/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/220126.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Wednesday, January 26, 2022, Vol. 23, No. 13 Headlines B R A Z I L BANCO RCI: Moody's Withdraws Ba2 LongTerm Deposit Ratings LIGHT SA: Fitch Affirms BB- Issuer Default Ratings, Outlook Stable SBM BALEIA: Fitch Affirms BB- on Sec. Notes Due 2027, Outlook Neg. C H I L E LATAM AIRLINES: Plan Patently Unconfirmable, Says Committee D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: Agribusiness Experience Price Hikes Every Day J A M A I C A CARIBBEAN CREAM: Loses $25 Million in Third Quarter M E X I C O GRUPO AEROMEXICO: All Eight Classes Voted in Favor of Plan P A R A G U A Y NAVIOS SOUTH: S&P Upgrades ICR to 'B', Outlook Stable T R I N I D A D A N D T O B A G O TRINIDAD & TOBAGO: Firms to Lose Guyana Oil Contract V E N E Z U E L A VENEZUELA: Breaks One of World's Longest Bouts of Hyperinflation - - - - - =========== B R A Z I L =========== BANCO RCI: Moody's Withdraws Ba2 LongTerm Deposit Ratings --------------------------------------------------------- Moody's Investors Service has withdrawn all ratings and assessments assigned to Banco RCI Brasil S.A. (RCI Brasil). Before the withdrawal, the outlook on the deposit ratings was stable. Withdrawals: Issuer: Banco RCI Brasil S.A. Adjusted Baseline Credit Assessment, Withdrawn, previously rated ba2 Baseline Credit Assessment, Withdrawn, previously rated ba3 ST Counterparty Risk Assessment, Withdrawn, previously rated NP(cr) LT Counterparty Risk Assessment, Withdrawn, previously rated Ba1(cr) ST Counterparty Risk Rating (Foreign Currency), Withdrawn, previously rated NP ST Counterparty Risk Rating (Local Currency), Withdrawn, previously rated NP LT Counterparty Risk Rating (Foreign Currency), Withdrawn, previously rated Ba1 LT Counterparty Risk Rating (Local Currency), Withdrawn, previously rated Ba1 LT Deposit Rating (Local Currency), Withdrawn, previously rated Ba2; outlook changed to Ratings Withdrawn from Stable LT Deposit Rating (Foreign Currency), Withdrawn, previously rated Ba2; outlook changed to Ratings Withdrawn from Stable ST Deposit Rating (Local Currency), Withdrawn, previously rated NP ST Deposit Rating (Foreign Currency), Withdrawn, previously rated NP Outlook Actions: Issuer: Banco RCI Brasil S.A. Outlook, Changed To Ratings Withdrawn From Stable RATINGS RATIONALE RCI Brasil is headquartered in Parana, Brazil, with assets of BRL10.6 billion and shareholders' equity of BRL1.7 billion as of September 30, 2021. LIGHT SA: Fitch Affirms BB- Issuer Default Ratings, Outlook Stable ------------------------------------------------------------------ Fitch Ratings has affirmed Light S.A. and its wholly owned subsidiaries Light Servicos de Eletricidade S.A. (Light Sesa) and Light Energia S.A.'s (Light Energia) Foreign Currency (FC) and Local Currency (LC) Issuer Default Ratings (IDRs) at 'BB-' and National Scale Ratings at 'AA-(bra)'. The Rating Outlook is Stable for all ratings. The ratings reflect Light group's low to moderate business risk profile within the Brazilian electric-energy sector. Light Sesa has exclusive electricity distribution rights in its concession area and Light Energia's generation asset base adds to cash flow predictability. Light group presents a robust liquidity position and lengthened debt maturity profile, but operational inefficiencies in the distribution segment and moderate leverage ratios limit the ratings. The analysis incorporates the benefit from a stronger consolidated EBITDA due to expected favorable tariff review for Light Sesa in March 2022. Fitch rates Light group on a consolidated basis given the strong ties among the three entities. KEY RATING DRIVERS Balanced Business Profile: Light group's credit profile benefits from its significant position and asset base in the Brazilian electric-energy sector. Light Sesa operates in the distribution segment, serving 4.3 million customers in the State of Rio de Janeiro - a segment characterized by a monopoly position in the concession area and pass-through of non-manageable costs to tariffs. This segment should account for approximately 90% and 70% of the group's consolidated net revenue and EBITDA, respectively, in 2022. Light Sesa's concession ends in 2026 and its renewal is deemed very likely since service quality requirements have been met. In the generation segment, Light Energia contributes to greater diversification of cash flows and the dilution of operating risks, which are more prevalent in the distribution segment. The company has 1.2 GW of hydro generation capacity and most of its concessions end in 2028, for which renewal conditions are more uncertain. Negative Performance on Distribution: Light Sesa's EBITDA is limited by energy losses and provisions for credit losses above tariff coverage, as well as indemnities to consumers. Positively, the company should benefit from the next tariff review on March 2022, which will likely incorporate a BRL2.0 billion increment in asset base and increase regulatory limits for energy losses to at least 21.7% of total load, from 19,2%. Fitch's base case assumes energy losses of 26.5% and a modest 0.5% growth rate on energy demand as of 2022, after an expected decrease of 0.5% in 2021. EBITDA should reach BRL1.2 billion in 2022 and BRL1.3 billion in 2023, significantly below the estimated regulatory EBITDA of BRL2.3 billion Generation Benefits Credit Profile: Light Energia adds predictability to the group's operating cash flows. Its assured energy of 672 aMW was largely sold to industrial clients through medium-term contracts. The company follows a conservative hedge strategy against hydrological risk by keeping 28% of its energy uncontracted for 2022 and 2023. This compensates for the lack of protection related to quotas or regulatory insurance. The company's EBITDA should reach BRL549 million in 2021 and BRL568 million in 2022, with underlying average GSF of 0.77 and 0.80, respectively. Light Energia's EBITDA may slightly decline as of 2024 due to falling long-term energy prices. Manageable Negative FCFs: The base case scenario for the ratings considers Light group's EBITDA and cash flow from operations (CFFO) of BRL1.6 billion and negative BRL470 million in 2021, and BRL1.8 billion and BRL373 million in 2022, respectively. The cash impact in 2021 derives from a BRL1.3 billion payment from Light Energia, related to GSF renegotiation, and an estimated BRL1.8 billion increase (+27%) in energy cost from Light Sesa, compared to 2020, due to water scarcity in Brazil. Investments should average BRL1.4 billion annually in 2021-2023, mostly focused in the distribution business. FCF is expected to be negative in 2021 and 2022, at BRL2.0 billion and BRL1.2 billion, and moderately positive as of 2023, after dividends of 25% of net income. Credit Metrics Under Pressure: The group's consolidated net adjusted leverage should be in the range of 4.0x-4.5x until 2023, compared with 4.1x in 2020, according to Fitch's criteria. These ratios incorporate guarantees provided to Norte Energia S.A. as off-balance sheet debt (BRL716 million on September 2021). Financial flexibility is limited, since the group has already been distributing minimum dividends and needs to maintain intensive capex. A new cash support sponsored by the government, anticipating future collections from customers, if implemented, might reduce net leverage in 0.2x. It assumes an uncertain cash inflow of around BRL400 million in 2022, not incorporated in the rating scenario. Gross leverage is estimated in 6.1x and 5.2x in 2021 and 2022. Consolidated Approach: The ratings consider the strong legal and strategic links between Light S.A. and its main subsidiaries, Light Sesa and Light Energia. These companies should generate 30% and 70% of all dividends to be received by the parent in 2021-2024, respectively. The parent guarantees most of the debt instruments issued by the subsidiaries and there are cross-default provisions between these debts. DERIVATION SUMMARY Light's IDRs are lower than several electric energy groups in Latin America, such as Empresas Publicas de Medellin E.S.P. (EPM, LC IDR BBB-/Rating Watch Negative), Grupo Energia Bogota S.A. E.S.P. (GEB, LC IDR BBB/Stable) and Enel Americas S.A. (LC IDR A-/Stable). Light operates in Brazil (BB-/Negative), while its peers are more exposed to higher rated countries, like Chile (A-/Stable) and Colombia (BB+/Stable). Light's business profile is also worse than these peers because it is more concentrated in energy distribution, wherein operating cash flows tend to be more volatile. Compared to the Brazilian Companhia Energetica de Minas Gerais (Cemig, LC IDR BB/Stable), Light has somewhat weaker business profile, with less diversified asset base and the generation business accounting for around 30% of its consolidated EBITDA, lower than Cemig`s ratio of 45%. In the distribution segment, Light faces weaker operating performance and poor growth prospects. Light's financial profile is also weaker. Average net leverage in 2021-2022 is estimated at 4.5x for Light and 2.3x for Cemig. KEY ASSUMPTIONS Fitch's key assumptions within its rating case for the issuer include: -- GSF: 0.77, 0.80, 0.85 and 0.94, from 2021 to 2024, on average; -- Energy short-term prices (BRL/MWh): 274, 190, 82 and 62, from 2021 to 2024, on average. Light Sesa -- Energy demand: 0.5% decline in 2021 and 0.5% growth as of 2022; -- Gross profit (after non-manageable costs): BRL2.9 billion in 2021 and BRL3.1 billion in 2022; -- Energy losses: 26.5% of total load (total market + losses); -- Provision for credit losses: 5.8% of energy supply revenues (sales + network usage). Light Energia -- Annual average values for 2021-2024; -- Existing sales contracts: 366 aMW at BRL220/MWh; -- New sales contracts: 77 aMW at BRL199/MWh; -- Existing purchase contracts: 54 aMW at BRL221/MWh; Light S.A. (consolidated) -- Average annual investments of BRL1.3 billion in 2021-2024; -- Dividend distribution equivalent to 25% of net income; -- Cash inflow of BRL179 million in 2022 for the sale of assets (equity stakes in Lightger and Guanhaes). RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Improvements in distribution segment operating performance, with the company's EBITDA closer to the regulatory EBITDA; -- Net leverage consistently less than or equal to 3.5x; -- Total leverage consistently less than or equal to 4.5x. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Deterioration of the company's liquidity profile; -- Net leverage consistently at or above 4.5x; -- Total leverage consistently at or above 5.5x. 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 Sound Liquidity Profile: Light's liquidity profile improved after the BRL1.4 billion follow-on and successful liability management transactions, despite the strong negative FCF in 2021. The group has been able to refinance existing debt with lower funding costs and a longer debt-amortization profile. Light's consolidated cash and equivalents were BRL3.5 billion at the end of September 2021. This amount covered more than three years of debt amortization, but Fitch estimates refinancing needs in 2022 - even considering a BRL179 million receipt from the sale of generation assets. Short-term debt was BRL924 million at the end of September 2021. Total adjusted consolidated debt of BRL11.3 billion mainly consisted of debentures issuances (BRL6.2 billion) and Eurobonds issued in June 2021 (BRL3.3 billion), and included off-balance sheet debt of BRL716 million related to guarantees provided to Norte Energia S.A.. There is no debt at the holding level. ISSUER PROFILE Light S.A. is a corporation listed at B3 and a non-operational holding of a mid-size Brazilian energy group. The two main subsidiaries, Light Sesa and Light Energia, hold a 4.0 aGW power distribution concession and a 1.2 GW portfolio of hydro plants. 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. SBM BALEIA: Fitch Affirms BB- on Sec. Notes Due 2027, Outlook Neg. ------------------------------------------------------------------ Fitch Ratings has affirmed SBM Baleia Azul, S.a.r.l.'s series 2012-1 senior secured notes due 2027 at 'BB-'. The Rating Outlook is Negative. The Negative Outlook reflects the Outlook on Petroleo Brasileiro S.A.'s (Petrobras) Issuer Default Rating (IDR). The transaction's rating is capped by Fitch's view of the strength of the offtaker's payment obligation, which in this case is equalized with Petrobras' IDR. DEBT RATING PRIOR ---- ------ ----- SBM Baleia Azul, SII/ S.a.r.l. Senior L8038*AA4 LT BB- Affirmed BB- TRANSACTION SUMMARY The notes are backed by the flows related to the charter agreement signed with Petrobras for the use of the Cidade de Anchieta floating production storage and offloading unit (FPSO) for a term of 18 years. SBM do Brasil Ltda. (SBM Brasil), the Brazilian subsidiary of SBM Holding Inc. S.A. (SBM), is the operator of the FPSO. SBM is the sponsor of the transaction. The Cidade de Anchieta FPSO began operating at the Baleia Azul oil field (now considered part of the New Jubarte field) in September 2012. KEY RATING DRIVERS Linkage to Petrobras' Credit Quality: Fitch uses the offtaker's IDR as the starting point to determine the appropriate strength of the offtaker's payment obligation. On Feb. 16, 2021, Fitch affirmed Petrobras' Long-Term IDR at 'BB-'. The Rating Outlook is Negative. Fitch conducted a review no-action on the rating on May 24, 2021. Petrobras' ratings continue to reflect its close linkage with Brazil's sovereign rating due to the government's control of the company, and its strategic importance as the country's near-monopoly supplier of liquid fuels. Strength of Off-taker's Payment Obligation: Fitch's view on the strength of the off-taker's payment obligation acts as the ultimate rating cap to the transaction. Given Fitch's qualitative assessment of asset/contract/operator characteristics and the off-taker's/industry's characteristics related to this transaction the strength of such payment obligation has been equalized to Petrobras' Long-Term IDR. Credit Quality of the Operator/Sponsor: SBM Offshore N.V. is the ultimate parent to SBM Holding Inc. S.A., the main sponsor of the transaction. The transaction benefits from SBM Offshore N.V.'s solid business position, global leadership in leasing FPSOs and overall strong operational performance of its fleet, aligning SBM's credit quality with investment-grade metrics. The transaction's rating is ultimately capped by Fitch's view of the sponsor's credit quality. Stable Asset Performance: Asset performance is in line with expectations, tied to the contract's characteristics, including fixed rates, which provide for cash flow stability. Average uptime levels have been stable, averaging 99.7% during 2021 and 97.9% since the start of operations. In this analysis, Fitch considered an uptime of 97.9% as the base case assumption and stressed it in accordance with its criteria. Leverage/Credit Enhancement: The key leverage metric for fully amortizing FPSO transactions is DSCR. This transaction has maintained quarterly DSCRs above trigger levels and above Fitch's initial expectations. The rolling 12-month pre-opex DSCR for the period ending December 2021 is 2.07x. This has allowed the transaction the ability to withstand potential one-off events that may negatively affect cash flows. Fitch expects the transaction's DSCRs will maintain sufficient coverage in line with the rating level. As a result, the transaction's rating is not constrained by leverage and coverage ratios. Available Liquidity: The transaction benefits from a $26 million (LoCs provided by ABN Amro, rated A/Stable) debt service reserve account (DSRA) equivalent to the following two quarterly payments of principal and interest. As of December 2021, net debt balance (i.e. net of the DSRA and $7.64 million cash balance in the revenue collection account) closed at approximately $207.21 million. RATING SENSITIVITIES Factor that could, individually or collectively, lead to negative rating action/downgrade: -- The rating may be sensitive to changes in Petrobras' credit quality as charter off-taker, and any deterioration in SBM's credit quality as operator and sponsor. In addition, the transaction's rating may be impacted by the Cidade de Anchieta FPSO's operating performance. Factor that could, individually or collectively, lead to positive rating action/upgrade: -- Fitch does not anticipate developments that could likely trigger an upgrade. However, the main current constraint to the transaction's rating is currently the offtaker's credit quality. If upgraded, Fitch will consider whether the strength of the offtaker's payment obligation would be equalized with the entity's IDR. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Structured Finance transactions have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of seven 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 seven notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAAsf' to 'Dsf'. Best- and worst-case scenario credit ratings are based on historical performance. USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10 Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action. 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. ========= C H I L E ========= LATAM AIRLINES: Plan Patently Unconfirmable, Says Committee ----------------------------------------------------------- The Official Committee of Unsecured Creditors (the "Committee") of LATAM Airlines Group S.A., et al., filed an objection to LATAM Airlines Group S.A., et al.'s Motion to Approve the Disclosure Statement explaining the Debtors' Plan. The Committee points out that the Debtors have proposed a patently unconfirmable plan ("Plan") that violates virtually every fundamental norm of reorganization practice, including: (1) equality of distribution among similarly situated claimants, codified in Sections 1123(a)(4) and 1129(b); (2) principles of absolute priority, codified in section 1129(b); (3) the obligation to maximize the value of the estate for the creditors' benefit, inherent in the debtor's fiduciary duties and codified in section 1129(a)(7); (4) the obligation to avoid burdening the estate with unreasonable fees and expenses, codified in Section 1129(a)(4); and (5) the prohibition against vote-buying schemes and disenfranchising voting restrictions, codified in section 1129(a)(3). Indeed, the defects in the Plan and the proposed voting and solicitation procedures are so numerous and extreme, there is a risk that the flaws that are merely improper will be overshadowed by those that are truly egregious. The Committee further points out that the Plan's flaws are an outgrowth of the Debtors' relentless effort to salvage as much value as possible for controlling insiders (the "Insider Shareholders"). To achieve this goal, the Debtors and their Insider Shareholders have struck an illicit bargain with a preferred group of creditors holding a large voting block (the "Evercore Group"). In exchange for the group's agreement that the Insider Shareholders may retain a significant ownership stake in the Debtors on terms favorable to them, the Debtors and the Insider Shareholders have agreed that the Evercore Group may enjoy a basket of arbitraged benefits that vastly overcompensates their funding contributions and claims as both general unsecured creditors and bondholders. This bargain has not been subject to any market test. Rather, in executing their restructuring support agreement ("RSA") the Debtors have formally bound themselves to avoid exposing this bargain to any true market light. In and of itself, this dooms the Plan, for it is established law that, absent a truly meaningful market test, a plan that provides shareholders with property on account of their interests cannot be approved. According to Committee, the Plan's remarkable unfairness is revealed by reference to the Debtors' own valuation of their business (between $13 and $15 billion with a midpoint of $14 billion) and a simple comparison of distribution recoveries. The Plan allocates the Debtors' enterprise value chiefly among the Insider Shareholders and the Evercore Group, yielding general unsecured creditors a paltry return of less than 20%. In contrast, based on a pro rata allocation amongst unsecured creditors, a sale of the Debtors at a lower enterprise value of $13 billion would yield general unsecured creditors a far more robust recovery. The discrepancy stems from the Debtors' proposed diversion of approximately $1.9 billion in fees and discounts to the Evercore Group and shareholders. This illustrates how far the Plan's economics stray from any reasonable market-based proposal: no reasonable business would agree to such financial terms. Of course, these costs have to be paid by someone, and under the Debtors' Plan that "someone" is the Debtors' general unsecured claimants who will receive far less under the Plan than they would if the Debtors' business were sold to a third party such as Azul. The Committee asserts that in addition, the Disclosure Statement lacks the necessary completeness and candor demanded under section 1125. This is an unusually complicated plan, under which impaired creditors are proposed to be compensated with complex convertible debt instruments. More than vague, boilerplate statements and requiring voting creditors to parse through complex term sheets that are part of an RSA to reveal intricate economic terms is required to put creditors in a position to make an informed judgment regarding the Plan. Moreover, many disclosures of central importance to creditors -- such as how much value the Plan diverts to other stakeholders -- are either materially incomplete or misleading. For example, the Disclosure Statement asserts that the Debtors "explored numerous other alternatives" and negotiated with "many different parties with widely disparate interests" before concluding that "the Plan represents the best opportunity to maximize the value of the Debtors' estates." Finally, the Debtors' proposed voting and solicitation procedures are designed simultaneously to enhance the voting clout of the Evercore Group while disenfranchising potentially dissenting claimants. These procedures, together with the Plan they support, are reminiscent of the worst abuses of equity receivership practice that current reorganization law prohibits. Because the Motion is inconsistent with the requirements of Section 1125, it should be denied. Counsel to the Official Committee of Unsecured Creditors: Allan S. Brilliant G. Eric Brunstad, Jr. Craig P. Druehl David A. Herman DECHERT LLP 1095 Avenue of the Americas New York, NY 10036 Phone: (212) 698-3500 Facsimile: (212) 698-3599 Email: allan.brilliant@dechert.com eric.brunstad@dechert.com craig.druehl@dechert.com david.herman@dechert.com About LATAM Airlines Group 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. It 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 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. The Debtors tapped Cleary Gottlieb Steen & Hamilton LLP as bankruptcy counsel, FTI Consulting as restructuring advisor, Lee Brock Camargo Advogados as local Brazilian litigation counsel, and Togut, Segal & Segal LLP and Claro & Cia in Chile as special counsel. The Boston Consulting Group, Inc. and The Boston Consulting Group UK LLP serve as the Debtors' strategic advisors. Prime Clerk LLC is the claims agent. The official committee of unsecured creditors formed in the case tapped Dechert LLP as its bankruptcy counsel, Klestadt Winters Jureller Southard & Stevens, LLP as conflicts counsel, UBS Securities LLC as investment banker, and Conway MacKenzie, LLC as financial advisor. Ferro Castro Neves Daltro & Gomide Advogados is the committee's Brazilian counsel. The Ad Hoc Group of LATAM Bondholders tapped White & Case LLP as counsel. Glenn Agre Bergman & Fuentes, LLP, led by managing partner Andrew Glenn and partner Shai Schmidt, has been retained as counsel to the Ad Hoc Committee of Shareholders. =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: Agribusiness Experience Price Hikes Every Day ----------------------------------------------------------------- Dominican Today reports that shopping in a supermarket or one of the capital's markets in the Dominican Republic is now almost the same. Although there are differences in prices, the high cost of goods, according to buyers, results in the family's salary buying less every day, the report notes. According to buyers and sellers, the prices of most agricultural products have been rising since last month, which has affected sales and purchasing power, the report notes. "One buys because one has to buy, but this is not easy," said Wendy de Los Santos, who regularly buys at the Merca Santo Domingo, according to Dominican Today. For his part, Pablo Mateo said that the population has become accustomed to the increases in the price of products from time to time "because there is no other way," the report relays. "The Government and the Ministry of Agriculture say they are supporting production, but look how much onions, garlic, lemons are already costing. So what is being done," he added. Meanwhile, vendors at the Merca and Mercado Nuevo de Villas Agricolas assured that their sales have been dropping after the December holidays, the report notes. "One day it sells, another more or less, but that's the way we are," explained José Cuevas, the report says. In the Merca Santo Domingo and the Villa Consuelo Market, there were few buyers, while in the supermarkets, there was more affluence of people, the report discloses. A tour of the markets and supermarkets showed differences of up to RD$5.00 between the same agricultural products, the report adds. About Dominican Republic The Dominican Republic is a Caribbean nation that shares the island of Hispaniola with Haiti to the west. Capital city Santo Domingo has Spanish landmarks like the Gothic Catedral Primada de America dating back 5 centuries in its Zona Colonial district. Luis Rodolfo Abinader Corona is the current president of the nation. TCRLA reported in April 2019 that the Dominican Today related that Juan Del Rosario of the UASD Economic Faculty cited a current economic slowdown for the Dominican Republic and cautioned that if the trend continues, growth would reach only 4% by 2023. Mr. Del Rosario said that if that happens, "we'll face difficulties in meeting international commitments." An ongoing concern in the Dominican Republic is the inability of participants in the electricity sector to establish financial viability for the system. Fitch Ratings, in December 2021, revised the Outlook on Dominican Republic's Long-Term Foreign-Currency Issuer Default Rating (IDR) to Stable from Negative and affirmed the IDRs at 'BB-'. The revision of the Outlook to Stable reflects the narrowing of Dominican Republic's government deficit and financing needs since Fitch's last review resulting in the stabilization of the government debt/GDP ratio, as well as the investment-driven economic momentum, reflected in the faster-than-expected economic recovery in 2021 that Fitch expects to carry into above-potential GDP growth during 2022 and 2023. Standard & Poor's, also in December 2021, revised its outlook on the Dominican Republic to stable from negative. S&P also affirmed its 'BB-' long-term foreign and local currency sovereign credit ratings and its 'B' short-term sovereign credit ratings. The stable outlook reflects S&P's expectation of continued favorable GDP growth and policy continuity over the next 12 to 18 months that will likely stabilize the government's debt burden, despite lack of progress with broader tax reforms, S&P said. A rapid economic recovery from the downturn because of the pandemic should mitigate external and fiscal risks. Moody's affirmed the Dominican Republic's long-term issuer and senior unsecured ratings at Ba3 and maintained the stable outlook in March 2021. About Dominican Republic The Dominican Republic is a Caribbean nation that shares the island of Hispaniola with Haiti to the west. Capital city Santo Domingo has Spanish landmarks like the Gothic Catedral Primada de America dating back 5 centuries in its Zona Colonial district. Luis Rodolfo Abinader Corona is the current president of the nation. TCRLA reported in April 2019 that the Dominican Today related that Juan Del Rosario of the UASD Economic Faculty cited a current economic slowdown for the Dominican Republic and cautioned that if the trend continues, growth would reach only 4% by 2023. Mr. Del Rosario said that if that happens, "we'll face difficulties in meeting international commitments." An ongoing concern in the Dominican Republic is the inability of participants in the electricity sector to establish financial viability for the system. Fitch Ratings, in December 2021, revised the Outlook on Dominican Republic's Long-Term Foreign-Currency Issuer Default Rating (IDR) to Stable from Negative and affirmed the IDRs at 'BB-'. The revision of the Outlook to Stable reflects the narrowing of Dominican Republic's government deficit and financing needs since Fitch's last review resulting in the stabilization of the government debt/GDP ratio, as well as the investment-driven economic momentum, reflected in the faster-than-expected economic recovery in 2021 that Fitch expects to carry into above-potential GDP growth during 2022 and 2023. Standard & Poor's, also in December 2021, revised its outlook on the Dominican Republic to stable from negative. S&P also affirmed its 'BB-' long-term foreign and local currency sovereign credit ratings and its 'B' short-term sovereign credit ratings. The stable outlook reflects S&P's expectation of continued favorable GDP growth and policy continuity over the next 12 to 18 months that will likely stabilize the government's debt burden, despite lack of progress with broader tax reforms, S&P said. A rapid economic recovery from the downturn because of the pandemic should mitigate external and fiscal risks. Moody's affirmed the Dominican Republic's long-term issuer and senior unsecured ratings at Ba3 and maintained the stable outlook in March 2021. ============= J A M A I C A ============= CARIBBEAN CREAM: Loses $25 Million in Third Quarter --------------------------------------------------- RJR News reports that Caribbean Cream suffered a $25 million loss during the third quarter which ended November. It made an $11 million profit during the same period in 2020, according to RJR News. Caribbean Cream says its financial performance was affected by unforeseen challenges with production, which reduced plant efficiency, the report notes. The company says the issues have been addressed, the report adds. =========== M E X I C O =========== GRUPO AEROMEXICO: All Eight Classes Voted in Favor of Plan ---------------------------------------------------------- Grupo Aeromexico, S.A.B. de C.V., informs that the Bankruptcy Court announced that it will enter an order granting the Company's motion to enforce a court order requiring certain parties to vote their claims to accept the Company's Plan of Reorganization (the "Plan"). As a result, all eight classes of creditors entitled to vote on the Plan (including the unsecured creditors of Aerovaas Empresa de Cargo, S.A. de C.V) have voted to accept the Plan, with approximately 88% by amount of claims voting in favor. Previously, seven of the eight classes (totaling approximately 86% by amount of claims) had voted to accept the Plan. The Court hearing to consider confirmation of the Plan is scheduled to begin on January 27, 2022. Aeromexico continues working with all of its key stakeholders to obtain Court approval of the Plan and emerge from Chapter 11 as expeditiously as possible following the Effective Date under the Plan. Importantly, at the Shareholders Meeting held on January 14, 2022, the Company adopted the corporate resolutions required to effectuate the Plan, which are subject to the occurrence of the Effective Date of the Plan. About Grupo Aeromexico Grupo Aeromexico, S.A.B. de C.V. (BMV: AEROMEX) -- 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 sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 20-11563) on June 30, 2020. In the petitions signed by CFO Ricardo Javier Sanchez Baker, the Debtors reported consolidated assets and liabilities of $1 billion to $10 billion. The Debtors tapped Davis Polk and Wardell LLP as their bankruptcy counsel, KPMG Cardenas Dosal S.C. as auditor, and Rothschild & Co US Inc. and Rothschild & Co Mexico S.A. de C.V. as financial advisor and investment banker. White & Case LLP, Cervantes Sainz S.C. and De la Vega & Martinez Rojas, S.C., serve as the Debtors' special counsel. Epiq Corporate Restructuring, LLC, is the claims and administrative agent. The U.S. Trustee for Region 2 appointed a committee to represent unsecured creditors on July 13, 2020. The committee is represented by Willkie Farr & Gallagher, LLP and Morrison & Foerster, LLP. =============== P A R A G U A Y =============== NAVIOS SOUTH: S&P Upgrades ICR to 'B', Outlook Stable ----------------------------------------------------- S&P Global Ratings raised its issuer credit rating on Navios Maritime Holdings Inc. (NMH) to 'B' from 'CCC' and assigned a stable outlook after the company refinanced its outstanding $455.5 million, 7.375% first priority ship mortgage notes on Jan. 6, 2022, easing liquidity pressures. S&P said, "As a result, we're raising our issuer credit and issue-level ratings on its subsidiary, Navios South American Inc. (NSAL), to 'B' from 'B-'. "The stable outlook reflects NSAL's comfortable debt amortization schedule with no significant maturities until its $500 million secured notes come due in July 2025. We expect funds from operations (FFO) to debt close to 12% and FOCF to debt around 5% in the next 12 months. "Although NSAL's stand-alone credit profile (SACP) is 'b', our issuer credit rating is capped at 'B-' due to parent company's high refinancing risk and the risk of upstreaming funds from its subsidiary to meet its debt maturities. However, we recently upgraded NMH to 'B' from 'CCC' following its Jan. 6, 2022, debt refinancing. For more details on NMH, please refer to "Navios Maritime Holdings Inc. Upgraded to 'B' On Improved Liquidity And Debt Repayment; Outlook Stable". NMH's debt refinancing didn't involve any upstream of funds from NSAL. This was different from what we have seen in the past, given that the parent received intercompany loans and dividend payments from NSAL. Given the stronger group credit profile, we upgraded NSAL to 'B', the same level as its SACP and rating on NMH." If water rises to normal levels in the river system known as the Hidrovia region, performance of NSAL's barge business should improve in 2022 due to price recovery and higher volumes, particularly after the company's acquisition of three pushboats and 18 liquid cargo barges in late 2020 and early 2021. S&P said, "We assume a 20% tariff and volume increase in the barge business in 2022, after volumes dropped due to very lower water levels in 2020 and 2021. In this sense, we expect the barge segment's EBITDA to recover in 2022 and jump to about $15 million from $5 million - $7 million in 2020-2021." New iron ore storage and transshipment contract with Vetorial/Cargill for about 1.5 million tons should increase the port's EBITDA to about $90 million in 2022. S&P said, "We estimate NSAL's consolidated leverage will drop close to 4.5x in 2022-2023 from 6.0x in 2020 and the likely 6.4x in 2021. Although we're not aware of committed capital expenditures (capex), we expect higher capital investments in 2022 than in 2020." However, reported debt would remain fairly stable, given that the company's internal cash flows will largely fund capital spending. ===================================== T R I N I D A D A N D T O B A G O ===================================== TRINIDAD & TOBAGO: Firms to Lose Guyana Oil Contract ---------------------------------------------------- Jamaica Observer reports that firms in Trinidad and Tobago, which at present are contracted to provide all marine support vessel (MSV) tank cleaning operations needed for Guyana's oil industry, are set to lose those contracts valuing several billions of dollars. International oil giant ExxonMobil, which is the company drawing oil in Guyana, has disclosed plans of bringing the multi-billion-dollar vessel cleaning services in-house in Guyana via its subsidiary Esso Exploration and Production Guyana Limited (EEPGL), according to Jamaica Observer. At present, all MSV tank cleaning operations needed for Guyana's oil industry are conducted by companies in Trinidad and Tobago, as stated by ExxonMobil in its Comprehensive Waste Management Plan (CWMP) submitted to Guyana's Environmental Protection Agency last year, the report relays. The cleaning process employed in the twin island Caribbean republic is manual and generates large volumes of wash water and solids with the material recovered from tank cleaning services evaluated for reuse at liquid mud plants (LMPs), the report notes. The tank cleaning waste streams that are unable to be reclaimed are evaluated for treatment, the report discloses. ExxonMobil's has advised that a tender is now out in Guyana to provide tank cleaning services locally using technologies that minimise the generation of waste, the report says. The company reports that the need for MSV tank cleaning services in Guyana is part of the strategy for LMP operations in the country in the future, the report relates. Expounding in this regard, Exxon said the operation of three LMPs in Georgetown to support offshore operations efficiently requires co-located tank cleaning services, the report notes. Additionally, the oil giant explained that the start-up for MSV tank cleaning capabilities in Guyana was slated to get off the ground late last year, adding that the tank cleaning system selected for Guyana includes a solids removal system and wash water reuse technology, the report adds. ================= V E N E Z U E L A ================= VENEZUELA: Breaks One of World's Longest Bouts of Hyperinflation ---------------------------------------------------------------- Nicolle Yapur at Bloomberg News reports that Venezuela broke a four-year bout of hyperinflation, one of the longest in the world, as the socialist government slowed the pace of printing money and the US dollar became the preferred currency in the country. Prices rose 7.6 percent in December from November, according to the central bank, marking a full year with monthly inflation below 50 percent, the threshold most economists commonly use to define hyperinflation. On an annual basis, Venezuela ended 2021 with inflation at 686.4 percent, according to Bloomberg News. "Venezuela's hyperinflation went as it came," Ronald Balza, a professor of economics at Catholic University in Caracas, said Friday. "The government didn't take any measures, it just stopped doing what was causing it, which is financing itself via accelerated money printing," Bloomberg News notes. Bloomberg News relays that the reduction in money printing comes as a result of less government spending, which effectively cut the fiscal deficit to less than 10 percent of gross domestic product last year from around 30 percent of GDP when hyperinflation began in late 2017, according to Luis Oliveros, a professor of economics at Central University in Caracas. In place of the bolivar, which is the national currency, the country has unofficially adopted the US dollar, Bloomberg News notes. More than 60 percent of all transactions take place in the currency, Bloomberg News discloses. "Although inflation in bolivaers is still important, it doesn't capture all the information about what is going on with prices," Oliveros said. "We need to pay attention to prices in dollars," Bloomberg News says. Despite the exit from hyperinflation, the country still suffers from one of the highest inflation rates in the world, Bloomberg News notes. While official government data in Venezuela is notoriously unreliable, a parallel inflation index gathered by opposition lawmakers also showed a significant easing in prices last year, Bloomberg News relays. Bloomberg's Cafe Con Leche Index - which tracks the price of a cup of coffee in Caracas on a weekly basis - shows increases have levelled off too, especially since the government redenominated its currency, dropping six zeros from the previous bolivar. The central bank has upped its interventions in the foreign exchange market, keeping the digital bolívar - as the new currency is known - relatively stable, Bloomberg News notes. Since October, it has been more than doubling their supply of dollars to the market, injecting as much as US$100 million per week and keeping the exchange rate artificially below five bolívares per dollar, Bloomberg News discloses. Some wonder if the government will have the cash to continue the policy, Bloomberg News relays. Central bank reserves have fallen below US$6 billion, the lowest in at least 30 years, excluding IMF funds that the government can't access. Analysts have said the government likely uses oil revenue and other hard currency income sources to intervene in the foreign exchange market, Bloomberg News notes. "Sooner or later we are going to see an important adjustment in the exchange rate, and that is going to have an impact on prices," JosE Manuel Puente, professor of the Public Policy Center at the IESA, said, Bloomberg News adds. As reported in the Troubled Company Reporter-Latin America on Sep. 22, 2021, S&P Global Ratings withdrew its 'SD/D' foreign currency sovereign credit ratings and 'CCC-/C' local currency ratings on Venezuela due to lack of sufficient information. At the same time, S&P withdrew its 'D' issue rating on 15 bonds. ********* 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 2022. 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 * * *