/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/230503.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, May 3, 2023, Vol. 24, No. 89 Headlines B R A Z I L BRADSEG PARTICIPACOES: Fitch Affirms 'BB' LongTerm Local Curr. IDR BRAZIL: Reports 1st Current Account Surplus for March in 17 Years D O M I N I C A N R E P U B L I C BANCO DE RESERVAS: Fitch Affirms BB- LongTerm IDRs, Outlook Stable BANCO MULTIPLE: Fitch Affirms 'BB-' Long-Term IDRs DOMINICAN REPUBLIC: Cinema Sustainability Clashes w/ Recovery Rate DOMINICAN REPUBLIC: U.S. to Verify Sugarcane Growers' Situation E C U A D O R BANCO PICHINCHA 5: Fitch Affirms B-sf Rating on 3 Debt Tranches J A M A I C A JAMALCO: Century Aluminium Company Buys Firm for US$1 P U E R T O R I C O BED BATH: U.S. Trustee Solicits Members for Creditors Panel COMUNICADORES GRAFICOS: Taps Batista Law Group as Legal Counsel - - - - - =========== B R A Z I L =========== BRADSEG PARTICIPACOES: Fitch Affirms 'BB' LongTerm Local Curr. IDR ------------------------------------------------------------------ Fitch Ratings has affirmed Bradseg Participacoes S.A.'s (Bradseg) Long-Term Local Currency Issuer Default Rating (IDR) at 'BB' and its National Long-Term Rating at 'AAA(bra)'. The Rating Outlook is Stable. KEY RATING DRIVERS Support-Driven Ratings: Bradseg's IDRs are aligned with the ratings of its parent, Banco Bradesco S.A. (Bradesco, Long-Term Local Currency IDR BB/Stable Outlook). The Outlook for BradSeg's IDR mirrors Bradesco's, which, in turn, is one notch above Brazil's sovereign ratings (BB-/Stable). Core Subsidiary: Fitch considers BradSeg a core subsidiary of Bradesco. This reflects the strategic importance of its insurance operations, common branding and BradSeg's high contribution to group profits, with an average of 27.1% from 2019 through 2022. Robust Market Position: The ratings also reflect the company's leading position, consistent performance and diversified revenue base. Bradseg had a leading position and overall market share of approximately 22.5% as of September 2022. The ratings also consider the company's strong distribution capacity, underpinned by the wide branch network of its parent, good performance and comfortable capitalization ratios. Diversified Product Mix: The life and pension segments are the largest contributors to gross written premiums (47%) in 2022, followed by health (37%), property/casualty (P/C, 9%) and savings bonds (7%). In 2022, premiums written grew by about 17%, and Bradseg experienced growth in all of its business lines. Pension and life premiums grew 16.4%, healthcare 13.2%, P&C 36.3% and saving bonds 15.9%. Solid Capitalization: Bradseg's leverage indicators are strong and comfortable. They remained at favorable levels in 2022. Bradseg's operational and asset leverage ratio remained strong at the end of 2022 at 2.1x and 10.9x, respectively, compared with Fitch's international life insurer company benchmark ranges. Strong Profitability: In 2022, Bradseg showed an improvement in profitability in almost all segments and ROAE was 21%, an increase from 15% the previous year. Net income was boosted by premium growth, loss ratio improvement and the increase in the financial result, given high interest rates and inflation. The company has a solid and consistent record of technical results through the cycles. This reflects its sound underwriting skills, control systems and pricing practices. Concentration in Government Securities: Bradseg's investment portfolio is concentrated in government securities, which made up 82% of the total exposure in 2022. The company's liquidity remains adequate, with all the regulatory minimum liquidity ratios met easily. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: - Bradseg' IDR has limited upside potential, as it is equalized to that of Banco Bradesco, whose ratings are constrained by its operating environment. Over the medium term, the ratings could benefit from stabilization and eventual improvement of Fitch's assessment of the operating environment for Brazilian banks. - For the national scale rating, this sensitivity is not applicable, given that the National LT rating of Bradseg was affirmed at 'AAA(bra)'. Factors that could, individually or collectively, lead to negative rating action/downgrade: - Bradseg' ratings are linked to that of Banco Bradesco. Therefore, any negative change in the bank's ratings would affect the issuer's ratings, as would a change in its willingness to provide support, which Fitch considers highly unlikely. PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS Bradseg's rating is directly linked to the IDR of Banco Bradesco, the ultimate parent company. Entity/Debt Rating Prior ----------- ------ ----- Bradseg Participacoes S.A. LC LT IDR BB Affirmed BB Natl LT AAA(bra)Affirmed AAA(bra) BRAZIL: Reports 1st Current Account Surplus for March in 17 Years ----------------------------------------------------------------- Reuters reports that Brazil posted a current account surplus of $286 million in March, the strongest data for the month in 17 years, boosted by a strong trade balance performance, central bank data showed. The trade balance had a positive balance of $9.48 billion, the highest figure in the entire series, driven by a significant increase in exports, with emphasis on booming shipments of oil and soybean, according to the report. This led the current account to record its first positive balance since June 2022, with a March surplus being the first since 2006, the report discloses. According to the central bank, foreign direct investment totaled $7.673 billion in March, the report notes. Investors made a net portfolio investment withdrawal of $1.955 billion in Brazilian markets, compared with withdrawals of $5.489 billion in the same month last year, the report says. Outflows in stocks totaled $3.67 billion, while inflows in bonds reached $1.715 billion, the report adds. About Brazil Brazil is the fifth largest country in the world and third largest in the Americas. Luiz Inacio Lula da Silva won the 2022 Brazilian general election. He will be sworn in on January 1, 2023, as the 39th president of Brazil, succeeding Jair Bolsonaro. In July 2022, Fitch Ratings affirmed Brazil's Long-Term Foreign Currency Issuer Default Rating at 'BB-' and revised the Rating Outlook to Stable from Negative. In June 2022, S&P Global Ratings also affirmed its 'BB-/B' long- and short-term foreign and local currency sovereign credit ratings on Brazil. Moody's, in April 2022, affirmed Brazil's long-term Ba2 issuer ratings and senior unsecured bond ratings, (P)Ba2 senior unsecured shelf ratings, and maintained the stable outlook. On the other had, DBRS, in August 2022, confirmed Brazil's Long-Term Foreign and Local Currency Issuer Ratings at BB (low). =================================== D O M I N I C A N R E P U B L I C =================================== BANCO DE RESERVAS: Fitch Affirms BB- LongTerm IDRs, Outlook Stable ------------------------------------------------------------------ Fitch Ratings has affirmed Banco de Reservas de la Republica Dominicana, Banco de Servicios Multiples' (Banreservas) Local and Foreign Currency Long-Term Issuer Default Ratings (IDRs) at 'BB-'. The Rating Outlook is Stable. Fitch has also affirmed the Banreservas' National Ratings and those of its subsidiary, Inversiones y Reservas, S.A. (I&R) at 'AA+(dom)' and 'F1+(dom)'. KEY RATING DRIVERS Support Driven: Banreservas' IDRs and National Ratings reflect Fitch's assessment of the Dominican Republic government's reasonable ability and propensity to support the bank due to its systemic importance, policy role and full ownership by the government. Stable Outlook: The Stable Outlook on Banreservas' IDRs is aligned with that of the Sovereign, reflecting the track record of robust economic growth and Stable Outlook on Fitch's assessment of the bank's operating environment. The agency expects this to be translated into the bank's good business prospects and consistent financial performance. Strong Franchise: Banreservas's 'b+' Viability Rating (VR) reflects the strength of the bank's business profile as it has the largest franchise in the Dominican Republic with a market share by assets and deposits of 38.6% and 39.1% at YE 2022, respectively. It enjoys a leadership position in the commercial and consumer segments. Improved Asset Quality: At YE 2022, the 90-day nonperforming loan (NPL) ratio improved to 0.6% (YE 2021: 1.2%), mainly reflecting the exhaustive collection practices, charge-offs, and loan portfolio growth. The loan loss allowances coverage of impaired loans significantly increased to 949.3% at YE 2022, reflecting the sound asset quality and the creation of countercyclical provisions in the previous year. Fitch expects the NPL ratio to remain sound in 2023, despite potential deterioration related to high interest rates and inflation. Sound Profitability: The operating profit to risk weighted assets (RWA) ratio remained sound at 4.7% at YE 2022 (5.2% at YE 2021), mainly due to low loan impairment charge, despite the Net Interest Margin reduction due to higher funding costs. Fitch expects profitability to decline slightly in 2023 due to lower credit growth and higher credit costs; nevertheless, it will remain sound at around 4%, supported by a strong interest and non-interest income. Adequate Capitalization: The Fitch Core Capital to RWA ratio improved to 15.8% at YE 2022 from 15.4% at YE 2021, reflecting the lower asset growth and high capital internal generation, both more than compensated for the higher risk-weighted assets density. The bank's loss-absorbing capacity benefits from maintaining ample reserve coverage. Fitch expects Banreservas' capitalization to remain adequate and commensurate with current ratings, sustained by moderate expected growth and sound earnings generation. Sound Liquidity: Liquidity declined in 2022, reflecting tighter liquidity in the banking system, but remains sound. The loan-to-customer deposit ratio deteriorated to 56.4% at YE 2022 from 53.9% at YE 2021, as customer deposits grew slower at 8.7% compared to the previous year (YE 2021: 30.9%). However, this ratio compares favorably with the banking system average of 75.9% at YE 2022. Fitch believes that liquidity will remain sound, benefiting from an ample and stable deposit base. Government Support Rating: The 'bb-' Government Support Rating (GSR) reflects Banreservas' systemic importance with a deposit market share of 39.1% at YE 2022, its policy role by collecting funds for the government's single treasury account to pay debt obligations, its role as a provider of public sector loans, and its 100% government ownership. The GSR also reflects moderate probability of support being forthcoming because of uncertainties about the ability or propensity of the Dominican Republic due to its speculative-grade IDR of BB-/Stable, should it be needed. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade BANRESERVAS IDRS, VR AND NATIONAL RATINGS - The IDRs would be downgraded following a downgrade in the sovereign rating; - The bank's IDRs and National Ratings are sensitive to a change in Fitch's perception of the Dominican sovereign of propensity to support the bank; - A relevant deterioration in asset quality or profitability, or sustained pressures on Banreservas' Fitch Core Capital to RWA ratio to below 9.0% could trigger a downgrade of its VR. GSR - Banreservas' GSR would be affected if Fitch negatively changes its assessment of the Dominican government's propensity to provide timely support to the bank. This could also arise in the event of a sovereign negative rating action. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade BANRESERVAS IDRS, VR AND NATIONAL RATINGS - The IDR could be upgraded if there is a similar sovereign rating action; - Over the medium term, the VR could be upgraded by the confluence of improvements in the operating environment and the financial profile of the bank; - There is limited upside for the bank's National Ratings since are at the maximum level of the scale. GSR - Banreservas' GSR could be upgraded if the sovereign rating is upgraded. OTHER DEBT AND ISSUER RATINGS: KEY RATING DRIVERS Banreservas' outstanding subordinated debt includes two domestic issuances of DOP10 billion and DOP20 billion due in 2024 and 2032, respectively. Subordinated bonds are basic issues as they do not have loss absorption capacity features. These issuances are two notches below the national long-term rating, reflecting the baseline notching for loss severity of two notches, due to its subordination nature and no coupon deferral. OTHER DEBT AND ISSUER RATINGS: RATING SENSITIVITIES The subordinated debt rating would be downgraded if Banreservas' National Long-Term rating is downgraded. The subordinated debt rating would be upgraded if Banreservas' National Long-Term rating is upgraded. SUBSIDIARIES & AFFILIATES: KEY RATING DRIVERS I&R's national ratings are aligned with those of Banreservas, its sole shareholder, reflecting Fitch's opinion about the bank's propensity and capacity to support I&R, if needed. In Fitch's view, I&R is a key and integral part of Banreservas' business as it provides investment and trading services to its core clients. Furthermore, a clear commercial identification among this entity with Banreservas, and the reputational risk to which it would be exposed in the event of an I&R default results in a high probability of shareholder support, should it be required. SUBSIDIARIES AND AFFILIATES: RATING SENSITIVITIES - I&R's ratings are sensitive to a negative change in Banreservas's ratings or a change in the ability or propensity of Banreservas to provide support; - There is limited upside potential for I&R's national ratings since are at the maximum level of the scale. VR ADJUSTMENTS Fitch has assigned an Operating Environment score of 'b+' that is below the 'bb' category implied score due to the following adjustment reasons: Reported and Future Metrics (negative). Fitch has assigned a Business Profile score of 'bb' that is above the 'b' category implied score due to the following adjustment reasons: Market Position (positive). Fitch has assigned a Funding and Liquidity score of 'bb-' that is above the 'b' category implied score due to the following adjustment reasons: Deposit Structure (positive). PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS Banreservas' ratings are driven by the Dominican Republic sovereign rating. I&R's ratings are driven by Banreservas' ratings. 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. Entity/Debt Rating Prior ----------- ------ ----- Banco de Reservas de la Republica Dominicana, Banco de Servicios Multiples (BANRESERVAS) LT IDR BB- Affirmed BB- ST IDR B Affirmed B LC LT IDR BB- Affirmed BB- LC ST IDR B Affirmed B Natl LT AA+(dom)Affirmed AA+(dom) Natl ST F1+(dom)Affirmed F1+(dom) Viability b+ Affirmed b+ Government Support bb- Affirmed bb- Subordinated Natl LT AA-(dom)Affirmed AA-(dom) Inversiones y Reservas, S.A. Natl LT AA+(dom)Affirmed AA+(dom) Natl ST F1+(dom)Affirmed F1+(dom) BANCO MULTIPLE: Fitch Affirms 'BB-' Long-Term IDRs -------------------------------------------------- Fitch Ratings has affirmed Banco Multiple BHD S.A.'s (BHD) Long-Term Local and Foreign Currency Issuer Default Ratings (IDRs) at 'BB-'. The Rating Outlooks on the IDRs are Stable. Fitch has also affirmed BHD's Viability Rating (VR) at 'bb-' and Long-Term National Ratings at 'AA+(dom)'. The Rating Outlook on the Long-Term National Rating is Stable. BHD's related entity, BHD Puesto de Bolsa, S.A.'s (BHDPB) National Ratings were also affirmed at the same level. BHDPB's Rating Outlook is Stable. KEY RATING DRIVERS Stable Outlook: BHD's VR drives its Long-Term IDRs and National Ratings. The Stable Outlook on its IDRs is aligned with that of the sovereign, reflecting a track record of robust economic growth and the stable outlook on Fitch's assessment of the operating environment. The agency expects this to be translated to good business prospects and consistent financial performance for the bank. Operating Environment Influence: Fitch believes BHD' IDRs are sensitive to broader OE considerations or a sovereign rating action. Pressure in the OE includes slower than expected economic growth due to external shocks and the challenging investment and business environment. Strong Franchise and Diversified Business Model: BHD is the third largest bank in Dominican Republic, with a market share of 15.3% by assets as of YE22. BHD's loan portfolio is fairly diversified, with commercial loans accounting for 58.0% of total loans, 31.1% consumer and 10.9% mortgages. The business model has been stable through time; BHD has a long track record of earnings stability, which has proven to be resilient amid the economic cycles. Sound Asset Quality: BHD has maintained adequate and stable asset quality metrics. As of YE22, the 90-day NPL ratio improved to 1.2% from 1.6% in YE21 due to the strengthening of risk controls and underwriting standards, and a more dynamic growth (impaired loans decreased 10.2%, and loans increased 19.6%). The loan loss allowances ratio of 369.0% is considered conservative and provides protection against possible adverse situations. Fitch expects asset quality to show pressures due to a more challenging operating environment; however, deterioration is not expected to be material, given the bank's strong risk profile. Resilient Profitability: BHD profitability has remained adequate through the economic cycles. Operating profit-to-risk-weighted assets decreased to 3.1% from 3.3%, driven mainly by a contraction on NIM due to higher funding costs, and higher RWA. Fitch expects profitability to benefit from lower funding costs and lower interest rates due to the expected monetary easing for the second half of 2023. However, it also considers that some pressures could arise from higher credit costs in a challenging operating environment. Adequate Capitalization: BHD's capitalization ratios have remained stable, reflecting an adequate internal capital generation that compensated the impact of higher risk-weighted assets due to the double-digit loan growth and the high volatility of interest rates that significantly increased market risk. As of YE22, the Fitch Core Capital (FCC) ratio stood at 14.5% (2021: 14.5%). In addition, BHD loss absorbing capacity benefits from adequate reserve coverage, which has proven to be a good cushion during times of crisis. Sound Liquidity: BHD's liquidity position and deposit growth are adequate. The loan-to-deposit ratio stood at 79.7% as of YE22. Historically, customer deposits have covered more than two-thirds of the bank's funding needs (83.7% at YE 2022), and BHD maintains access to local capital debt markets and wholesale funding. Liquidity remains commensurate with the bank's current rating levels. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade IDRs, VR and National Ratings: - Negative changes in the BHD's IDRs and VR would mirror any movement in the Dominican Republic's sovereign ratings and Country Ceiling; - Downgrades of BHD's VR could also result from significant pressure on the bank's financial profile, such as a relevant deterioration in asset quality or profitability combined with an FCC to RWAs ratio consistently below 10%. Government Support Rating (GSR): - A downgrade of BHD's GSR could occur if the sovereign's ability to support the bank weakened, as reflected in a sovereign downgrade, or if the sovereign's propensity to support the bank becomes less likely. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade IDRs, VR and National Ratings: - Upside potential is limited. Over the medium term, the VR could be upgraded by the confluence of improvements in the operating environment and the financial profile of the bank. Government Support Rating (GSR): - An upgrade of BHD's GSR is possible in the event of a sovereign upgrade if it coincides with a strengthening of the sovereign's ability and propensity to support the bank. OTHER DEBT AND ISSUER RATINGS: KEY RATING DRIVERS Subordinated Debt: BHD' outstanding domestic subordinated debts include two domestic issuances, one for up to DOP10 billion due 2030 and another one of up to DOP10 billion due 2028. Subordinated bonds are basic issues as they do not have loss absorption capacity features. The bank's subordinated debt rating is two notches below its National Long-Term rating, 'AA+(dom)', reflecting the baseline notching for loss severity of two notches, due to its subordination nature and no coupon deferral. OTHER DEBT AND ISSUER RATINGS: RATING SENSITIVITIES Subordinated Debt: Factors that could, individually or collectively, lead to negative rating action/downgrade: - BHD' subordinated debt rating is sensitive to any downgrade in the bank's IDR and National Long-Term rating. Factors that could, individually or collectively, lead to positive rating action/upgrade: - BHD' subordinated debt rating is sensitive to any upgrade in the bank's IDR and National Long-Term rating. Consequently, there is limited upside potential. SUBSIDIARIES & AFFILIATES: KEY RATING DRIVERS National Ratings: BHDPB's ratings reflect Fitch's opinion about its sole shareholder's, Centro Financiero BHD (CFBHD), propensity and ability to support its subsidiary if needed. In Fitch's view, CFBHD's creditworthiness is highly linked to BHD. BHDPB is a key and integral part of CFBHD's diversified financial business model as it provides specific financial products. Moreover, a clear branding identification between this entity with BHD and CFBHD, and the reputational risk at which they would be exposed in the case of potential financial difficulties in BHDPB ultimately result in a high probability of direct or indirect support by BHD and CFBHD, should it be required. SUBSIDIARIES AND AFFILIATES: RATING SENSITIVITIES Factors that could, individually or collectively, lead to negative rating action/downgrade: - BHDPB's ratings are sensitive to a negative change in BHD's ratings or a change in the ability or propensity of BHD to provide support. Factors that could, individually or collectively, lead to positive rating action/upgrade: - There is limited upside potential for BHDPB's national ratings. VR ADJUSTMENTS Fitch has assigned a Operating Environment score of 'b+' that is below the 'bb' category implied score due to the following adjustment reasons: Reported and Future Metrics (negative). Fitch has assigned a Business Profile score of 'bb' that is above the 'b' category implied score due to the following adjustment reasons: Business Model (positive). Fitch has assigned a Funding and Liquidity score of 'bb-' that is above the 'b' category implied score due to the following adjustment reasons: Deposit Structure (positive). PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS BHD Puesto de Bolsa and BHD International Bank's ratings are driven by Banco BHD's ratings. 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. Entity/Debt Rating Prior ----------- ------ ----- BHD Puesto de Bolsa, S.A. Natl LT AA+(dom)Affirmed AA+(dom) Natl ST F1+(dom)Affirmed F1+(dom) Banco Multiple BHD, S.A. LT IDR BB- Affirmed BB- ST IDR B Affirmed B LC LT IDR BB- Affirmed BB- LC ST IDR B Affirmed B Natl LT AA+(dom)Affirmed AA+(dom) Natl ST F1+(dom)Affirmed F1+(dom) Viability bb- Affirmed bb- Government Support b+ Affirmed b+ Subordinated Natl LT AA-(dom)Affirmed AA-(dom) DOMINICAN REPUBLIC: Cinema Sustainability Clashes w/ Recovery Rate ------------------------------------------------------------------ Dominican Today reports the end of film production marks the beginning of a new phase for the movie industry. Movie theaters open their doors to showcase the latest films, with hopes of recouping the budget approved by the Directorate General of Cinema (DGCine), according to Dominican Today. Success is measured by the level of audience engagement, from applause and laughter to comments and critiques, the report notes. However, the Dominican cinema industry faces a daunting challenge, as none of the films released in 2022 generated a profit, which is an unsustainable situation from a business perspective, the report relays. The figures from DGCine reveal that the 29 Dominican films released in 2022 generated only RD$101.5 million, a meager 8.2% of the approved budget of RD$1,237.8 million, the report discloses. Even the most expensive films, such as "Flow calle," "El Brujo," and "El país de las ultimas cosas," failed to break even, with losses ranging from 23.7% to 99.97%, the report adds. Investors are understandably wary of such a bleak scenario, as investing in films that do not guarantee a return offers little to no value in terms of brand advertising, the report notes. Despite the tax incentives offered by the government, the fact remains that the film industry must produce commercially viable films that appeal to audiences and generate profits, the report relays. However, profitability is not only measured by box office collections but also by distribution and participation in festivals, the report discloses. The industry can still attract investors who believe in the potential of Dominican cinema, the report says. Furthermore, the public's support is vital for the industry's growth, and actors and filmmakers are calling for more support from the local audience, the report adds. As reported in the Troubled Company Reporter-Latin America in March 2022, Fitch Ratings has affirmed Jamaica's Long-Term Foreign Currency Issuer Default Rating (IDR) at 'B+'. The Rating Outlook is Stable. DOMINICAN REPUBLIC: U.S. to Verify Sugarcane Growers' Situation --------------------------------------------------------------- Dominican Today reports that a commission of the United States Department of Labor will come to the country to verify the reality of the sugar cane workers and the denunciations made to Central Romana. The information was offered by the Minister of Labor, Luis Miguel De Camps, during his participation in the Listin Diario Breakfast, where he specified that the visit of the US officials was due to a request of the country, according to Dominican Today. De Camps said three joint meetings with three departments (State, Commerce, and Labor) and three ministries were held weeks ago, the report notes. The Minister said that for more than a decade, the sugar cane production sector had had a kind of warning "or Sword of Damocles," which has shown that these allegations have been unfounded, the report relays. It is recalled that during specific periods, reports of alleged mistreatment in the Dominican sugar mills, particularly child labor, were made public by various media and the Department of Labor, the report discloses. This type of report, however, has recognized essential improvements in the living conditions in the Dominican mills, the report says. In March 2022, a delegation from the Department of Labor came to the country, and a Technical Working Group was created to follow up on these cases, the report notes. No Child Labor "One of the things to highlight from the report made by the US Department of Labor last year is the recognition that there is an absence of child labor in the sugar sector in the Dominican Republic," the official indicated, the report says. In the last report, he explained that the rebuke was about forced labor. Therefore, the US customs authorities acted against Central Romana, which has the largest production quota, although the penalty is for the entire sector, the report discloses. He said that given this fact, they have been working on improvement plans and "in the individualization of the facts," the report relays. He also recalled that a US congressman came last year to the country, and who represents the beet sugar-producing sector denounced slavery in the country a few weeks ago. So, naturally, the answer to the US congressional representative was to say where, how, when, with whom, which company, and what he saw because impressions of that type affect the company, the country, and the working class, the report notes. "Next month, in May, a commission from the Department of Labor with whom we regularly talk with is coming just for that, at our request and in constant coordination to be able to show the areas of improvement and also show the events that make them reach those conclusions," he added, notes the report. Likewise, the Minister emphasized that progress has been made. Still, ten or twelve years claiming that has to be dismantled with arguments and samples of the realities, especially in strengthening inspection and identification capacities, "because at the end of the day, the right to work is a human right," the report notes. In this context, he said, workers' rights have to be safeguarded, including the right to freedom of association, the report relays. The official said there is a process of improvement in the inspections, verifying the realities, and compliance with the norms, the report notes. Minister De Camps was accompanied by Elsa Sabrina De La Cruz Vargas, vice minister of union and business relations, Gustavo Piantini, general director of employment, and Johanna Hilario from the Department of Communications of the Ministry of Labor, the report discloses. Manuel Corripio, president of Editora; Miguel Franjul, director of Listin Diario; and journalist Candida Acosta, editor of Economia & Negocios, participated in the meeting, the report says. Export In July 2022, the Department of Agriculture of the Office of the United States Trade Representative (USTR) granted the highest tariff quota for raw sugar exports from 35 countries in the world to the Dominican Republic, surpassing that of Brazil and the Philippines, the report notes. 2023 Quota The tariff quota allocated to the DR for 2023 is 189,343 metric tons of cane sugar, the report says. The Dominican sugar mills that export cane sugar are Central Romana Corporation, Consorcio Azucarero de Empresas Industriales (CAEI), and Consorcio Azucarero Central (CAC), the report adds. As reported in the Troubled Company Reporter-Latin America in March 2022, Fitch Ratings has affirmed Jamaica's Long-Term Foreign Currency Issuer Default Rating (IDR) at 'B+'. The Rating Outlook is Stable. ============= E C U A D O R ============= BANCO PICHINCHA 5: Fitch Affirms B-sf Rating on 3 Debt Tranches --------------------------------------------------------------- Fitch Ratings has affirmed the IMS Ecuadorian Mortgage 2021-1 Trust certificates at 'AAA' with a Stable Rating Outlook. Fitch has also affirmed the series A notes issued by Fideicomiso Mercantil Titularizacion Hipotecaria de Banco Pichincha 5 (FIMEPCH 5) at 'B-' with a Stable Outlook. Entity/Debt Rating Prior ----------- ------ ----- IMS Ecuadorian Mortgage 2021-1 Trust 2021-1 44970EAA1 LT AAAsf Affirmed AAAsf Fideicomiso Mercantil Titularización Hipotecaria de Banco Pichincha 5 A2 LT B-sf Affirmed B-sf A3 LT B-sf Affirmed B-sf A4 LT B-sf Affirmed B-sf KEY RATING DRIVERS FIMEPCH 5 Rating Capped at Transaction Account Bank: The series A notes are capped at the rating of the Transaction Account Bank provider (currently Banco Pichincha [B-/Stable]). For the 'Bsf' rating category the Transaction Account Bank must have at least the same rating as the notes, according to Fitch's Structured Finance and Covered Bonds Rating Criteria. However, in this case, the eligible bank has been defined as an entity with a rating equal to or maximum one notch below Ecuador's sovereign rating (B-/Stable), which constrains the ratings. Stable Pool Characteristics: The portfolio has finished the replenishment phase and has been static since January 2022. Pool characteristics remained similar since issuance. As of March 2023, Fitch has updated the weighted average foreclosure frequency to 18.4% from 17.0%, and weighted average recovery rate to 87.2% from 85.2% for the 'B-sf' stress scenario, which are similar from initial assumptions. These assumptions consider the stability of assets main characteristics, with the average original loan-to-value of 67%, the assets original term averaging 18 years, the remaining term averaging 13 years, and 30.4% of the portfolio concentrated in properties valued equal to or less than 300 minimum wages at origin. As of March 23, on a cumulative basis, just 13 loans (0.3%) reached 180 dpd, while its initial assumption for the same period is 1.6%, and only two loans (0.04%) have been restructured. The portfolio has performed better than Fitch's initial expectations. Adequate Capital Structure Supports Ratings: The series A notes benefit from a sequential pay structure, where their target amortization payments are senior to interest and principal payments on the series B notes. Series A also benefits from credit enhancement (CE) of 13.7% as of March 2023 and an interest reserve account equivalent to 3x their next interest payment, which allows them to pass the 'B-sf' stress. In addition, although they benefit from excess spread, due to their net weighted average coupon feature, Fitch does not consider this variable. Higher Stresses Applied Due to Ecuador's Macroeconomic Environment: Ecuador's Issuer Default Ratings are 'B-'/Stable and its Country Ceiling is 'B-'. Fitch applied higher stresses to the rated notes to reflect the macroeconomic environment and Latin America's potential idiosyncratic risks. The stresses applied are commensurate to the stresses equivalent to three rating categories above the cap level (defined at B+sf for Ecuador) for an uncapped country, in accordance with Fitch's Structured Finance and Covered Bonds Country Risk Rating Criteria. Operational Risk Mitigated: Pursuant to the servicer agreement, Banco Pichincha will perform the role of primary servicer. Fitch has reviewed Banco Pichincha's systems and procedures and is satisfied with its servicing capabilities. Additionally, Corporacion de Desarrollo de Mercado Secundario de Hipotecas CTH S.A. (CTH) has been designated as master and back-up servicer, mitigating the exposure to operational risk. IMS Ecuadorian Mortgage 2021-1 Trust DFC Credit Quality Supports Rating: The rating assigned to the 2021-1 certificates is commensurate with the guarantee provider's credit quality. The DFC's credit quality is directly linked to the U.S. sovereign rating (AAA/F1+/Stable), as guarantees issued by, and obligations of, the DFC are backed by the full faith and credit of the U.S. government, pursuant to the Foreign Assistance Act of 1969. Reliance on DFC Guaranty: Fitch assumes the payment on the notes will rely on the DFC guaranty. Through this guaranty the DFC will unconditionally and irrevocably guarantee the receipt of proceeds from the underlying notes in an amount sufficient to cover timely scheduled interest amounts (considering the minimum between the class A2 and A4 interest rate minus trust expenses and 3.4%) and the ultimate principal amount on the certificates. The DFC guaranty effectively protects noteholders, taking into consideration the scope of the guaranty, the claim process and the timing required for the guarantor to disburse the funds to the issuer. Ample Liquidity: The transaction benefits from liquidity, in the form of a five-day buffer between payment dates on the underlying notes and payment dates on the certificates. Additionally, the certificates benefit from a three-month debt service reserve account at the underlying note level and a guaranty fee reserve account that was funded at transaction closing and will be utilized throughout the life of the certificates to ensure the guaranty fee due to the guarantor is paid in a timely manner. Fitch considers this sufficient to keep debt service current on the guaranteed certificates until funds are received under a DFC Guaranty claim and that the guaranty will not terminate as a result of a failure to pay the guaranty fee. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade For the RMBS transaction, the ratings are sensitive to the Ecuadorian sovereign's credit quality, as well as Banco Pichincha's (acting as the transaction account bank holder) credit quality. A downgrade of Ecuador's ratings (especially of its Country Ceiling) or a downgrade of Banco Pichincha would result in a downgrade of the series A notes. The transaction's performance may also be affected by changes in market conditions and economic environment. Weakening economic performance is strongly correlated to increasing levels of delinquencies and defaults that could reduce CE available to the notes. Additionally, unanticipated declines in recoveries could result in lower net proceeds, which may make certain note ratings susceptible to potential negative rating actions depending on the extent of the decline in recoveries. For IMS Ecuadorian Mortgage 2021-1 Trust, the certificates' rating is directly linked to the credit quality of DFC, the guaranty provider. The DFC's credit quality is directly linked to the U.S. sovereign rating, as guarantees issued by, and obligations of, DFC are backed by the full faith and credit of the U.S. government, pursuant to the Foreign Assistance Act of 1969. The rating could be downgraded if the U.S. sovereign rating is downgraded. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade The ratings assigned to the class A notes issued by FIMEPCH 5 are sensitive to the credit quality of the Ecuadorian sovereign, as well as to the credit quality of Banco Pichincha (acting as the transaction account bank holder). An upgrade of the sovereign rating of Ecuador (especially of its Country Ceiling) and an upgrade of Banco Pichincha could result in an upgrade of the series A notes. For IMS Ecuadorian Mortgage 2021-1 Trust, the rating is at the maximum achievable rating, thus cannot be upgraded. PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS The transaction is linked to the credit quality of DFC. A change in Fitch's assessment of the credit quality of the DFC would automatically result in a change in the Rating on the IMS certificates. 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. ============= J A M A I C A ============= JAMALCO: Century Aluminium Company Buys Firm for US$1 ----------------------------------------------------- RJR News reports that the majority stake in the Jamalco alumina refinery will be acquired by Century Aluminium Company for US$1. The deal will be closed in the coming days. According to the Financial Gleaner, a breakdown of the deal price was not given, but the implication is that the transaction may have cleared Noble Group of liabilities for Jamalco going forward, the report notes. Jamalco will add to Century's assets which currently stand at US$1.47 billion, according to RJR News. As reported in the Troubled Company Reporter-Latin America on Nov. 22, 2018, RJR News said that Singapore authorities have launched an investigation into suspected false and misleading financial statements at Noble Group, the part owner of the Jamalco alumina refinery. The investigation, which involves the white collar crime unit of the Singapore police, comes almost four years after a former employee published the first in a series of reports highly critical of Noble's accounts, according to RJR News. The police, the Monetary Authority of Singapore and the Accounting and Corporate Regulatory Authority said in a joint statement they were investigating potential false and misleading statements as well as potential non-compliance with accounting standards, the report notes. ===================== P U E R T O R I C O ===================== BED BATH: U.S. Trustee Solicits Members for Creditors Panel ----------------------------------------------------------- The United States Trustee was soliciting members for committee of unsecured creditors in the bankruptcy cases of Bed Bath & Beyond Inc., et al. Parties wishing to be considered for membership on any official committee that is appointed, was to complete a questionnaire available at https://bit.ly/3njHHdS and return by email it to Tina L Oppelt --Tina.L.Oppelt@usdoj.gov -- and Neidy.Fuentes@usdoj.gov at the Office of the United States Trustee so that it was received by no later than 1:00 p.m., last May 2, 2023. If the U.S. Trustee receives sufficient creditor interest in the solicitation, it may schedule a meeting or telephone conference for the purpose of forming a committee. About Bed Bath & Beyond Bed Bath & Beyond Inc., together with its subsidiaries, is an omnichannel retailer selling a wide assortment of merchandise in the Home, Baby, Beauty & Wellness markets and operates under the names Bed Bath & Beyond, buybuy BABY, and Harmon, Harmon Face Values. The Company also operates Decorist, an online interior design platform that provides personalized home design services. At its peak, Bed Bath & Beyond operated the largest home furnishing retailer in the United States with over 970 stores across all 50 states, consistently at the forefront of major home and bath trends. Operating stores spanning the United States, Canada, Mexico, and Puerto Rico, Bed Bath & Beyond offers everything from bed linens to cookware to electric appliances, home organization, baby care, and more. Bed Bath & Beyond closed over 430 locations across the United States and Canada before filing chapter 11 cases, implementing full scale winddowns of their Canadian business and the Harmon branded stores. Left with 360 Bed Bath & Beyond and 120 buybuy BABY stores, Bed Bath & Beyond Inc. and 73 affiliated debtors on April 23, 2023, each filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code to pursue a wind down of operations. The cases are pending before the Honorable Vincent F. Papalia and have requested joint administration of the cases under Bankr. D.N.J. Lead Case No. 23-13359. Kirkland & Ellis LLP and Cole Schotz P.C. are serving as legal counsel, Lazard Frares & Co. LLC is serving as investment banker, and AlixPartners LLP is serving as financial advisor. Bed Bath & Beyond Inc. has retained Hilco Merchant Resources LLC to assist with inventory sales. Kroll LLC is the claims agent. COMUNICADORES GRAFICOS: Taps Batista Law Group as Legal Counsel --------------------------------------------------------------- Comunicadores Graficos, Inc. seeks approval from the U.S. Bankruptcy Court for the District of Puerto Rico to hire The Batista Law Group, P.S.C. to handle its Chapter 11 case. The hourly rates of the firm's attorneys and staff are as follows: Jesus E. Batista Sanchez, Esq. $275 Associates $225 Paralegals $100 Jesus Batista Sanchez, Esq., principal at The Batista Law Group, disclosed in a court filing that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Jesus Enrique Batista Sanchez, Esq. The Batista Law Group, P.S.C. 239 Ave Arterial Hostos Ste 206 San Juan PR 00918-1475 Tel: (787) 620-2856 Email: jeb@batistasanchez.com About Comunicadores Graficos Comunicadores Graficos Inc. is a Puerto Rico-based company engaged in printing and related support activities. Comunicadores Graficos filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D.P.R. Case No. 23-01064) on April 13, 2023, with $1 million to $10 million in both assets and liabilities. Juan Rafael Pierantoni Gonzalez, president of Comunicadores Graficos, signed the petition. Jesus Enrique Batista Sanchez, Esq. at The Batista Law Group, P.S.C represents the Debtor as counsel. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Latin America is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA, Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A. Chapman, Editors. Copyright 2023. All rights reserved. ISSN 1529-2746. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Latin America subscription rate is US$775 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Peter A. Chapman at 215-945-7000. . * * * End of Transmission * * *