit
Ecuador) Long-Term Issuer Default Rating (LT IDR) at 'B-' with a
Stable Rating Outlook and its Short-Term IDR at 'B'. Fitch has also
affirmed the bank's Viability Rating (VR) at 'ccc+'.
KEY RATING DRIVERS
Support Driven Ratings: ProCredit Ecuador's IDRs are driven by
Fitch's assessment of the potential support it would receive from
its parent, ProCredit Holding AG & Co. KGaA's (PCH; BBB/Stable), if
required.
Shareholder Support Rating: The 'b-' Shareholder Support Rating
reflects Fitch's view of parent support as robust but constrained
by Ecuador's transfer and convertibility risks captured by the
country ceiling rating of 'B-'. Fitch's assessment of support
considers the strategic role ProCredit Ecuador plays for ProCredit
Group through its operation, providing core products and services
of the group. The ProCredit group is an international group of
development-oriented commercial banks with a focus on Eastern
Europe. Ecuador is the group's only remaining operation in Latin
America.
PCH's ability to provide timely support contemplates ProCredit
Ecuador's relative size of approximately 6% of consolidated assets;
Fitch believes any required support would be immaterial relative to
the ability of parent to provide it. The propensity and commitment
of PCH to provide support is reflected in the high level of
operational and managerial integration and the reputational
implications of subsidiary default. In addition, Fitch considers
the presence of related funding and guarantees during different
economic cycles in the support assessment.
VR
Adequate Asset Quality: At 3Q22, the NPL ratio deteriorated to 2.2%
compared to 4YA of 1.6% (2018-2021; YE21: 2.5%) mainly due to
seasoning of restructured and refinanced loans and more recently as
a result of the Ecuadorian national strike that took place in June.
Fitch expects asset quality to deteriorate when regulatory
flexibility to delay NPLs recognition up to 60 days to cushion the
coronavirus pandemic impact ends at YE22. However, it will remain
adequate and commensurate with the bank's rating category.
Slight Profitability Increase: ProCredit's profitability
performance, which has historically been constrained, improved
slightly since 2Q22 as a result of increased business volumes to
absorb high loan impairment charges. This was reflected in an
operating profit to risk weighted assets (RWA) ratio of 0.05%
compared to a 4YA of -1.05% (2018-2022). Further improvement is
possible if the bank's business scale increases, the cost of credit
decreases, and if funding and operating costs are reduced.
Parent Supported Capitalization: Capitalization ratios remain
modest but supported, given PCH's propensity to provide support in
line with ProCredit Ecuador's capitalization objectives. At 3Q22,
the Fitch Core Capital to RWA ratio declined to 11.3% from 12.0% at
4Q21 due to 9.3% credit growth and consequent higher RWA. Fitch
expects the entity's capitalization metrics to remain cushioned by
PCH's propensity to provide support, along with ProCredit Ecuador's
capitalization standards and in line with its projection of growth
plans.
Improved Liquidity: Fitch believes that ProCredit Ecuador maintains
a stable funding structure and adequate liquidity levels. The bank
relies on external funding sources, primarily supported by the
parent's benefits. At 3Q22, ProCredit Ecuador's loans to deposits
ratio improved to 142.7% (compared to 151.7% at 4Q21), reflecting
growth of 16.2% in customer deposits and the benefits of adequate
liquidity in the Ecuadorian banking system, albeit less than in
2020 and 2021. Further funding diversification is possible in
keeping with continuous growth of retail deposits and regulatory
limits regarding parent funding.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- ProCredit Ecuador's IDR and SSR are sensitive to changes in the
sovereign rating and country ceiling;
- IDRs and the SSR could also be downgraded if PCH's propensity or
ability to support materially weakened;
- The VR could be downgraded in the event of a sharp deterioration
of the asset quality and consequently on its profitability metrics
that would significantly reduce capital metrics.
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- ProCredit Ecuador's IDR and SSR could be upgraded in the event of
an upgrade in the country ceiling and Ecuador's sovereign rating;
- The VR has limited upside potential considering the still
challenging operating environment. An upgrade of the bank's VR
would also require sustainable improvements on profit ratios.
VR ADJUSTMENTS
Fitch has assigned an Operating Environment score of 'ccc+' that is
below the 'b' category implied score due to the following
adjustment reason: Macroeconomic Stability (negative).
Fitch has assigned a Business Profile score of 'ccc+' that is below
the 'b' category implied score due to the following adjustment
reason: Business Model (negative).
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
Entity/Debt Rating Prior
----------- ------ -----
Banco ProCredit
S.A. LT IDR B- Affirmed B-
ST IDR B Affirmed B
Viability ccc+ Affirmed ccc+
Shareholder Support b- Affirmed b-
=======
P E R U
=======
PERU: Trade Exchange With APEC Economies Exceeds US$59 Billion
--------------------------------------------------------------
Juan Martinez at Rio Times Online reports that trade exchange
between Peru and the economies that make up the Asia-Pacific
Economic Cooperation Forum (APEC) totaled US$59.444 billion between
January and September 2022, announced on Nov. 17 by the Ministry of
Foreign Trade and Tourism (Mincetur).
The portfolio informed through a statement that the figure
represented an increase of 14.2 percent over the same period last
year and was produced thanks to the fact that this economic forum
"has favored the performance of national exports and imports,"
according to Rio Times Online.
Regarding Peru's shipments, he detailed that they amounted to
US$31.9 billion (7.5 percent) during the first nine months and
highlighted the shipments of hydrocarbons, non-metallic minerals,
chemical products, textiles, and agricultural and livestock
products, the report notes.
With respect to imports, during the same period, they reached
US$27.5 billion due to the arrival of goods such as household
appliances, tires, textiles, as well as information technology
products, and steel products, the report relays.
The head of Mincetur, Roberto Sanchez, assured that during this
period exports to China grew by 2.5 percent, which means that the
Asian country continues to be Peru's leading trading partner, the
report notes.
After considering that APEC is one of the "most important" markets
for Peruvian exports, he highlighted the importance of Peru's
participation in the 29th APEC Economic Leaders' Meeting that was
to be held in Thailand last Nov. 17 and 18, the report notes.
He recalled that, during the last 12 months, trade with the
economies that make up the forum accounted for 66 percent of total
goods trade between Peru and the world, which "demonstrates the
importance of our integration with the main global economies," the
report says.
Peru's exports to APEC economies in 2021 reached US$37 billion,
which meant a 66 percent growth, while imports from the world
accounted for 65.6 percent by registering US$30 billion, the report
relays.
Mincetur took the opportunity to remind that Peru will chair APEC
for the third time in 2024, an achievement that is a further
demonstration of the confidence that the other twenty member
economies have in the South American nation, the report adds.
=====================
P U E R T O R I C O
=====================
CEDIPROF INC: Seeks Approval to Hire C. Conde & Assoc. as Counsel
-----------------------------------------------------------------
Cediprof, Inc. seeks approval from the U.S. Bankruptcy Court for
the District of Puerto Rico to hire the Law Offices of C. Conde &
Assoc. as its counsel.
The firm's services include:
a. advising the Debtor with respect to its duties, powers
and
responsibilities in the bankruptcy case under the laws of the U.S.
and Puerto Rico;
b. advising the Debtor to determine whether a
reorganization
is feasible and, if not, helping the Debtor in the orderly
liquidation of its assets;
c. assisting the Debtor in negotiations with creditors
for the
purpose of arranging the orderly liquidation of assets and
proposing a viable plan of reorganization;
d. preparing legal papers;
e. appearing before the bankruptcy court or any court in
which
the Debtor asserts a claim interest or defense directly or
indirectly related to the bankruptcy case;
f. providing all notary services;
g. performing other necessary legal services; and
h. employing other professionals, if necessary.
The firm's hourly rates are as follows:
Carmen Conde Torres, Esq. $350 per hour
Associates $300 per
hour
Junior Attorney $275 per hour
Clerical Services $150 per hour
In addition, the firm will seek reimbursement for its
out-of-pocket
expenses.
The retainer fee is $20,000.
Carmen Conde Torres, Esq., a partner at C. Conde & Assoc.,
disclosed in a court filing that her firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
C. Conde & Assoc. can be reached at:
Carmen D. Conde Torres, Esq.
Law Offices of C. Conde & Assoc.
254 San Jose Street, 5th Floor
Old San Juan, PR 00901-1523
Tel: (787) 729-2900
Fax: (787) 729-2203
Email: condecarmen@condelaw.com
About Cediprof
Inc.
Cediprof, Inc. is a company in Caguas, P.R., which develops,
manufactures, supplies and distributes finished dosage forms of
pharmaceutical products.
Cediprof filed its voluntary petition for relief under Chapter 11
of the Bankruptcy Code (Bankr. D.P.R. Case No. 22-03198) on Nov. 4,
2022, with $10 million to $50 million in both assets and
liabilities.
Carmen D. Conde Torres, Esq., at the Law Offices of C. Conde &
Assoc. and RSM Puerto Rico as legal counsel and accountant,
respectively.
CEDIPROF INC: Seeks Approval to Hire RSM Puerto Rico as Accountant
------------------------------------------------------------------
Cediprof, Inc. seeks approval from the U.S. Bankruptcy Court for
the District of Puerto Rico to hire RSM Puerto Rico as its
accountant.
The firm's services include:
(a) preparation or review of monthly operating reports
required by the bankruptcy court;
(b) reconciliation of proofs of claim;
(c) preparation or review of the Debtor's projections;
(d) analysis of profitability of the Debtor's
operations;
(e) assistance in the development or review of plan of
reorganization or disclosure statement;
(f) consultation on strategic alternatives and
developments of
business plans; and
(g) any other consulting and expert witness services
relating
to various bankruptcy matters such as insolvency, feasibility, and
forensic accounting, as necessary.
The firm will be compensated as follows:
Doris Barroso-Vicens $250 per hour
Partner $200 - $300 per
hour
Managers $145 - $184 per
hour
Seniors $75 - $90 per
hour
Staff $65 - $75 per
hour
The hourly rates increase at approximately 10 percent every June
1.
The firm has required a retainer in the amount of $5,000.
As disclosed in court filings, RSM Puerto Rico neither represents
nor holds any interest adverse to the Debtor and its bankruptcy
estate.
The firm can be reached through:
Doris Barroso-Vicens
RSM Puerto Rico, Certified Public Accountants and
Consultants
Postal Address:
P.O. Box 10528
San Juan, PR 00922-0528
About Cediprof
Inc.
Cediprof, Inc. is a company in Caguas, P.R., which develops,
manufactures, supplies and distributes finished dosage forms of
pharmaceutical products.
Cediprof filed its voluntary petition for relief under Chapter 11
of the Bankruptcy Code (Bankr. D.P.R. Case No. 22-03198) on Nov.
4,
2022, with $10 million to $50 million in both assets and
liabilities.
Carmen D. Conde Torres, Esq., at the Law Offices of C. Conde &
Assoc. and RSM Puerto Rico as legal counsel and accountant,
respectively.
=====================================
T R I N I D A D A N D T O B A G O
=====================================
CL FIN'L: Government Gets Four More CLICO Properties
----------------------------------------------------
Asha Javeed at Trinidad Express reports that government has
acquired three additional properties belonging to Colonial Life
Insurance Company (Trinidad) Ltd (CLICO) in the last year, with the
payments going to reduce of the company's debt to the State.
In addition, CLICO was directed to transfer lands at Mausica
Estate, Arima, to the Government for "an appropriate reduction in
liabilities," according to Trinidad Express.
The insurance company's debt to the Government now stands at $1.24
billion, the report notes.
This was revealed in the 43rd quarterly report of the Central Bank,
which was filed in the High Court pursuant to Section 44 E(7) of
the act, for the quarter which ended June 30, 2022, the report
relays. The report is also supposed to be laid in Parliament, the
report discloses.
CLICO has been under the Central Bank's management since February
13, 2009. The report provides an update on proposals to restructure
CLICO, Bristish American Trinidad (BAT) and Clico Investment Bank
(CIB), the report says.
The Sunday Express reported previously that Government acquired two
properties, previously owned by CLICO, in 2020, the report relays.
Those properties include a building in Chaguanas and CLICO's head
office, which is located at 29 St Vincent St Port of Spain, the
report relates.
The report relays that the Central Bank's June 30, 2022 report
reveals that further to directions from the Minister of Finance:
1. On May 11, 2021, CLICO was directed to transfer the property at
No.3 Rushworth Street, San Fernando to the Government or a
designated Government entity and to cover the cost of refurbishment
of the said property as agreed. A purchase agreement dated June 1,
2022 was executed.
2. On March 28, 2022, CLICO was directed to transfer the property
in No. 25 Western Main Road, St James to the Government or a
designated entity. A purchase agreement was executed on June 1,
2022 with the deed of conveyance being prepared.
3. CLICO was directed to transfer the property on 76-78 St Vincent
Street, subject to a valuation and at a price to cover the cost of
refurbishment of the property. It noted that a purchase agreement
was executed on November 26, 2021 and the deed of conveyance
registered on April 22, 2022.
4. It noted that the transfer of land at Mausica Estate was based
on an independent valuation. The Purchase Agreement was signed on
July 14, 2021 and the Deed of Conveyance was registered on October
11, 2021.
The Central Bank Act at 44 F(5) requires the Bank to comply "with
any general or special directions of the Minister and shall act
only after due consultation with the Minister," the report notes.
All the properties have been acquired, according to the report,
through an independent valuation and for "an appropriate reduction
in liabilities" which CLICO owes the State, the report relates.
The Central Bank report does not outline what is the valuation of
the four properties, who is the valuator or the amount by which
CLICO's debt has been reduced, the report discloses.
CL Financial (CLF), CLICO's parent company, which is in liquidation
(CLICO is 51 per cent owned by CLF and 49 per cent by the
Government), has been trying to sell the company's land in
tranches. According to the Liquidator's latest report, it has not
attracted much interest or money for the company, the report
relays.
In fact, according to the tenth report to the Court for the period
December 22, 2021 to July 29, 2022, and signed by David Holukoff,
even the Government has offered below-value sums to CLF for land
which it intends to compulsory acquire for development, the report
notes.
Since being granted approval by the court in 2020 to sell its
lands, 11 formal notices of ‘Land Likely to be Acquired for a
Public Purpose,' which amount to 1,455 acres, have been filed in
the Trinidad and Tobago Gazette against land owned by the HCL
sub-group, the report discloses.
As a result, the 11 lots will be subject to a compulsory
acquisition process by the Government, the report notes.
According to the tenth liquidators' report, on February 8, 2021,
HCL submitted to the Government "its understanding of the value of
the lands to be compulsorily acquired complete with recent
valuations, the report says.
"During the period, the Government made an offer for five of the 11
properties subject to the compulsory acquisition process, albeit at
a price significantly less that the valuations obtained by HCL. HCL
is attempting to understand the Governments' valuations and
commence negotiations to reach a mutually acceptable price for the
lands. Further, HCL is awaiting the offer from the Government of
the Republic of Trinidad and Tobago with respect to the other
properties. Notably, the process remains incomplete in relation to
four of the properties where no Section 4 notice has yet been
issued by the Government," the report said, Trinidad Express
discloses.
It noted that a further parcel of land has recently been notified
to HCL as being subject to compulsory acquisition, the report
relays.
"The land in question is required by the Department of Works to
build a roundabout to improve traffic flow at a site near Trincity
Mall and to increase capacity for an upcoming development. Attempts
were made to agree a sale to the developer to expedite matters, but
the title would still have had to pass to the local authority in
any event. The JLs will work with HCL to agree appropriate
compensation for the land," that report said, Trinidad Express
relays.
$1.24 Billion Owed
Despite its solvency, CLICO still has a billion dollar debt to
repay to GORTT, the report relays.
"CLICO has reported, as at December 31, 2021, that its regulatory
capital ratio is in excess of the minimum requirement under the
Insurance Act 2018 (which came into force on January 1, 2021)" the
report said, Trinidad Express relays.
The report noted that payments for interest on the preference
shares due to the Government have commenced, Trinidad Express
says.
As at the date of the report, the remaining interest due to the
Government on the preference shares was $28.8 million,Trinidad
Express notes.
"In summary, of the approximately $18.34 billion (inclusive of
preference interest due) provided by the Government in respect of
CLICO, approximately $17.10 billion has been repaid by CLICO,
leaving a balance of approximately $1.24 billion as at June 30,
2022," the report stated, Trinidad Express discloses.
In its 40th quarterly report of the Central Bank, which was filed
in the High Court for the quarter which ended September 30, 2021,
that debt was lower, Trinidad Express relays.
"Payments for interest on the preference shares due to the
Government have commenced. As at August 31, 2021, the remaining
interest due to the Government on these preference shoes amounted
to approximately $27.9 million. In summary, of the approximately
$18 billion (inclusive of preference interest due) provided by the
Government in respect of CLICO, approximately $16.78 billion has
been repaid by CLICO, leaving a balance of approximately $1.21
billion, as at September 30,2021," that report had stated, Trinidad
Express says.
The report revealed that further to directions from the Minister of
Finance, CLICO was directed to pay US$16 million in cash on June
30, 2022, in consideration for an appropriate reduction in
liabilities, Trinidad Express notes.
In an interview, CLICO's executive chair, Claire Gomez-Miller said
that the insurer was in a position to clear its debt to the
Government, Trinidad Express notes.
In May, the company released its financial statement for its year
ended December 31, 2021, in which it reported that its total assets
exceeded its total liabilities by $3.71 billion, Trinidad Express
relays. The company declared after-tax profits of $367.6 million,
which was more than double the $119.2 million it declared in 2020,
Trinidad Express notes.
The company's profitability is attributed to its investments since
it stopped writing new business in 2014, Trinidad Express recalls.
Those statements were qualified by auditor KPMG as it did not have
up-to-date valuations for Methanol Holdings International Limited
(MHIL) and CL World Brands (CLWB), the report relays.
But once the sum is repaid, it paves the way for the Central Bank
to exit its management of the insurance company, the report
relays.
CLICO has been under Central Bank management even as the company
has increasingly become profitable and apart from the debt owed to
the State, does not necessarily qualify for the stipulations of
44D, the report notes.
BAT
With regard to British American Trinidad (BAT), the report noted
that the Government had advanced funds to BAT on July 10, 2015 to
meet key operations expenditures and the "transitional insurance"
policyholder liabilities in the Statutory Fund and to pay the
principal balance only (without interest) of the non-assenting STIP
holders, Trinidad Express discloses.
The Ministerial directions given were for cash:
1. BAT was directed on September 21, 2021 to pay GORTT
approximately $50 million in cash for a reduction in debt. The
payment was made on September 28, 2021.
2. BAT was directed on May 31, 2022 to pay GORTT approximately $30
million in cash for a reduction in debt. The payment was made on
June 6, 2022.
The report noted that of the $1.72 billion (inclusive of interest
due) provided by the Government in respect of BAT, approximately
$80.1 million has been repaid by BAT, leaving a balance of $1.64
billion as at June 30, 2022, Trinidad Express adds.
About CL Financial/CLICO
CL Financial was one of the largest privately held conglomerate in
Trinidad and Tobago. It was originally founded as an insurance
company and has since expanded to be the holding company for a
diverse group of companies and subsidiaries.
CL Financial is the parent company of Colonial Life Insurance
Company (Trinidad) Limited (Clico). CLICO is now the Company's
insurance division.
CL Financial however experienced a liquidity crisis in 2009 that
resulted in a "bail out" agreement by which the government of
Trinidad and Tobago loaned the company funds ($7.3 billion as of
December 2010) to maintain its ability to operate, and obtained a
majority of seats on the company's board of directors.
The companies to be bailed out were: CL Financial Ltd (CLF);
Colonial Life Insurance Company Ltd (CLICO); Caribbean Money
Market Brokers Ltd (CMMB); Clico Investment Bank (CIB) and British
American Insurance Company (Trinidad) Ltd (BAICO).
As reported in the Troubled Company Reporter-Latin America in July
2017, CL Financial Limited shareholders vowed to pay back a TT$15
billion (US$2.2 billion) debt to the Trinidad Government.
=================
V E N E Z U E L A
=================
VENEZUELA: Seeks to Resolve Territorial Dispute with Guyana
-----------------------------------------------------------
Iolanda Fonseca at Rio Times Online reports that the Vice President
of Venezuela, Delcy Rodriguez, expressed on Nov. 17 that "we extend
our hand to Guyana to resolve the current territorial dispute", in
compliance with the Geneva Agreement of 1966, during her
intervention before the International Court of Justice (ICJ) of the
United Nations (UN), in The Hague.
Rodriguez presented Venezuela's pleadings before a lawsuit filed by
Guyana at the ICJ to ratify the validity of the 1899 Arbitral
Award, one of the reasons for the existing territorial dispute
between both nations, according to Rio Times Online.
"Guyana and the United Kingdom recognized in 1966 Venezuela's claim
and therefore committed themselves to an amicable solution through
their subsequent adherence to the Geneva Agreement," Rodriguez
indicated, the report notes.
The Venezuelan Vice President reiterated that her country
"continues to believe that the Court has no jurisdiction in this
case; however, we will demonstrate that Guyana's claim is
inadmissible," the report discloses.
Among the arguments put forward, Rodriguez pointed out that to
settle the dispute requested by Guyana, the United Kingdom, which
is "the indispensable party to this claim, is not present," the
report relays.
Rodriguez's assertion is based on the fact that the Arbitral Award
of 1899, on which Guyana is requesting its ratification, did not
include that country at the time but the United Kingdom as a
colonial nation, the report notes.
"Venezuela cannot challenge the rights and obligations of the
conduct of a State that is absent in these proceedings," he said
about this context, the report relates.
Rodriguez indicated that a decision by the ICJ dismissing the claim
made "unilaterally" by Guyana "will contribute positively and
constructively" to the purpose of an amicable resolution of the
territorial dispute, the report adds.
As recently reported in the Troubled Company Reporter-Latin
America, Moody's Investors Service has withdrawn Venezuela's C
local currency and foreign currency ceilings.
===========================
V I R G I N I S L A N D S
===========================
ZHONGYUAN DAYU: Fitch Assigns 'BB+' Rating to New US Dollar Notes
-----------------------------------------------------------------
Fitch Ratings has assigned China-based Zhongyuan Asset Management
Co., Ltd's (Zhongyuan AMC, BB+/Positive) proposed US dollar senior
notes a rating of 'BB+'. The proposed notes will be issued by
Zhongyuan AMC's wholly owned subsidiary, Zhongyuan Dayu
International (BVI) Co., Ltd., and will be unconditionally and
irrevocably guaranteed by Zhongyuan AMC.
KEY RATING DRIVERS
The proposed guaranteed bonds will constitute Zhongyuan AMC's
direct, unconditional, unsubordinated and unsecured obligations and
will rank pari passu with other unsecured and unsubordinated
obligations. Bond proceeds will be used for refinancing existing
offshore debt and replenishing working capital.
The proposed bonds are rated at the same level as Zhongyuan AMC's
Issuer Default Rating (IDR) because the direct guarantee structure
transfers the ultimate responsibility of payment to Zhongyuan AMC.
DERIVATION SUMMARY
Fitch rates Zhongyuan AMC under the agency's Public Sector,
Revenue-Supported Entities Rating Criteria, which take into account
the company's revenue defensibility, operating risk and financial
profile. The three-notch uplift applied to the Standalone Credit
Profile reflects the application of the Government-Related Entities
Rating Criteria and Fitch's assessment of the four factors under
the strength of linkage and incentive to support.
Zhongyuan AMC's proposed notes are rated on a par with its IDR,
reflecting its unconditional and irrevocable guarantee.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- An upgrade of Zhongyuan AMC's IDR will result in a similar change
in the rating of the proposed notes.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- A downgrade of Zhongyuan AMC's IDR will result in a similar
change in the rating of the proposed notes.
ISSUER PROFILE
Zhongyuan AMC was established in August 2015 with the Henan Finance
Bureau as its major shareholder and controller under the approval
of the provincial government. Its core business is non-performing
asset resolution. It is also engaged in equity investment, finance
leasing, factoring and social resettlement housing projects. It had
total assets of CNY70.8 billion at end-June 2022.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
Entity/Debt Rating
----------- ------
Zhongyuan Dayu
International
(BVI) Co., Ltd.
senior unsecured LT BB+ New Rating
===============
X X X X X X X X
===============
LATAM: IDB Aids Central America, Dominican Republic Over Hurricanes
-------------------------------------------------------------------
The Inter-American Development Bank (IDB) activated an emergency
response for Central American countries that have been battered in
recent months by hurricanes Julia, Fiona and Lisa, as well as other
tropical storms and heavy rains, which have triggered floods and
mudslides that have taken lives and damaged infrastructure in the
region.
The Bank has made available $40 million in immediate resources that
include emergency grants for Belize, Costa Rica, El Salvador,
Guatemala, Honduras, and the Dominican Republic; contingent loans
in Nicaragua and El Salvador; and a reallocation of funds within
Honduras' portfolio. These resources will provide humanitarian aid
to victims of the emergencies and will also be used to evaluate
damage, identify risk zones, and restore infrastructure.
Building resilience in the region
In addition to its immediate response to the emergencies, the IDB
is pursuing a strategy to make countries in the region more
disaster resilient. Its strategy is built on the Sendai
framework—the international agreement on disaster risk
reduction—which has four priorities: (1) understanding disaster
risk; (2) strengthening disaster risk governance; (3) investing in
disaster risk reduction for resilience; and (4) enhancing disaster
preparedness for effective response.
As part of these actions, the IDB has developed initiatives for
managing water resources, for sustainable management of coastal
areas, for boosting the resilience of agroforestry activities, and
for making social and productive infrastructure more resilient,
among others. It is also working with countries in the region to
strengthen disaster risk governance by updating the Index of
Governance and Public Policy in Disaster Risk Management (iGOPP).
This update will guide effective processes to manage risk and adapt
to climate change. In tandem with this agenda, the IDB is also
working to share knowledge about building resilience (Spanish
version only).
This week, the 27th Conference of the Parties to the United Nations
Framework Convention on Climate Change (COP 27) is taking place in
Egypt, and the IDB Group is attending as the leading strategic
partner in Latin America and the Caribbean in channeling public-
and private-sector investment for climate action.
*********
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 * * *