/raid1/www/Hosts/bankrupt/TCRLA_Public/230403.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
Monday, April 3, 2023, Vol. 24, No. 67
Headlines
A R G E N T I N A
BANCO DE GALICIA: S&P Cuts Long-Term Issuer Credit Rating to 'CCC-'
CITY OF BUENOS AIRES: S&P Lowers ICRs to 'CCC-', Outlook Negative
YPF SA: S&P Lowers ICR to 'CCC-', Outlook Negative
B R A Z I L
AMERICANAS SA: Faces Extended Bankruptcy Battle with Creditors
AMERICANAS SA: Managers Present Conflicting Debt Information
BRAZIL: After new Fiscal Rule, Brazil’s Ibovespa Drops 1.7%
JSL SA: S&P Raises Long-Term Rating to 'BB-', Outlook Stable
LIGHT SA: Fitch Lowers Local & Foreign Currency LongTerm IDRs to CC
J A M A I C A
JAMAICA: Monetary Policy Interest Rate Remains at 7%
M E X I C O
GRUPO IDESA: S&P Cuts ICR to 'CC' on Distressed Debt Exchange
GRUPO KUO: S&P Alters Outlook to Negative, Affirms 'BB' ICR
U R U G U A Y
NARANJAL/LITORAL URUGUAY 2: Moody's Affirms 'Ba2' Sub. Bond Rating
V E N E Z U E L A
VENEZUELA: Offers to Suspend Deadline on $60 Billion of Bonds
X X X X X X X X
[*] BOND PRICING: For the Week March 27 to March 31, 2023
- - - - -
=================
A R G E N T I N A
=================
BANCO DE GALICIA: S&P Cuts Long-Term Issuer Credit Rating to 'CCC-'
-------------------------------------------------------------------
S&P Global Ratings lowered its long-term issuer credit rating on
Banco De Galicia Y Buenos Aires S.A.U. (Banco Galicia) to 'CCC-'
from 'CCC+' and its subordinated debt rating to 'C' from 'CCC-'. At
the same time, S&P lowered the long-term issuer credit rating on
Banco Patagonia S.A. to 'CCC-' from 'CCC+' and affirmed the
short-term credit rating at 'C'. The outlook on both entities
remains negative.
The rating action on all financial entities S&P rates on the global
scale in Argentina follows a similar action on the sovereign.
S&P said, "We lowered our foreign currency ratings on Argentina to
'CCC-/C' following announced plans that, if implemented, would
oblige some nonfinancial public-sector entities to exchange or sell
their holdings of global- and local-law dollar-denominated bonds
issued during the 2020 restructuring for other locally issued peso
debt, likely dollar- and/or inflation-linked bonds. The specific
terms and timing of the potential transaction(s) remain unknown.
But, since the decree applies only to holdings of intra-government
debt, we don't consider it a distressed exchange or tantamount to
default under our methodology--which speaks to payment of
commercially held debt.
"However, in our view, the lack of clarity and the apparent
motivation for the potential transaction underscore heightened
credit vulnerabilities, in particular given the increasing
pressures from the severe drought that Argentina is facing, which
further constrains the already disrupted foreign-exchange (FX)
market. Hence, we lowered the foreign currency issuer credit rating
applicable to commercially held debt. A 'CCC-' rating reflects that
a default, distressed exchange, or redemption appears to be
inevitable within six months, absent unanticipated significantly
favorable changes in the issuer's circumstances. This expected
greater pressure on the FX markets also explains our lowering the
transfer and convertibility assessment to 'CCC-'."
The sovereign's deteriorating conditions are intensifying pressure
on already restrictive credit conditions in Argentina, and
amplifying vulnerabilities for banks operating in the country.
Additionally, banks have significant holdings in central banks
securities (Leliqs), and to a lesser extent in government bonds.
Environmental, social, and governance factors have no material
influence on our credit rating analysis of Banco Galicia and Banco
Patagonia.
Outlook
The negative outlook on the entities reflects the one on the
sovereign, in conjunction with potential volatility in market
prices and liquidity of money market instruments, stemming from the
concentration in sovereign bond maturities, indirectly affecting
financial entities. The outlook also incorporates the multiple
distortions in the economy, as well as volatilities, which could
erode the solvency and liquidity of Argentine banks and their
capacity to service debt. S&P could also lower ratings if
exchange-rate restrictions further intensify in the next 6-12
months or if there are difficulties in managing Leliqs.
Upside scenario
S&P could revise the outlook on both banks to stable in the next 12
months if the economic and business conditions in Argentina
improve.
-- Banco de Galicia y Buenos Aires S.A.U. ESG credit indicators:
E-2, S-2, G-2
-- Banco Patagonia S.A. ESG credit indicators: E-2, S-2, G-2
CITY OF BUENOS AIRES: S&P Lowers ICRs to 'CCC-', Outlook Negative
-----------------------------------------------------------------
S&P Global Ratings lowered its foreign and local currency issuer
credit ratings on the city of Buenos Aires and the provinces of
Mendoza, Salta, Entre Ríos, La Rioja, Neuquen, Rio Negro, Jujuy,
and Buenos Aires to 'CCC-' from 'CCC+'. The outlook on the nine
local and regional governments (LRGs) is negative. S&P also lowered
its issue-level ratings on the LRGs to 'CCC-' from 'CCC+'.
Outlook
The negative outlook on the nine Argentine LRGs reflects potential
further deterioration of overall credit conditions, given
Argentina's challenging economic dynamics including its worsened
external liquidity, which has raised pressure in the FX market.
Notwithstanding the very complex context, Argentine provinces in
general have been improving their financial positions in the recent
months. However, they depend on the availability of foreign
currency to service their debt.
Central bank international reserves have fallen in the first
quarter of 2023, and S&P expects them to come under greater
pressure as the ongoing severe drought hits agricultural exports,
weakening foreign currency inflows and further limiting the ability
of nonsovereign entities to convert or transfer money for timely
debt service.
Downside scenario
S&P could lower the long-term ratings on the LRGs if the central
government further tightens access to FX, which could impair the
provinces' ability to service foreign currency debt in the next six
to 12 months. In addition, we would likely consider a debt exchange
or restructuring as distressed and tantamount to a default at such
low rating levels.
Upside scenario
S&P could raise the ratings in the next 12 months if it sees
improvement in conditions for non-sovereigns' access to foreign
currency to service debt. A track record of the sovereign's
successful execution under the IMF's Extended Fund Facility (EFF),
coupled with clarity on how policy will ease financing challenges
and provide a road map to address Argentina's major structural
macroeconomic imbalances, would be positive for Argentine LRGs.
Rationale
S&P said, "Our downward revision of the T&C assessment and the
downgrade of Argentine LRGs reflects our view of increasing
pressures for nonsovereign entities to access foreign exchange
needed to satisfy their debt service obligations. Pressure in the
FX markets has increased this year, while market confidence has
further weakened. The severe drought has taken a toll on
agricultural exports during the first quarter and has exacerbated
already low levels of international reserves.
"In our view, the LRGs don't meet the criteria for us to rate them
above the related T&C assessment. LRGs are highly sensitive to
sovereign risk. Budgetary execution is affected by macroeconomic
conditions such as high inflation, low economic growth, and high
uncertainty on exchange-rate movements, which limit space for
effective financial planning. This is compounded by restrictions on
saving in foreign currency. Moreover, Argentine LRGs operate in a
weak institutional framework, in our view." Stressed sovereign
conditions have often led to swings in policies and negative
intervention in the form of cuts to nonautomatic transfers or
increased spending responsibilities.
The bulk of provincial debt service payments in the next 12 months
is in U.S. dollars. Amortization of the bonds restructured in
2020-2021 started this year, and S&P estimates principal and
interest payments for all provincial bonds to be $1.6 billion. In
general, the amounts are manageable for the provinces given their
recently accumulated liquidity and capacity to generate internal
cash flow: total debt service payments are about 7% of their
revenues. Moreover, in many cases, high inflation and provinces'
cautious fiscal policies have somewhat improved their fiscal
performances and liquidity positions.
S&P said, "We reflect this recent improvement in the LRGs
stand-alone credit profiles (SACPs), which are all above the 'CCC-'
issuer credit ratings. The SACPs incorporate our view of the
varying levels of recently accumulated savings and ability of each
local administration to deal with rapidly worsening socioeconomic
conditions, rising fiscal pressure, and eroding revenues.
Regardless of these differences, current exchange controls limit
the LRGs capacity to accumulate liquidity in foreign currency and
they--along with many domestic entities that issue debt in foreign
currency--rely on the sovereign's access to hard currency to meet
any foreign currency debt service payment. That said, we think some
entities, such as the city of Buenos Aires, may have hard currency
liquidity that could allow for timely debt service for some time if
exchange controls tighten."
S&P incorporates different liquidity coverage ratios and cash flow
strengths into the different SACPs for the Argentine LRGs it
rates:
-- The city of Buenos Aires has a 'b+' SACP,
-- The provinces of Salta, Mendoza, Jujuy, and Entre Rios have
'b-' SACPs, and
-- The provinces of Buenos Aires, Rio Negro, Neuquen, and La Rioja
have 'ccc+' SACPs.
Ratings List
Downgraded
TO FROM
City of Buenos Aires
Issuer credit rating CCC-/Negative/-- CCC+/Stable/--
Senior unsecured CCC- CCC+
Province of Entre Rios
Issuer credit rating CCC-/Negative/-- CCC+/Stable/--
Senior unsecured CCC- CCC+
Province of Salta
Issuer credit rating CCC-/Negative/-- CCC+/Stable/--
Senior unsecured CCC- CCC+
Province of Neuquen
Issuer credit rating CCC-/Negative/-- CCC+/Stable/--
Senior unsecured CCC- CCC+
Province of Mendoza
Issuer credit rating CCC-/Negative/-- CCC+/Stable/--
Senior unsecured CCC- CCC+
Province of Jujuy
Issuer credit rating CCC-/Negative/-- CCC+/Stable/--
Senior unsecured CCC- CCC+
Province of La Rioja
Issuer credit rating CCC-/Negative/-- CCC+/Stable/--
Senior unsecured CCC- CCC+
Province of Rio Negro
Issuer credit rating CCC-/Negative/-- CCC+/Stable/--
Senior unsecured CCC- CCC+
Province of Buenos Aires
Issuer credit rating CCC-/Negative/-- CCC+/Stable/--
Senior unsecured CCC- CCC+
YPF SA: S&P Lowers ICR to 'CCC-', Outlook Negative
--------------------------------------------------
S&P Global Ratings lowered its local and foreign currency ratings
on the following companies to 'CCC-' from 'CCC+'. The outlook on
these ratings is now negative:
-- Aeropuertos Argentina 2000 S.A.
-- AES Argentina GeneraciOn S.A.
-- CAPEX S.A.
-- Compania General de Combustibles S.A.
-- CLISA-Compania Latinoamericana de Infraestructura & Servicios
S.A.
-- Empresa Distribuidora Y Comercializadora Norte S.A.
-- Pampa Energia S.A.
-- Telecom Argentina S.A.
-- Transportadora de Gas del Sur S.A. (TGS)
-- YPF Energia Electrica S.A.
-- YPF S.A.
The downgrade follows a similar action on our long-term foreign
currency ratings and T&C on Argentina, following announced plans
that, if implemented, would oblige some nonfinancial public-sector
entities to exchange or sell their holdings of global- and
local-law dollar-denominated bonds issued during the 2020
restructuring for other locally issued peso debt, likely dollar-
and/or inflation-linked bonds. In S&P's view, the lack of clarity
and the apparent motivation for the potential transaction
underscore heightened credit vulnerabilities, in particular given
the increasing pressures from the severe drought that Argentina is
facing, which further constrains the already disrupted FX market.
This expected greater pressure on the FX markets also explains
S&P's downward revision of the T&C assessment to 'CCC-'.
The T&C assessment reflects S&P's perception of the risk of the
sovereign interfering with the ability of domestic companies to
access, convert, and transfer money abroad, which is essential for
the affected companies to service their financial obligations, many
of which are denominated in foreign currency, particularly U.S.
dollars.
Although some of these entities do not face material obligations in
foreign currency in the next 12 months, Argentina's recent track
record of forcing entities to restructure foreign-currency debts in
times of severe external account weakness, such as the current one,
increases the likelihood of a similar action in the next few
quarters.
S&P said, "The outlook on these entities is negative, reflecting
potential harsher restrictions to access and/or transfer funds
abroad in the near future, including additional central bank
regulations forcing Argentine entities to unilaterally push forward
payments in foreign-currency debt, as was the case in early 2021, a
situation that we typically view as tantamount to default. The
negative outlook on these entities also reflects the chances of a
deeper recession, along with increasing inflation, a sharp
depreciation of the peso, which could in turn reduce the companies'
ability to generate enough revenue in domestic currency to convert
into the needed funds for servicing the foreign-currency
obligations. We could raise the ratings if our perception of the
T&C risk diminishes."
Ratings List
AES CORP. (THE)
DOWNGRADED
TO FROM
AES ARGENTINA GENERACION S.A.
Issuer Credit Rating CCC-/Negative/-- CCC+/Negative/--
AES ARGENTINA GENERACION S.A.
Senior Unsecured CCC- CCC+
AEROPUERTOS ARGENTINA 2000 S.A.
DOWNGRADED
TO FROM
AEROPUERTOS ARGENTINA 2000 S.A.
Senior Secured CCC- CCC+
DOWNGRADED; CREDITWATCH/OUTLOOK ACTION
TO FROM
AEROPUERTOS ARGENTINA 2000 S.A.
Issuer Credit Rating CCC-/Negative/-- CCC+/Stable/--
CAPEX S.A.
DOWNGRADED
TO FROM
CAPEX S.A.
Senior Unsecured CCC- CCC+
DOWNGRADED; CREDITWATCH/OUTLOOK ACTION
TO FROM
CAPEX S.A.
Issuer Credit Rating CCC-/Negative/-- CCC+/Stable/--
CLISA-COMPANIA LATINOAMERICANA DE INFRAESTRUCTURA & SERVICIOS S.
DOWNGRADED
TO FROM
CLISA-COMPANIA LATINOAMERICANA DE INFRAESTRUCTURA
& SERVICIOS S.A.
Senior Secured CCC- CCC
Senior Unsecured CCC- CCC
DOWNGRADED; CREDITWATCH/OUTLOOK ACTION
TO FROM
CLISA-COMPANIA LATINOAMERICANA DE INFRAESTRUCTURA
& SERVICIOS S.A.
Issuer Credit Rating CCC-/Negative/-- CCC/Positive/--
COMPANIA DE INVERSIONES DE ENERGIA S.A.
DOWNGRADED
TO FROM
TRANSPORTADORA DE GAS DEL SUR S.A. (TGS)
Senior Unsecured CCC- CCC+
DOWNGRADED; CREDITWATCH/OUTLOOK ACTION
TO FROM
TRANSPORTADORA DE GAS DEL SUR S.A. (TGS)
Issuer Credit Rating CCC-/Negative/-- CCC+/Stable/--
COMPANIA GENERAL DE COMBUSTIBLES S.A.
DOWNGRADED
TO FROM
COMPANIA GENERAL DE COMBUSTIBLES S.A.
Senior Unsecured CCC- CCC+
DOWNGRADED; CREDITWATCH/OUTLOOK ACTION
TO FROM
COMPANIA GENERAL DE COMBUSTIBLES S.A.
Issuer Credit Rating CCC-/Negative/-- CCC+/Stable/--
EMPRESA DISTRIBUIDORA Y COMERCIALIZADORA NORTE S.A.
DOWNGRADED
TO FROM
EMPRESA DISTRIBUIDORA Y COMERCIALIZADORA NORTE S.A.
Issuer Credit Rating CCC-/Negative/-- CCC+/Negative/--
PAMPA ENERGIA S.A.
DOWNGRADED
TO FROM
PAMPA ENERGIA S.A.
Senior Unsecured CCC- CCC+
DOWNGRADED; CREDITWATCH/OUTLOOK ACTION
TO FROM
PAMPA ENERGIA S.A.
Issuer Credit Rating CCC-/Negative/-- CCC+/Stable/--
TELECOM ARGENTINA S.A.
DOWNGRADED
TO FROM
TELECOM ARGENTINA S.A.
Senior Unsecured CCC- CCC+
DOWNGRADED; CREDITWATCH/OUTLOOK ACTION
TO FROM
TELECOM ARGENTINA S.A.
Issuer Credit Rating CCC-/Negative/-- CCC+/Stable/--
YPF S.A.
DOWNGRADED
TO FROM
YPF S.A.
Issuer Credit Rating CCC-/Negative/-- CCC+/Stable/--
YPF S.A.
Senior Unsecured CCC- CCC+
YPF ENERGIA ELECTRICA S.A.
DOWNGRADED; CREDITWATCH/OUTLOOK ACTION
TO FROM
YPF ENERGIA ELECTRICA S.A.
Issuer Credit Rating CCC-/Negative/-- CCC+/Stable/--
YPF ENERGIA ELECTRICA S.A.
Senior Unsecured CCC- CCC+
===========
B R A Z I L
===========
AMERICANAS SA: Faces Extended Bankruptcy Battle with Creditors
--------------------------------------------------------------
Reuters reports that Brazilian retailer Americanas SA, which filed
for bankruptcy protection in January, faces resistance from key
creditors to a reorganization plan that could lead to a haircut of
up to 80% on their claims.
The plan, submitted to a Rio de Janeiro court, would include a
capital injection of 10 billion reais ($1.95 billion) from its top
shareholders announced earlier this month, according to Reuters.
The billionaire trio that founded 3G Capital - which controls
consumer goods giants like Kraft Heinz Co and Anheuser Busch Inbev
- owns about a third of Americanas, the report notes.
The amount offered under the reorganization plan falls short of
what some debt holders were hoping for, according to three people
who declined to be named because they are involved in the
negotiations, the report relays.
"Creditors are more interested in what shareholders can pay, in
particular if they can push them harder," one of the people said,
the report notes.
The proposal is seen as an "absurd" by some, given that it foresees
such large creditor discounts with such powerful shareholders, a
second person said, the report adds.
While the reorganization's filing triggered a brief rally in
Americanas shares on hopes that it could provide a road map for
recovery, the company faces protracted talks with creditors unhappy
about the losses they face, the people told Reuters.
About Americanas SA
Americanas was one of the largest diversified retail chains in
Brazil, with a wide platform of physical stores, robust
e-commerce,
fintech, and has just entered into the niche food retail. It is
listed on B3, being indirectly controlled by billionaire Jorge
Paulo Lemann, Carlos Alberto Sicupira and Marcel Telles.
The retailer nosedived in January 2023 after becoming mired in an
accounting scandal. The firm filed for bankruptcy at a court in
Rio de Janeiro on Jan. 19, 2023.
Americanas sought protection under Chapter 15 of the U.S.
Bankruptcy Code (Bankr. S.D.N.Y. Case No. 23-10092) on Jan. 25,
2023. White & Case LLP, led by John K. Cunningham, is the U.S.
counsel.
AMERICANAS SA: Managers Present Conflicting Debt Information
------------------------------------------------------------
Cristiane Lucchesi and Jessica Brice of Bloomberg News report the
management team at Brazilian retailer Americanas SA told its
external auditor and internal auditing committee as late as
December 2022 that there were no supply-chain financing operations
taking place at the firm.
At the same time, executives gave the securities regulator CVM
conflicting information, and a central bank system showed the
account registering supply chain financing at the firm had
ballooned to almost 17 billion reais ($3.2 billion).
Just weeks later, a new chief executive officer unveiled massive
accounting inconsistencies that led to a historic collapse for the
Rio de Janeiro-based firm.
Documents viewed by Bloomberg News reveal the most detailed account
yet of how Americanas' debt has expanded for years, out of public
view. The material was compiled by a court-appointed
administrator, based on audit reports and information from
Americanas. The details show that Americanas executives were
providing vastly different figures for supply chain financing
transactions versus information that might have been available in
the retailer's bank accounts.
PricewaterhouseCoopers LLC, the retailer's most recent third-party
auditor, said management told it there were no supply chain finance
transactions, according to the report. Internal audit committee
minutes from May 2021 and December 2022 reveal executives said as
much. But the documents sent by Americanas itself to the CVM
regulator show that The company began to venture into this type of
financing in 2015, with close to 3,500 million reais, and closed
2022 with 15,900 million reais, the administrator indicated.
"Americanas reinforces that its governing bodies (board of
directors, management and committees) are working together to
disclose their revised, rectified and audited financial statements,
as soon as the work of the consultants hired by the company, its
current external auditor, PwC, and the internal committee has
concluded," the company said in an emailed response.
PwC declined to comment.
Known as "risco sacarado" in Brazil, supply chain financing is
central to the massive 20 billion reais accounting hole revealed by
Americanas in January after Sergio Rial took the reins. That led
to a large liquidation, a rushed bankruptcy filing to prevent
creditors from seizing assets, and another review by company
executives.
Accounting errors at the company artificially boosted profits for a
decade and they cut reported liabilities in half under Miguel
Gutirrez's tenure as CEO. Americanas recorded a total debt of
42.3 billion reais in its restructuring proposal, although that
figure would be closer to 50,000 million reais if intra-company
loans are included.
The country's richest businessmen, Jorge Paulo Lemann, Marcel
Telles and Carlos Sicupira, collectively own a 30% stake in
Americanas. Sicupira was formerly president and is a member of the
board. In the only public statement from him since the scandal
broke, they said they did not know about the errors and added that
neither the executives, nor the banks, nor the auditors they had
noticed no previous irregularities.
PwC also submitted documents to the administrator showing that bank
creditors did not list their supply chain finance transactions when
conducting the audit of the December 2022 financial statements,
according to the report. That is another contradiction with what
had been reported to the central bank, since around 17 billion
reais of that type of debt was reported in September 2022, an
increase from almost 13 billion reais in December 2021.
KPMG, which was the company's previous auditor, quoted Itau
Unibanco Holding SA and Banco Santander Brasil SA as saying that
had debts linked to supply chain finance with the company for the
2016 fiscal year, before retracting the statements in subsequent
responses.
Itau said the information is false, adding that it was Americanas
who received the document and asked Itaú to exclude the
information on supply chain financing. The bank said it disagreed
with the practice and has documents to prove it.
Santander said the bank letters were just one of many audit tools
and that the bank always included all the information about
Americanas loans in the central bank's system.
Both banks added that accounting inconsistencies or fraud are the
sole responsibility of the company, its managers and its board of
directors and that there is no point in trying to blame creditors.
KPMG declined to comment.
While Americanas released a public version of the receiver's
report
on its investor relations website, parts of the
report say "information is available on a confidential basis,"
including details about the conflicting bank reports.
"This report is presented in two versions, one public and the other
confidential, since part of the information and documents analyzed
are covered in secret, according to information provided by the
companies in the process of reorganization and by the other agents
consulted, and must be observed," the administrator wrote in the
report.
Americanas said in a statement that its 2022 earnings
report, which is scheduled for March 29, will not be released and
did not provide a new date.
About Americanas SA
Americanas was one of the largest diversified retail chains in
Brazil, with a wide platform of physical stores, robust e-commerce,
fintech, and has just entered into the niche food retail. It is
listed on B3, being indirectly controlled by billionaire Jorge
Paulo Lemann, Carlos Alberto Sicupira and Marcel Telles.
The retailer nosedived in January 2023 after becoming mired in an
accounting scandal. The firm filed for bankruptcy at a court in
Rio de Janeiro on Jan. 19, 2023.
Americanas sought protection under Chapter 15 of the U.S.
Bankruptcy Code (Bankr. S.D.N.Y. Case No. 23-10092) on Jan. 25,
2023. White & Case LLP, led by John K. Cunningham, is the U.S.
counsel.
BRAZIL: After new Fiscal Rule, Brazil’s Ibovespa Drops 1.7%
-------------------------------------------------------------
Richard Mann at Rio Times Online reports that on the day after the
presentation of the new fiscal anchor, the main index of the
Brazilian Stock Exchange (B3), the Ibovespa, ended the session
March 31, with a significant drop of 1.7%, at 101,000 points.
The leading players in the financial market are still evaluating
whether the government will commit to reducing the debt and the
surplus in public accounts, according to Rio Times Online.
Investors expect Luiz Inacio Lula da Silva's team to show how to
increase tax collection, reduce taxes and prevent the creation of
new taxes, the report notes.
About Brazil
Brazil is the fifth largest country in the world and third largest
in the Americas. Luiz Inacio Lula da Silva won the 2022
Brazilian general election. He was sworn in on January 1, 2023, as
the 39th president of Brazil, succeeding Jair Bolsonaro.
As recently reported in the Troubled Company Reporter-Latin
America, Fitch Ratings, in December 2022, affirmed Brazil's
Long-Term Foreign Currency Issuer Default Rating (IDR) at 'BB-'
with a Stable Outlook. The ratings are constrained by high
government indebtedness, a rigid fiscal structure, weak economic
growth potential, and a record of governability challenges that
have hampered efforts to address these fiscal and economic issues
and clouded policy predictability. The Stable Outlook reflects
Fitch's expectation that growth will slow in the coming year and
that recent fiscal improvement will erode under a new government,
but within a margin consistent with the current rating, and from a
better starting point than previously expected. Uncertainty is
elevated regarding the plans of the incoming government and the
extent to which these could ease or aggravate fiscal and economic
challenges. However, Fitch does not expect policies that
jeopardize broad economic stability.
Standard & Poor's affirmed its 'BB-/B' long- and short-term
foreign and local currency sovereign credit ratings on Brazil, and
the outlook remains stable (June 2022). The stable outlook
reflects S&P's base-case assumption that Brazil will maintain its
fiscal anchors over the next two years despite an increasing
interest burden, preventing significant fiscal slippage and
limiting the rise in its already high debt burden.
Moody's credit rating for Brazil was last set at Ba2 in 2018 with
stable outlook. Moody's affirmed the Ba2 issuer ratings and
senior unsecured bond ratings in April 2022.
DBRS's credit rating for Brazil is BB (low) with stable outlook
(March 2018).
JSL SA: S&P Raises Long-Term Rating to 'BB-', Outlook Stable
------------------------------------------------------------
S&P Global Ratings raised its long-term global scale rating on JSL
S.A. to 'BB-' from 'B+'. S&P also raised its national scale issuer
and issue ratings to 'brAA+' from 'brAA'. S&P's recovery rating on
the senior unsecured debentures remains '3'.
S&P's stable outlook reflects its view that JSL will continue
growing, with improving profitability through gains of scale and
strict cost control, while also adequately funding its growth.
JSL reported net revenue of Brazilian real (R$) 6 billion in 2022,
up 40% compared with 2021, and almost doubled its size since the
IPO in 2020, with greater diversification of clients and sectors
served. Moreover, the company has a solid backlog and benefits from
long-term contracts, leading to high cash flow predictability.
JSL's new contracts signed in 2022 amounted to R$6 billion (up 50%
year over year), with an average term of 50 months. S&P expects
backlog to continue increasing in the coming years as JSL
consolidates its leadership position in the highly fragmented
logistics transportation segment--both organically and via mergers
and acquisitions. S&P believes the company's solid track record of
high-quality services and assets allows for cross-selling for
existing clients and enables the company to gain new contracts in a
flight-to-quality move from clients. Moreover, JSL has exposure to
sectors with somewhat limited demand volatility--such as food and
beverage, automotive chain, pulp and paper, metals and mining, and
chemicals--which supports its view of long-term growth prospects.
Even in a scenario of high inflation, JSL posted an EBITDA margin
of about 17% in 2022, compared with 14.3% in 2021, mostly owing to
its ability to pass through cost increases and keep strict cost
management. Additionally, the company demonstrated an efficient
integration of recent acquisitions, improving profitability through
route optimization, digitalization, and integration between
subsidiaries. Moreover, acquired companies are benefiting from a
larger group to negotiate better terms with suppliers. S&P expects
the EBITDA margin to expand to around 17.5%-18% in 2023 (our number
already includes the recently acquired company, IC, from May this
year) and above 19% in 2024. If it considers JSL on a stand-alone
basis, without incorporating IC, the EBITDA margin would likely
already reach 19% in 2023.
With seven acquisitions in the past two years, JSL diversified its
portfolio of services and sectors served. Once concluded, the
acquisition of IC Participacoes will increase exposure to road
transportation of fuels and agribusiness (mostly fertilizers), as
well as strengthen JSL's position in the transportation of bulks,
gases, chemicals, and highly complex cargo. S&P said, "The company
will continue financing growth with debt, but we expect it to keep
a relatively prudent approach. Our forecast considers S&P Global
Ratings-adjusted leverage will remain between 3x-4x and funds from
operations (FFO) to debt between 12%-20%. Additionally, we expect
JSL will stick to its financial policy targeting net debt to EBITDA
around 3x. (Our adjusted leverage metric differs from the company's
calculation.)"
Debt levels have been rising over the years to support capital
expenditures (capex) and acquisitions. S&P said, "JSL ended 2022
with gross debt of R$4.2 billion, and we forecast an additional
R$1.5 billion per year in the next three years to support capex. We
don't incorporate new acquisitions in our base case. We expect free
operating cash flow deficits over the next years owing to large
capex planned and a higher interest burden amid tough financing
conditions. Still, the company demonstrated good access to the
domestic credit market and solid relationships with banks, issuing
debt with long-term maturities and at reasonable costs over the
past years. It could also finance a large portion of this year's
capex with already signed credit lines from BNDES and BID,
amounting to R$876 million by the end of 2022. And we believe there
is some flexibility to reduce planned capex if needed, but this
would also reduce the pace of growth."
ESG credit indicators: E-2, S-2, G-3
S&P said, "Governance factors are a moderately negative
consideration in our credit rating analysis of JSL. The chairman of
the board and indirect controlling shareholder, as well as some
related companies, have been implicated in alleged fraud and
bribery in bidding for public contracts. Although such allegations
could increase reputational risks and eventually result in fines
for the parent, Simpar, two civil lawsuits haven't been ruled on
yet, while others were dismissed. Also, the group currently has
processes to monitor and mitigate the key risks related to its
public bidding activities, such as independent third-party audits.
Environmental and social factors are a neutral consideration."
LIGHT SA: Fitch Lowers Local & Foreign Currency LongTerm IDRs to CC
-------------------------------------------------------------------
Fitch Ratings has downgraded the Local Currency and Foreign
Currency Long-Term Issuer Default Ratings (IDRs) of Light S.A.
(Light) and its wholly owned subsidiaries Light Servicos de
Eletricidade S.A. (Light Sesa) and Light Energia S.A.'s (Light
Energia) to 'CC' from 'CCC+'. Fitch has also downgraded the
Long-Term National Scale Ratings of these entities to 'CC(bra)'
from 'CCC(bra)'. The ratings of foreign currency and local currency
debt instruments were downgraded to 'CC'/'RR4' from 'CCC+'/'RR4'
and to 'CC(bra)' from 'CCC(bra)', respectively.
The downgrade reflects Fitch's view that there is a high
probability that Light group will enter into a debt restructuring
process, following the statements made by management during its
4Q22 earnings call. Light's management publicly stated its
intention to start discussions with creditors, in an effort to
improve its capital structure and preserve its cash balance while
executing its capex program. Fitch expects the restructuring
process will fall within its definition of a default-like process,
which would result in a downgrade to 'C'.
Light's financial flexibility has weakened due to a confluence of
concession renewal uncertainty and operating cash flow pressure, as
a result of high energy losses, elevated interest expenses, and tax
credits reimbursement to customers. These factors along with high
leverage metrics have led to the company to hire a financial
advisor that specializes in restructuring. Fitch believes the
company's access to financing is limited and/or too expensive given
the current markets conditions coupled with the credit profile of
the company. Therefore, Fitch does not expect the company to be
able to raise the necessary financing to support its expected
negative FCF and debt amortization in 2023, estimated to be at
BRL1.5 billion-BRL2.0 billion.
KEY RATING DRIVERS
Probable Debt Restructuring: Fitch expects Light to launch a debt
restructuring process in 2023 that would fall within Fitch's
definition of a default-like process. Light Sesa, Light's main
subsidiary, has sizeable cash outflows of BRL 2.8 billion in 2023,
comprising of BRL1.0 billion in debt amortization, approximately
BRL800 million of capex, and BRL1.0 billion in deferred tax
expenses. The company's cash position at its power distribution
segment was BRL633 million, as of 4Q22, had reduced to BRL457
million; on a pro forma basis, after the anticipated payment of the
third and the ninth debenture issuance on March 29, 2023, which is
not enough to support those disbursements.
High Refinancing Needs: Fitch believes the company is unlikely to
access competitive financing to secure its funding needs. Fitch
estimates that the group needs up to BRL1.8 billion of financing in
2023, and at least BRL1.5 billion in 2024. In case of non-renewal
of the Light Sesa concession, the company should receive an
indemnity for unamortized assets equal to its asset base, currently
valued at BRL10.1 billion, which unfavorably compares with
on-balance-sheet consolidated debt of BRL11.1 billion and BRL8.7
billion at Light Sesa's level. The company had a cash position of
BRL2.1 billion in December of 2022. The indemnification would
partially support the recovery prospect of debt holders, if
needed.
High Leverage; Weak Coverage Ratios: Light's consolidated adjusted
leverage should remain high. The rating case estimates a
consolidated net adjusted debt/EBITDA above 5.0x in 2023 and 2024,
including guarantees provided to Norte Energia S.A. as off-balance
sheet debt (BRL730 million in December 2022). As of December 2022,
group's consolidated adjusted net leverage reached 5.6x, with 9.2x
at Light Sesa's level. EBITDA to interest expense for the company
is estimated to be 1.3x in 2023, which leaves small room for capex
and debt amortization.
Recovery Analysis: Fitch applies a bespoke approach to recovery for
issuers rated 'B+' and lower, using the higher of going-concern and
liquidation estimates to enterprise valuation. In the case of
Light, Fitch estimates recovery rates to be 'RR1' for its secured
debts and 'RR3' for unsecured debts, which could potentially lead
to uplift on the bonds' rating from Light's FC IDR.
However, Fitch's "Country-Specific Treatment of Recovery Ratings
Criteria" caps at 'RR4' the recovery for debt instruments in
Brazil, resulting in an instrument rating equal to Light's FC IDR.
These caps reflect Fitch's concerns over the enforceability of
creditor rights in certain jurisdictions, where average recoveries
tend to be lower.
DERIVATION SUMMARY
Light's ratings reflect its probable debt restructuring, worse than
of Azul S.A. (Azul; Long-Term Foreign and Local Currency IDRs CCC-)
and InterCement Brasil S.A. (InterCement; FC and LC IDRs CCC),
where the risk of default is more a possibility. The power company
has publicly announced its intention to start discussions with the
creditors. For the three companies, high financial leverage coupled
with high interest rates weakens their financial flexibility.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Light maintains its ability to receive funding from banks or the
capital market;
--The group sells assets or raises equity in a follow-on issuance;
- Renewal of Light Sesa's concession on more favorable terms.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- A downgrade may occur if, in Fitch's judgment, a default or
default-like process has begun, which would be represented by a
''C' rating.
LIQUIDITY AND DEBT STRUCTURE
Heightened Refinancing Risk: Light's ability to secure funding in
the short term is uncertain. During the 4Q22, Light's cash position
reduced by BRL1.9 billion (or 48%), and the cash and equivalent
position as of December 2022, BRL2.1 billion, should not cover the
expected debt amortizations (BRL1.0 billion) and expected negative
FCF through 2023. Adjusted consolidated debt was BRL11.8 billion
and comprises debentures (BRL6.9 billion) and Eurobonds (BRL3.5
billion), with off-balance sheet debt of BRL730 million related to
guarantees provided to Norte Energia S.A. There is no debt at the
holding level.
ISSUER PROFILE
Light Sesa is the fourth largest power concession in Brazil,
serving more than 70% of Rio de Janeiro's consumption, and accounts
for about 60% of the group's EBITDA. Light Energia has 511 MW of
assured energy, on a consolidated basis. Light S.A. is listed on B3
and has a pulverized share ownership.
SUMMARY OF FINANCIAL ADJUSTMENTS
Construction revenues and costs excluded from EBITDA
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 Recovery Prior
----------- ------ -------- -----
Light Servicos
de Eletricidade
S.A. LT IDR CC Downgrade CCC+
LC LT IDR CC Downgrade CCC+
Natl LT CC(bra)Downgrade CCC(bra)
senior
unsecured LT CC Downgrade RR4 CCC+
senior
unsecured Natl LT CC(bra)Downgrade CCC(bra)
Light Energia
S.A. LT IDR CC Downgrade CCC+
LC LT IDR CC Downgrade CCC+
Natl LT CC(bra)Downgrade CCC(bra)
senior
unsecured LT CC Downgrade RR4 CCC+
senior
unsecured Natl LT CC(bra)Downgrade CCC(bra)
Light S.A. LT IDR CC Downgrade CCC+
LC LT IDR CC Downgrade CCC+
Natl LT CC(bra)Downgrade CCC(bra)
=============
J A M A I C A
=============
JAMAICA: Monetary Policy Interest Rate Remains at 7%
----------------------------------------------------
RJR News reports that the Bank of Jamaica has kept the Monetary
Policy Interest Rate at seven per cent.
The central bank announced that it held the rate offered to
deposit-taking institutions on overnight placements at this level
to maintain tight Jamaican dollar liquidity, according to RJR
News.
The last adjustment in the rate was last November, as the BoJ keeps
a close watch on the lag effect of previous decisions, and as
inflation slows, the report notes.
As at February, inflation stood at 7.8 per cent, the report
relays.
Effective April 1, the BOJ will also increase the cash reserve
requirements applicable to deposit taking institutions by one per
cent, in a bid to further slow inflation, the report relays.
The next interest rate decision is due in May, the report adds.
As reported in the Troubled Company Reporter-Latin America in March
2022, Fitch Ratings has affirmed Jamaica's Long-Term Foreign
Currency Issuer Default Rating (IDR) at 'B+'. The Rating Outlook is
Stable.
===========
M E X I C O
===========
GRUPO IDESA: S&P Cuts ICR to 'CC' on Distressed Debt Exchange
-------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on Mexico-based
petrochemicals producer Grupo Idesa S.A. de C.V. (IDESA) to 'CC'
from 'CCC-'. At the same time, S&P lowered its issue-level rating
to 'CC' from 'CCC-' on the company's senior secured notes due 2026
in line with the issuer credit rating and kept the '4' recovery
rating on them unchanged. The '4' recovery rating indicates its
expectation of average (30%-50%; rounded estimate 40%) recovery
prospects in the event of a payment default.
The negative outlook reflects that S&P will lower its credit rating
on IDESA to 'SD' (selective default) and our rating on the
company's senior secured notes due 2026 to 'D' (default) when the
transaction closes.
The downgrade follows IDESA's announcement that it commenced offers
to exchange any and all of its outstanding existing senior secured
notes of about MXN6.2 billion (about $310 million) due 2026 with a
9.375% interest rate for new senior secured notes due 2028 with a
6.50% interest rate. The new notes will be fully and
unconditionally guaranteed by IDESA's main subsidiaries. The new
notes and guarantees will rank senior in right of payment to all
existing and future unsecured debt. The proposed transaction will
somewhat extend the company's maturities and offer some interest
cost savings due to the 6.50% interest rate on the new notes.
However, S&P views the proposed exchange offer as tantamount to
default because it believes lenders will receive less than
originally promised as the interest rate of the new securities
offered (6.50%) is less than the one (9.375%) of the existing
notes. Moreover, the new notes' maturity will be 2028 as opposed to
the original one of 2026. In addition, all existing debt holders
are essentially being primed by the senior position of the new
notes, as the proposed notes will add a new subsidiary-guarantor of
IDESA (Etileno XXI S.A. de C.V.). Therefore, the new notes
effectively will rank senior in right of payment to all of the
existing and future unsecured debt, including the existing secured
notes due 2026 (which will become unsecured debt if the offer and
solicitation are successful), to the extent of the collateral.
Currently, IDESA's capital structure is unsustainable, while under
the current debt structure, the risk of payment default of the
coupon on the senior secured notes due 2026 increases. Moreover,
the company has limited options to reduce its debt burden and
improve its cash flow through its own operations to keep complying
with its financial obligations.
Environmental, Social, and Governance
ESG credit indicators: E-3, S-2, G-3
GRUPO KUO: S&P Alters Outlook to Negative, Affirms 'BB' ICR
-----------------------------------------------------------
S&P Global Ratings revised its outlook on Grupo Kuo S.A.B. de C.V.
(Kuo) to negative from stable and affirmed its 'BB' global scale
issuer credit and issue–level ratings and its 'mxA' national
scale issuer credit rating.
The negative outlook for the next 12 to 18 months reflects S&P's
expectation that the company's credit metrics will remain pressured
by the high raw material prices for Keken and the challenging
global economic conditions.
S&P said, "As of December 2022, the conglomerate's EBITDA from its
pork segment was below our expectations, driven mainly by Keken's
higher operating costs, although Kuo's polystyrene and automotive
segments had solid performances. Keken has always been exposed to
volatility in raw material prices. However, since the beginning of
2022, the Russia-Ukraine conflict, higher inflation, extreme
weather events, and supply chain disruptions have ballooned corn
and soybean paste prices. As a result, corn prices peaked at about
$8 per bushel (from an average of $4 per bushel in the last eight
years). These unprecedently high raw material prices illustrated
how exposed Keken is to them. Its EBITDA dropped 65% in 2022 versus
2021, considerably deviating from our base-case scenario."
On the other hand, the polystyrene ("Resirene") and the automotive
segments had solid performances in 2022. Higher prices, more demand
for Resirene, and higher sales of transmissions and components,
brakes, engine parts, and power train parts supported the results
of the chemical and automotive segments. The chemical segment's
EBITDA increased 35% and automotive's increased 8%, which partially
mitigated Keken's abrupt fall in EBITDA. Consequently, Kuo's
overall EBITDA fell 22% in 2022 from the previous year, increasing
its debt to EBITDA to 3.3x (including reverse factoring
adjustments) as of year-end 2022 from our previous assumption of
2.2x. S&P will monitor the raw material prices for Keken and the
effect that they could have on Kuo's leverage metrics.
S&P said, "We think the price of Keken's inputs have peaked, but we
expect them to fall gradually, which will keep pressuring this
division's results. We expect that Ukraine will resume exporting
grains, including wheat, corn, soybeans, and rapeseed, from
selected Black Sea ports because of the Black Sea Grain Initiative
agreement. Stemming from this initiative, we forecast corn prices
to fall to $5.70 in 2024 per bushel from $8.00 per bushel in 2022,
and continue decreasing through 2026 and 2027 before stabilizing at
$4.30. Although prices will fall, we anticipate the Keken segment's
EBITDA margins will only gradually recover to about 4.0% in 2023
and 5.8% in 2024, which compares unfavorably with its historical
three-year average of 12%.
"Despite the mentioned challenges in the pork meat segment, we
forecast a solid performance in the polystyrene and the automotive
segments. We expect an average EBITDA margin for 2023 and 2024 of
11.5% for polystyrene and 9.9% for automotive (compared to
historical three-year averages of 11.3% and 8.8%). We think that
the polystyrene segment will benefit from better volumes because of
higher value-added applications and the development of compostable
applications. We also expect lower styrene prices that will bring
down final sale prices, although inventory management will somewhat
mitigate this.
"Additionally, we expect that the continuous demand for DCT (dual
clutch transmission), coupled with increased market share in brakes
and engine parts in Mexico, will keep the automotive segment
steady. Consequently, we expect that Kuo will be able to still post
EBITDA margins of 10.3% (although down from the historical
three-year average of 13.5%) in the next two years. Although we
forecast debt to EBITDA of about 3.2x in 2023, we also expect that
the company will focus on stabilizing its three business segments
without incurring in additional debt, lowering its leverage ratio
to below 3.0x going forward.
"Kuo has a strong cash position of about MXN2.3 billion as of the
end of 2022. In addition, its liquidity benefits from MXN6.1
billion revolving committed credit lines (five-year tenor).
Therefore, although we expect cash flow of about MXN4.6 billion for
the next 12 months, lower than the previous year due to higher raw
material prices, the company has enough cushion to withstand
challenging economic cycles."
ESG credit indicators: E-3, S-2, G-2
=============
U R U G U A Y
=============
NARANJAL/LITORAL URUGUAY 2: Moody's Affirms 'Ba2' Sub. Bond Rating
------------------------------------------------------------------
Moody's Investors Service has affirmed the Baa3 senior secured
rating of Naranjal/Litoral Uruguay Issuer 1's (Naranjal/Litoral)
and the Ba2 subordinate rating of Naranjal/Litoral Uruguay Issuer
2's (Naranjal/Litoral). The outlook was changed to positive from
stable.
Affirmations:
Issuer: Naranjal/Litoral Uruguay Issuer 1
Senior Secured Regular Bond/Debenture, Affirmed Baa3
Issuer: Naranjal/Litoral Uruguay Issuer 2
Subordinate Regular Bond/Debenture, Affirmed Ba2
Outlook Actions:
Issuer: Naranjal/Litoral Uruguay Issuer 1
Outlook, Changed to Positive from Stable
Issuer: Naranjal/Litoral Uruguay Issuer 2
Outlook, Changed to Positive from Stable
RATINGS RATIONALE
Naranjal/Litoral Uruguay Issuer 1's Baa3 senior secured rating
reflects the project's long-term, fixed-price power purchase
agreement (PPA) with the Administración Nacional de Usinas y
Trasmisiones Eléctricas (UTE), Uruguay's government-owned
electricity company. The Government of Uruguay (Baa2 stable) acts
as a guarantor of UTE's obligations. The PPAs do not require
minimum production levels and include compensation provisions for
curtailment and defined termination payments. Naranjal/Litoral's
senior secured notes benefit from standard project finance creditor
protections, including a first lien on assets, well-defined cash
flow waterfalls, limitations in incurring additional debt and debt
distribution tests. Moreover, creditors benefit from additional
liquidity embedded in the structure in the form of a senior debt
service reserve account sized to 12 months of debt service, an
advantage over its local peers.
Naranjal/Litoral Uruguay Issuer 2's Ba2 subordinated debt rating
considers the lower ranking of these notes in the waterfall
schedule and the second lien on the project's assets. It also
incorporates the existence of a distribution test that could stop
debt service on the subordinated notes should the senior debt
service coverage ratio (SDSCR) in any year be below 1.20 times.
While the existence of a twelve month debt service reserve account
mitigates default risk, the two notch difference in the ratings
between the senior and the subordinated notes reflect this
potential restriction on cash flows for the subordinated debt.
The positive outlook reflects Moody's view that the project's cash
generation profile is benefiting from the inflation pass through on
tariffs and solid energy production levels leading to higher than
anticipated debt service coverage ratios. The SDSCR reached 1.50x
in 2022. Moody's updated projections indicate an average SDSCR
potentially above 1.40x for the remaining life of the notes,
against 1.26x in the initial projections.
Signed in 2017, the PPA with UTE established a remuneration of
$85.36 per megawatt hour generated, annually adjusted by the US
Producer Price Index for Finished Goods. Moody's initial
projections took into account PPA prices at $97.08/MWh for 2023,
but high inflation rates in 2021 and 2022 have pushed the PPA
prices to $112.46/MWh for this year. At the same time, the
accumulated operating cost increases have been lower than the
inflation adjustments on the PPA, supporting higher operating
margins since the project started operations in 2017. The operation
and maintenance service agreement provides for fixed costs with a
2% annual step up rate through 2027. After that, there is some
degree of uncertainty on the project's cash flow.
In terms of production, both farms have recovered from the initial
operating difficulties observed during 2018-2019. In late 2019,
both plants concluded a maintenance recovery plan to enhance
production levels, which resolved initial underperformance of the
ramp up. As a result, production has been at or above the P90 since
2020. Going forward, Moody's ratings base case assumes a P90
production with equipment degradation varying from 0.5% to 1%.
On October 11, 2022, Actis announced that it had sold 100% of
Atlas, the project's sponsor, to Global Infrastructure Partners
(GIP). Moody's view the acquisition as credit positive because of
GIP's sponsorship profile and track record as an equity investment
fund. GIP holds about $84 billion of assets under management,
including a significant portfolio of assets in the infrastructure
and energy sectors. Despite the change in ownership, financial
policy that balances creditors' and shareholders' interests to
remain unchanged, as per the debt documentation. Moody's assume the
management team will remain in place ensuring the continuity of the
company's commercial, operational and financial strategy.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
A continuation of strong cash generation driven by both adequate
operating performance and supportive contractual structure
resulting in SDSCR continuously above 1.40x would underpin a higher
rating. The credit quality of the Uruguayan government, as the
owner of the off-taker (UTE) and guarantor of the payments under
the PPA, would also be an important rating consideration.
The positive outlook signals that a rating downgrade is unlikely in
the near term. However, an unforeseen reduction in cash flow or
operational problems that lead to an SDSCR below 1.2x for an
extended period could exert downward pressure on the rating.
Additionally, given the linkages with the credit quality of the
Government of Uruguay, a downgrade of the sovereign rating could
also lead to a downgrade of the project's ratings.
COMPANY PROFILE
The issuers of the notes Naranjal/Litoral Issuer 1 and
Naranjal/Litoral Issuer 2 are two special purpose vehicles,
established solely for the purpose of issuing the senior and
subordinated B Notes to fund the senior B loan participation and
the subordinated B loan participation, per the participation
agreement with the Inter-American Investment Corporation ("IDB
Invest"), the lender of record. The proceeds from the notes were
provided by IDB Invest to Colidim S.A. and Jolipark S.A., the
borrowers, which are wholly owned by Global Infrastructure
Partners.
The principal methodology used in these ratings was Power
Generation Projects Methodology published in January 2022.
=================
V E N E Z U E L A
=================
VENEZUELA: Offers to Suspend Deadline on $60 Billion of Bonds
-------------------------------------------------------------
globalinsolvency.com, citing Bloomberg News, reports that Venezuela
will push back a legal deadline on $60 billion of defaulted debt in
a bid by President Nicolas Maduro to prevent creditors from filing
a wave of lawsuits while he attempts to regain recognition from the
U.S.
Maduro's administration announced it suspended the statute of
limitations on bonds issued by the government and state oil
company, PDVSA, according to statements published on government
websites, notes the report.
The suspension will be in effect for five years or until the US
government lifts economic sanctions that prevent a debt
restructuring, the report notes.
The statute is set to expire on some bonds in October - six years
after Caracas stopped payments on the debt - meaning creditors face
losing their right to pursue repayment in court, the report
discloses.
Bondholders now have to decide whether to accept Maduro's offer or
file suit to protect their claims, the report says.
The offer by Caracas, known as a tolling announcement, would give
the government and creditors more time to work on a potential
restructuring, the report relays. But because Maduro's government
is not recognized by the US, creditors say other guarantees are
needed, the report notes. The Venezuela Creditor Committee, a
group of long-term investors holding in excess of $10 billion of
the debt, said in a statement that it welcomed the announcement and
urged the opposition-led National Assembly to endorse it and the US
government to "recognize its validity," the report adds.
===============
X X X X X X X X
===============
[*] BOND PRICING: For the Week March 27 to March 31, 2023
---------------------------------------------------------
Issuer Name Cpn Price Maturity Country Curr
----------- --- ----- -------- ------- ---
AES Tiete Energia SA 6.8 1.2 4/15/2024 BR BRL
Argentine Republic Gov 8.3 72.9 12/31/2033 AR USD
Province of Santa Fe 6.9 74.7 11/1/2027 AR USD
Esval SA 3.5 49.9 2/15/2026 CL CLP
Provincia de Rio Negro 7.8 70.3 12/7/2025 AR USD
Provincia de Cordoba 7.1 72.7 8/1/2027 AR USD
Fospar S/A 6.5 1.2 5/15/2026 BR BRL
Argentina Bonar Bonds 7.6 74.4 4/18/2037 AR USD
Noble Holding Internat 5.3 60.5 3/15/2042 KY USD
Argentine Republic Gov 0.5 27.6 12/31/2038 AR JPY
Provincia de Rio Negro 7.8 70.4 12/7/2025 AR USD
Argentina Bonar Bonds 5.8 75.2 4/18/2025 AR USD
Provincia del Chaco Ar 4.0 0.0 12/4/2026 AR USD
Cia Latinoamericana de 9.5 74.3 7/20/2023 AR USD
Argentine Republic Gov 8.3 74.5 12/31/2033 AR USD
Argentine Republic Gov 8.3 74.5 12/31/2033 AR USD
Province of Santa Fe 6.9 74.7 11/1/2027 AR USD
Provincia de Cordoba 7.1 74.7 8/1/2027 AR USD
Noble Holding Internat 6.2 62.2 8/1/2040 KY USD
Provincia del Chaco Ar 9.4 74.8 8/18/2024 AR USD
Provincia de Rio Negro 7.8 70.3 12/7/2025 AR USD
Sylph Ltd 2.4 65.1 9/25/2036 KY USD
City of Cordoba Argent 7.9 73.1 9/29/2024 AR USD
Argentine Republic Gov 8.3 72.9 12/31/2033 AR USD
Argentine Republic Gov 7.1 75.7 6/28/2117 AR USD
Noble Holding Internat 6.1 62.0 3/1/2041 KY USD
Cia Latinoamericana de 9.5 73.9 7/20/2023 AR USD
Provincia de Buenos Ai 7.9 75.3 6/15/2027 AR USD
Odebrecht Finance Ltd 6.0 16.4 4/5/2023 KY USD
Argentine Republic Gov 8.3 72.9 12/31/2033 AR USD
Argentine Republic Gov 6.3 74.1 11/9/2047 AR EUR
Province of Santa Fe 6.9 75.2 11/1/2027 AR USD
Metrogas SA/Chile 6.0 41.6 8/1/2024 CL CLP
Argentine Republic Gov 4.3 70.0 12/31/2033 AR JPY
Odebrecht Finance Ltd 6.0 16.4 4/5/2023 KY USD
Province of Santa Fe 6.9 75.2 11/1/2027 AR USD
Odebrecht Finance Ltd 6.0 16.4 4/5/2023 KY USD
*********
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 2023. 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
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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 * * *