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/raid1/www/Hosts/bankrupt/TCRLA_Public/210806.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, August 6, 2021, Vol. 22, No. 151 Headlines A R G E N T I N A GENNEIA SA: Moody's Affirms 'Caa3' CFR & Rates New Notes 'Caa3' B E R M U D A FLY LEASING: Moody's Confirms B1 CFR & Rates New $400MM Notes B3 C O L O M B I A ALPHA LATAM: Files Ch. 11 to Facilitate Sale of Colombian Assets E L S A L V A D O R BANCO DE DESARROLLO: Moody's Downgrades Issuer Rating to Caa1 G R E N A D A GRENADA: Discloses EC$36 Million Stimulus Package J A M A I C A CARIBBEAN CEMENT: Records $2 Billion Profit For January to June M E X I C O ALPHA HOLDING: Fitch Withdraws 'RD' LT IDRs P E R U NAUTILUS INKIA: Fitch Affirms 'BB' LT IDR, Alters Outlook to Stable P U E R T O R I C O NATIONAL JEWELRY: Hires Javier M. Garcia Quintana as Accountant STONEMOR INC: All Four Proposals Passed at Annual Meeting T R I N I D A D A N D T O B A G O CARIBBEAN AIRLINES: Reports Downward Trend in Bookings - - - - - ================= A R G E N T I N A ================= GENNEIA SA: Moody's Affirms 'Caa3' CFR & Rates New Notes 'Caa3' --------------------------------------------------------------- Moody's Investors Service has assigned a Caa3 rating to Genneia S.A.'s proposed new notes, while also affirming Genneia S.A.'s Caa3 Corporate Family Rating and senior unsecured ratings. The outlook is stable. The new notes are offered in exchange of Genneia's $500 million outstanding Class XX notes and $53 million private notes, both due January 2022. If the transaction is completed, the offer will be consider a distressed exchange under Moody's definition. The offer to bondholders of the outstanding notes contemplates an Early Exchange Consideration with two options (option A for a total consideration between US$1,010 and US$1,020 of new notes in exchange of US$1,000 old notes and option B a minimum of US$200 cash and a maximum of US$800 new notes in exchange of US$1,000 old notes) as well as a Late Exchange Consideration offering US$970 new notes per US$1,000 old notes. The new notes will carry the same coupon than the old notes (8.75%) and, starting in 2023, will have equal semi-annual amortizations with final maturity in 2027. RATINGS RATIONALE The rating action incorporates Moody's expectation of prudent financial management of debt maturities as demonstrated by the exchange offer, which has been launched 6 months ahead of the bonds' maturity date providing the company with some flexibility to be able to orderly refinance debt maturities amid FX restrictions imposed by the Argentine Central Bank. Moody's also take comfort on the company's good track record of managing its debt maturities and financing needs as demonstrated by the successful exchange of its $50 million Class XXI notes at the end of last year as well as its ample access to external financing, as demonstrated by the several loans it obtained from multilaterals and credit export agencies to finance its expansion plan in recent years while maintaining ample access to the local capital and bank markets. Genneia's credit profile continues to be supported by the company's asset base and positioning as one of the main power producers in the renewable space in Argentina, with a solid operating track record and production levels, including average load factor for its wind projects of over 45%. Also supporting Moody's expectation of continued strong cash generation is the long-term contractual base with an average remaining life of contracts of 12 years. After the completion of its investment plan early this year, Moody's anticipates the company will be able to produce a ratio of cash flow from operations before working capital changes (CFO pre-WC) to debt in the range of 20 to 25%, which will allow for a progressive debt reduction amid a prudent dividend policy. The ratings continue to be constrained by the exposure of the company to Cammesa, the agency controlled by the Argentine government (Ca, Stable) that manages the wholesale electricity market and Genneia's main off-taker. While Cammesa's payments to Genneia under its Renovar contracts provide for better payment terms than for other peers in the sector because they have a payment guarantee from Foder, given the recent history of government intervention in the electricity market and Cammesa's increased reliance on government transfers, Moody's believe other downside risks persist, including the potential risk of unilateral change to the contracts' terms and conditions. In addition, Genneias' debt is mostly dollar denominated and while contractual revenues are also dollar-denominated providing a natural hedge, Cammesa payments are made in pesos at the official exchange rate, which exposes bondholders to convertibility risks. Rating Outlook The stable outlook reflects Moody's expectation that Genneia will prudently manage its upcoming financing needs while maintaining sound operations. Shareholders support evidenced by limited distributions is also a key rating consideration, particularly until the company completes its refinancing needs over the next twelve to eighteen months. Quantitatively, the stable outlook incorporates Moody's expectation of credit metrics improving steadily as the company reduces leverage to below 3 times debt to EBITDA and CFO pre WC to debt in the range of 20-25%. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS What could change the rating up/down Given the current constraining factors and the exposure to Cammesa, an upgrade of Genneia's ratings will require an upgrade of the sovereign along with verification of strengthening credit metrics such CFO pre WC to debt consistently above 25% . The ratings could come under negative pressure if the company fails to progressively reduce its current debt levels and CFO pre WC to debt remains below 15%. Profile Genneia S.A. is privately held independent power producer company that owns and operates a portfolio of power projects with 1.3 GW of installed capacity. Genneia was the first company to build and operate a wind farm in Argentina in 2012 and is currently the leading renewable power company in the country with 840 MW wind and solar plants, representing around 25% of the renewable market in Argentina. Genneia's current shareholders include Argentum Investments LLC, a limited liability company incorporated in Delaware and managed by PointState Master Fund LP; LAIG Eolia S.A. a limited liability company incorporated in Uruguay, with investment interest in companies in the energy sector across Latin America; Fintech Energy LLC, incorporated in Delaware and controlled by Fintech Advisory Inc., a New York-based limited liability company with a long-term return strategy focused on emerging markets and the Brito Group that pertains to the Brito and Carballo families, main owners and directors at the board of Banco Macro S.A. (Caa3 stable), one of the biggest local private banks in Argentina. The principal methodology used in these ratings was Unregulated Utilities and Unregulated Power Companies published in May 2017. ============= B E R M U D A ============= FLY LEASING: Moody's Confirms B1 CFR & Rates New $400MM Notes B3 ---------------------------------------------------------------- Moody's Investors Service confirmed Fly Leasing Limited's B1 corporate family rating and its B3 senior unsecured notes rating. Moody's also assigned a B3 rating to FLY's planned $400 million senior unsecured notes that it intends to issue in exchange for its existing $300 million senior unsecured notes. Moody's also confirmed the Ba3-rated term loans of FLY's subsidiaries, Fly Funding II S.a.r.l. and Fly Willow Funding Limited. Moody's said the rating on FLY's existing senior unsecured notes would be withdrawn upon the completion of the exchange transaction. FLY's and its subsidiaries' outlooks are stable. These rating actions conclude the review for upgrade initiated on March 30, 2021, following the announcement that an affiliate of Carlyle Aviation Partners (Carlyle Aviation), the commercial aviation investment and servicing arm within The Carlyle Group's Global Credit platform, will acquire all of the outstanding shares of FLY for approximately $2.4 billion. The merger was completed on August 2, 2021 [1]. Assignments: Issuer: Fly Leasing Limited Senior Unsecured Regular Bond/Debenture (Foreign Currency), Assigned B3 Confirmations: Issuer: Fly Funding II S.a.r.l. Backed Senior Secured 1st Lien Term Loan B (Foreign Currency), Confirmed at Ba3 Issuer: Fly Leasing Limited Corporate Family Rating, Confirmed at B1 Senior Unsecured Regular Bond/Debenture (Foreign Currency), Confirmed at B3 Issuer: Fly Willow Funding Limited Backed Senior Secured Term Loan, Confirmed at Ba3 Outlook Actions: Issuer: Fly Funding II S.a.r.l. Outlook, Changed To Stable From Rating Under Review Issuer: Fly Leasing Limited Outlook, Changed To Stable From Rating Under Review Issuer: Fly Willow Funding Limited Outlook, Changed To Stable From Rating Under Review RATINGS RATIONALE FLY's B1 CFR reflects Moody's expectations of FLY's better profitability and more stable fleet utilization, both of which are likely to benefit from improved air travel prospects. The majority of FLY's fleet is comprised of modern narrow-body aircraft used primarily in domestic and regional travel, which, Moody's believes, have better prospects of improved volumes as air travel demand recovers. Moody's expects that global air passenger demand will recover toward 2019 levels through 2023, but the recovery will be uneven due to varying vaccination rates and uncertainty around the spread of COVID-19 variants. Moody's believes that the gradual recovery will improve the environment for Carlyle Aviation to better place aircraft assets as leases mature (28% of fleet by the end of 2022), and for more favorable outcomes from asset sales. Carlyle Aviation has a long and broad experience of aircraft management throughout the aircraft life cycle, and currently has a fleet of 240 aircraft. Moody's said FLY's ratings also consider its high airline lessee concentrations. At December 31, 2020, FLY's top ten airline customers comprised approximately 61% of the carrying value of its fleet, whereas its larger rated competitors' customer concentrations ranged more favorably from 30% to 45% at this date. FLY has a good liquidity position supported primarily by cash raised as a part of the transaction ($212 million as of March 31, 2021). Moody's expects that FLY will maintain excess cash to buoy its liquidity position as it continues to operate without any external committed revolving facilities. Moody's anticipates that the company's free cash flow generation will be negative in 2021 and approximately $10 million in 2022 but could benefit from gains on asset sales, if these are effectively executed. This free cash flow projection incorporates an assumption of the repayment of rent deferrals in the amount of approximately $15 million by the end of 2021, as anticipated by FLY. FLY's outstanding debt will remain largely unchanged with the exception of the incremental $100 million senior unsecured notes being issued as an add-on to the exchanged $300 million notes due October 15, 2024. In addition to the notes, FLY's subsidiaries have other term debt that FLY guarantees; specifically Fly Willow Funding Limited's $180 million term loan due 2025 and Fly Funding II S.a.r.l.'s term loan due 2025 (outstanding amount of $357 million at March 31, 2021), which do not contain change of control provisions. The Ba3 ratings for the subsidiaries' term loans reflect their security interest in aircraft as well as the benefit of the loss absorption cushion provided by the unsecured notes' obligations in FLY's capital structure. The B3 ratings on FLY's senior unsecured notes reflect their subordinated position in FLY's capital structure. The stable outlooks on FLY and its subsidiaries reflect Moody's expectation that FLY will return to growth in 2022 supported by improving, albeit uneven, domestic travel globally, and that it will benefit from favorable liability management from its new owner, Carlyle Aviation, that over time will reduce refinancing risk. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if FLY generates significantly enhanced and sustained profitability and cash flows, with enhanced liquidity, and further transitions to a more favorable capital structure. The ratings could be downgraded if FLY suffers from a deterioration in revenue, earnings or liquidity, or disposes of aircraft assets on unfavorable terms. The principal methodology used in these ratings was Finance Companies Methodology published in November 2019. Incorporated in Bermuda, FLY Leasing Limited (FLY) is a lessor of commercial aircraft and engines now owned by Carlyle Aviation. As of March 31, 2021, the company had 72 aircraft and seven engines on lease and 5 aircraft off-lease and had total assets of $3.2 billion. Carlyle Aviation is a multi-strategy aviation investment manager with assets under management of $6.1 billion which owns and manages a fleet of 240 aircraft. =============== C O L O M B I A =============== ALPHA LATAM: Files Ch. 11 to Facilitate Sale of Colombian Assets ---------------------------------------------------------------- Alpha Latam Management, LLC and certain of its affiliates that operate its Colombian business filed voluntary petitions for relief under chapter 11 of the U.S. Bankruptcy Code in the Bankruptcy Court for the District of Delaware. The Debtors are a technology-enabled financial services company that have historically provided consumer lending products in Colombia. The Debtors' affiliates operating in Mexico, including Alpha Holding, S.A. de C.V. ("Alpha Holding" and such affiliates, collectively with the Debtors, the "Company") are not included in the chapter 11 filing. Alpha Holding announced on April 20, 2021, that it would restate its financial statements for the years ended December 31, 2018, and 2019 (the "Prior Period Financial Statements to correct an error in Alpha Holding's accounting for its derivative positions. Alpha Holding also identified additional accounting errors that it anticipates will result in a restatement of other assets and other accounts receivable in its financial statements for previous years, including the Prior Period Financial Statements, or a current write-down of other assets and other accounts receivable. The accounting errors ultimately resulted in several defaults and events of default under the Company's funded debt obligations. Though the Company endeavored to negotiate forbearance and waiver agreements with several of its lenders, such efforts were unsuccessful. Given these events, the Company no longer had access to the new financing necessary to continue originating new loans, and accordingly has ceased its on-balance sheet origination activities. The actions became necessary despite the Company's best efforts to streamline the business by implementing significant cost-cutting measures. To fund working capital needs, the Debtors have obtained, subject to Bankruptcy Court approval, debtor-in-possession financing for a senior secured facility of $45 million. The Debtors expect access to the debtor-in-possession financing, together with its incoming cash from collections, will provide them with sufficient liquidity to consummate a value-maximizing sale transaction of their Colombian loan portfolio. The Debtors have requested Bankruptcy Court permission to continue operating the Colombian business without interruption to ensure that collections of all outstanding loans continue in the ordinary course. The Debtors intend to continue to act in accordance with Colombian governmental regulations, including with respect to employee benefits and severance payments associated with recent workforce reductions. Court filings and claims information are available at @ cases.primeclerk.com/alphalatam. About AlphaCredit(C) AlphaCredit (C) is a technology-enabled, financial services company in Latin America that provides consumer loans to individuals and financial solutions for SMEs in Mexico and Colombia. ===================== E L S A L V A D O R ===================== BANCO DE DESARROLLO: Moody's Downgrades Issuer Rating to Caa1 ------------------------------------------------------------- Moody's Investors Service has downgraded all the long-term ratings and assessments of Banco de Desarrollo de la Republica de El Salvador (Bandesal) and Banco Agricola, S.A. (Agricola). Bandesal's issuer rating was downgraded to Caa1 from B3 and its baseline credit assessment to caa1 from b3. Agricola's deposit rating was also downgraded to B2 from B1, BCA to caa1 from b3 and adjusted BCA to b2 from b1. At the same time, Moody's affirmed both banks' Not Prime short term ratings and Not Prime(cr) short term counterparty risk assessments. The outlook on the banks' ratings remains negative. The rating actions follow the announcement made by Moody's Investors Service on July 30, 2021, that it downgraded El Salvador's sovereign bond rating to Caa1 from B3, and maintained the negative outlook. RATINGS RATIONALE The downgrade of Bandesal's and Agricola's ratings and assessments were prompted by the downgrade of El Salvador's sovereign bond rating to Caa1, from B3, which mainly reflect the country's limited market access amid a challenging debt amortization schedule beginning in 2023, coupled with a deteriorated quality of the country's policymaking. These risks have intensified implementation challenges to the authorities' fiscal adjustment plans and increased uncertainty about financing prospects. The negative outlook on the sovereign debt rating captures the fact that the fiscal position remains vulnerable and susceptible to financing shocks that could further jeopardize the sovereign's repayment capacity. Bandesal and Agricola's BCAs continue to be constrained by El Salvador's sovereign debt rating, considering both banks' domestic franchises and their highly correlated financial fundamentals to the creditworthiness of El Salvador, through the macroeconomic and financial conditions, as well as the banking system's direct exposure to government risk, in the form of holdings of government bonds. Rising uncertainties about El Salvador's government finances, which is the basis for the negative outlook on its ratings, challenges these banks' asset risk, profitability and funding perspectives. Bandesal's ratings incorporate the bank's good asset quality metrics, which benefit from its preferred creditor status as the government development bank in El Salvador. Asset risk metrics remained sound throughout 2020 and the beginning of 2021 amid the economic implications of the pandemic and the bank's adequate level of provisions to absorb potential credit losses. In December 2020, the total loan loss reserves stood at 3.4% of gross loans. In addition, despite being a government bank, Bandesal does not hold El Salvador's sovereign debt -neither it provides direct financing to the government- in accordance with the Salvadoran Development Bank Law. The bank's profitability has historically been low as a result of its policy purpose to provide long-term funding to other financial institutions to lend to companies in the country, a low-yielding lending activity. However, profitability metrics remained above historical levels since 2020, benefited by improved margins on businesses. Although most of its funding mix is provided by multilateral financial institutions, future market access and funding facilities could be affected by the deterioration of the sovereign's credit profile. However, Bandesal's capitalization remains strong -with a tangible common equity (TCE) to risk weighted assets (RWA) ratio of 50.4% as of March 2021- supported by recent improvements in profitability and contained dividend payments to the government. Agricola's B2 deposit ratings incorporate its strong profitability that benefits from ample net interest margins derived from a broad and inexpensive deposit base and strong footprint in the country's credit market. With the end of deferral measures in early 2021, the bank's asset quality metrics started to deteriorate, with non-performing loans reaching 1.9% of gross loans as of March 2021 from 1.1% as of 2020 year-end. However, Agricola built conservative provisions against credit losses, representing 2.5x NPLs or 4.8% of gross loans as of March 2021, which will help mitigate rising asset risks. Agricola's capital position stood at an adequate 13.3% TCE to RWA ratio in March 2021, supported by a moderate loan book growth, that helped to mitigate its high shareholders' payout ratio close to 100% of its net income. Bandesal's Caa1 long-term issuer rating is currently placed at the level of the sovereign debt rating, while Agricola's B2 deposit rating remains two notches above the Caa1 sovereign debt rating, as its adjusted BCA is uplifted by Moody's assessment of a high probability of affiliate support from its parent bank Bancolombia S.A. (Baa2 negative, ba1). Agricola is one of Bancolombia's most important subsidiaries in Central America. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS An upgrade is unlikely for Bandesal and Agrícola at this time because both banks' ratings have negative outlookss. However, the outlooks could be changed to stable following a stabilization of the Government of El Salvador's sovereign rating outlook, provided that operating conditions for the banks stabilized and their financial profiles remained sound. Conversely, downward pressure on these banks' ratings would occur following any additional downgrade of the sovereign rating, that could reflect potential pressures on banks' operating environment in light of the strong interlinkages between the banks' creditworthiness and that of the government. ISSUERS AND RATINGS AFFECTED Issuer: Banco de Desarrollo de la Republica de El Salvador Downgrades Baseline credit assessment and adjusted baseline credit assessment, to caa1 from b3 Long-term foreign currency issuer rating, to Caa1 from B3, outlook remains negative Long-term foreign currency counterparty risk rating, to B3 from B2 Long-term counterparty risk assessment, to B3(cr) form B2(cr) Affirmations: Short-term foreign currency counterparty risk rating at Not Prime Short-term counterparty risk assessment at Not Prime(cr) Outlook action: Outlook remains negative Issuer: Banco Agricola, S.A. Downgrades Baseline credit assessment, to caa1 from b3 Adjusted baseline credit assessment, to b2 from b1 Long-term foreign currency deposit rating, to B2 from B1, outlook remains negative Long-term foreign currency counterparty risk rating, to B2 from B1 Long-term counterparty risk assessment, to B2(cr) from B1(cr) Affirmations: Short-term foreign currency deposit rating at Not Prime Short-term foreign currency counterparty risk rating at Not Prime Short-term counterparty risk assessment at Not Prime(cr) Outlook action: Outlook remains negative RATING METHODOLOGY The principal methodology used in these ratings was Banks Methodology published in July 2021. ============= G R E N A D A ============= GRENADA: Discloses EC$36 Million Stimulus Package ------------------------------------------------- RJR News reports that the Grenada government has announced EC$36 million economic stimulus package that is expected to benefit close to 9,000 nationals directly as well as 10,000 indirectly. Prime Minister Dr. Keith Mitchell, in a radio and television broadcast, said the government is in the advanced stages of preparation for the implementation of the package, according to RJR News. It is being funded through the Barbados-based Caribbean Development Bank (CDB) under the Inter-American Development Bank-CDB Global Loan Program and the Grenada government, the report notes. He said the support program is expected to be implemented in September, the report adds. ============= J A M A I C A ============= CARIBBEAN CEMENT: Records $2 Billion Profit For January to June --------------------------------------------------------------- RJR News reports that Caribbean Cement Limited's profit for the first six months of this year increased by $2 billion arising from stronger domestic demand and the company's capacity to supply the market. During the January to June period, profit amounted to $3 billion compared to $1 billion a year ago, according to RJR News. Caribbean Cement recorded revenues of $12.3 billion -- 32 per cent higher than the January to June period in 2020, the report relates. The company says the increase in revenue and efficiency in operating cost control have been a fundamental factor for the financial results, the report adds. About Caribbean Cement Caribbean Cement Company Limited, together with its subsidiaries, manufactures and sells cement and clinker in Jamaica and other Caribbean countries. The company was incorporated in 1947 and is based in Kingston, Jamaica. As reported in the Troubled Company Reporter-Latin America on Oct. 30, 2017, RJR News said that Caribbean Cement Limited is reporting improved profits for the three months ending September. For the quarter, the company earned J$747.8 million compared with a loss of J$81 million for the corresponding period last year, according to RJR News. =========== M E X I C O =========== ALPHA HOLDING: Fitch Withdraws 'RD' LT IDRs ------------------------------------------- Fitch Ratings has withdrawn the following ratings of Alpha Holding, S.A. de C.V. (Alpha Holding): Long-Term Local and Foreign Currency Issuer Default Ratings (IDRs) at 'RD', Short-Term Local and Foreign Currency IDRs at 'RD', and senior unsecured 2022 and 2025 global bonds at 'C'. Fitch has withdrawn the ratings because the agency does not have sufficient information to maintain the ratings. Accordingly, Fitch will no longer provide ratings or associated ESG Relevance Scores for Alpha Holding. The withdrawal follows Alpha Holding's Aug. 2, 2021 announcement that some of its affiliated companies operating its Colombian business initiated voluntary proceedings under Chapter 11. In the press release, the entity also stated it has stopped its loan origination activities. Fitch is withdrawing the ratings due to the lack of information following the announcement. KEY RATING DRIVERS Alpha Holding's key rating drivers were detailed in the last rating action commentary published on July 22, 2021. ESG Relevance factors as key rating drivers are no longer relevant, as the ratings have been withdrawn. RATING SENSITIVITIES Rating sensitivities are not applicable as the ratings have been withdrawn. 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. The ratings are being withdrawn due to lack of information. ESG CONSIDERATIONS Alpha Holding's ESG considerations were detailed in the last rating action commentary published on July 22, 2021. ======= P E R U ======= NAUTILUS INKIA: Fitch Affirms 'BB' LT IDR, Alters Outlook to Stable ------------------------------------------------------------------- Fitch Ratings has affirmed Nautilus Inkia Holdings SCS's Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) at 'BB'. The rating action affects USD600 million senior unsecured notes due in 2027. The Rating Outlook was revised to Stable from Negative. Inkia's revised Outlook reflects Fitch's view that a capital structure more aligned to the rating should be reached by 2022 after the execution of liability management initiatives in the last couple of years. In 2019, Inkia transferred USD200 million in debt used to acquire the minority stakes in Kallpa Generacion S.A. (BBB-/Stable) and Samay I from its balance sheet to that of Nautilus Energy Partners LLC. In April 2021, Inkia also removed around USD350 million of net debt from its balance sheet after transferring Samay I to Samay Holdings SCS. Inkia's ratings reflect its consolidated credit profile, strengthened by its main cash flow subsidiary, Kallpa, partially offset by other subsidiaries' weaker credit profiles, its debt-acquisitive strategy and pressured cash outflows from its shareholder. KEY RATING DRIVERS Improving Capital Structure: Fitch expects Inkia's leverage to be pressured in the short term, peaking at 5.3x in 2020, as Kallpa pursues an investment cycle funded by debt with continued cash flow distribution pressures. Leverage should fall to 5.0x by 2022, aided by the recent liability management initiatives and the contribution of additional capacity in Las Flores. Inkia's consolidated financial profile places it at the boundaries of Fitch's sensitivities for a 'BB' rating. Debt Structurally Subordinated: Inkia's holding company debt remains structurally subordinated to operating company debt, although management has eliminated onerous cash trapping mechanisms that could negatively affect cash flow predictability to the holding company. Inkia's cash flow depends on cash distributions from subsidiaries and associated companies, which totaled USD223 million in 2020, resulting in holding company debt to cash flow of 2.6x. Total subsidiary debt amounted to approximately USD2.2 billion (including Samay debt of USD363 million), or 79% of total consolidated debt at YE 2020. Neutral to Negative FCF Expectations: Fitch expects Inkia will report neutral to negative FCF in the medium term due to expansionary capex in Peru and significant cash outflow to I Squared Capital. Average annual capex is expected at USD120 million. Most of this includes the Las Flores plant expansion and Kallpa upgrade, for a total investment of USD165 million, and maintenance capex in the distribution business, Energuate Trust (BB-/Stable). Additionally, Fitch expects significant distributions to shareholders averaging over USD204 million annually in the next four years. Historically Aggressive Shareholder Strategy: Inkia has historically pursued an aggressive growth strategy prioritizing high short-term dividend flows over capitalizing on deleveraging opportunities. Inkia had a Negative Outlook from 2014 to 2016 and from 2018 to 2021, largely due to the aggressive strategy and lack of financial discipline resulting in significant and unexpected cash outflows from Inkia when its financial profile was weak. A negative rating action could result from additional cash distribution funded by debt. Geographic and Business Diversification: Inkia is focused on diversifying its energy asset base in Latin American markets, where overall and per capita energy consumption has a higher growth potential than developed markets. This adds risk to the consolidated profile. Inkia adopted an aggressive expansion strategy during the last few years to expand its portfolio. Fitch estimates around 63% of its 2020 EBITDA came from investment-grade countries, mainly Peru, at 58%, while the balance came from below-investment-grade countries. DERIVATION SUMMARY Inkia presents a generally weaker capital structure relative to its large, multi-asset energy peers in Latin America. Its nearest peer in this group is Chilean generator AES Andes S.A. (BBB-/Stable), which is also in a deleveraging trajectory, with expected leverage at 3.6x by 2021. Colbun S.A. (BBB+/Stable) and Engie Energia Chile S.A. (BBB+/Stable) operate with a stronger capital structure than Inkia, with leverage consistently at or below 2.0x, comfortably within the investment-grade rating category. In Peru, Fitch rates Kallpa, Orazul Energy Peru S.A. (BB/Stable) and Fenix Power Peru S.A. (BBB-/Stable). Inkia is rated two notches below Kallpa. Inkia has a more diversified asset base, but it has greater exposure to countries with weak operating environments, indicating higher business risk. Kallpa has a diversified asset base in Peru and expected lower leverage through the rating horizon, peaking at 4.5x during Las Flores construction. Inkia has the capacity to reduce leverage below 5.0x after completion of the investment cycle. Inkia is rated two notches below Fenix. Fenix is a single-asset generator with a high proportion of take-or-pay costs, but its ratings are buoyed by strong shareholder support from Colbun. Inkia is rated at the same level as Orazul. Orazul's smaller scale is offset by its efficient generation assets in a strong operating environment. Both companies are expected to report leverage closer to 5.0x through the rating horizon. KEY ASSUMPTIONS Fitch's key assumptions within its rating case for the issuer include: Kallpa Generacion S.A. -- Average Power Purchase Agreements (PPA )prices at USD44/MWh in the next four years; -- Contracted capacity and generation remain at similar levels; -- Four-year average capex at USD48 million, including Las Flores expansion and Kallpa upgrade; -- Las Flores expansion of 125MW and Kallpa (KII and KIII) upgrades of 37MW begin operations by mid-2022; -- Average annual dividends of USD147 million, while maintaining a minimum cash balance of USD20 million. Energuate Trust -- Average energy losses of 19% in the next four years; -- Approximately 58,000 new customers per year; -- Inflation of around 3%, in line with historical data; -- Minimal FX fluctuation, reflecting Guatemala's managed float; -- Dividends paid on cash averaging USD62 million in the next four years; -- Average capex of around USD51 million annually through the medium term. Nautilus Inkia Holdings -- Annual dividend payments of USD204 million over next four years; -- Annual capex averaging USD120 million over next four years; -- Debt reduction of around USD285 million in 2021. RATING SENSITIVITIES Factor that could, individually or collectively, lead to positive rating action/upgrade: -- A positive rating action could be triggered by a conservative cash flow management, leading to total debt/EBITDA below 4.0x on a sustained basis while moving the portfolio of assets to investment-grade countries. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Consolidated gross leverage remains above 5.0x through the rating horizon following additional investment opportunities undertaken without an adequate amount of additional equity; -- Reduced cash flow generation due to adverse regulatory issues, deterioration of its contractual position and/or deteriorating operating conditions for the distribution company business; -- An aggressive dividend policy funded by debt; -- Inkia's asset portfolio becomes more concentrated in countries with high political and economic risk. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Non-Financial Corporate 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. LIQUIDITY AND DEBT STRUCTURE Adequate Liquidity: Inkia's liquidity is adequate as a result of strong cash flows from subsidiaries, adequate cash on hand, a comfortable amortization profile and adequate access to the debt capital markets. The company held approximately USD192 million of readily available cash at March 31, 2021, mostly in hard currency in the U.S. The higher than usual cash on hand is part of the company's strategy to improve liquidity during the uncertainty brought on by the coronavirus pandemic. Inkia's senior unsecured notes due 2027 are structurally subordinated to all existing and future indebtedness and other liabilities of the company's subsidiaries. In addition, the 2027 notes are effectively subordinated to all existing and future secured indebtedness of the company and any subsidiary to the extent of the value of the assets securing such indebtedness. ISSUER PROFILE Inkia is an international company focused on the electric power sector, specifically on generation and distribution. The company is based in Latin America with operations in Peru, Chile, the Dominican Republic, El Salvador, Bolivia, Nicaragua, Jamaica, Guatemala and Panama. The company owns, operates and develops power plants to generate and sell electricity to distribution companies and unregulated consumers under short- and long-term PPAs and to the spot market. Its operating companies use natural gas, water, wind, diesel and heavy fuel oil to produce electricity. The company's combined installed capacity was 2,504MW. It also owns the largest distribution company in Central America, measured by population served, Energuate, based in Guatemala. SUMMARY OF FINANCIAL ADJUSTMENTS Kallpa's contract extension costs of USD23.5 million were subtracted from EBITDA in 2020. ESG CONSIDERATIONS Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. ===================== P U E R T O R I C O ===================== NATIONAL JEWELRY: Hires Javier M. Garcia Quintana as Accountant --------------------------------------------------------------- National Jewelry, LLC seeks approval from the U.S. Bankruptcy Court for the District of Puerto Rico to employ Javier M. Garcia Quintana, as accountant. Javier M. Garcia Quintana will provide assistance in the preparation of the monthly operating reports, as well as render business consulting in the development of new strategies, and tax consulting. Javier M. Garcia Quintana will be paid at the rate of $150 per hour, will also be reimbursed for reasonable out-of-pocket expenses incurred. Javier M. Garcia Quintana disclosed in a court filing that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Javier M. Garcia Quintana Javier M. Garcia Quintana PO Box 192890 San Juan, PR, 00919 Tel: (787) 721-4855 About National Jewelry, LLC National Jewelry, LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D.P.R. Case No. 21-01742) on June 4, 2021. At the time of the filing, the Debtor reported total assets of up to $50,000 and total liabilities of up to $500,000. Judge Enrique S. Lamoutte Inclan oversees the case. The Debtor is represented by the Law Offices of Luis D. Flores Gonzales. STONEMOR INC: All Four Proposals Passed at Annual Meeting --------------------------------------------------------- At the Annual Meeting of Stockholders of StoneMor Inc., the Company's stockholders: (1) elected Andrew Axelrod, Spencer E. Goldenberg, David Miller, Stephen J. Negrotti, Kevin D. Patrick, Joseph M. Redling, and Patricia D. Wellenbach as directors; (2) ratified Grant Thornton LLP as the Company's independent registered accounting firm for the fiscal year ending Dec. 31, 2021; (3) approved, in a non-binding advisory vote, the compensation of the Company's named executive officers; and (4) approved an amendment to the Company's Certificate of Incorporation to increase the supermajority vote of stockholders required to approve certain matters from 66- 2/3% to 85%. About StoneMor Inc. StoneMor Inc. (http://www.stonemor.com),headquartered in Bensalem, Pennsylvania, is an owner and operator of cemeteries and funeral homes in the United States, with 304 cemeteries and 70 funeral homes in 24 states and Puerto Rico. StoneMor's cemetery products and services, which are sold on both a pre-need (before death) and at-need (at death) basis, include: burial lots, lawn and mausoleum crypts, burial vaults, caskets, memorials, and all services which provide for the installation of this merchandise. StoneMor reported a net loss of $8.36 million for the year ended Dec. 31, 2020, compared to a net loss of $151.94 million for the year ended Dec. 31, 2019. As of March 31, 2021, the Company had $1.68 billion in total assets, $1.77 billion in total liabilities, and a total stockholders' deficit of $96.53 million. ===================================== T R I N I D A D A N D T O B A G O ===================================== CARIBBEAN AIRLINES: Reports Downward Trend in Bookings ------------------------------------------------------ RJR News reports that Caribbean Airlines (CAL) has reported a downward trend in bookings for arrivals and departures in Trinidad and Tobago. CAL's Corporate Communications Head, Dionne Ligoure, said the reduction did not come as a surprise, according to RJR News. When asked by the Trinidad Guardian newspaper what measures Caribbean Airlines would take to stimulate demand, Miss Ligoure declined to give details, the report relays. She said the airline would continue to monitor bookings. Since the reopening of Trinidad and Tobago's borders and the resumption of travel on July 17, Miss Ligoure said up to July 25, the total number of international flights outbound, was 43 while there were 42 inbound flights, 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. Caribbean Airlines is among many airlines whose business has been greatly affected in 2020 by the slowdown of international travel caused by the COVID-19 pandemic. The government of Trinidad & Tobago guaranteed a US$65 million loan for the airline, and that funding has helped with the airlines' cash flow shortfall since May 2020. In September 2020, the airline related it will be taking cost-cutting measures to help keep it afloat. The measures, which was to affect some 1,700 employees, included salary deductions, no-pay leaves and lay-offs. ********* 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 * * *