/raid1/www/Hosts/bankrupt/TCRLA_Public/200709.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Thursday, July 9, 2020, Vol. 21, No. 137
Headlines
A R G E N T I N A
ARGENTINA: S&P Cuts Foreign Currency Bonds Due 2028/2036 to 'D'
EDENOR: S&P Lowers ICR to 'CCC', Outlook Negative
TELECOM ARGENTINA: S&P Affirms 'CCC+' ICR on Exchange Offer
B R A Z I L
BRAZIL: Investing Risk Reverts to 2016 Level
VALID SA: Moody's Lowers CFR to Ba3/A2.br & Alters Outlook to Neg.
C A Y M A N I S L A N D S
YANKUANG GROUP: Moody's Rates New USD Senior Unsecured Notes 'Ba1'
C H I L E
LATAM AIRLINES: White & Case Represents LATAM Bondholders
C O L O M B I A
CREDIVALORES CREDISERVICIOS: Fitch Retains B+ IDR Amid Coronavirus
D O M I N I C A N R E P U B L I C
DOMINICAN REPUBLIC: Exports Fall 8.47% to US$3.7 Billion
J A M A I C A
SOS: Experiences Decline in Revenue
M E X I C O
GRUPO AEROMEXICO: Case Summary & 30 Largest Unsecured Creditors
GRUPO AEROMEXICO: July 9 Deadline Set for Committee Questionnaires
MAXCOM TELECOMUNICACIONES: S&P Cuts ICR to 'CCC-', On Watch Neg.
S U R I N A M E
SURINAME: Moody's Lowers Unsec. Ratings to Caa3, Outlook Negative
T R I N I D A D A N D T O B A G O
CARIBBEAN AIRLINES: To Resume Flights Out of Jamaica
TRINIDAD & TOBAGO: IDB OKs US$100MM Loan for Covid Response
TRINIDAD NITROGEN: Local Directors Approved Tringen 1's Closure
- - - - -
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A R G E N T I N A
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ARGENTINA: S&P Cuts Foreign Currency Bonds Due 2028/2036 to 'D'
---------------------------------------------------------------
S&P Global Ratings lowered its issue ratings on two of Argentina's
foreign currency-denominated bonds to 'D' from 'CC':
-- BIRAD due July 2028
-- BIRAD due July 2036
These are New York law U.S. dollar-denominated bonds that had a
total of about US$95 million in interest due July 6, 2020. Other
similar bonds we already lowered to 'D' include the BIRAD 2021,
2026, 2046, and 2117, as well as New York-law U.S.
dollar-denominated discount bond due December 2033 and English-law
euro-denominated discount bond due December 2033. These bonds will
remain at 'D' pending conclusion of the debt renegotiations that
are currently underway.
S&P said, "Other bonds we rate 'D' include those captured by
government decree 346/2020, dated April 6, 2020, which postpones
payment of all U.S. dollar-denominated principal and interest on
local-law debt to Dec. 30, 2020, or when the government deems
feasible. This includes the BONAR 2020, BONAR 2022, BONAR 2024,
BONAR 2025, BONAR 2027, and Argentine-law U.S. dollar-denominated
discount bond due Dec. 31, 2033.
"This decree led to S&P Global Ratings lowering its foreign
currency issuer credit rating on Argentina to 'SD' on April 7,
2020. We viewed this unilateral extension as tantamount to default
under our criteria. The government has also signaled that,
following the conclusion of the ongoing restructuring negotiations
of foreign-law foreign currency debt, it would apply equitable
treatment to local-law foreign currency debt. As a result, once we
lower any local-law U.S. dollar bond issue rating to 'D', we will
keep it there until that process has concluded."
Ratings List
Downgraded
To From
Argentina
Senior Unsecured
US$1 bil 6.625% bnds due July 6, 2028 D CC
US$1.75 bil 7.125% bnds due July 6, 2036 D CC
EDENOR: S&P Lowers ICR to 'CCC', Outlook Negative
-------------------------------------------------
S&P Global Ratings, on July 7, 2020, lowered its issuer credit and
issue-level ratings on Argentina-based electric utility, Empresa
Distribuidora Y Comercializadora Norte S.A. (Edenor), to 'CCC' from
'CCC+'.
After the deferral of the second rate adjustment in 2019, the next
scheduled rate adjustment was first postponed until June 2020,
which was just extended again until December 31 with no clear
indications for 2021. Therefore, other things remaining unchanged,
the likelihood of rate adjustments in 2021 is dim. This also raises
our concern over the company's credit metrics, cash flows, and
ability to comply with its financial commitments. S&P said, "As a
result, we expect Edenor to continue compensating for its cash flow
deficits by retaining the portion of the funds slated to the
electricity market administrator, Compania Administradora del
Mercado Mayorista Electrico SA (CAMMESA), a similar situation to
the one during the Kirchner administration. Since March 2020,
Edenor has paid to Cammesa 75%-80% of the due amount. These payment
delays could trigger measures, such as penalties and even the
termination of the concession.
S&P said, "Our new base-case scenario now incorporates no rate
increase for 2020 and 2021, compared with a 20% hike in our
previous forecast. For 2020, we now expect debt to EBITDA to be
around 7x and EBITDA interest coverage below 2x, compared with
4.0x-5.0x and 2.5x, respectively, in our previous assumptions,
along with weaker credit metrics in 2021. This reaffirms our view
of Edenor's capital structure as unsustainable, given its
vulnerable situation and its reliance on favorable business and
market conditions to meet its operating and financial needs
starting in 2021, including the payment of its 2022 bullet bond.
"Our updated base-case scenario indicates an EBITDA interest
coverage metric of less than 1x by 2021, weighing on the company's
ability to cover interest payments on its 2022 bullet bond."
As of this report's date, the company made the principal payment of
$12.5 million on the loan from Industrial and Commercial Bank of
China and the interest payment on the bond in April 2020. S&P said,
"We expect Edenor to repay the bank loan in October 2020 (the last
$12.5 million amortization plus interest) and cover the bond
interest in October 2020 for around $6.5 million mainly with its
cash position ($47 million as of March 31, 2020)."
The next substantial principal payment is on the bullet bond (with
$135 million outstanding) in October 2022, which the company will
have to make—while other credit fundamentals remain
unchanged--amid uncertain business conditions and restricted access
to financing. In that sense, S&P believes Edenor is increasingly
dependent on an uncertain regulatory framework to meet the $13
million annual interest payments due 2021, related to its 2022
bullet bond.
Even though Edenor has managed to maintain stable hard currency
cash positions in 2019 and the first quarter of 2020 (about $47
million), as of May 2020 and according to Communication A7030,
excess domestic currency holdings can no longer be converted into
dollars to make payments in hard currency. As a result, the
existing dollar positions will have to be used to meet such
payments (mostly imports and debt service). This new measure will
cause the gradual reduction in Edenor's hard currency cash
reserves, jeopardizing its liquidity and creating an incentive for
debt refinancing before depleting such reserves, in S&P's view.
TELECOM ARGENTINA: S&P Affirms 'CCC+' ICR on Exchange Offer
-----------------------------------------------------------
S&P Global Ratings, on July 7, 2020, affirmed its 'CCC+' ratings on
Argentine telecommunications company Telecom Argentina S.A.
following the company's announcement of its debt exchange
proposal.
At the same time, S&P assigned its 'CCC+' issue-level rating to the
company's proposed senior unsecured notes due 2025. The outlook on
the issuer credit ratings remains negative.
Argentine telecom operator Telecom Argentina S.A. (Telecom) intends
to exchange its outstanding $465.8 million 6.5% senior unsecured
notes due 2021 for the proposed 2025 notes that will amortize
starting in 2023. Together with the exchange, the company intends
to raise an additional principal amount of new notes that will be
consolidated into the same series.
S&P said, "We view the debt exchange as a measure of active debt
management and not a distressed exchange. The existing notes have
about a year to mature, and in our view, the company's liquidity
position and projected cash generation don't reflect any type of
distress at this point. We believe that if Telecom is unable to
complete the refinancing, it would still have other options
available to refinance its 2021 notes bullet maturity.
"We expect the interest on the new notes to be higher at about
8.5%. Investors who agree to the exchange will receive per each
$1,000 of the original bond $700 in the new notes and $250 in a
cash consideration. The transaction also includes an early tender
premium of $70 in cash.
"The rating on the notes is the same as the issuer credit rating on
Telecom, because we don't believe there's significant contractual
or structural subordination. We estimate priority debt (secured
debt or debt at subsidiaries level) represents less than 5% of
consolidated financial obligations. In our opinion, the proposed
exchange would improve Telecom's financial flexibility, for
upcoming years, given that the company would extend its debt
maturity profile.
"Our 'CCC+' credit rating on Telecom is below its 'b+' stand-alone
credit profile (SACP). We cap the rating on Telecom at our transfer
and convertibility assessment of Argentina. This is because only
about 5% of the company's revenue and EBITDA come from operations
outside Argentina, which we believe wouldn't be enough to cover
full foreign currency commitments if the sovereign were to further
restrict corporates access to foreign exchange, which would erode
Telecom's capacity to service cross-border debt."
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B R A Z I L
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BRAZIL: Investing Risk Reverts to 2016 Level
--------------------------------------------
Richard Mann at Rio Times Online reports that since the outbreak of
the novel coronavirus pandemic in Brazil, the country risk has
skyrocketed 178 points, rising from 210 to 388 points between
February and June on JPMorgan's EMBI+ (Emerging Markets Bond Index
Plus) - which is approximately the same level in 2016.
As reported in the Troubled Company Reporter-Latin America on May
8, 2020, Fitch Ratings has affirmed Brazil's Long-Term Foreign
Currency Issuer Default Rating at 'BB-' and has revised the Rating
Outlook to Negative. The Outlook revision to Negative reflects the
deterioration of Brazil's economic and fiscal outlook, and downside
risks to both given renewed political uncertainty, including
tensions between the executive and congress, and uncertainty over
the duration and intensity of the coronavirus pandemic.
On April 10, 2020, the TCR-LA reported that S&P Global Ratings
revised on April 6, 2020, its outlook on its long-term ratings on
Brazil to stable from positive. At the same time, S&P affirmed its
'BB-/B' long- and short-term foreign and local currency sovereign
credit ratings. S&P also affirmed its 'brAAA' national scale rating
and its transfer and convertibility assessment of 'BB+'. The
outlook on the national scale rating remains stable.
VALID SA: Moody's Lowers CFR to Ba3/A2.br & Alters Outlook to Neg.
------------------------------------------------------------------
Moody's America Latina downgraded VALID S.A.'s global scale and
national scale corporate family ratings to Ba3/A2.br from
Ba2/Aa3.br. The outlook for the ratings is negative. This concludes
the review initiated on April 14, 2020.
Issuer: VALID S.A.
Corporate Family Rating: Downgraded to Ba3/A2.br from Ba2/Aa3.br
Outlook, Changed to Negative from Ratings Under Review
RATINGS RATIONALE
The downgrade of Valid's ratings to Ba3/A2.br incorporates the
challenges relating to the impacts of the coronavirus outbreak,
difficult operating environment which will persist in the
foreseeable future and aggressive financial policy consisting of
high dividend payouts combined with a short average maturity of its
debt. Fitch believes Valid has a strong cash balance presently,
sufficient to weather the operating challenges of 2020, but that
amortizations in the short-term have increased considerably with an
estimated over BRL1.0 billion due in 2021 and 2022, raising
liquidity risk. This includes the BRL217.6 million raised to
reinforce the company's cash balance. Although Valid has increased
the offering of new and more advanced products and services, the
new ventures are unlikely to compensate for operating challenges in
the company's core divisions of identification, mobile and
payments. These current and new projects will require increased
investments and the continuity of an aggressive M&A activity.
The rapid and widening spread of the coronavirus outbreak,
deteriorating global economic outlook, falling oil prices, and
asset price declines have created a severe and extensive credit
shock across many sectors, regions and markets. More specifically,
Valid's operations are being negatively impacted by the shut-down
of some of its operating sites in the identification division
(issuance of I.D.s and driver's license) in Brazil and in the US,
hurting its cash generation and liquidity. Fitch regards the
coronavirus outbreak as a social risk under its ESG framework,
given the substantial implications for public health and safety.
Valid's Ba3/A2.br ratings reflect the company's diversification and
strong local market position in its operating segments as a service
provider for payments, identification and mobile. Valid is one of
Brazil's leading suppliers of plastic cards for payments, SIM cards
and digital certificates. It is also the fifth-largest SIM card
producer globally. The ratings are also supported by the company's
long-term client relationships with financial institutions, state
governments, and telecommunications companies, and increased
diversification of customers. Historically, Valid has shown stable
margins, high cash generation ability and low leverage which
support the company's rating level despite the small scale,
long-term operating challenges and current stress scenario. The
growth of new products in Valid's product portfolio, namely digital
ID services, digital payments and marketing support, connectivity,
and track & trace are still timid to compensate for the operating
risks and volatility expected in its core traditional operating
segments. But Fitch believes the digital platform projects
undertaken by Valid in the last few years could help it to remain a
competitive service provider in segments including security and
identification systems. Valid's management has a proven track
record of anticipating and executing on projects to keep-up with
the changing services industry since it started to branch-out and
diversify from the secure printing services since the early 2000s.
The ratings are constrained by (1) Valid's small size in comparison
with its global business services peers; (2) challenging operating
performance outlook with obsolescence risk, commoditization of
certain lines of business, and increasing technological transition
risk; (3) its reliance on a few industries: banking, government and
telecom; and (4) the relatively low barriers to entry in the
plastic and SIM card sectors, although the ID system sector has
high entry barriers. Fitch believes these operating challenges will
lead to the continuity of an aggressive M&A strategy and increasing
capex needs for the company to keep-up with the changes in the
industry and customer's needs. The combination of these elements
with significant maturities in the short-term increases' liquidity
risk, especially following the sharp decline in EBITDA in 2020 and
overall increased risk aversion in the current crisis scenario.
Despite the lower operating results in 2020 because of COVID-19
related disruptions, Fitch believes Valid has taken appropriate
actions to reduce additional liquidity pressures in the coming
months. In March 2020, Valid reported a cash balance of BRL334
million and in April it raised BRL217.6 million in debt with local
banks to reinforce its cash balance. The company has also postponed
BRL22 million in dividends relating to 2019 to December 2020 from
April 2020; put 3,000 employees on anticipated vacation and,
following this period, suspended 2,500 employment contracts
temporarily; reduced the salaries of its executive officers and
members of the Board of Directors for a period of 90 days in a
range of 25% to 35%.
The COVID-19 outbreak has led to the shut-down of operating sites
in the identification division in Brazil and in the US. In 2019,
this division accounted for 56% of Valid's EBITDA. Although most
sites in Brazil have gradually resumed operations, Sao Paulo's
State Transit Department (Detran-SP) -- the most relevant -- is
still shut-down. April was the month when most sites were
negatively impacted by the shut-downs, therefore, that should be
the month with the lowest generation of receivables because of the
crisis. After that, a gradual recovery should be observed with the
paced resumption of operations in driver's license and ID bureaus
in Minas Gerais, Rio de Janeiro, Rio Grande do Sul and other
regional offices. Despite the gradual recovery of operations, Fitch
still considers the risk that the economic downturn could force
local governments in Brazil to delay payments, putting further
pressure on Valid's working capital. The identification division is
highly defensive and once it resumes normal operations until the
end of 2020 and early 2021 it is likely to compensate some of the
lost volumes with the unwinding of pent-up demand. But lower
economic activity and a high level of unemployment will lead to
overall lower demand levels in 2021.
Fitch believes Valid's pro forma cash position is close to BRL549
million, compared to BRL334 million reported in March 2020.
Although amortizations for the remainder of 2020 are minimal, Fitch
estimate there is over BRL1.0 billion due in 2021 and 2022, which
makes the company increasingly dependent on the extensions of these
lines to avoid further liquidity deterioration. Fitch believes
EBITDA will drop to around BRL220 million in 2020 from BRL323
million in 2019, with margin contracting to below 12% from 16.1%.
The sharp drop in EBITDA from identification services will be
somewhat mitigated by a ramp-up of the mobile division during the
year and sustained volumes from the payments division, for which
about half of the result is generated in US dollars thus benefiting
from local currency depreciation. Nonetheless, about 60% of Valid's
debt is denominated in foreign-currency compared to only 30% of
EBITDA, leading to higher leverage and, consequently, covenant
breaches for which Fitch expects waivers to be negotiated.
The negative outlook incorporates Valid's increasing liquidity
risk, with an estimated over BRL1 billion in debt maturing between
2021 and 2022, in a challenging operating environment
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be downgraded if the company's operating
performance deteriorates with total adjusted debt to EBITDA above
4.0x and negative free cash flow generation without prospects for
recovery. A deterioration in liquidity, the inability to refinance
its 2021 debt well-ahead of maturity or sizable debt-financed
acquisitions would also affect the rating negatively.
Although unlikely in the short term, the ratings would experience
upward pressure if the company increases its scale and further
diversifies its geographic and client base while maintaining total
adjusted debt to EBITDA below 3.0x, adjusted EBITA to interest
expense above 3.5x and healthy liquidity.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
Headquartered in Rio de Janeiro, Brazil, Valid is a provider of
services, mobile network connectivity, and identification system.
As such, the company is leading supplier of payment cards, SIM
cards and digital certificates in Brazil. The company is the
fifth-largest global producer of SIM cards with a 8.5% market
share, and operations in the Americas, Europe, Africa and Asia.
Valid also provides payment card and ID solutions for financial
institutions and local governments in the US. In the last twelve
months ended in March 2020, Valid posted net revenues of BRL2.0
billion ($499 million), with an adjusted EBITDA margin of 15.5%.
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C A Y M A N I S L A N D S
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YANKUANG GROUP: Moody's Rates New USD Senior Unsecured Notes 'Ba1'
------------------------------------------------------------------
Moody's Investors Service has assigned a Ba1 rating to the proposed
USD senior unsecured notes to be issued by Yankuang Group (Cayman)
Limited and guaranteed by Yankuang Group Company Limited (Yankuang,
Ba1, stable).
Yankuang will use the net proceeds to refinance its existing
offshore debt.
The rating outlook is stable.
Yankuang is one of China's leading coal companies. It produced 166
million tonnes of raw coal in 2019, making it the third-largest
coal producer in China by production volume.
RATINGS RATIONALE
"The Ba1 bond rating reflects the guarantee from Yankuang and the
fact that the notes will rank pari passu with all other senior
unsecured obligations of Yankuang," says Gerwin Ho, a Moody's Vice
President and Senior Credit Officer.
"In addition, the bond issuance will not materially increase
Yankuang 's debt leverage, because the company will use the net
proceeds to refinance existing debt," adds Ho.
Yankuang 's Ba1 corporate family rating incorporates its Baseline
Credit Assessment of b1 and a three-notch uplift, reflecting
Moody's assessment of a strong likelihood of support from and a
high dependency on the Shandong provincial government and
ultimately the Government of China (A1 stable), in times of
stress.
Yankuang's b1 BCA primarily reflects (1) its large scale and
diversified coal mining assets; (2) the strong performance of its
subsidiary Yancoal Australia Ltd (Yancoal Australia); and (3) its
low-cost mining operations in Shandong Province and Australia.
At the same time, Yankuang's standalone credit profile is
constrained by (1) long-term carbon transition risks; (2)
volatility in coal prices; (3) execution and financial risks
related to its investments in the financial services sector; and
(4) its moderately high debt leverage relative to rated global and
regional peers, after years of expansion and acquisitions.
The strong likelihood of government support reflects the continued
support that the company receives from the provincial government
and the importance of Yankuang's mining assets to Shandong
Province, in terms of economic contribution and employment. Moody's
believes the central government would support the Shandong
provincial government's efforts to prevent Yankuang from
defaulting, thereby avoiding any disruption to domestic financial
markets. Such support can take various forms, including government
subsidies, capital or asset injections, as well as loans from
state-owned banks.
The high dependency reflects the fact that Yankuang and the central
government are exposed to common political and economic event
risks.
The bond rating is not affected by the structural subordination to
claims at Yankuang's operating companies. This is because, despite
its status as a holding company, Moody's expects that support from
the Chinese government to Yankuang will flow through the holding
company to operating companies, thereby mitigating any differences
in expected loss that could result from structural subordination.
Yankuang's Ba1 CFR also takes into account the following
environmental, social and governance considerations.
Yankuang faces elevated environmental risks associated with the
coal mining industry, including carbon transition risks, as
countries seek to reduce their reliance on coal power. These risks
are partially mitigated by its (1) geographically diversified
customer base across Japan (A1, Stable), Korea (Aa2, Stable), China
(A1, Stable), and Australia (Aaa, Stable); and (2) sizeable
investment of RMB3.3 billion between 2018 and 2020 in environmental
protection at its key subsidiary, Yanzhou Coal Mining Company
Limited (Yanzhou Coal, Ba1, stable), focusing on reducing air,
water and dust pollution.
Yankuang is exposed to social risks associated with the coal mining
industry, including health and safety and responsible production.
The company pursues a "zero site accidents" goal at its mines.
Yankuang achieved zero deaths for 4,933 consecutive days up to
December 31, 2019. It also sponsors corporate social responsibility
projects, such as poverty alleviation campaigns in Shandong
Province.
In terms of governance considerations, there is low predictability
with regards to the investments that Yankuang will make, and
limited information transparency on its investment strategy and
financial policy at the holding company level. These concerns are
partially mitigated by the full ownership and close monitoring by
the Shandong Provincial Government. In addition, its core
subsidiary Yanzhou Coal, which accounted for the majority of the
group's assets and revenue, is listed on both the Hongkong and
Shanghai stock exchanges; with the listings providing a high degree
of transparency.
The stable outlook on the rating incorporates Moody's expectation
that over the next 12-18 months (1) Yankuang's credit metrics will
stay appropriate for its b1 BCA; (2) there will be no drastic
decline in coal prices in China; (3) the company will be prudent in
acquiring coal assets and in its investments in non-coal
businesses; and 4) the ability of the Government of China to
provide support will remain intact.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
Moody's could upgrade the rating on the senior unsecured notes if
Yankuang's rating is upgraded.
Moody's could upgrade Yankuang's CFR if the company's credit
metrics further improve, without any adverse changes in government
support. Credit metrics indicative of upward rating pressure
include adjusted debt/EBITDA below 3.0x -3.5x on a sustained
basis.
Moody's could downgrade the rating on the senior unsecured notes if
Yankuang's rating is downgraded.
Moody's could downgrade Yankuang's CFR if there is a material
deterioration in Yankuang's business or financial profile. Credit
metrics indicative of downward rating pressure include adjusted
debt/EBITDA above 6.0x - 6.5x over a prolonged period.
Evidence of weakening government support or Yankuang 's significant
investment in non-coal related commercial businesses will pressure
the support assumption and rating.
The methodologies used in this rating were Mining published in
September 2018.
Yankuang Group Company Limited is one of China's leading coal
companies. Yankuang produced 166 million tonnes of raw coal in
2019, making it the third-largest coal producer in China by
production volume. In 2019, the company reported revenue of RMB285
billion and an asset size of RMB319 billion.
At the end of 2019, Yankuang operated various coal mines in China's
Shandong Province, Shaanxi Province and the Inner Mongolia
Autonomous Region, as well as in the Australian states of
Queensland, New South Wales and Western Australia.
Yankuang is ultimately held by Shandong State-owned Assets
Supervision and Administration Commission (Shandong SASAC), which
owns 70% of the registered capital, followed by a 20% ownership by
Shandong Guohui Investment Co., Ltd. (Baa2 stable) and 10% by
Shandong Provincial Council for Social Security Fund.
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C H I L E
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LATAM AIRLINES: White & Case Represents LATAM Bondholders
---------------------------------------------------------
In the Chapter 11 cases of LATAM Airlines Group S.A., et al., the
law firm of White & Case LLP submitted a verified statement under
Rule 2019 of the Federal Rules of Bankruptcy Procedure, to disclose
that it is representing the Ad Hoc Group of LATAM Bondholders.
The Ad Hoc Group of certain holders of the 6.875% Senior Notes due
2024 and 7.00% Senior Notes due 2026, each issued by LATAM Finance
Limited, and the Series A Local Bonds due 2028, Series B Local
Bonds due 2028 Series C Local Bonds due 2022, Series D Local Bonds
due 2028, and the Series E Local Bonds due 2029, each issued by
LATAM Airlines Group S.A. The 2024 Bonds, 2026 Bonds, Series A
Local Bonds, Series B Local Bonds, Series C Local Bonds, Series D
Local Bonds, and Series E Local Bonds are collectively referred to
herein as the "Bonds".
As of June 29, 2020, members of the Ad Hoc Group and their
disclosable economic interests are:
Administradora de Fondos de Pensiones Capital S.A. Av. Apoquindo
4820, Las Metropolitana, Chile
* Holder of $13,692,829 of Series B Local Bonds, $4,940,711 of
Series D Local Bonds and $38,078,769 of Series E Local Bonds
Administradora de Fondos de Pensiones Cuprum S.A.
Bandera 236, Piso 6, Metropolitana, Chile
* Holder of $4,000,000 of 2026 Bonds and $53,694,946 of Series E
Local Bonds
Administradora General de Fondos SURA S.A.
Av. Apoquindo 4820, Oficina 1501
Las Condes, Region Metropolitana, Chile
* Holder of $16,101,731 of Series A Local Bonds, $3,654,669 of
Series B Local Bonds, $8,174,454 of Series C Local Bonds, and
$2,577,689 of Series D Local Bonds
BICE VIDA Compania de Seguros S.A.
Av. Providencia 1806
Santiago, Region Metropolitana, Chile
* Holder of $22,500,00 of 2024 Bonds, $8,000,000 of 2026 Bonds,
$176,454 of Series B Local Bonds, $4,499,577 of Series D Local
Bonds
Caius Capital LLP
135-137 New Bond Street
London, W1S 2TQ
* Holder of $16,649,000 of 2024 Bonds and $25,833,000 of 2026
Bonds
Compania de Seguros Confuturo S.A.
Av. Apoquindo 6750, Piso 19
Las Condes, Region Metropolitana, Chile
* Holder of $45,500,000 of 2024 Bonds and $5,000,000 of 2026
Bonds.
DoubleLine Capital LP
333 S. Grand Ave, 18th Floor
Los Angeles, CA 90071
* Holder of $55,466,000 of 2024 Bonds, $43,553,000 of 2026 Bonds,
and $1,377,306 of 2027 EETCs
HSBC Securities Inc. USA
452 5th Avenue
New York, NY 10018
* Holder of $30,515,000 of 2026 Bonds, $5,150,000 of 2023 EETCs
and $7,416,000 of 2027 EETCs
Livello Capital Management LP
1 World Trade Center, 85th Floor
New York, NY 10007
* Holder of $1,500,000 of 2026 Bonds, and $1,000,000 of 2027 EETCs
LMR Partners LLP
10th Floor, 363 Lafayette Street
New York, NY 10012
* Holder of $10,000,000 of 2024 Bonds, and $1,150,000 of 2026
Bonds
Penta Vida Compania de Seguros de Vida S.A.
Av. El Bosque Norte 500, Piso 3
Las Condes, Region Metropolitana, Chile
* Holder of $17,645,398 of Series A Local Bonds, $17,998,306 of
Series B Local Bonds, $7,058,159 of Series C Local Bonds,
$9,916,714 of Series D Local Bonds, and $899,915 of Series E
Local Bonds
Seguros Vida Security Prevision S.A.
Av. Apoquindo 3150, Piso 8
Las Condes, Region Metropolitana, Chile
* Holder of $7,058,159.24 of Series A Local Bonds and
$3,405,561.83 of Series C Local Bonds
TCW Investment Management Company
865 South Figueroa Street, Suite 1800
Los Angeles, CA 90017
* Holder of $34,000,000 of 2026 Bonds
VR Global Partners, L.P.
300 Park Avenue, 16th Floor
New York, NY 10022
* Holder of $3,257,000 of 2024 Bonds, $53,742,000 of 2026 Bonds,
$7,601,000 of 2023 EETCs, and $1,000,000 of 2027 EETCs
Warlander Asset Management LP
250 West 55th Street 33rd Floor
New York, NY 10019 United States
* Holder of $7,250,000 of 2026 Bonds
On June 15, 2020, the Ad Hoc Group retained Counsel to represent it
in connection with the Debtors' Chapter 11 Cases.
Each member of the Ad Hoc Group has consented to Counsel's
representation. No member of the Ad Hoc Group represents or
purports to represent any other entities in connection with these
chapter 11 cases.
The information contained in this Verified Statement or Exhibit A
attached hereto is intended only to comply with Bankruptcy Rule
2019 and nothing contained in herein should be construed as a
limitation or waiver of any rights of any member of the Ad Hoc
Group.
The undersigned verifies that the foregoing is true and correct to
this best of his knowledge.
Counsel reserves the right to amend or supplement this Verified
Statement.
Counsel for the Ad Hoc Group of LATAM Bondholders can be reached
at:
WHITE & CASE LLP
John K. Cunningham, Esq.
John Ramirez, Esq.
Mark Franke, Esq.
1221 Avenue of the Americas
New York, NY 10020
Telephone: (212) 819-8200
Facsimile: (212) 354-8113
Email: jcunningham@whitecase.com
john.ramirez@whitecase.com
mark.franke@whitecase.com
Jason N. Zakia, Esq.
111 South Wacker Drive, Suite 5100
Chicago, IL 60606-4302
Telephone: (312) 881-5400
Facsimile: (312) 881-5450
Email: jzakia@whitecase.com
Richard S. Kebrdle, Esq.
Southeast Financial Center, Suite 4900
200 South Biscayne Boulevard
Miami, FL 33131
Telephone: (305) 371-2700
Facsimile: (305) 358-5744
Email: rkebrdle@whitecase.com
A copy of the Rule 2019 filing, downloaded from PacerMonitor.com,
is available at https://is.gd/fRrHml
About LATAM Airlines
LATAM Airlines Group S.A. -- http://www.latam.com/-- is a
pan-Latin American airline holding company involved in the
transportation of passengers and cargo and operates as one unified
business enterprise.
LATAM Airlines Group S.A. is the largest passenger airline in
South America. Before the onset of the COVID-19 pandemic, LATAM
offered passenger transport services to 145 different destinations
in 26 countries, including domestic flights in Argentina, Brazil,
Chile, Colombia, Ecuador and Peru, and international services
within Latin America as well as to Europe, the United States, the
Caribbean, Oceania, Asia and Africa.
LATAM Airlines Group S.A. and its 28 affiliates sought Chapter 11
protection (Bankr. S.D.N.Y. Lead Case No. 20-11254) on May 25,
2020. Affiliates in Chile, Peru, Colombia, Ecuador and the United
States are part of the Chapter 11 filing.
The Debtors disclosed $21,087,806,000 in total assets and
$17,958,629,000 in total liabilities as of Dec. 31, 2019.
The Hon. James L. Garrity, Jr., is the case judge.
Debtors tapped Cleary Gottlieb Steen & Hamilton LLP as general
bankruptcy counsel; FTI Consulting as restructuring advisor; and
Togut, Segal & Segal LLP and Claro & Cia in Chile as special
counsel. Prime Clerk LLC is the claims agent.
===============
C O L O M B I A
===============
CREDIVALORES CREDISERVICIOS: Fitch Retains B+ IDR Amid Coronavirus
------------------------------------------------------------------
Fitch Ratings has maintained on Rating Watch Negative Credivalores
Crediservicios S.A.S.'s Long-Term Foreign Currency Issuer Default
Rating of 'B+'. At the same time, Fitch has affirmed Credivalores'
Short-Term IDR at 'B'. The RWN on the 'B+/RR4' LT Rating of the
senior unsecured debt has also been maintained.
The RWN reflects the increasing near-term risks mainly arising from
the credit card business, as Fitch believes the deteriorating
operating environment, as a result of the coronavirus outbreak,
will adversely affect the payment capacity of Credivalores' client
base, which is expected to affect its credit metrics, mainly asset
quality and profitability. Although the magnitude of the negative
effects from the coronavirus are still uncertain, Fitch believes
current challenges from the operating environment pose short-term
pressures to the rating, as effects from the economic downturn
could rapidly impact the entity's already low profitability and
high tangible leverage metrics.
KEY RATING DRIVERS
Credivalores' IDRs are highly influenced by the company's profile
and concentrated nature within the financial system, which, despite
is small size, benefits from its role as one of the largest
non-bank financial institutions engaged in consumer lending to the
low-to-mid income population. The ratings also consider, as high
influence factors, the company's modest profitability and high
leverage. At the same time, the ratings also incorporate the
company's good funding flexibility and adequate liquidity to
confront current challenges from the operating environment.
During 2019, Credivalores imposed a series of measures including
tighter underwriting and collection policies, along with
technological and system improvements that improved its asset
quality metrics. However, during the 1Q20, the effects of the
coronavirus pandemic began to impact the level of non-performing
loans and this pressure is expected to continue into the next few
quarters in view of the significant level of requests for loan
renegotiations and delays in repayments.
Credivalores' ratio of NPL past due over 60 days rose slightly to
11.7% at March 31, 2020 from 11% at FYE December 2019. The overall
loan loss coverage ratio on Credivalores' managed portfolio
decreased slightly to 115% from 120% and FYE December 2019. Despite
the decrease, the level is still adequate in view of the lower risk
of its payroll/pension-backed loan segment, which represented
nearly 57% of the total managed portfolio at the end of March 2020.
In addition, the entity has been focusing on increasing its credit
card origination in lower-risk segments. As of March 31, 2020, the
level of renegotiations within the credit card segment has been
significant at around 33% of the total portfolio. This level is
expected to grow during the second quarter. Fitch will continue to
evaluate the extent of loan renegotiations and its effect on the
structural asset quality of the entity.
Credivalores' profitability remained weak for 2019, and for 1Q20
the company reported a loss as it continues to be affected by
higher interest and credit costs, lower earning asset growth and
other operating costs while revenue generation continues to be
impaired during the pandemic. Pre-tax income to average assets
stood at -0.3% as of 1Q20. Fitch expects profitability for the
remainder of 2020 to be one of the main weaknesses for the rating.
Fitch also expects the continued low levels of profitability will
provide the entity with little room to manage and absorb additional
asset quality deterioration and loan loss reserve requirements
during the third and likely fourth quarter of this year.
The ratings also consider Credivalores' relatively higher leverage
ratios for its concentrated and higher-risk business model. Fitch
believes leverage could be pressured if profitability reduces
further or if the entity reports sustained losses due to the
pandemic's economic effects on its borrowers. Tangible leverage
stood at a high 8.1x as of 1Q20.
Although the funding profile is wholesale and confidence sensitive,
Credivalores' current funding and liquidity metrics remain as
strength to the rating with average maturity tenors of close to 3.2
years and a high 92% portion of unsecured sources. The company has
been able to maintain diverse sources of funding from both domestic
and foreign lenders. The company issued a USD300 million, five-year
note in February 2020 and had USD125 million cash on their balance
sheet as of March 31, 2020. On June 5, Credivalores also placed a
USD20 million Euro commercial paper note through September 2021 to
support loan portfolio growth, especially in the lower risk in
payroll loans. Sources of funding appear ample to cover upcoming
2020 and 2021 debt amortizations and fund future growth.
Fitch believes management needs to prove effective in executing its
strategies in enhancing asset quality, profitability and leverage
metrics that have deteriorated over the past few years. Management
and strategy are expected to be tested under the current
challenging conditions.
RATING SENSITIVITIES
Factors That Could, Individually or Collectively, Lead to a
Negative Rating Action/Downgrade:
Credivalores' IDRs could be downgraded if there is a relevant
increase in tangible leverage, measured as tangible leverage
sustainably above 8.5x, or if profitability metrics deteriorate
relevantly, measured as negative operating income, that reduces the
company's ability to absorb unexpected losses.
Factors That Could, Individually or Collectively, Lead to a
Positive Rating Action/Upgrade:
Credivalores' ratings are currently on RWN, due to the short-term
risks to its profitability, tangible leverage and asset quality
metrics, given the coronavirus outbreak. This makes an upgrade
highly unlikely in the near future.
Ratings could be removed from the RWN and affirmed with a Stable
Outlook if the company is able to stabilize its operational
profitability, asset quality and tangible leverage at a level
consistent with its current ratings despite deterioration in the
operating environment, or if it shows ability to revert effects in
a relatively short period of time. Ratings continue to be sensitive
to significant changes in Credivalores' company profile.
Ratings could be upgraded by the confluence of a relevant
improvement in the asset quality, earnings and tangible leverage,
together with an improvement of the operating environment.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Financial Institutions and
Covered Bond issuers have a best-case rating upgrade scenario
(defined as the 99th percentile of rating transitions, measured in
a positive direction) of three notches over a three-year rating
horizon; and a worst-case rating downgrade scenario (defined as the
99th percentile of rating transitions, measured in a negative
direction) of four notches over three years. The complete span of
best- and worst-case scenario credit ratings for all rating
categories ranges from 'AAA' to 'D'. Best- and worst-case scenario
credit ratings are based on historical performance.
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF
RATING
The principal sources of information used in the analysis are
described in the Applicable Criteria.
ESG CONSIDERATIONS
The highest level of ESG credit relevance, if present, is a score
of 3. This means ESG issues are credit-neutral or have only a
minimal credit impact on the entity(ies), either due to their
nature or to the way in which they are being managed by the
entity(ies).
Credivalores Crediservicios S.A.S.
- LT IDR B+; Rating Watch Maintained
- ST IDR B; Affirmed
- Senior unsecured; LT B+; Rating Watch Maintained
===================================
D O M I N I C A N R E P U B L I C
===================================
DOMINICAN REPUBLIC: Exports Fall 8.47% to US$3.7 Billion
--------------------------------------------------------
Dominican Today reports that Dominican Republic exports reached
US$3.7 billion between January-May, a fall of 8.47% when compared
to the same period in 2019, when US$4.1 billion were exported.
According to the publication of the Customs Directorate (DGA), for
that period, 56.88% of the exports were from the free zones, 39.30%
domestic production, 3.58% to temporary admission and the remaining
0.24% to re-exports, the report notes.
It said that 43.01% of the exports belong to raw materials, at
US$1.6 billion in the period January May 2020, a relative variation
of -0.14% compared to January-May 2019 when raw materials were
exported totaling US$1.6 billion, according to Dominican Today.
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.
The Troubled Company Reporter-Latin America 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.
Standard & Poor's credit rating for Dominican Republic stands at
BB- with negative outlook (April 2020). Moody's credit rating for
Dominican Republic was last set at Ba3 with stable outlook (July
2017). Fitch's credit rating for Dominican Republic was last
reported at BB- with negative outlook (May 8, 2020).
=============
J A M A I C A
=============
SOS: Experiences Decline in Revenue
-----------------------------------
RJR News reports that listed company Stationery and Office Supplies
(SOS), says it experienced a decline in revenue in March due to the
COVID-19 pandemic.
However, the company sustained its gross profit percentage,
according to RJR News.
SOS says it was still able to record a 65 per cent increase in
cash, largely due to 2019 profits, the report relays.
This increase allows SOS to have the cash reserves to remain
operational in the short to medium term, depending on the impact of
COVID-19, the report adds.
===========
M E X I C O
===========
GRUPO AEROMEXICO: Case Summary & 30 Largest Unsecured Creditors
---------------------------------------------------------------
Lead Debtor: Grupo Aeromexico, S.A.B. de C.V.
243 Paseo de la Reforma
Piso 25
Mexico City, Mexico 06500
Business Description: Grupo Aeromexico, S.A.B. de C.V. --
https://www.aeromexico.com -- is a
holding company whose subsidiaries are
engaged in commercial aviation in Mexico and
the promotion of passenger loyalty programs.
Aeromexico, Mexico's global airline, has its
main hub at Terminal 2 at the Mexico City
International Airport. Its destinations
network features the United States, Canada,
Central America, South America, Asia and
Europe.
Chapter 11 Petition Date: June 30, 2020
Four affiliates that concurrently filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
Grupo Aeromexico, S.A.B. de C.V. 20-11563
Aerolitoral, S.A. 20-11565
Aerovias de Mexico, S.A. de C.V. 20-11561
Aerovias Empresa de Cargo, S.A. de. C.V. -
Court: United States Bankruptcy Court
Southern District of Mexico
Debtors' Counsel: Timothy Graulich, Esq.
DAVIS POLK AND WARDWELL LLP
450 Lexington Avenue
New York, NY 10017
Tel: 212-450-4639
Email: timothy.graulich@davispolk.com
Estimated Assets
(on a consolidated basis): $1 billion to $10 billion
Estimated Liabilities
(on a consolidated basis): $1 billion to $10 billion
The petition was signed by Ricardo Javier Sanchez Baker, chief
financial officer.
Copies of the petitions are available for free at PacerMonitor.com
at:
https://is.gd/PM7ctA
https://is.gd/CZjIAB
https://is.gd/chDPXw
Consolidated List of Debtors' 30 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
1. The Bank of New York Mellon International $411,355,556
Attn: Corporate TR Admin Issuance 2020
240 Greenwich Street
Floor 7 East
New York, NY 10286
Tel: 212-815-8273
Fax: 212-815-5875
Email: miguel.barrios@bnymellon.com
julie.hoffman-ramos@bnymellon.com
peter.baumgaertner@hklaw.com
2. Aeropuerto Internacional de Trade Payable $61,950,676
La Ciudad De Mexico SA de CV
Av Capitan Carlos Leon SN
Penon De Los Banos
Venustiano Carranza
CDMX 15620 Mexico
Contact: Francisco Pardo
Tel: 52(55) 2482-2424
Email: fpardo@aicm.com.mx
3. Banco Bilbao Vizcaya Guarantee $25,719,330
Argentaria, S.A. Hermes
Av Paseo De La Reforma 243
Colonia Cuauhtemoc
Delegacion Cuauhtemoc
Distrito Federal 06500 Mexico
Attn: General Counsel
Tel: 34 537 79 54
Email: maria.zotes@bbva.com;
eca.structuring@bbva.com
4. HSBC Mexico SA Guarantee $17,035,285
Paseo De La Reforma 347, 18th FL Exim Bank
Co. Cuahtemoc
Mexico City 06500 Mexico
Contact: General Counsel
Tel: 52(55) 5721-5978
Email: cecilia.steta@hsbc.com.mx
5. Aeropuertos y Trade Payable $16,184,197
Servicios Auxiliares
AV 602 No 161
San Juan De Aragon
Venustiano Carranza
CDMX 15620 Mexico
Contact: Rosa Maria
Davila Morales
Tel: 52(55) 5133 1000
Email: mam.comercial@asa.gob.mx
6. Tesoreria De La Federacion Taxes $14,882,399
Domicilio Conocido
Distrito Federal CDMX
Mexico, Mexico
Contact: Jorge Armendariz Jimenez
Tel: 618-118-7017
Email: jarmend@imt.mx
7. World Fuel Services Trade Payable $10,344,391
Avenida Libertad 1405 of 1302
Vina Del Mar 1111111
Brasil
Contact: Juan Pinto
Tel: 569322689200
Email: jpinto@wfscorp.com
8. General Electric Trade Payable $9,189,203
3135 Easton Turnpike
Fairfield, CT 06828
Contact: Alan Fretwell
Tel: 513-479-9428
Email: alan.fretwell.ge.com
9. Panasonic Avionics Trade Payable $8,324,902
Corporation
3303 Monte Villa Parkway
Bothell, WA 98021
Contact: Jose Martinez
Tel: 949-462-1943
Email: joser.martinez@panasonic.aero
10. Banco Bilbao Vizcaya Short Term Loan $7,943,114
Argentaria, S.A.
Niederlassung Deutschland
Neue Mainzer Strasse 28
60311 Frankfurt Am Main
Germany
Contact: General Counsel
Email: maria.zotes@bbva.com;
eca.structuring@bbva.com
11. Credit Agricole Corporate and Trade Payable $6,404,527
Investment Bank Tokyo Branch
1 9 2 Higashi Shimbashi
Tokyo
Minato KU 1050021 Japan
Contact: Thomas Jean
Tel: 12 122617067
Email: thomas.jean@ca-cib.com
12. Boeing Trade Payable $5,684,079
100 N Riverside Plaza MC 5003-4549
Chicago, IL 60606
Contact: Erika Zavala
Tel: 52 8125595386
Email: sales.mexico@boeingdistribution.com
13. Aeropuerto De Guadalajara Trade Payable $5,211,109
SA De CV
AV Solidaridad Iberoamerican
KM 17 12
Tlajomulco De Zuniga Jalisco
Tlajomulco De Zuniga 45659
Mexico
Contact: Daniel Osvaldo Arellano
Tel: 33366714582
Email: darellanos@aeropuertosgap.com.mx
14. Nordic Aviation Capital Trade Payable $5,160,868
Attn: Chief Contract Officer
Stratusvej 12
Billund 7190
Denmark
Contact: Mike Fitzgerald
Tel: 45 7651 1200
Email: nac@nac.dk
15. Aeropuerto De Monterrey SA De CV Trade Payable $5,058,384
Dom Conocido Carr Miguel Aleman SN
Centro De Apodaca Nuevo Leon
Mexico
Nuevo Leon
Monterrey 66600 Mexico
Contact: Abigail Campos Medina
Tel: 52 81 8625 4300
Email: acampos@oma.aero
16. HSBC Bank USA, N.A. Guarantee Exim $5,045,129
Attn: Daniela Alvarado Bank
Aileen Chua
452 Fifth Avenue
New York, NY 20018
Contact: Daniela Alvarado
Tel: 212-252-2482
Email: daniela.alvarado@us.hsbc.com;
aileen.l.chua@us.hsbc.com;
carla.g.campo@us.hsbc.com
17. Citibank, NA Guarantee Exim $4,829,251
Attn: Paul Joseph Bank
3800 Citigroup Center Drive
Tampa, FL 33610
Tel: 813-604-4724
Email: paul.o.joseph@citi.com
18. SMBC Aviation Capital Limited Trade Payable $4,468,777
IFSC House IFSC Diblin 1 Ireland
Dublin
Irlanda, Ireland
Contact: Federico Pascual
Tel: 353 1 859 9000
Email: federico.pascual@smbc.aero
19. IBM Capital Mexico Long Term Loan $4,367,664
1 S De RL De CV
Attn: Jose Ramon Garcia
Alfonso Napoles Gandara 3111
Pena Blanca Santa Fe
Ciudad De Mexico 01210 Mexico
Contact: Jose Ramon Garcia
Tel: 5270 3095
Email: rastudil@mx1.ibm.com
20. Celestial Aviation Trading Trade Payable $4,334,100
Aviation House Shanon
Shannon
Ireland, Ireland
Contact: Fiona Connolly
Tel: 353 61706684
Email: fiona.connolly@gecas.com
21. Asociacion Sindical De Pilotos Union $3,375,738
Aviadores
Palomas 110 1ER Piso Reforma Social
CDMX, Miguel Hidalgo, 11650
Mexico
Contact: Arturo Maliachi
Email: arturo.maliachi@aspa.org.mx
22. Air Lease Corporation Trade Payable $3,228,871
2000 Avenue of the Stars 1000N
California
Los Angeles, CA 90067
Contact: Chief Financial Officer
Tel: 310-553-0555
Email: info@airleasecorp.com
23. Grupo Televista SA DE CV Trade Payable $2,409,986
BLV Agua Calente 11606
Aviacion Tijuana
Baja California
Tijuana 22420, Mexico
Contact: Karen Arriaga
Tel: 5130 0600
Email: karen_arriaga@telvista.com
24. Sabre Group Inc. Trade Payable $2,400,000
3150 Sabre Drive
Mail Drop 8510 SouthL
Chicago, IL 60693
Contact: Chris Powers
Tel: 817-584-0887
Email: chris.powers@sabre.com
25. MTU Maintenance Trade Payable $2,309,021
Strawinwinshylaan 1639
1077XX
Amsterdam, Netherlands
Contact: Marek Friedrich
Tel: 31(0) 207052592
Email: marek.friedrich@mtu-lease-services.com
26. Wilmington Trust Company Trade Payable $2,161,899
345 Main St.
One M&T Plaza
7th Floor
Buffalo, NY 14203
Contact: Chief Financial Officer
Tel: 302-651-1000
Email: rritrovato@wilmingtontrust.com
27. Aeropuerto De Cancun Sa De CV Trade Payable $2,076,290
KM 22 Carr Cancunchetumal
Municipio Benito Juarez
Quintana ROO
Cancun 77500 Mexico
Contact: Alicia Isabel
Guzman Cortes
Tel: 52-99-8848-7200
Email: aguzman@asur.com.mx
28. Oracle De Mexico Sa De CV Trade Payable $1,813,758
Montes Urales 470 PB
Lomas De Chapultepec
Miguel Hidalgo
CDMX 11710 Mexico
Contact: Yuglal Kumar
Tel: 553 300 6913
Email: yuglal.kumar@oracle.com
29. Entserv Enterprise Services Trade Payable $1,680,744
Mexico S De Rl De CV
Av Prolongacion Paseo De la
Reforma 700
Lomas De Santa Fe, Alvaro Obregon
CDMX 1210 Mexico
Contact: Elizabeth Moreno
Tel: 703-245-9700
Email: elizabeth.moreno@dxc.com
30. US Department of Trade Payable $1,616,478
Transportation FAA
6500 S MacArthur Boulevard
Oklahoma, OK 73169
Contact: Michelle Leissner
Tel: 405-954-9559
Fax: 202-267-3227
Email: 9-AMC-AMZ-Overflight-fees@faa.gov
GRUPO AEROMEXICO: July 9 Deadline Set for Committee Questionnaires
------------------------------------------------------------------
The U.S. Trustee will not be holding any in-person meeting for the
formation of an unsecured creditors committee in the bankruptcy
cases of Grupo Aeromexico, S.A.B. de C.V., et al.
If a party wishes to be considered for membership on the Committee,
it must complete a required Questionnaire and return it to the
Office of the United States Trustee by electronic mail to
USTPRegion02.NYECF@usdoj.gov so that it is received no later than
July 9, 2020 at 12:00 p.m. (EST).
The Committee represents the interest, and acts on behalf, of all
unsecured creditors. Members of the Committee are generally
selected from the list of the twenty largest unsecured creditors.
Under the Bankruptcy Code, the Committee has the right to demand
that the Debtor consult with the Committee before making major
decisions or changes, to request the appointment of a trustee or
examiner, to participate in the formation of a plan of
reorganization, and in some cases, to propose its own plan of
reorganization.
About Grupo Aeromexico
Grupo Aeromexico, S.A.B. de C.V. -- https://www.aeromexico.com --
is a holding company whose subsidiaries are engaged in commercial
aviation in Mexico and the promotion of passenger loyalty programs.
Aeromexico, Mexico's global airline, has its main hub at Terminal 2
at the Mexico City International Airport. Its destinations network
features the United States, Canada, Central America, South America,
Asia and Europe.
Grupo Aeromexico and three of its subsidiaries filed for Chapter 11
(Bankr. S.D. M., Case No. 20-11563) on June 30, 2020. The petition
was signed by Ricardo Javier Sanchez Baker, chief
financial officer.
The Debtors reported consolidated assets and liabilities of $1
billion to $10 billion.
Timothy Graulich, Esq. of Davis Polk and Wardell LLP serves as
counsel to the Debtors.
MAXCOM TELECOMUNICACIONES: S&P Cuts ICR to 'CCC-', On Watch Neg.
----------------------------------------------------------------
S&P Global Ratings, on July 7, 2020, lowered its issuer credit and
issue-level rating on Mexico-based telecommunication (telecom)
services provider, Maxcom Telecomunicaciones S.A.B. de C.V.
(Maxcom), to 'CCC-' from 'CCC+'. S&P also placed the ratings on
CreditWatch with negative implications.
As the global coronavirus outbreak continues hitting the economy
and, to some extent, the spending on non-essential telecom services
among government entities and enterprise customers, Maxcom's
liquidity position fell to MXN148.8 million as of March 31, 2020.
S&P said, "Given that the company bears a fixed semi-annual
interest rate of 8% on its senior secured notes due 2024, we
estimate that its cash position dropped during April 2020 after
covering its latest interest payment. We view the company at a
stage where it has to prioritize the allocation of available cash
between fixed operating costs and upcoming second interest payment
scheduled for October 2020. Therefore, we believe that Maxcom is
dependent upon extraordinary sources of liquidity to meet its debt
interest obligations in the next six months." This also raises a
risk of a bankruptcy filing or the potential undertaking of a
distressed restructuring process if Maxcom fails to increase its
cash position.
On Feb. 14, 2020, the Mexican tax collections authority, Servicio
de Administracion Tributaria (SAT), issued a statement demanding
Maxcom to pay taxes owed since 2015 totaling MXN631 million. The
company is currently under legal advocacy procedures; however, this
has narrowed the company's means of accessing liquidity. Maxcom was
unable to finance its spectrum license renewal through debt funding
for which it disbursed MXN200 million during the first quarter of
2020 (compared with the cash position of MXN312.5 million as of
Dec. 31, 2020). S&P believes this reflects negatively on Maxcom's
ability to receive financial support from banks while the tax
liquidation process is in place.
S&P said, "Our latest revision to our economic credit conditions
for 2020 and 2021 includes Mexico's expected GDP decline of 8.5%
and potential recovery of 3.0%, respectively. We believe that
Maxcom depends on extraordinary financial aid as we have seen in
the past, in the form of capital injection or selling non-core
assets, to support the company through the expected further
weakening of operating cash generation during the recession and
slow recovery prospects. Moreover, we believe that the company also
depends largely on the resolution of its tax liquidation process,
and if the ruling is against Maxcom, we could also see a potential
default scenario for the company."
===============
S U R I N A M E
===============
SURINAME: Moody's Lowers Unsec. Ratings to Caa3, Outlook Negative
-----------------------------------------------------------------
Moody's Investors Service downgraded the long-term issuer and
senior unsecured ratings of the Government of Suriname to Caa3 from
B3 and maintained the negative outlook.
The downgrade to Caa3 reflects a much higher probability of a
distressed exchange or default on Suriname's market debt than
expected at the time of the April downgrade to B3 negative as a
result of the economic and financial shock the country is
experiencing due to the coronavirus outbreak. Spending pressures
related to the coronavirus and increased financing needs have led
to a severe tightening of financing conditions. The government has
already issued a consent solicitation to defer payment of principal
that was due on June 30, which Moody's expects will be granted.
The negative outlook reflects the material risk of an extensive
restructuring of Suriname's marketable debt, with losses exceeding
levels consistent with the Caa3 rating, which is typically
associated with losses of up to 35%. Given the rise in the debt
burden and limited financing options, Moody's anticipates the
government could impose heavier losses on bondholders through a
more extensive restructuring of outstanding government debt that
goes beyond the recent consent solicitation to defer payments, as
part of a broader economic reform program.
Concurrently, Moody's lowered Suriname's long-term foreign-currency
bond and deposit ceilings to Caa2 from B1 and to Ca from Caa1,
respectively. Moody's has lowered the long-term local-currency bond
and deposit ceilings to Caa1 from B1. All short-term
foreign-currency ceilings remain at Not Prime.
RATINGS RATIONALE
RATIONALE FOR DOWNGRADE TO Caa3
The economic and financial implications of the coronavirus pandemic
have compounded Suriname's fiscal and funding challenges. Spending
pressures associated with the pandemic, as well as institutional
weaknesses that limited policy effectiveness, and volatility in
mining revenue, have put substantial pressure on Suriname's
government finances. Even relatively small principal amortizations
on external debt in 2020, estimated at just 0.7% of GDP, have
strained already limited foreign exchange liquidity.
The unprecedented deterioration in the global economic outlook
resulting from the rapid and widening spread of the coronavirus
outbreak, which Moody's considers a social factor under its ESG
framework, has weighed on Suriname's external and fiscal accounts
through volatile commodity prices. The decline in oil prices has
reduced government revenue due to lower taxes paid by the oil
sector. One of the country's two largest gold producers, IAMGOLD,
suspended operations in June 2020 due to a number of positive
coronavirus cases, posing downside risk to gold production and
mining revenue in 2020.
Moody's expects real GDP will contract by 4% in 2020, with risks to
the downside. The contraction in output, along with volatile
commodity prices, has contributed to further deteriorate the fiscal
accounts. Moody's estimates the fiscal deficit will be in the order
of 10% of GDP annually in 2020-21. Risks of even larger deficits
cannot be discarded given evidence of previously undisclosed
spending in late 2019 and in the months prior to the May 2020
general elections -- official data showed a sizable increase in
government debt owed to the central bank.
The deterioration in the fiscal balance and a widening of the
current account deficit, along with limited funding options, has
strained the country's foreign exchange liquidity position. Moody's
expects current account deficits to remain at 8%-10% of GDP over
the next two years, weighing on the country's international
reserves. Persistent foreign exchange shortages, as reflected in a
parallel exchange rate significantly higher than the official
exchange rate, increase the likelihood the authorities will be
forced to devalue the exchange rate, which would significantly
increase the government debt burden and debt servicing costs.
Although the central bank reports foreign currency reserves
amounting to $424.9 million as of May 2020, once commercial banks'
reserve requirements are netted out, the central bank has only
around $100 million of free reserves available, of which $80
million is in gold.
Due to its distressed liquidity position, the government has
requested a deferral of the $15.6 million principal payment on its
sovereign bond maturing in 2023. The government expects the consent
solicitation to be accepted by the necessary three-quarters
majority of bondholders within the 10-day grace period ending on
July 10, with 83% of bondholders having already agreed at the time
the announcement was made. Upon approval of the consent
solicitation, the government has indicated its intention to make
the $8 million interest payment to bondholders, which would occur
within the 30-day grace period for interest payments.
The Caa3 rating captures Moody's view that the one-time deferral of
the principal payment expected under the consent solicitation will
likely prove insufficient to address the government's liquidity
pressures given the severity of the economic and fiscal stress
facing the country, eventually forcing the government to seek a
more comprehensive debt restructuring exercise.
RATIONALE FOR THE NEGATIVE OUTLOOK
The negative outlook reflects the presence of material risks that
could lead to losses exceeding levels associated with a Caa3
rating, as part of a broader structural reform agenda with the
support of multilateral creditors.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE CONSIDERATIONS
Suriname is significantly exposed to environmental risks through
its vulnerability to rising sea levels. The large share of the
population that lives within a few meters of the sea, along with
the large share of economic activity that occurs in these areas,
exposes Suriname to coastal flooding risks.
Social considerations are important for Suriname's credit profile.
Social considerations have also contributed to the slow
implementation of measures to correct large fiscal deficits.
Moody's also considers the coronavirus outbreak as a social risk
under its ESG framework, given the substantial implications for
public health and safety.
Governance considerations are material for Suriname's credit
profile. The quality of policymaking suffers due to the absence of
material technical expertise in the public administration.
Weaknesses in oversight of government spending, particularly at
lower levels, often results in an accumulation of government
arrears.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Evidence of multilateral financing at affordable rates to fully
cover the sovereign's funding needs, without imposing a haircut on
investors in Suriname's marketable debt would reduce the likelihood
of material losses to bondholders, leading to a stabilization of
the outlook. It could also possibly support a higher rating if the
country were to embark on a structural reform program aimed at
reducing its sizable fiscal imbalances.
The rating would be downgraded further if the losses to investors
from a possible restructuring of government debt would not be
consistent with the Caa3 rating.
GDP per capita (PPP basis, US$): 15,526 (2019 Actual) (also known
as Per Capita Income)
Real GDP growth (% change): -0.8% (2019 Actual) (also known as GDP
Growth)
Inflation Rate (CPI, % change Dec/Dec): 4.8% (2019 Actual)
Gen. Gov. Financial Balance/GDP: -10.1% (2019 Actual) (also known
as Fiscal Balance)
Current Account Balance/GDP: -10.3% (2019 Actual) (also known as
External Balance)
External debt/GDP: 97.4% (2019 Actual)
Economic resiliency: b3
Default history: No default events (on bonds or loans) have been
recorded since 1983.
On July 06, 2020, a rating committee was called to discuss the
rating of the Suriname, Government of. The main points raised
during the discussion were: The issuer's economic fundamentals,
including its economic strength, have not materially changed. The
issuer's institutions and governance strength, have not materially
changed. The issuer's fiscal or financial strength, including its
debt profile, has materially decreased. The issuer has become
increasingly susceptible to event risks.
The principal methodology used in these ratings was Sovereign
Ratings Methodology published in November 2019.
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T R I N I D A D A N D T O B A G O
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CARIBBEAN AIRLINES: To Resume Flights Out of Jamaica
----------------------------------------------------
RJR News reports that Caribbean Airlines Limited is to resume
international and regional flights, on a phased basis, out of its
Jamaica hub.
Flights began July 6.
Caribbean Airlines will initially provide daily flights between
Kingston and New York as well as weekly flights between Kingston
and Toronto, Canada starting July 8, according to RJR News.
This will be increased to twice weekly with an additional service
from July 19, the report note.
There will be twice weekly flights between Kingston and Bridgetown,
Barbados, on Mondays and Fridays, the report adds.
About Caribbean Airlines
Caribbean Airlines Limited - http://www.caribbean-airlines.com/-
provides passenger airline services in the Caribbean, South
America, and North America. The company also offers freighter
services for perishables, fish and seafood, live animals, human
remains, and dangerous goods. In addition, it operates a duty free
store in Trinidad. Caribbean Airlines Limited was founded in 2006
and is based in Piarco, Trinidad and Tobago.
As reported in the Troubled Company Reporter-Latin America on
November 2, 2015, RJR News said that Michael DiLollo, Chief
Executive Officer of Caribbean Airlines Limited, quit after just 17
months on the job. The 48-year-old Canadian national, citing
personal reasons, resigned with immediate effect. His resignation
was accepted by the airline's board of directors. Mr. DiLollo was
appointed Caribbean Airlines CEO in May 2014, following the sudden
resignation of Robert Corbie in September 2013.
In early February 2015, Larry Howai, then Finance Minister, told
Parliament that unaudited accounts for 2014 showed the airline made
a loss of US$60 million, inclusive of its Air Jamaica operations,
and the airline planned to break even by 2017. Mr. Howai told the
Parliament that a five-year strategic plan had been completed and
was in the process of being approved for
implementation.
In an interview with the Trinidad & Tobago Guardian in early
November 2015, Mr. DiLollo said CAL did not need a bailout just
yet. Mr. DiLollo said the airline had benefited from extremely
patient shareholders for years and he believed the airline was
strategically positioned to break even in three years.
TRINIDAD & TOBAGO: IDB OKs US$100MM Loan for Covid Response
-----------------------------------------------------------
The Inter-American Development Bank's (IDB) Board of Executive
Directors has approved a US$100 million loan to help Trinidad and
Tobago finance its public health response against the COVID-19
crisis and implement fiscal and financial measures to offset the
negative impact of the pandemic on its economy and the lives of its
citizens.
The operation is part of a two-tranche programmatic Policy Based
Loan program approved by the Bank to help Trinidad and Tobago fight
the health and fiscal crisis and prepare the country's recovery
after the pandemic.
This first operation mainly focuses on supporting policy measures
undertaken during the pandemic to promote the availability and
efficient execution of resources during the emergency. It will
support household income and business liquidity through the
provision of tax refunds, salary relief grants, food stamps, and
rental assistance while improving the government's ability to
properly target the beneficiaries for such programs. Purchases of
medical equipment and hiring of medical staff will also be
facilitated.
Through the provision of technical tools to the Fair Trading
Commission for the implementation of the Fair Trading Act (FTA),
the operation will also support the goals of the Act: promoting
enhanced rivalry in markets, lowering the cost of essential goods
for consumers and increasing private sector productivity.
The IDB loan has a repayment term of 20 years, a grace period of
five and a half years and an interest rate based on LIBOR.
TRINIDAD NITROGEN: Local Directors Approved Tringen 1's Closure
---------------------------------------------------------------
Trinidad Express report that three local directors on the board of
Trinidad Nitrogen Company (Tringen) approved the decision to stop
ammonia production at Tringen 1, one of the two operating plants of
the company that is majority owned by National Enterprises Ltd
(NEL), Government sources told the Sunday Express.
*********
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 2020. All rights reserved. ISSN 1529-2746.
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