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/raid1/www/Hosts/bankrupt/TCRLA_Public/210226.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, February 26, 2021, Vol. 22, No. 36 Headlines B R A Z I L BANRISUL: Moody's Completes Review, Retains Ba3 Rating C H I L E ENJOY SA: S&P Alters Outlook to Neg. & Affirms Prelim 'CCC+' ICR C O L O M B I A BANCO GNB SUDAMERIS: Moody's Completes Review, Retains Ba2 Rating GRUPO AVAL: Moody's Completes Review, Retains Ba2 Issuer Rating D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: Central Bank & IMF Revise Forecasts for Economy DOMINICAN REPUBLIC: IDB Projects Losses of 7% of GDP for Country FALCONBRIDGE DOMINICANA: Mine at Crossroads to Expand or Shut Down P U E R T O R I C O ENRIQUE R. NARVAEZ: Vidal Buying Arroyo Properties for $1.3 Million T R I N I D A D A N D T O B A G O TRINIDAD & TOBAGO: Forex Shortage Getting Worse - - - - - =========== B R A Z I L =========== BANRISUL: Moody's Completes Review, Retains Ba3 Rating ------------------------------------------------------ Moody's Investors Service has completed a periodic review of the ratings of Banco do Estado do Rio Grande do Sul S.A. and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review discussion held on February 10, 2021 in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. The review did not involve a rating committee. Since January 1, 2019, Moody's practice has been to issue a press release following each periodic review to announce its completion. This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future. Credit ratings and outlook/review status cannot be changed in a portfolio review and hence are not impacted by this announcement. Key rating considerations Banco do Estado do Rio Grande do Sul's (Banrisul) Ba3 local currency deposit rating stems from its ba3 baseline credit assessment (BCA). Banrisul has a very strong regional franchise, with almost all of its operations concentrated in the state of Rio Grande do Sul. As the leading banking institution in that state it has ample access to low-cost deposit-based funding. The bank's asset quality remains challenged despite its focus on secured consumer loans due to deterioration in its corporate loan book as well as in unsecured consumer lending during the pandemic. In addition, the bank faces heightened profitability pressures coming from increased competition, low interest rates and regulatory rate caps despite its very low cost of funding. The bank's capitalization is adequate although lower than historical levels. The concentration of its operations in the state of Rio Grande do Sul is also a concern, given that the state is currently in negotiation with the federal government on a fiscal bailout. The principal methodology used for this review was Banks Methodology published in November 2019. ========= C H I L E ========= ENJOY SA: S&P Alters Outlook to Neg. & Affirms Prelim 'CCC+' ICR ---------------------------------------------------------------- S&P Global Ratings, on Feb. 23, 2021, revised its outlook on the Chilean casino operator Enjoy S.A. to negative from stable because of greater near-term downside risks. S&P also affirmed its preliminary 'CCC+' issuer credit and senior secured issue-level ratings on the company. S&P's preliminary ratings assume the company will successfully complete the exchange of its local debt in the next few months. The negative outlook reflects weaker-than-expected market conditions and the potential need for additional liquidity this year if severe revenue disruption persists. S&P said, "The outlook revision primarily stems from a downward shift in our base-case forecast for revenue and EBITDA in 2021 and 2022, and the still significant uncertainty around the shape of the gaming and hotels industry recovery while governments continue making efforts to contain COVID-19. In late December 2020, amid rising COVID-19 cases, the Uruguayan government closed its borders until Jan. 10, and later extended the closure with some exceptions. In our view, this will hurt Enjoy's operations in Punta del Este (which pre-pandemic were responsible for about 30% of Enjoy's EBITDA) because the closure encompassed what are normally the strongest weeks of the year that depend on the arrival of Brazilian and Argentinean tourists. We believe the casino and hotel in Uruguay will have very limited operations throughout the first quarter." Additionally, in January some regions and cities in Chile returned to stricter lockdowns, which forced Enjoy to close several of its casinos. Municipal governments have gradually lifted restrictions during February and casinos have reopened, and the Casinos' Superintendence recently approved protocols to keep casinos operating in outdoor terraces even when areas return to strict lockdowns and relaxed operational restrictions further when lockdowns are less strict. However, uncertainty remains about the level of activity or if there could be additional closures throughout the year. S&P said, "Based on the more complicated COVID-19 situation than we previously anticipated for the first months of the year, we have revised downward our projections and now estimate the company will report marginally negative EBITDA and negative funds from operations (FFO) in 2021, along with higher cash burn. "Considering Enjoy's CLP84 billion in cash as of Sept. 30, 2020, our EBITDA estimate for the last quarter of 2020 and forecast for 2021, minor financial amortizations and cash interests for the year, and the lower capital expenditure (capex) needs as the start-up of renewed municipal licenses has been extended, we estimate that the company has enough cash to support operations through 2021. "In our view, Enjoy could only have minor need of intra-year working capital lines and significant liquidity needs will only come in 2022. However, depending on the length of restrictions and casino closures and the uncertainty around economic and industry recovery, the outcomes may vary widely for revenue, EBITDA, and liquidity in the next few quarters. Revenue and EBITDA declines could also be harsher than our base case and the company might need to raise additional liquidity before year-end. A source of liquidity could be additional subscriptions to convertible bonds when Enjoy issues them in the next couple of months. The company could raise up to CLP 24 billion from convertible Bonds T and R, if the stock price remains above conversion price there could be incentives to subscribe. For 2022, the scenario looks more complicated from a liquidity standpoint, because even under our base case of sound operational recovery the company would need about CLP25 to CLP35 billion of fresh liquidity sources. While we believe access to markets and financial institutions is constrained, Enjoy has some other ways to raise additional liquidity (asset sales, stock subscription options -- stock warrants), although we believe the likelihood any of these would be completed in advance during 2021 is low." =============== C O L O M B I A =============== BANCO GNB SUDAMERIS: Moody's Completes Review, Retains Ba2 Rating ----------------------------------------------------------------- Moody's Investors Service has completed a periodic review of the ratings of Banco GNB Sudameris S.A. and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review discussion held on February 9, 2021 in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. The review did not involve a rating committee. Since January 1, 2019, Moody's practice has been to issue a press release following each periodic review to announce its completion. This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future. Credit ratings and outlook/review status cannot be changed in a portfolio review and hence are not impacted by this announcement. Key rating considerations GNB Sudameris' Ba2 long-term global deposit rating incorporates the bank's baseline credit assessment (BCA) of ba3 and Moody's assessment of a moderate probability of government support in a financial stress scenario. GNB Sudameris' ba3 BCA reflects the bank's good asset quality and ample liquidity, which derives from its focus on low risk payroll lending and sizable holdings of liquid assets. The BCA is challenged by GNB's modest adjusted capitalization and the potential for earnings volatility given the bank's limited revenue diversification. The bank's large share of payroll loans, which tend to experience low delinquency levels, has resulted in consistently modest non-performing loan ratios over the years, although its commercial loan book could weaken as operating conditions remain challenging in Colombia. GNB's funding is predominantly sourced from market funds, which tend to be confidence sensitive and expensive. The principal methodology used for this review was Banks Methodology published in November 2019. GRUPO AVAL: Moody's Completes Review, Retains Ba2 Issuer Rating --------------------------------------------------------------- Moody's Investors Service has completed a periodic review of the ratings of Grupo Aval Acciones y Valores S.A. and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review discussion held on February 9, 2021 in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. The review did not involve a rating committee. Since January 1, 2019, Moody's practice has been to issue a press release following each periodic review to announce its completion. This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future. Credit ratings and outlook/review status cannot be changed in a portfolio review and hence are not impacted by this announcement. Key rating considerations Grupo Aval Acciones y Valores' (Grupo Aval) Ba2 long-term local and foreign currency issuer ratings and Grupo Aval Limited's ratings incorporate the structural subordination of the bank holding company's liabilities and those of the bank and other subsidiaries. The ratings are notched off Banco de Bogota's ba1 baseline credit assessment (BCA). In addition, the ratings incorporate the company's high interest coverage and stable but high double leverage ratio, as measured by investments in subsidiaries relative to shareholders' equity. Grupo Aval Limited's debt ratings are based on Grupo Aval's irrevocable and unconditional guarantee of Grupo Aval Limited's liabilities under the indentures. The principal methodology used for this review was Banks Methodology published in November 2019. =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: Central Bank & IMF Revise Forecasts for Economy ------------------------------------------------------------------- Dominican Today reports that the Governor of the Central Bank, Hector Valdez Albizu, held a virtual meeting with the Western Hemisphere Department of the International Monetary Fund (IMF), Patricia Alonso. He presented a report on the Dominican Republic's economic performance and prospects for 2021. Alonso, accompanied by the new IMF chief of mission for the Dominican Republic, Esteban Vesperoni, expressed the willingness of the international organization to continue collaborating with the country in the process of economic recovery, according to Dominican Today. IMF officials highlighted the macroeconomic stability of the pre-pandemic country and the close relationship that the government has historically had with that organization, the report notes. In particular, they congratulated the Central Bank for how monetary policy was implemented to face the economic effects of the pandemic, which gave great credibility to the Dominican economy in international markets, the report relays. During the meeting, Valdez Albizu presented a report on the recent macroeconomic performance of the Creole economy and its prospects for 2021, the report notes. The report discloses that as a sign of this recovery, the governor pointed to the sustained rise in the Monthly Economic Activity Indicator (IMAE). After standing at -29.8% in April, the worst month of the pandemic closed with a revealing -1.00% in December. He reported that the International Reserves of the Central Bank had strengthened steadily, exceeding 15% of GDP and covering eight months of imports above the metrics recommended by the IMF itself, the report relays. Patricia Alonso praised the work of Governor Valdez Albizu in maintaining macroeconomic stability in the Dominican Republic, the report notes. Alonso highlighted the ease of access of the DR to capital markets and welcomed the willingness of the new government authorities to advance in fiscal and electricity pacts, the report discloses. The BC governor also participated in the Central American Monetary Council meetings and the Central American Council of Superintendents of Banks, Insurance, and other Financial Institutions, the report adds. About Dominican Republic The Dominican Republic is a Caribbean nation that shares the island of Hispaniola with Haiti to the west. Capital city Santo Domingo has Spanish landmarks like the Gothic Catedral Primada de America dating back 5 centuries in its Zona Colonial district. Luis Rodolfo Abinader Corona is the current president of the nation. 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. Fitch Ratings on Jan. 18, assigned a 'BB-' rating to Dominican Republic's USD1.5 billion 5.3% notes due Jan. 21, 2041. Concurrently, the Dominican Republic reopened its 2030 4.5% notes for an additional USD1.0 billion, which Fitch rates 'BB-', raising the total outstanding amount of the 2030 notes to USD2.0 billion. Standard & Poor's, on December 4, 2020, affirmed its 'BB-' long-term foreign and local currency sovereign credit ratings on the Dominican Republic. The outlook remains negative. S&P also affirmed its 'B' short-term sovereign credit ratings. The negative outlook reflects S&P's view that it could lower the ratings on the Dominican Republic over the next six to 18 months, given the severe impact of the COVID-19 pandemic on the sovereign's already vulnerable fiscal and external profiles, as well as the potential for a weaker-than-expected economic recovery. 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). DOMINICAN REPUBLIC: IDB Projects Losses of 7% of GDP for Country ---------------------------------------------------------------- Dominican Today reports that the long-term economic repercussions due to the closures of preschool programs due to COVID-19 may be unprecedented, according to the Inter-American Development Bank (IDB), which projected for the Dominican Republic losses of 7% of GDP. In the publication: "Economic costs of the reductions in preschool programs due to the COVID-19 pandemic", the international organization presented the first study to simulate the future losses that the closure of these services would cause in 140 countries, according to Dominican Today. It emphasizes that the effects can be observed when children, currently of preschool age, are adults, the report notes. "These losses are considerable, compared to government spending on all levels of education in the same countries. Policies must mitigate the effects of the closure of preschool programs to avoid these huge losses," says the document published last September, the report relays. About Dominican Republic The Dominican Republic is a Caribbean nation that shares the island of Hispaniola with Haiti to the west. Capital city Santo Domingo has Spanish landmarks like the Gothic Catedral Primada de America dating back 5 centuries in its Zona Colonial district. Luis Rodolfo Abinader Corona is the current president of the nation. 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. Fitch Ratings on Jan. 18, assigned a 'BB-' rating to Dominican Republic's USD1.5 billion 5.3% notes due Jan. 21, 2041. Concurrently, the Dominican Republic reopened its 2030 4.5% notes for an additional USD1.0 billion, which Fitch rates 'BB-', raising the total outstanding amount of the 2030 notes to USD2.0 billion. Standard & Poor's, on December 4, 2020, affirmed its 'BB-' long-term foreign and local currency sovereign credit ratings on the Dominican Republic. The outlook remains negative. S&P also affirmed its 'B' short-term sovereign credit ratings. The negative outlook reflects S&P's view that it could lower the ratings on the Dominican Republic over the next six to 18 months, given the severe impact of the COVID-19 pandemic on the sovereign's already vulnerable fiscal and external profiles, as well as the potential for a weaker-than-expected economic recovery. 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). FALCONBRIDGE DOMINICANA: Mine at Crossroads to Expand or Shut Down ------------------------------------------------------------------ Dominican Today reports that the future of Falconbridge Dominicana (Falcondo) in the Dominican Republic depends, at this time, on the start of exploitation in Loma Miranda (central), given the imminent expiration of the lifespan of the area where the miner currently operates. Edwin Deveaux, vice president of Falcondo, told Diario Libre that the area they are currently exploiting will have, at most, four or five more years of ferronickel production, so they are considering several options: The one that is gaining the most weight at this time is accessing the La Manaclita area, in Loma Miranda, according to Dominican Today. With that condition, Deveaux said they could expand their operations in the country for another 20 years, the report notes. "Within that large area of 46 square kilometers, there is a small area of 4.6 square kilometers. That small area was the one that was proposed for operation, an area that was a sawmill in the 50s so it is not a primary forest," the report relays. ===================== P U E R T O R I C O ===================== ENRIQUE R. NARVAEZ: Vidal Buying Arroyo Properties for $1.3 Million ------------------------------------------------------------------- Enrique Rodriguez Narvaez and Myrna Iris Rivera Ortiz ask the U.S. Bankruptcy Court for the District of Puerto Rico to authorize the sale to Manuel Vidal for the corporation designated by him for the sum of $1.3 million, free and clear from any liens, the following real properties located in Arroyo, Puerto Rico: a. RUSTICA: Finca compuesta de 63 cuerdas de terreno, equivalentes a 24 hectareas, 76 areas y 15 centiareas, radicada en el barrio Cuatro Calles Sector Sabana Eneas del termino municipal de Arroyo, Puerto Rico, colindando por el NORTE, SUR, ESTE Y OESTE, con terrenos de Luce and Company, Sociedad en Comandita. Registered in the Public Registry of Guayama, Book 197, Page 41, 37th inscription, Property no. 68. Property Identification 420-000-005-04-000. b. RUSTICA: Finca compuesta de 11 cuerdas de terreno, equivalentes a 4 hectareas, 32 areas y 134 centiareas, radicada en el barrio Cuatro Calles Sector Sabana Eneas del termino municipal de Arroyo, Puerto Rico, colindando por el NORTE, SUR, ESTE Y OESTE, con terrenos de Luce and Company, Sociedad en Comandita. Esta enclavada dentro de finca denominada Vigia, de la cual forma parte. Registered in the Public Registry of Guayama, Book 197, Page 42, Property no. 345, 30th inscription Property Identification 420-000-005-31-000. The describe property have no lien except for the garnishment recorded by creditor, Lopez Enterprises, Inc. and Miguel Vazquez now Sucesion Vazquez. As to Lopez Enterprises, Inc., the creditor hold lien over all the properties of Debtors which exceed the value vs the debt owed to the creditor and the same thing happen with creditor, Sucesion Vazquez. In the case, the Debtors sought an appraisal for both properties in which the same were appraise for the total amount of $1.26 million, $1.134,000 million for the lot of land comprised of 63.0 cuerdas and $198,000 for the lot of land comprised of 11.0 cuerdas. The Debtors have received a purchase offer from the Buyer to buy these properties in the sum of $1.3 million free and clear from any liens. As per CRIM's certification, the properties owed the amount of $845 for the property number 345 comprised of 11 cuerdas and $1,600.98 for the property number 68 comprised of 63 cuerdas. At the moment of closing, the Debtors will deliver a certification validating the amount and if there is any additional balance the same will be included and paid. In order to make the sale, the Debtors hired attorney, Hector A. Sostre Narvaez, in order to prepare all the documents and deeds necessary to make the sale. The Debtors will pay the closing cost for the attorney in the amount of $13,394. The total CRIM debt is in the amount of $2,445.98. The amount received after deductions from the sale will be used to make payments as per the Chapter 11 Plan. The amount to be paid to creditors is as follows: (i) CRIM debt - $2,445.98, (ii) closing cost - $13,394, (iii) to Sucesion Vazquez, which has agreed and provided a discount in order to receive the full amount from $156,000 to $95,000, (iv) $1,114,795.08 in full payment of debt as per filed at POC # 8-1 owed to Lopez Enterprises, Inc., with the payment in full of the debt, Lopez Enterprises be surrendering all collateral guarantees that belongs to the Debtor and (v) any remaining balance will be place in the Debtors state account. The sale will be made in a period of 20 days after the Order approving the Motion is entered. In view of the payment made by the Debtors, they ask all lien attach to this property be eliminated. And the sale is understood to be free and clear of any lien. The Debtors ask that the present motion announcing the sale of the property be approved. The sale is made for the benefit of creditor and the Buyer has the fund to make the sale. In accordance to section 363(c)(2)(B) of the Bankruptcy code, the Debtors ask the approval of the sale and an order to cancel debt and all liens to delated to the Property with any provision that in accordance to law the Court deems just and proper. Objections, if any must be filed within 21 days after service of Motion. A copy of the Offer is available at https://tinyurl.com/2gq59r7h from PacerMonitor.com free of charge. About Enrique Rodriguez Narvaez and Myrna Iris Rivera Ortiz Enrique Rodriguez Narvaez and Myrna Iris Rivera Ortiz was engaged in the development and construction business in Puerto Rico. Mrs. Ortiz is a housewife. During many years, Mr. Rodriguez acquired and developed many lots of land. The Debtors filed for Chapter 11 bankruptcy protection (Bankr. D.P.R. Case No. 18-02044-EAG) on April 16, 2018. ===================================== T R I N I D A D A N D T O B A G O ===================================== TRINIDAD & TOBAGO: Forex Shortage Getting Worse ----------------------------------------------- Andrea Perez-Sobers at Trinidad Express reports that the lack of foreign exchange is constricting operations within the business community, growth and also leading to the closure of several businesses. These were some of the findings of a recent survey conducted by the Trinidad and Tobago Chamber of Industry and Commerce and Trinidad and Tobago Coalition of Service Industries, along with other business stakeholders, according to Trinidad Express. The survey took place from January 25 to February 1 and 204 firms across nine business organizations participated, the report relays. Among the respondents 63 per cent were forex earners while 37 per cent were importers, the report notes. The issue of foreign exchange has been a challenge over the past five years and more so given the negative impact of Covid-19, the report discloses. According to the survey, which was conducted to better understand the foreign exchange demand, the majority of firms, approximately 170, or 83 per cent of those surveyed, were affected by the inability to source forex which prevented them from purchasing raw material and some finished products from external sources, the report says. It noted that this shortage has had a drastic negative impact on sales, the inability to maintain supply chains which resulted in delays in restocking and meeting orders as well as more stringent credit terms and conditions from suppliers, the report relays. All of these issues are adding to cost pressures, the report notes. The survey outlined that 135 of the respondents received less than 50 per cent of their forex requirements from their local bankers in 2020, the report relays. "Subsequent to this, 147 indicated that it took longer to access funds in 2020 versus 2019, and 118 stated that it was even more difficult to do so in the latter part of 2020. This challenge of sourcing forex led to 159 companies resorting to alternative solutions which included use of personal or company credit cards," the survey explained, the report relays. This challenge of sourcing forex has created complications such as a reduction on their US dollar credit limit, exposure to credit card fraud, credit card limits which restricted regular usage, some suppliers not accepting credit cards and the increased bank charges and onerous compliance requirements, the report discloses. Due to the inability to access forex requirements in a timely manner,128 firms were forced to reduce the range of products they provide while 137 downsized their operations and 106 reduced staff, the report relays. The Central Bank in its Economic Bulletin for January 2021, said conditions in the foreign exchange market remained relatively tight in 2020, the report discloses. Total purchase of foreign exchange by authorised dealers from the public declined by 23.0 per cent in 2020, mainly as a result of a 30.1 per cent decrease in conversions by energy companies, the report relays. The bank added that foreign exchange sales to the public authorised dealers also declined by 24.2 per cent, 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 2021. 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 * * *