/raid1/www/Hosts/bankrupt/TCRLA_Public/231011.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Wednesday, October 11, 2023, Vol. 24, No. 204
Headlines
A R G E N T I N A
ARGENTINA: Peru's Velarde Insists on Freedom to Choose Currency
B A H A M A S
FTX GROUP: 4 Points in Opening Statements for Founder's Trial
B R A Z I L
BRAZIL: Renews Push for IMF Reform, Sees BRICS Bank Alternative
FS INDUSTRIA: Fitch Affirms 'BB-' LongTerm IDRs, Outlook Stable
HIDROVIAS DO BRASIL: Fitch Affirms 'BB-' LongTerm IDRs
D O M I N I C A N R E P U B L I C
DOMINICAN REPUBLIC: $570MM Financing to Improve Electricity Sector
DOMINICAN REPUBLIC: Egg Farmers Stages Protest
P A N A M A
ENA NORTE: Fitch Affirms BB Rating on $600MM Notes, Outlook Neg.
P E R U
PERU: Annual Inflation Eases to Lowest Level in 2++ Years
P U E R T O R I C O
NEW BEGINNING: Unsecureds Owed $3MM to Get 4.1% in Plan
X X X X X X X X
LATAM: Growth Lags Behind Global Rates in 2023
- - - - -
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A R G E N T I N A
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ARGENTINA: Peru's Velarde Insists on Freedom to Choose Currency
---------------------------------------------------------------
Buenos Aires Times reports that Latin America's longest-serving
central bank chief has just stepped into a heated debate about the
future of Argentina's currency, apparently siding with those who
defend the adoption of the dollar as an alternative to the peso.
"People should choose what currency they want to keep their money
in," Peru's Julio Velarde told a conference of leading company
executives in the Argentine city of Mar del Plata, drawing applause
from the audience, according to Buenos Aires Times.
His remarks were interpreted as supporting the dollarisation plan
sponsored by Javier Milei, the libertarian candidate who seeks to
win Argentina's highest office in the October 22 presidential
election, the report notes. Milei proposes the introduction of a
stronger currency to stem Argentina's chronic inflation problem,
largely fuelled by the Central Bank's financing of government
spending via money printing, the report relays.
At home, Velarde has successfully fought inflation during his 17
years at the helm of the central bank. Peruvians are free to save
their money or take loans in the local currency or dollars, and
private banks offer accounts in both currencies, the report
discloses.
The Peruvian monetary authority is expected to cut its benchmark
interest rate by another 25 basis points after an aggressive
monetary tightening cycle that has brought inflation closer to the
bank's one percent to three percent target, the report relays.
By contrast, Argentina's inflation is running at more than 120
percent a year and likely to accelerate further as Economy Minister
Sergio Massa, who's also running for president, greatly increases
public spending ahead of the vote, the report notes.
Instead of adopting austerity measures, President Alberto
Fernández's government has sought to curb the depreciation of the
peso by implementing a series of foreign exchange controls,
particularly on agriculture exports that are the main source of
foreign currency in Argentina, the report discloses. The measures
have been unable to support the national currency, which reached a
record low of 884 pesos per dollar in parallel markets - 152
percent weaker than the official exchange rate, the report says.
"The agriculture exporter shouldn't have to bring his dollars into
the country, he should be able to leave all of his money abroad,"
Velarde said. "This is the citizen's money and they should decide
in which currency they have it and where they keep it," the report
relays.
After his presentation, Velarde declined to make specific comments
about Milei's dollarization proposal, saying he'd rather not get
involved in Argentina's domestic politics, the report notes.
"There is a candidate talking about this and I cannot give my
opinion about him," he said, the report 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.
The IMF's executive board completed on August 23, 2023, the fifth
and six reviews of Argentina's 30-month Extended Fund Facility
(EFF), and approved a US$7.5-billion disbursement to Argentina as
part of the larger program, which refinances payments Argentina
owes the institution from a previous bailout that failed to
stabilize the economy in 2018. Argentina would receive another IMF
disbursement in November of about US$2.75 billion pending another
staff-level agreement and board approval.
S&P Global Ratings, on June 13, 2023, raised its local currency
sovereign credit ratings on Argentina to 'CCC-/C' from 'SD/SD' and
its national scale rating to 'raCCC+' from 'SD'. S&P also affirmed
its 'CCC-/C' foreign currency sovereign credit ratings on
Argentina. The outlook on the long-term ratings is negative. S&P's
'CCC-' transfer and convertibility assessment is unchanged. None of
its rated bond issues are affected.
S&P said the negative outlook on the long-term ratings is based on
the risks surrounding pronounced economic imbalances and policy
uncertainties before and after the 2023 national elections.
Divisions within the government coalition, and infighting among the
opposition, constrain the sovereign's ability to implement timely
changes in economic policy.
Fitch Ratings also upgraded on June 13, 2023, Argentina's Long-Term
Foreign Currency (FC) Issuer Default Rating (IDR) to 'CC' from 'C'
and affirmed the Long-Term Local Currency (LC) IDR at 'CCC-'. Fitch
typically does not assign Outlooks to sovereigns with a rating of
'CCC+' or below.
The upgrade of the FC IDR reflects that Fitch no longer deems a
default-like process to have begun, as the authorities have not
signaled a clear intention to follow through with an intra-public
debt swap announced in March. The new 'CC' rating signals a default
event of some sort appears probable in the coming years,
regardless of the outcome of upcoming elections. The affirmation
of
the LC IDR at 'CCC-' follows the peso debt swap in June that Fitch
did not deem to be a "distressed debt exchange" (DDE).
Moody's Investors Service, in September 2022, affirmed Argentina's
Ca foreign-currency and local-currency long-term issuer and senior
unsecured ratings. The outlook remains stable. The decision to
affirm the Ca ratings balances Argentina's limited market access,
weak governance, and history of recurrent debt restructurings with
recent efforts to marshal fiscal and monetary measures to start
addressing underlying macroeconomic imbalances in the context of
the IMF program that was approved in 2022, according to Moody's.
DBRS, Inc. confirmed Argentina's Long-Term Foreign Currency Issuer
Rating at CCC and downgraded its Long-Term Local Currency Issuer
Rating to CCC from CCC (high) on March 3, 2023.
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B A H A M A S
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FTX GROUP: 4 Points in Opening Statements for Founder's Trial
-------------------------------------------------------------
Jody Godoy and Luc Cohen at Reuters report that jurors in the trial
of FTX founder Sam Bankman-Fried heard from both sides for the
first time, receiving dueling portrayals of key events and players
involved in what prosecutors have called a multibillion-dollar
fraud that affected thousands of the cryptocurrency exchange's
customers.
Bankman-Fried pleaded not guilty. Opening statements by prosecutor
Thane Rehn and defense lawyer Mark Cohen made it clear that four
points of contention, described below, will be crucial to the
trial, which is expected to last up to six weeks, according to
Reuters.
Was Bankman-Fried a power-hungry thief or a "math nerd" startup
CEO?
In his opening statement, Rehn said Bankman-Fried used more than
$10 billion in FTX customer funds to amass his own wealth, power
and influence, the report notes. Rehn said he bought beachfront
property in the Bahamas and donated to a nonprofit his brother
founded, the report relays.
Cohen, Bankman-Fried's attorney, called that depiction a "cartoon
of a villain," and said evidence would show that his client was
actually a "math nerd who didn't drink or party," the report
discloses. Bankman-Fried, he said, was in reality a CEO of a
startup company that collapsed after it was faced with an
unanticipated "perfect storm," the report says.
"It's not a crime to be a CEO of a company that later files for
bankruptcy," he said.
Did FTX collapse because of a smear job or fraud?
From Cohen's point of view, FTX and Alameda Research - a
crypto-focused hedge fund also controlled by Bankman-Fried - were
casualties of a downturn across the cryptocurrency sector, which
was subject to fluctuations based on "many factors that nobody
controlled," the report notes.
As Bankman-Fried's companies sought to weather the storm, public
"attacks" by the crypto press and Changpeng Zhao, the CEO of rival
exchange Binance, led to a run on FTX, Cohen said, the report
relays.
But Rehn said FTX collapsed because of Bankman-Fried's plundering
of FTX customer cash. Blaming FTX's implosion on the broader
downturn in crypto amounts to "excuses," Rehn said, the report
discloses.
FTX's relationship with Alameda: nefarious or normal?
Rehn told jurors that Bankman-Fried stole customer funds in two
ways: by duping FTX customers into sending money intended for their
trading accounts to Alameda, and through a "secret special
privilege" embedded in FTX software that let Alameda make unlimited
withdrawals, the report notes.
Cohen said prosecutors had misconstrued instances of Alameda
performing functions for FTX that the fledgling exchange was not
yet set up to perform itself, the report discloses.
He said the software allowed FTX to rely on Alameda as a "market
maker," which let Alameda buy and sell crypto as the exchange
sought to attract more customers, the report notes.
Caroline Ellison: failed deputy or "front"?
Each side presented different stories about former Alameda chief
executive Caroline Ellison, who has pleaded guilty to fraud and
agreed to cooperate against Bankman-Fried, the report relays.
According to prosecutors, Bankman-Fried installed Ellison, his
sometime romantic partner, as a "front" to lead Alameda in 2021,
the report recalls.
"In reality, he was still calling the shots at Alameda," Rehn
said.
But Bankman-Fried's lawyer said that handing over the reins was
normal as FTX grew and took up his time. It was just as natural for
Bankman-Fried, still Alameda's majority owner, to stay involved, he
said, the report notes.
"He relied on her and he trusted her to act as the CEO and manage
the day-to-day," he added.
Cohen also said Bankman-Fried had asked Ellison to hedge Alameda's
investments after crypto's successful year in 2021, but that she
failed to do so, the report adds.
About FTX Group
FTX is the world's second-largest cryptocurrency firm. FTX is a
cryptocurrency exchange built by traders, for traders. FTX offers
innovative products including industry-first derivatives, options,
volatility products and leveraged tokens.
Then CEO and co-founder Sam Bankman-Fried said Nov. 10, 2022, that
FTX paused customer withdrawals after it was hit with roughly $5
billion worth of withdrawal requests.
Faced with liquidity issues, FTX on Nov. 9 struck a deal to sell
itself to its giant rival Binance, but Binance walked away from the
deal amid reports on FTX regarding mishandled customer funds and
alleged US agency investigations.
At 4:30 a.m. on Nov. 11, Bankman-Fried ultimately agreed to step
aside, and restructuring vet John J. Ray III was quickly named new
CEO.
FTX Trading Ltd (d/b/a FTX.com), West Realm Shires Services Inc.
(d/b/a FTX US), Alameda Research Ltd. and certain affiliated
companies then commenced Chapter 11 proceedings (Bankr. D. Del.
Lead Case No. 22-11068) on an emergency basis on Nov. 11, 2022.
Additional entities sought Chapter 11 protection on Nov. 14, 2022.
FTX Trading and its affiliates each listed $10 billion to $50
million in assets and liabilities, making FTX the biggest
bankruptcy filer in the US this year.
According to Reuters, SBF shared a document with investors on Nov.
10, 2022, showing FTX had $13.86 billion in liabilities and $14.6
billion in assets. However, only $900 million of those assets were
liquid, leading to the cash crunch that ended with the company
filing for bankruptcy.
The Hon. John T. Dorsey is the case judge.
The Debtors tapped Sullivan & Cromwell, LLP as bankruptcy counsel;
Landis Rath & Cobb, LLP as local counsel; and Alvarez & Marsal
North America, LLC as financial advisor. Kroll is the claims agent,
maintaining the page https://cases.ra.kroll.com/FTX/Home-Index
The Official Committee of Unsecured Creditors tapped Paul Hastings
as counsel, FTI Consulting, Inc., as financial advisor, and
Jefferies LLC as the investment banker. Young Conaway Stargatt &
Taylor LLP is the Committee's Delaware and conflicts counsel.
Montgomery McCracken Walker & Rhoads LLP, led by partners Gregory
T. Donilon, Edward L. Schnitzer, and David M. Banker, is
representing Sam Bankman-Fried in the Chapter 11 cases.
White-collar crime specialist Mark S. Cohen has reportedly been
hired to represent SBF in litigation. Lawyers at Paul Weiss
previously represented SBF but later renounced representing the
entrepreneur due to a conflict of interest.
===========
B R A Z I L
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BRAZIL: Renews Push for IMF Reform, Sees BRICS Bank Alternative
---------------------------------------------------------------
globalinsolvency.com, citing Bloomberg News, reports that Brazil is
bringing an urgent message to the meetings with the International
Monetary Fund: Western-backed lenders must give developing nations
more say if they want to remain relevant.
A major redistribution of IMF quotas to correct the
underrepresentation of large emerging-market economies has been a
decades-old demand from Brazil and other key developing countries,
but the price of inaction is growing higher, according to Tatiana
Rosito, international affairs secretary at the Brazilian Finance
Ministry, according to globalinsolvency.com.
"The developing world has not stayed still while reforms stall,"
she told Bloomberg News in an interview, the report notes.
The creation of the New Development Bank by the BRICS and the Asian
Infrastructure Investment Bank show that emerging countries are
looking for ways to finance their own development," the report
relays.
President Luiz Inacio Lula da Silva will use the power of his Group
of 20 presidency to make a stronger push for reforming the IMF and
the World Bank, just as he called for changes at the United
Nation's Security Council last month, the report says. It will be
up for Finance Minister Fernando Haddad to take his message to the
multilateral lenders in Marrakesh, the report adds.
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.
Fitch Ratings upgraded on July 26, 2023, Brazil's Long-Term
Foreign-Currency Issuer Default Rating (IDR) to 'BB', from 'BB-',
with a Stable Outlook. The upgrade reflects better-than-expected
macroeconomic and fiscal performance amid successive shocks in
recent years, proactive policies and reforms that have supported
this, and Fitch's expectation that the new government will work
toward further improvements.
In mid-June 2023, S&P Global Ratings, revised the outlook on its
long-term global scale ratings on Brazil to positive from stable.
S&P affirmed its 'BB-/B' long- and short-term foreign and local
currency sovereign credit ratings on Brazil. S&P also affirmed its
'brAAA' national scale rating, and the outlook remains stable. The
transfer and convertibility assessment remains 'BB+'. The positive
outlook reflects signs of greater certainty about stable fiscal and
monetary policy that could benefit Brazil's still-low GDP growth
prospects. Continued GDP growth plus the emerging framework for
fiscal policy could result in a smaller government debt burden than
expected, which could support monetary flexibility and sustain the
country's net external position.
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 Inc., on August 15, 2023, upgraded Brazil's Long-Term Foreign
and Local Currency - Issuer Ratings to BB from BB (low). At the
same time, DBRS Morningstar confirmed Brazil's Short-term Foreign
and Local Currency - Issuer Ratings at R-4. The trend on all
ratings is Stable (March 2018).
FS INDUSTRIA: Fitch Affirms 'BB-' LongTerm IDRs, Outlook Stable
---------------------------------------------------------------
Fitch Ratings has affirmed FS Industria de Biocombustiveis Ltda's
(FS) Long-Term Local and Foreign Currency Issuer Default Ratings
(IDR) at 'BB-', and its Long-Term National Scale rating at
'AA-(bra)'. The Ratings Outlook is Stable. Fitch has also affirmed
at 'BB-' the senior secured notes issued by fully owned FS
Luxembourg S.a r.l and guaranteed by FS.
The ratings incorporate FS's adequate business model and low cash
costs in the volatile Brazilian ethanol industry. The high
volatility of Brazil's corn and ethanol prices and the lack of
meaningful short-term price correlation between them are key
considerations.
The ratings consider the expectation of EBITDA margin above 30% and
the reduction in investments in fiscal year 2025, which contribute
to positive FCF. FS is exposed to Petrobras' pricing policy for
fuels in Brazil, which may curb ethanol prices.
The Stable Outlook reflects the expectation of a temporary increase
of net leverage to about 3.7x in fiscal 2024 due to investments in
the third industrial plant and weaker than expected EBITDA
generation, followed by a reduction to below 3.0x in fiscal year
2025.
KEY RATING DRIVERS
High Price Volatility: FS is exposed to price volatility from corn,
its main raw material, and ethanol, its main output. Corn prices
adjust rapidly to global supply and demand imbalances and follow
parity with Chicago Board of Trade (CBOT) corn prices over the long
run. Brazilian ethanol prices depend largely on local gasoline
price levels, which move in tandem with international oil prices
and the Brazilian FX rate, according to the price policy set by
Petrobras. Ethanol prices are also indirectly influenced by sugar
prices, as near 85% of all Brazilian ethanol produced comes from
sugar cane processors, which typically shift a portion of
production between ethanol and sugar depending on prevailing price
parity with sugar.
Weaker Corn and Ethanol Price Correlation: Corn prices in Brazil
are declining in 2023 following a reduction in international price
levels and a record high production in the Brazilian corn winter
crop. Fitch projects international corn prices of USD5,55 per
bushel in 2023 and USD5,00 per bushel in 2024. Hydrous ethanol
prices are currently trading at nearly BRL2.18/liter (CEPEA/ESALQ
as of September 2023), which is 19% lower than ethanol prices of
BRL2.68/liter in October 2022. Fitch projects average Brent prices
of USD80/bbl in 2023 and of USD75/bbl in 2024.
Adequate Business Model: FS's business model benefits from its
sizable 2.1 billion liters of corn ethanol production capacity,
strong corn supplies close to the industrial plants traded with
price discounts in relation to CBOT and a partial hedge provided by
animal nutrition products strongly correlate with corn and soybeans
regional prices. Fitch expects that revenues from animal nutrition
products will provide the company with a satisfactory 40%-50%
coverage over corn costs in the long term. In fiscal 2023, coverage
was 45% compared to 47% in fiscal 2022. The industrial plants are
located in the State of Mato Grosso, Brazil's largest corn
producing state, which attenuates corn origination risks.
Low Cash Cost Producer: The company's cash cost structure is in
line with some of the most efficient sugar cane producers. FS's
efficient operational performance yields around 430 liters of
ethanol per ton of processed corn. FS produces and sells corn
co-products used in animal nutrition, the prices of which tend to
correlate with corn prices, helping to reduce the inherent price
volatility. The company already fixed 78% of all of its expected
corn needs for 2023/2024 at an average price of BRL56.08/bag and
16% for the corn needed for the 2024/2025 season at BRL44.31/bag.
Strong FCF Only in Fiscal 2025: FS is expected to generate EBITDA
of BRL1.8 billion and cash flow from operations (CFFO) of BRL273
million in fiscal 2024, and BRL2.3 billion and BRL880 million,
respectively, in fiscal 2025. These numbers compare with EBITDA of
BRL2.4 billion and CFFO of BRL342 million in fiscal 2023, as per
Fitch's calculations. FS's fixed corn prices above current prices
combined with lower ethanol prices during fiscal 2024 will
contribute to the expected reduction in EBITDA margin to 23%.
Margins are expected to recover to 30% in fiscal 2025, supported by
lower corn prices.
Higher cost pressure and interest expenses and elevated investments
of BRL716 million should pressure FCF in fiscal 2024, which Fitch
expects to remain at negative BRL1 billion. The company should
generate meaningful FCF starting in fiscal 2025, as EBITDA margin
recovers and expansionary investments are concluded.
Deleverage Capacity: The expected lower EBITDA margin stymies FS's
potential net leverage reduction during fiscal 2024. Fitch's base
case projection incorporates a temporary increase in net leverage
to 3.7x in fiscal 2024, following a reduction to about 2.6x in
fiscal 2025, as higher volumes from the new plant in Primavera do
Leste kick in and EBITDA margins increase due to lower corn costs.
In fiscal 2023, net leverage was 2.3x. The company reported total
debt of BRL9.1 billion as of June 30 2023, net of FX derivatives
and the total return swap (TRS) balance, of which the 2025 notes
and working capital lines in BRL accounted for 27% and 73%,
respectively.
DERIVATION SUMMARY
FS's IDR's are four notches lower than Raizen S.A. and Raizen
Energia S.A. (Raizen; BBB/Stable). FS has lower scale than Raizen
and is more exposed to commodity price risk compared with sugar
cane processors, which rely on a market pricing mechanism that
links sugar cane costs to commodity prices. FS also has weaker
liquidity than Raizen.
FS's business model is similar to Inpasa Agroindustrial S.A.
(Inpasa; BB-/Stable, National Scale A+[bra]/Stable) and both
companies are low-cost producers, with capacity to produce ethanol
with cash cost comparable with Jalles Machado S.A.
(AA-[bra]/Stable), a cost benchmark in the industry. Both FS and
Inpasa finished their third plant, and a quick deleveraging
capacity is expected following the startup of the plant. FS's
National Scale rating benefits from its stronger liquidity and more
diversified access to financing compared to Inpasa, while Inpasa is
still challenged to increase its access to both the banking and
capital markets in Brazil.
FS's National Scale Rating is the same as Jalles Machado, as both
companies are well positioned in the Brazilian food and renewable
energy market landscape in terms of cash costs. Jalles Machado
should consume its currently high liquidity as it advances with its
investments plan, while FS's access to both domestic and
international capital markets and presence of largely liquid corn
inventories place its liquidity at higher levels compared to most
sugar cane processors.
KEY ASSUMPTIONS
- Ethanol sales volumes of 1.9 billion liters in fiscal 2024 and
2.0 billion liters in fiscal 2025 following investments in capacity
expansion. Hydrous ethanol will make up 56% of total ethanol
volumes going forward;
- Sales of animal nutrition products of over 1.6 million tons in
fiscal 2024 and near 1.7 million tons in fiscal 2025;
- Ethanol prices to vary in tandem with a combination of oil prices
and the FX rate. Brent crude prices have been forecast to average
USD80bbl in 2023 and USD75/bbl in 2024;
- Average FX rate at BRL5.00/USD in fiscal 2024 and BRL5.10/USD in
2025;
- Corn prices at BRL54/bag in the current crop season and BRL44/bag
in 2024/2025;
- The company already fixed 78% of all of its expected corn needs
for 2023/2024 at average price of BRL56.08/bag and 16% for the
2023/2024 season at BRL44.31/bag;
- Animal nutrition products providing around 45% coverage for total
corn costs;
- Total investments of BRL716 million in 2023/2024 and BRL137
million in 2024/2025;
- Dividends of BRL645 million in 2023/2024 and of BRL25 million in
2024/2025.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Longer track record in different cycles of ethanol and corn
prices;
- FCF consistently positive, with the maintenance of conservative
capital structure.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Deterioration in liquidity and/or difficulties refinancing
short-term debt;
- EBITDA margins below 20% on a sustained basis;
- Net debt/EBITDA above 3.0x on a sustained basis.
LIQUIDITY AND DEBT STRUCTURE
Satisfactory Liquidity: FS has satisfactory liquidity and financial
flexibility. As of June 30, 2023, the company had cash and
marketable securities of BRL3.8 billion and total debt of BRL9.0
billion, including net FX derivatives and TRS. Cash position
benefited from the BRL750 million CRA issued in April 2023. The
company has BRL703 million of debt maturing in the short term and
BRL2.7 billion from July 2024 to June 2025. FS's USD680 million
senior secured notes is due in December 2025, with an outstanding
of around USD512 million as of August 2023.
FS has satisfactory financial flexibility to address upcoming
maturities and diversified access to funding, banks and capital
markets. Readily marketable inventories and offtake contracts with
large fuel distributors improve financial flexibility; inventories
can be easily monetized and accounts receivables can be used as
collateral under new credit facilities, if required.
ISSUER PROFILE
FS produces corn-based hydrous and anhydrous ethanol, dried
distillers' grains with Solubles for animal nutrition, corn oil and
energy from cogeneration. It runs three plants in the State of Mato
Grosso with total capacity to crush 4.7 million tons of corn and
produce 2.1 billion liters of ethanol annually.
ESG CONSIDERATIONS
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' 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. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Prior
----------- ------ -----
FS Industria de
Biocombustiveis Ltda. LT IDR BB- Affirmed BB-
LC LT IDR BB- Affirmed BB-
Natl LT AA-(bra) Affirmed AA-(bra)
FS Luxembourg S.a r.l.
senior secured LT BB- Affirmed BB-
HIDROVIAS DO BRASIL: Fitch Affirms 'BB-' LongTerm IDRs
------------------------------------------------------
Fitch Ratings has affirmed Hidrovias do Brasil S.A.'s (Hidrovias)
Long-Term Foreign (FC) and Local Currency (LC) Issuer Default
Ratings (IDR) at 'BB-', its National Long-Term Rating and its
unsecured debentures at 'AA-(bra)'. The Rating Outlook is Stable.
Hidrovias' ratings reflect its good position in the waterway
transportation industry in the North and Central-West of Brazil and
in the Parana-Paraguay river system, where logistics infrastructure
is relatively limited. Hidrovias' take-or-pay contract business
model, with more than 60% of EBITDA coming from long-term agreement
helps to partially mitigate volume volatility. The ratings are
tempered by its exposure to hydrological risks and/or crop failures
and client concentration.
The ratings also incorporate Fitch's expectation that Hidrovias
will continue to maintain its deleveraging trend, reducing
expansion capex, and its solid liquidity position. The company is
expected to be proactive to refinance its 2025 bonds outstanding
bond maturity before mid-2024, seeking to avoid refinancing risks.
KEY RATING DRIVERS
Cash Flow Volatilities Despite Take or Pay Contracts: Hidrovias'
business resilience faces challenges due to hydrological risks
and/or agricultural crop failures. Over the past few years, the
company's operating performance has been impacted by a combination
of drastic non-manageable events. The hydrological risk on its
South Corridor has now eased with the recovery in water levels in
the Parana-Paraguay River system. The North and Northeast of Brazil
are facing a severe drought, with significant impact on the
Madeira-Amazonas River system. Hidrovias' area of operations has
not been impacted yet, and it has a track record of much lower
water level seasonality.
Diversification Helps Attenuate Hydrological Risk: In a sensitivity
scenario of EBITDA loss in the North Corridor during 2024 as result
of the drought, Hidrovias' credit metrics would still show some
rating headroom within Fitch's rating sensitivities triggers. In
Fitch's base case, net leverage metric would remain in line with
'BB-' rating triggers (below 4.5x) with up to 30% loss in the North
Corridor EBITDA. Above this threshold, Fitch would expect Hidrovias
to better evaluate its expansion capex in order to preserve cash.
Capital Allocation Remains Key: Management's strategy of business
diversification, growth (discretionary capex), and returns to
shareholders is critical to determining leverage trends. Fitch
expects that in the medium term Hidrovias will continue to invest
to leverage its business scale, taking advantage of growth
opportunities in the market it operates. Fitch estimates capex of
around BRL370 million in capex during 2023 and then increasing to
BRL380 million in 2024; these levels would still be lower than
previously planned capex (BRL550-650 million). The more moderate
business expansion is likely to lead to positive FCF in 2023 and
2024 of BRL97 million and BRL140 million, respectively.
Nevertheless, in a drought scenario in the North Corridor part of
the 2024 capex would most likely be postponed.
Deleveraging Trend: Hidrovias have been improving its operating
cash flow generation over the past quarters with recovery in water
levels in the South Corridor, record volume levels and efficiencies
gains. Fitch's base case scenario estimates around BRL862 million
of EBITDAR in 2023 and BRL995 million in 2024, up from BRL724
million in 2022. Free cash flow (FCF) generation during 2022 was
BRL162 million and it should be BRL96 million during 2023, after
higher capex of BRL370 million. For 2024, FCF is estimated at
BRL139 million and capex of BRL380 million. Fitch expects net
leverage to show significant improvement to 4.2x in 2023 and 3.5x
in 2024. This compares with 5.3x in 2022 and average of 5.5x in the
previous three years, per Fitch's calculations.
Challenge to Increase Client Diversification: Hidrovias has
portfolio concentration risk, as its main clients are J&F
Mineração (a former contract of Vale S.A. [BBB/Stable], COFCO
Group and Alumina do Norte do Brasil S.A. [Alunorte]), which Fitch
estimates together account for 48%-62% of total EBITDA on
historical basis. In recent years, Hidrovias added new clients and
sectors to its portfolio, including new service activities in
Santos Port, but these additions only account for around 10% of
EBITDA. During 2022, EBITDA breakdown by corridor was: North (55%),
South (35%), Coastal (10%) and Santos (5%) (with holding and others
representing 5% of expenses). Approximately 58% and 42% of EBITDA
is generated in Brazil and Uruguay/Paraguay, respectively.
DERIVATION SUMMARY
Hidrovias's has the weakest position in the 'BB' rating category
relative to transportation and logistics peers across the region,
which are generally rated in the 'BB' to 'BBB' categories.
Hidrovias' rating is constrained by its medium-size business scale,
hydrological risks and weakest capital structure among Brazilian
peers, including MRS Logistica S.A. (BB/Stable), Rumo S.A.
(BB/Stable), and VLI S.A. (AAA[bra]/Stable). Offsetting those
factors are Hidrovias' competitive position in the region it
operates and the majority of operations being based on take-or-pay
contracts that helps to partially mitigates business volatility.
Hidrovias' expected 2023 net leverage is higher than other rated
Brazilian peers in the transportation and logistics sector with
more mature operations and with higher credit ratings. Rumo, VLI
and MRS Logistica are forecast to report 2023 net leverage below
2.5x in the next two years. Hidrovias' ratings incorporate
expectations of net adjusted leverage ratio trending to 3.5x by
2024.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within the Rating Case for the Issuer:
- Strong Revenue growth in 2023, reflecting recovery in both South
and North Corridor, reaching around BRL2 billion and around 13%
growth in 2024;
- EBITDAR adjusted margin around 42%-43% in the next three years;
- Average capex of around BRL380 million in 2023-2025;
- No dividends payments during 2023-2024.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Broader client diversification;
- Net debt/EBITDA consistently below 3.5x and total debt/EBITDA
below 4.0x;
- Interest coverage consistently above 4.5x;
- Maintenance of strong liquidity to avoid refinancing risks.
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Large debt-funded M&A transactions or entering into a new
business in the logistics sector that adversely affect its capital
structure on a sustained basis or increase business risk exposure;
- Net leverage consistently above 4.5x on a sustained basis;
- Deterioration of liquidity position, with increasing short- to
medium-term refinancing risks.
LIQUIDITY AND DEBT STRUCTURE
Good Liquidity Position, Refinancing Approaching: Hidrovias has a
track record of maintaining strong cash balances. As of June 30
2023, the company's cash position was BRL726 million and BRL207
million of short-term debt. Fitch expects Hidrovias to remain
proactive and to refinance its 2025 outstanding bond (BRL745
million) by mid-2024 in order to avoid greater exposure to
refinancing risks.
As of June 30 2023, the company's total debt was BRL4.3 billion and
included BRL2.6 billion of international bonds (60%) due 2025 and
2031, local debentures (22%), BNDES (11%) and leasing (5%).
ISSUER PROFILE
Hidrovias is an integrated logistics provider focused on waterways
logistics services. It has an end-to-end infrastructure, including
transhipment, port terminals and a fleet of barges, pusher tugs and
cabotage vessels. The company operates in logistics corridors in
the northern region of Brazil and in the Paraguay-Paraná river
system.
ESG CONSIDERATIONS
Hidrovias has a ESG Relevance score for Exposure to Environmental
Impacts of '4', considering the effective impact on the company
operations due the hydrological risks. Due to lower draft in
rivers, the company stopped navigating for around 2 months in South
Corridor (iron ore take or pay contract) during 2021. This has a
negative impact on the credit profile, and is relevant to the
ratings in conjunction with other factors.
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' 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. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Prior
----------- ------ -----
Hidrovias
International
Finance S.a.r.l.
senior
unsecured LT BB- Affirmed BB-
Hidrovias do
Brasil S.A. LT IDR BB- Affirmed BB-
LC LT IDR BB- Affirmed BB-
Natl LT AA-(bra) Affirmed AA-(bra)
senior
unsecured Natl LT AA-(bra) Affirmed AA-(bra)
===================================
D O M I N I C A N R E P U B L I C
===================================
DOMINICAN REPUBLIC: $570MM Financing to Improve Electricity Sector
------------------------------------------------------------------
Dominican Today reports that the government has included plans to
expand investments in the electricity sector in the 2024 General
State Budget Bill, aiming to implement four programs aimed at
enhancing networks and the distribution system.
These projects are expected to receive financing from international
organizations totaling $570 million, according to Dominican Today.
Additionally, a line of credit amounting to 30,000 million pesos
has been authorized for the Electricity Distribution Companies
(EDE), the report notes.
Out of 49 public investment projects outlined in the legislative
document, four are related to the electricity sector, to be carried
out either by the Ministry of Energy and Mines (MEM) or the EDE,
the report relays.
These initiatives come at a time when electrical distribution lines
have deteriorated significantly, with President Luis Abinader
estimating a need for approximately $2 billion in investments to
address these issues, the report discloses.
Milton Morrison, administrator of the state company Edesur
Dominicana, has highlighted the challenges faced by EDEs due to
limited resources, which have become more pronounced in recent
years due to rising electricity demand, the report says.
The 2024 budget bill authorizes the Executive Branch, through the
Ministry of Finance, to contract public credit operations for
specific investment projects lasting a minimum of seven years each,
the report notes.
The four programs outlined in the bill are as follows:
1. Support for the Improvement of Electrical Distribution Networks
with a maximum contract amount of $75 million, to be agreed with
the Andean Development Corporation (CAE).
2. Strategy to Improve the Distribution System at the National
Level with a maximum amount of $120 million, to be agreed with the
OPEC Fund for International Development (OFID).
3. Program for the Improvement of Medium and Low Voltage Networks
and Customer Standardization of Electricity Distribution Companies
at the National Level, with a maximum financing value of $225
million to be channeled through the International Bank for
Reconstruction and Development (IBRD).
4. Energy Efficiency and Solar Roofs program with a budget of $150
million, to be requested from the IBRD.
The urgency of implementing tax reform and prioritizing the
electricity sector is emphasized, the report relays. According to
Magin Diaz, former head of the General Directorate of Internal
Taxes (DGII), the electricity sector has been a significant
contributor to the fiscal deficit and debt over the last three
decades, the report notes0.
Addressing the national electrical system's issues not only
stabilizes public income but also strengthens the country's credit
rating, potentially reaching investment-grade status, the report
discloses. Diaz suggests that the next government must address
these challenges and make necessary adjustments, the report adds.
About Dominican Republic
The Dominican Republic is a Caribbean nation that shares the island
of Hispaniola with Haiti to the west. Capital city Santo Domingo
has Spanish landmarks like the Gothic Catedral Primada de America
dating back 5 centuries in its Zona Colonial district. Luis Rodolfo
Abinader Corona is the current president of the nation.
TCRLA reported in April 2019 that the Dominican Today related that
Juan Del Rosario of the UASD Economic Faculty cited a current
economic slowdown for the Dominican Republic and cautioned that if
the trend continues, growth would reach only 4% by 2023. Mr. Del
Rosario said that if that happens, "we'll face difficulties in
meeting international commitments."
An ongoing concern in the Dominican Republic is the inability of
participants in the electricity sector to establish financial
viability for the system.
Moody's Investors Service, on Aug. 10, 2023, changed the outlook on
the Government of Dominican Republic's ratings to positive from
stable and affirmed the local and foreign-currency long-term issuer
and senior unsecured ratings at Ba3. Moody's said the key drivers
for the outlook change to positive are: (i) sustained high growth
rates have enhanced the scale and wealth levels of the economy; and
(ii) a material decline in the government debt burden coupled with
improved fiscal policy effectiveness will support medium-term debt
sustainability. The affirmation of the Ba3 ratings balances the
Dominican Republic's strong economic growth dynamics and relatively
contained susceptibility to event risks, with a comparatively
weaker fiscal position, reflecting long-standing credit challenges
which include: (i) a shallow revenue base compared to peers, (ii)
weak debt affordability metrics, and (iii) high exposure to foreign
currency borrowing.
S&P Global Ratings, in December 2022, raised its long-term foreign
and local currency sovereign credit ratings on the Dominican
Republic to 'BB' from 'BB-'. The outlook on the long-term ratings
is stable. S&P affirmed its 'B' short-term sovereign credit
ratings. S&P also revised its transfer and convertibility (T&C)
assessment to 'BBB-' from 'BB+'. The stable outlook reflects S&P's
expectation of continued favorable GDP growth and policy continuity
over the next 12-18 months that will likely stabilize the
government's debt burden.
In February 2023, S&P said its BB ratings reflect the country's
fast-growing and resilient economy. It also incorporates the
country's historical political and social challenges in passing
structural reforms to contain fiscal deficits, despite recent
improvements in the electricity sector. The ratings are constrained
by relatively high debt, a hefty interest burden, and limited
monetary policy flexibility.
In September 2023, S&P assigned its 'BB' issue rating to the
Dominican Republic's 11.25% Dominican peso (DOP) linked bond for
DOP71 billion (equivalent to US$1.25 billion) maturing in 2035. The
rating on the bond is the same as the long-term local currency
sovereign credit rating on the Dominican Republic (BB/Stable/B).
The country used about 57% of the DOP-linked bond to roll over a
peso-denominated bond maturing in 2026, and will use the rest of
the proceeds for general budgetary purposes.
Fitch Ratings, in December 2022, affirmed the Dominican Republic's
Long-Term Foreign Currency Issuer Default Rating (IDR) at 'BB-'
with a Stable Rating Outlook.
DOMINICAN REPUBLIC: Egg Farmers Stages Protest
----------------------------------------------
Dominican Today reports that mall and medium-sized egg producers
from various regions of the Dominican Republic organized a
demonstration in which they distributed thousands of eggs to the
public. The demonstration was held to draw attention to their
alleged exclusion from government purchase programs intended to
support poultry farmers affected by the border closure with Haiti,
according to Dominican Today.
The producers brought 200,000 units of eggs to the Farmer's
Monument in Moca, located on Ramn Caceres Avenue. They distributed
the eggs to the public to prevent them from going to waste on their
farms, the report notes.
Elvis Quezada, one of the organizers, stated that their objective
was to highlight the imminent financial hardship faced by egg
producers due to the ongoing border blockade with Haiti, the report
discloses. They accused the government of favoring large
businessmen affiliated with the current administration in the
distribution of aid programs, the report says.
Quezada called on the authorities to disclose the names of those
benefiting from these "clandestine purchasing" programs, the report
notes.
Roberto Fernandez, another poultry farmer, invited agricultural
officials from the Dominican government to visit Moca and witness
the plight of the producers whose eggs are going to waste, the
report relays. He expressed hope that President Abinader would
intervene to include small and medium-sized egg producers in the
government's purchase program, the report notes.
The producers estimated that the cost of production for eggs is
approximately 5.15 pesos per unit, the report relays. However,
they are selling them for 3 pesos per large egg and 2.20 pesos for
medium-sized eggs, resulting in losses of 2.15 pesos per unit for
large eggs and 2.95 pesos for medium-sized eggs, the report
discloses.
Quezada and Fernández called on the government to compensate them
for their economic losses, which they claim amounted to 497 million
pesos during the days of the border closure, the report notes.
Additionally, the border closure has led to unemployment for
hundreds of people in the region, the report says.
The demonstration took place under police supervision, and people
from various backgrounds stood in long lines to receive the
distributed eggs, the report discloses. The producers aimed to
bring attention to the challenges they face and the need for
support in light of the border closure and its impact on their
livelihoods, the report adds.
About Dominican Republic
The Dominican Republic is a Caribbean nation that shares the island
of Hispaniola with Haiti to the west. Capital city Santo Domingo
has Spanish landmarks like the Gothic Catedral Primada de America
dating back 5 centuries in its Zona Colonial district. Luis Rodolfo
Abinader Corona is the current president of the nation.
TCRLA reported in April 2019 that the Dominican Today related that
Juan Del Rosario of the UASD Economic Faculty cited a current
economic slowdown for the Dominican Republic and cautioned that if
the trend continues, growth would reach only 4% by 2023. Mr. Del
Rosario said that if that happens, "we'll face difficulties in
meeting international commitments."
An ongoing concern in the Dominican Republic is the inability of
participants in the electricity sector to establish financial
viability for the system.
Moody's Investors Service, on Aug. 10, 2023, changed the outlook on
the Government of Dominican Republic's ratings to positive from
stable and affirmed the local and foreign-currency long-term issuer
and senior unsecured ratings at Ba3. Moody's said the key drivers
for the outlook change to positive are: (i) sustained high growth
rates have enhanced the scale and wealth levels of the economy; and
(ii) a material decline in the government debt burden coupled with
improved fiscal policy effectiveness will support medium-term debt
sustainability. The affirmation of the Ba3 ratings balances the
Dominican Republic's strong economic growth dynamics and relatively
contained susceptibility to event risks, with a comparatively
weaker fiscal position, reflecting long-standing credit challenges
which include: (i) a shallow revenue base compared to peers, (ii)
weak debt affordability metrics, and (iii) high exposure to foreign
currency borrowing.
S&P Global Ratings, in December 2022, raised its long-term foreign
and local currency sovereign credit ratings on the Dominican
Republic to 'BB' from 'BB-'. The outlook on the long-term ratings
is stable. S&P affirmed its 'B' short-term sovereign credit
ratings. S&P also revised its transfer and convertibility (T&C)
assessment to 'BBB-' from 'BB+'. The stable outlook reflects S&P's
expectation of continued favorable GDP growth and policy continuity
over the next 12-18 months that will likely stabilize the
government's debt burden.
In February 2023, S&P said its BB ratings reflect the country's
fast-growing and resilient economy. It also incorporates the
country's historical political and social challenges in passing
structural reforms to contain fiscal deficits, despite recent
improvements in the electricity sector. The ratings are constrained
by relatively high debt, a hefty interest burden, and limited
monetary policy flexibility.
In September 2023, S&P assigned its 'BB' issue rating to the
Dominican Republic's 11.25% Dominican peso (DOP) linked bond for
DOP71 billion (equivalent to US$1.25 billion) maturing in 2035. The
rating on the bond is the same as the long-term local currency
sovereign credit rating on the Dominican Republic (BB/Stable/B).
The country used about 57% of the DOP-linked bond to roll over a
peso-denominated bond maturing in 2026, and will use the rest of
the proceeds for general budgetary purposes.
Fitch Ratings, in December 2022, affirmed the Dominican Republic's
Long-Term Foreign Currency Issuer Default Rating (IDR) at 'BB-'
with a Stable Rating Outlook.
===========
P A N A M A
===========
ENA NORTE: Fitch Affirms BB Rating on $600MM Notes, Outlook Neg.
----------------------------------------------------------------
Fitch Ratings has affirmed ENA Norte Trust's (ENA Norte) USD600
million notes at 'BB'. The Rating Outlook is revised to Negative
from Stable. The standalone credit profile (SCP) is assessed at
'b+'.
The National Scale rating of 'A+(pan)' with a Stable Outlook is not
affected by the revision of the sovereign rating, as it reflects
ENA Norte's credit quality relative to other rated issuers and
issuances within Panama.
RATING RATIONALE
The Negative Outlook mirrors the recent revision of Panama's
sovereign Rating Outlook to Negative from Stable, given the
exposure of the project to the dynamics of the economy of the
country and the links between ENA Norte Trust and the Panamanian
government. Although the transaction is government-owned project
financing, Fitch considers the government has extensive
decision-making power and strong incentives to provide
extraordinary support to the project. The rating of the senior
secured notes considers a two-notch uplift of above ENA Norte's
SCP; therefore, a downgrade of the Issuer Default Rating (IDR) of
Panama would result in a downgrade of the rating of ENA Norte
Trust.
The Negative Outlook on Panama's IDR reflects persistent fiscal
pressures and uncertain prospects for consolidation. The government
has relied heavily on one-off measures and accounting maneuvers to
reduce the fiscal deficits over the last year. Furthermore, fuel
and electricity subsidies and a rising interest bill are pressuring
the fiscal deficit in 2023, and a large expansion of budgetary
spending in 2024 increases the risk of further slippage that could
result in a rising trajectory of government debt. The growing
imbalance in the defined-benefit pension subsystem continues to be
a key medium-term risk that could also potentially worsen Panama's
debt burden.
KEY RATING DRIVERS
ENA Norte's ratings reflect a strong and mature asset with a long
operational track record. The project has the contractual ability
to adjust tolls according to inflation, but tolls have not been
increased in several years, so Fitch assumes they will remain
unchanged over the life of the notes. ENA Norte's debt structure is
robust as it does not allow for distribution of excess cash, but
the totality of the toll revenue is dedicated to cover operational
and financial obligations.
Under Fitch's Rating Case, minimum Loan Life Coverage Ratio (LLCR)
is 0.5x in 2028, which indicates the debt is not expected to be
fully repaid at its maturity in 2028. Despite this, the SCP is
supported by Fitch's view that the concessionaire will be able to
refinance its debt considering its low leverage and the
government's ability to implement credit protection measures to
enable the concessionaire to refinance and/or repay its debt.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Traffic performance materially worse than Fitch's rating case
projection of 142,570 average annual daily traffic (AADT) for
2023;
- Government delay in taking actions to either refinance the debt
or create conditions for the debt payment;
- Multi-notch downgrade on Panama's sovereign rating.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Stabilization of Panama's sovereign Rating Outlook;
- Government actions that create better conditions for ENA Norte to
repay its debt.
ESG CONSIDERATIONS
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' 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. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Prior
----------- ------ -----
ENA Norte Trust
ENA Norte
Trust/Debt/1 LT LT BB Affirmed BB
=======
P E R U
=======
PERU: Annual Inflation Eases to Lowest Level in 2++ Years
---------------------------------------------------------
globalinsolvency.com, citing Reuters, reports that annual inflation
in Peru decelerated to 5.04% in September to hit its lowest level
in more than two years, according to official figures published,
though consumer prices remained some way above the central bank's
target rate.
Data from national statistics agency INEI showed the key index
based on the metropolitan region of Lima slowed to its lowest level
since August 2021, when it stood at 4.95%, according to
globalinsolvency.com.
On a month-to-month basis, the Lima Consumer Price Index, Peru's
inflation benchmark, inched up 0.02% in September, well below the
0.38% increase in August, the report notes.
The figures are a boost to Peru's bid to wrestle inflation back to
the central bank's official target of 2%, plus or minus one
percentage point, the report adds.
=====================
P U E R T O R I C O
=====================
NEW BEGINNING: Unsecureds Owed $3MM to Get 4.1% in Plan
-------------------------------------------------------
New Beginning Realty Corp. has submitted to the Bankruptcy Court a
Disclosure Statement.
Debtor New Beginning Realty Corp. is a corporation authorized to do
business within the Commonwealth of Puerto Rico, incorporated in
2011. The main business of the Debtor is the rental and
administration of its real property located at: #425, Ave. Barbosa,
Valencia Development, Oriente Ward, San Juan, PR 00923. The real
property is a "single asset real estate" within the definition of
11 U.S.C. Sec. 101(51B). The entire facility and building are
leased in favor tenant, Dewey University, Inc., with whom a written
commercial lease agreement was signed on June 15, 2015. The
commercial lease agreement expires on June 30, 2035. The Debtor is
up to date in all governmental permits for its operation.
Under the Plan, Class 4 Holders of Allowed General Unsecured Claims
total $3,056,818.95 and will recover 4.10% of their claims. Within
30 days after the Effective Date of the Plan, Class 4 claimants
will commence to receive a repayment of 4.10% of their claimed debt
through 60 monthly payments totaling $2,088.83. Total amount to be
received by Planet Home on account of the unsecured portion of its
claim #4 is $110,975.41 and amount to be received on account of
unsecured claim #5 is $14,354.16. Class 4 is impaired.
The source of payments under the proposed Plan will come from the
operation of Debtor's business.
The Plan provides for the full payment of Chapter 11
Administrative
Expense Claims, including professional fees and US Trustee's
quarterly fees, on the Effective Date. Under the Plan, the Holders
of Tax Claims and SBA claim will receive 100% of their claims, as
set forth in Debtor's Plan. Moreover, under the Plan, the Holders
of General Unsecured Claims will receive 4.10% of their claims.
Counsel for the Debtor:
Noem Landrau Rivera, Esq.
LANDRAU RIVERA & ASSOC.
P.O. Box 270219
San Juan, PR 00928
Tel: (787) 774-0224
E-mail: nlandrau@landraulaw.com
A copy of the Disclosure Statement dated September 20, 2023, is
available at https://tinyurl.ph/aEDUU from PacerMonitor.com.
About New Beginning Realty Corp.
New Beginning Realty Corp., a company in San Juan, P.R., filed its
voluntary petition for Chapter 11 protection (Bankr. D.P.R. Case
No. 23-01049) on April 12, 2023, with as much as $1 million to $10
million in both assets and liabilities. Carlos A. Quinones
Alfonso,
president of New Beginning Realty Corp., signed the petition.
Noemi Landrau Rivera, Esq., at Landrau Rivera & Assoc. serves as
the Debtor's legal counsel.
===============
X X X X X X X X
===============
LATAM: Growth Lags Behind Global Rates in 2023
----------------------------------------------
Rio Times Online reports that the World Bank has updated its 2023
growth forecasts for Latin America to 2%, up from the previous 1.4%
prediction. Yet, this rate trails the global average.
In contrast, East and South Asia have seen their GDPs grow by 30%
since the pandemic began. Eastern Europe also shows a 15% rise
despite conflicts.
However, Latin America has less economic volatility compared to
Europe and North America, according to Rio Times Online.
Future forecasts for 2024 and 2025 project 2.3% and 2.6% growth.
These numbers resemble the 2010s but don't promise much poverty
alleviation, the report adds.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Latin America is a daily newsletter
co-published by Bankruptcy Creditors' Service, Inc., Fairless
Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C.,
USA, Marites O. Claro, Joy A. Agravante, Rousel Elaine T.
Fernandez, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A.
Chapman, Editors.
Copyright 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
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 * * *