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/raid1/www/Hosts/bankrupt/TCRLA_Public/231013.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 Friday, October 13, 2023, Vol. 24, No. 206 Headlines B R A Z I L BRAZIL: IDB Approves $40MM Loan for Ourinhos for Healthcare System BRAZIL: To Cap Credit Card Rates Averaging 450% at 100% C A Y M A N I S L A N D S GLOBAL AIRCRAFT: Moody's Rates $1.95BB Sr. Secured Notes 'Ba2' C H I L E CHILE: Economy Nears Recession After Surprise Activity Drop CHILE: IDB Approves $100MM Loan to Boost Public Sector Transparency J A M A I C A JAMAICA: To Release New Customs Law M E X I C O ANZEN SOLUCIONES: Case Summary & 20 Largest Unsecured Creditors P U E R T O R I C O LUCENA DAIRY: Hires CPA Elisamuel Rivera Rivera as Accountant LUNA DAIRY: Seeks to Hire Howard Hanna as Real Estate Broker X X X X X X X X [*] LATAM: World Bank Says Inflation Slowing in Region - - - - - =========== B R A Z I L =========== BRAZIL: IDB Approves $40MM Loan for Ourinhos for Healthcare System ------------------------------------------------------------------ The Inter-American Development Bank (IDB) approved a loan of $40 million to improve the health system in Ourinhos, in Brazil. This is the fifth individual operation of a conditional line of credit for investment projects (CCLIP) 'ProSocial - Social Expenditure Modernization Program in Brazil', of $1.5 billion, approved by the IDB in 2020. In Ourinhos, the loan will expand access and effectiveness to healthcare by expanding and improving the infrastructure and equipment of services. The initiative will finance the construction and equipment of new Basic Health Units (BHUs) and the reform, expansion, and equipment of the existing BHUs. In addition, the operation includes the construction of a Zoonosis Control Center; the construction and equipment of a center specialized in adolescent health, and the renovation and equipment of a center specialized in children's health, among others. Evidence shows that efficiency in healthcare spending can improve health outcomes. This operation will enhance the management capacity of the Municipal Health Secretariat through investments in the digital transformation of healthcare. This will expand the integration of services, improve management, and reduce system costs. The loan will also finance the construction of a logistics center for medicines and supplies to improve the supply chain's efficiency. With nearly 115,000 inhabitants, the municipality of Ourinhos, in the State of São Paulo, is one of the main cities in the western region of the State. Estimates show that over 80% of its population relies solely on services provided by the Unified Health System. The loan will directly benefit the population of Ourinhos and other municipalities in the same health region, especially the population that depends exclusively on the Unified Health System. The project will reach around 200,000 people, including 100,000 women, 50,000 Afro-Descendants, and 45,000 people with disabilities. The IDB loan of $40 million has a disbursement period of 5 years, a grace period of 6 years, and an interest rate based on SOFR. 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). BRAZIL: To Cap Credit Card Rates Averaging 450% at 100% ------------------------------------------------------- globalinsolvency.com, citing Bloomberg News, reports that Brazil's Senate approved legislation to limit the growth of credit card debt to 100% of its original amount, an attempt to cap interest rates that currently average nearly 450%. Lawmakers passed the bill by acclamation, a day before the expiration of a provisional measure that included the cap, according to globalinsolvency.com. The lower house of congress approved the bill in September, meaning it is now on track to become law, the report notes. Once it is enacted, credit card issuers will have 90 days to submit their own regulatory proposal that will need authorization from Brazil's national monetary council, the report relays. The cap will take effect only if the companies fail to win approval for their regulation, the report says. Brazil's interest rates on revolving credit have skyrocketed to an average of almost 446%, their highest level since 2017, according to data compiled by the central bank, the report discloses. Household debt remains near record highs, with outstanding loans representing almost half of disposable income, the report relays. About 28% of monthly wages is used to repay some sort of debt, from credit cards to mortgages, 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). =========================== C A Y M A N I S L A N D S =========================== GLOBAL AIRCRAFT: Moody's Rates $1.95BB Sr. Secured Notes 'Ba2' -------------------------------------------------------------- Moody's Investors Service has assigned a Ba2 rating to the $1.95 billion five-year senior secured notes co-issued by Global Aircraft Leasing Co., Ltd. (GALC) and Global Sea Containers Two Limited (GSCL II). GALC is the entity that holds Bohai Leasing Co., Ltd.'s (Bohai) 70% shareholder interest in commercial aircraft leasing company Avolon Holdings Limited (Avolon, Baa3 stable). GSCL II is the newly formed Bohai subsidiary and parent of Global Sea Containers Limited (GSCL), a global lessor of shipping containers. GALC's outlook was changed to stable from negative. RATINGS RATIONALE Moody's assigned a Ba2 rating to the new senior secured notes based on the strong collateral coverage and initially weak debt service coverage of the transaction, which is associated with GALC's 70% ownership interest in competitively well-positioned and profitable aircraft leasing company Avolon and GSCL II's 100% ownership of GSCL, one of the largest lessors of sea containers globally through its Seaco and Cronos businesses. The rating also reflects the structural subordination of the new notes to debt issued by Avolon and GSCL. Proceeds of the new senior secured notes will be used to fully repay existing GALC senior unsecured notes that mature in September 2024 and to pay issuance fees and expenses. The new senior secured notes will be well collateralized. The notes will be secured by a first-priority security interest in the equity interests in GALC held by its immediate parent Global Aviation Leasing Co., Ltd. (GAL) and a pledge of the equity interests in GSCL held by its parent GSCL II. The combined equity interests had an approximate carrying value of $8.4 billion as of June 30, 2023. Moody's believes that the franchise strengths of Avolon in aircraft leasing and GSCL in container leasing, the two companies' history of good operating performance through industry cycles, as well as their moderate leverage profiles support the strength of the collateral coverage provided to holders of the new senior secured notes. The debt service and repayment obligations of the co-issuers under the notes indenture will be joint and several, but Moody's estimates that combined pro forma debt service coverage will initially be weak. Debt service will be provided by dividends that Avolon and GSCL pay to the co-issuers. Moody's expects that debt service coverage of the new notes will be just slightly above 100% on a pro forma forecast full-year 2023 basis, leaving little room for an unexpected decline in the operating performance of either Avolon or GSCL. Stronger operating performance, which is likely for Avolon given rising air travel volumes and aircraft lease demand, would moderately improve debt service coverage in the future. Similar to the existing GALC notes, the new secured notes include a payment-in-kind (PIK) toggle, which allows for interest payments to be capitalized should cash on hand be insufficient to make coupon payments. The rating of the new senior notes incorporates the structural subordination of the notes to debt issued by Avolon and GSCL. Structural subordination elevates the loss severity of the new senior notes in the event of default compared to the debt issued by Avolon and GSCL. At June 30, 2023, combined debt outstanding at Avolon and GSCL totaled approximately $24.1 billion. The notes indenture will include terms that strengthen creditor protections, including limits on additional indebtedness, restricted payments, liens, permitted investments, and asset sales. The new senior secured notes transaction is credit neutral for Avolon's credit profile. The dividend payout by Avolon to its shareholders is expected to range up to 50% of its earnings, continuing its historical practice since the existing GALC notes were issued in 2019. As a result, Moody's expects that Avolon will be able to maintain its stand-alone capital and liquidity strength and flexibility. Nevertheless, the existence of the parent company debt continues to reflect negatively on the quality of Avolon's capital and the demands on its internally generated liquidity. This is mitigated by ORIX Corporation's 30% minority interest in Avolon and its influence through board representation on Avolon's financial and strategic decisions. The stable outlook reflects Moody's expectation that the debt service coverage of the new senior secured notes will be stable to improving, based on the operating strengths and prospects of Avolon and GSCL and that the collateral coverage will remain strong. The stable outlook also reflects Moody's expectation that governance of GSCL II and GALC by ultimate parent Bohai will support stability in their ownership and operating strategies over the next 12-18 months. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING Moody's could upgrade the rating if Avolon's ratings are upgraded due to an improvement in its intrinsic credit profile including stronger earnings and if GSCL's credit profile also strengthens, resulting in improved profitability. The rating could be downgraded if either Avolon's ratings are downgraded or if GSCL's credit profile deteriorates materially, or if debt service or collateral coverage of the new notes otherwise deteriorates materially. The principal methodology used in these ratings was Finance Companies Methodology published in November 2019. ========= C H I L E ========= CHILE: Economy Nears Recession After Surprise Activity Drop ----------------------------------------------------------- globalinsolvency.com, citing Bloomberg News, reports that Chile's economic activity posted its biggest monthly drop since May as services declined, pushing one of Latin America's richest nations toward recession and paving the way for more big interest rate cuts. The Imacec index, a proxy for gross domestic product, fell 0.5% in August from July, compared to the median estimate for a 0.2% gain from analysts in a Bloomberg survey, according to globalinsolvency.com. It matched the 0.5% decline recorded in May, the report notes. From a year prior, the index dropped 0.9%, the central bank reported, the report discloses. Chile has been battered this year by high interest rates, above-target inflation and uncertainty among top trading partners like China, the report says0. The figures indicate the country is heading back into recession after GDP contracted in the second quarter, the report says0. Still, the economy is expected to gradually bounce back, expanding 2% in 2024 after posting one of the region's worst performances this year, the report discloses. "A technical recession in the third quarter is very probable, as it only requires a 0.3% month-on-month drop in September," Jorge Selaive, chief economist at Scotiabank Chile, posted on X, the platform formally known as Twitter, the report relays. CHILE: IDB Approves $100MM Loan to Boost Public Sector Transparency ------------------------------------------------------------------- Chile will launch a new program to enhance transparency and integrity in the public sector with the backing of a $100 million loan approved by the Inter-American Development Bank (IDB). This is the second and final operation under a programmatic policy-based lending scheme. The first was a $50 million loan approved by the IDB in July 2021 to support regulatory, technological, and governance measures to improve transparency and integrity in line with international standards. The second operation, approved by the Bank's Board of Executive Directors, will take further steps to implement the measures and achieve results. Its overall objective is to boost transparency and integrity by strengthening the legal framework and establishing institutional mechanisms for this purpose. The program will support activities to make it easier to access public information, to more effectively prevent and detect misconduct in the public administration, and to make the financial transparency framework more effective. It will also support policy actions that include a national public integrity strategy; actions to promote fiscal and municipal transparency; regulatory, technological and governance measures to improve transparency and integrity; and steps to make budgetary information easier to access. The program also aims to increase adherence to the principle of administrative integrity, supporting measures like improving the quality of public spending and raising the standards of probity and transparency, updating the Code of Ethics and Best Practices for lobbyists and special interest representatives, and improving the government's ethical compliance. The program will benefit Chilean citizens who interact with the government, civil society organizations, public officials, oversight bodies, academia and economic agents, and people or entities subject to financial regulations. In addition, Chilean society as a whole—and taxpayers and government employees in particular—will benefit from more user-friendly and timely access to public information. The $100 million IDB loan has an 18-year repayment term, a 5.5-year grace period, and an interest rate based on the Secured Overnight Financing Rate (SOFR). ============= J A M A I C A ============= JAMAICA: To Release New Customs Law ----------------------------------- RJR News reports that Finance Minister Dr Nigel Clarke has announced that the Jamaican Government is hoping to release new legislation accompanied by regulations for Jamaica Customs in one single volume by early next year. Speaking at a customs seminar hosted annually by the Jamaica Chamber of Commerce, Dr Clarke said the update of the near 80-year-old statute is among several steps being taken to improve services at the Jamaica Customs Agency, according to RJR News. He says the reform will include the introduction of a canine division, body cameras, contactless processing for non-commercial imports, single-window digital document processing, and digital immigration processing, the report notes. The new Customs Bill has already been tabled in Parliament, with expectations that the debate on the law should begin before year end, the report adds. About Jamaica Jamaica is an island country situated in the Caribbean Sea. Jamaica is an upper-middle income country with an economy heavily dependent on tourism. Other major sectors of the Jamaican economy include agriculture, mining, manufacturing, petroleum refining, financial and insurance services. S&P Global Ratings raised on September 13, 2023, its long-term foreign and local currency sovereign credit ratings on Jamaica to 'BB-' from 'B+', and affirmed its short-term foreign and local currency sovereign credit ratings at 'B'. The stable outlook reflects S&P's expectation that the government will remain committed to prudent fiscal policies and reducing debt, as well as supportive economic policies including a flexible exchange rate regime and effective monetary policy. This is the best credit rating that Jamaica has received from S&P since it started rating the country's sovereign debt in 1999, according to The Gleaner. In March 2022, Fitch Ratings affirmed Jamaica's Long-Term Foreign Currency Issuer Default Rating (IDR) at 'B+'. The Rating Outlook is Stable. Moody's credit rating for Jamaica was last set at B2 with stable outlook (December 2019). =========== M E X I C O =========== ANZEN SOLUCIONES: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Anzen Soluciones, S.A. de C.V. Av. Marina Nacional numero 60, piso 3 Colonia Tacuba, C.P. 11320 Ciudad de Mexico Mexico Business Description: The Debtor is a consulting, outsourcing and technology firm. Chapter 11 Petition Date: October 6, 2023 Court: United States Bankruptcy Court District of Delaware Case No.: 23-11687 Judge: Hon. J. Kate Stickles Debtor's Counsel: Jeremy W. Ryan, Esq. POTTER ANDERSON & CORROON LLP 1313 North Market Street, Sixth Floor Wilmington DE 19801 Tel: (302) 984-6000 Email: jryan@potteranderson.com Estimated Assets: $100 million to $500 million Estimated Liabilities: $100 million to $500 million The petition was signed by James S. Feltman as chief restructuring officer. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/WQ4JH2Q/Anzen_Soluciones_SA_de_CV__debke-23-11687__0001.0.pdf?mcid=tGE4TAMA List of Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount 1. Tax Administration Service Tax $105,000,000 (Mexico) Phone: (52) 55 627 22 728 2. S C Proteccion Y Asesoria SC Legal Services $201,677 Email: facturacion@proteccionyasesoria.com 3. Extend Solutions SA De CV Internal $64,122 Co Branza Licenses Email: cobranza@agilethought.com (Office) 4. Maria Dolores Garcia Litigation $54,800 Martinez 5. Concentrix CVG LLC Licenses for $47,927 Susan Digirolamo Santander EMAIL: susan.digirolamo@concentrix.com 6. Inmobiliaria Sky Office $47,827 De Yucatan S.A. DE Merida Email: facturacion@skycapital.mx Phone: 8132338210 7. Victor Alberto Litigation $47,130 Santana Delgadillo 8. Luis Raul Gonzalez Calderon Litigation $44,101 9. Latix NS SA De CV $36,622 10. Roel Y Roel Legal Services $29,102 Abogados SC Raquel, Carina, Jorge Email: raquel@roelabogados.com 11. Icorptti SA De CV $22,578 12. Atcon Estrategicos S.A. $15,294 DE C.V. Montserrat Cruz Email: montserrat.cruz@atconmx.net Phone: 5545055746 13. Google LLC License $8,625 14. Servicio De Enlace Personal $8,067 15. Pegaso PCS SA De CV License $7,343 16. KC Rentas S.A. DE C.V. Computer Lease/ $7,270 R. Cesareo, R. Mendieta KC Rentas EMAIL: rcesareo@kapali.com.mx 17. IQ4 S.A. DE C.V. $7,268 18. Industrias Ordonez SA DE CV Furniture $5,230 19. Erik Namur Campesino SC On Demand $4,853 IR. Sanchez, J. Carranza, C. Obranza Email: facturacion@notaria94.com.mx Phone: 5526241840 20. Inmobiliaria Kaza Loans $2,583 Para Todos SA DE Rafael Grinberg EMAIL: rafaelgrinberg@gmail.com ===================== P U E R T O R I C O ===================== LUCENA DAIRY: Hires CPA Elisamuel Rivera Rivera as Accountant ------------------------------------------------------------- Lucena Dairy, Inc. seeks approval from the U.S. Bankruptcy Court for the District of Puerto Rico to employ CPA Elisamuel Rivera Rivera, CSP as accountant. The firm will provide these services: [ed] a. preparation or review of bankruptcy court required monthly operating reports; b. reconciliation of proof of claims; c. preparation or review of the Debtor's projections; d. analysis of profitability of the Debtor's operations; e. assistance in the development or review of plan of reorganization or disclosure statement; and f. provision of any other consulting and expert witness services relating to various bankruptcy matters such as insolvency, feasibility forensic accounting, as necessary. The firm will be paid a monthly fee of $500, and will be reimbursed for reasonable out-of-pocket expenses incurred. Elisamuel Rivera Rivera, a partner at CPA Elisamuel Rivera Rivera, CSP disclosed in a court filing that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Elisamuel Rivera Rivera CPA Elisamuel Rivera Rivera, CSP PR-111 San Sebastian, P.R. 00605 Tel: (787) 896-6200 Fax: (787) 280-6200 About Lucena Dairy, Inc. Lucena Dairy Inc. is engaged in the production of cows' milk and other dairy products and in raising dairy heifer replacements. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. P.R. Case No. 23-02835) on September 8, 2023. In the petition signed by Jorge Lucena Betancourt, president, the Debtor disclosed $1,905,560 in assets and $11,464,130 in liabilities. Judge Edward A. Godoy oversees the case. Carmen D. Conde Torres, Esq., at C. Conde & Associates, represents the Debtor as legal counsel. LUNA DAIRY: Seeks to Hire Howard Hanna as Real Estate Broker ------------------------------------------------------------ Luna Dairy, Inc. seeks approval from the U.S. Bankruptcy Court for the District of Puerto Rico to employ Howard Hanna Real Estate as real estate broker. The firm will market and sell the Debtor's real property located in Dauphin County, Pennsylvania. The firm will be paid a commission of 5 percent of the sales price. As disclosed in a court filing that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Christine Farrell Howard Hanna Real Estate 5137 Devonshire Road Harrisburg, PA 17112 Tel: (717) 920-9700 About Luna Dairy, Inc. Luna Dairy Inc. is engaged in the production of cows' milk and other dairy products and in raising dairy heifer replacements. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. P.R. Case No. 23-02837) on September 9, 2023. In the petition signed by Jorge Lucena Betancourt, president, 0the Debtor disclosed $4,102,639 in assets and $11,316,130 in liabilities. Judge Edward A. Godoy oversees the case. Carmen D. Conde Torres, Esq., at C. Conde & Associates, represents the Debtor as legal counsel. =============== X X X X X X X X =============== [*] LATAM: World Bank Says Inflation Slowing in Region ------------------------------------------------------ RJR News reports that the World Bank says inflation in Latin America and the Caribbean continues to slow. Chief Economist in charge of the region at the World Bank, William Maloney, says the downward trend in prices is due to a number of factors, according to RJR News. "Global value chains are now normalised, so the prices of all those goods we couldn't get for a year have come down. Food and fuel prices have stabilised after the initial shock arising from the Russian invasion of Ukraine. Regional central banks have acted in general early and very convincingly, and they've managed to maintain expectations of inflation well anchored in the region, so people are not expecting a lot more inflation," Mr. Maloney explained, the report notes. However, he said more work needs to be done to tackle core inflation, which excludes the volatile cost of food and energy, 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 * * *