/raid1/www/Hosts/bankrupt/TCRLA_Public/230704.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
Tuesday, July 4, 2023, Vol. 24, No. 133
Headlines
A R G E N T I N A
ARGENTINA: Economy Shrank in April, Suffering Record Drought
ARGENTINA: Paid IMF as Negotiations to Continue in Washington
B O L I V I A
BOLIVIA: Moody's Confirms 'Caa1' Issuer Ratings, Outlook Negative
B R A Z I L
BRAZIL: Bank Lending Delinquency Reaches Highest Level in May
BRAZIL: Central Bank Sees Chance of Rate Cut in August
C O L O M B I A
COLOMBIA: Fitch Affirms 'BB+' Foreign Currency IDR, Outlook Stable
ECOPETROL SA: S&P Rates $1.2BB Senior Unsecured Notes 'BB+'
D O M I N I C A N R E P U B L I C
DOMINICAN REPUBLIC: Signs Cooperation Memorandum with Singapore
DOMINICAN REPUBLIC: Water Service Shortage Worsens in the Country
P A R A G U A Y
PARAGUAY: S&P Assigns 'BB' Rating on US$500MM Notes Due 2033
P U E R T O R I C O
PUERTO RICO: Oversight Board Plans to Cut PREPA Bond Offer by Half
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A R G E N T I N A
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ARGENTINA: Economy Shrank in April, Suffering Record Drought
------------------------------------------------------------
Manuela Tobias at Bloomberg News reports that Argentina's economy
contracted more than expected in April as a record drought took its
toll on trade, a sign that the economy is likely to enter recession
later this year.
Economic activity fell 1.9 percent in April from a month earlier,
more than median estimate for a 1.2 percent decrease, according to
Bloomberg News. The economy shrank 4.2 percent from a year ago,
according to government data published. The year-on-year drop
exceeded all forecasts of economists surveyed by Bloomberg.
A record drought in Argentina is ravaging forecasts for essential
commodity exports that help drive growth. Consumer spending is also
suffering as inflation running at over 100 percent decimates
purchasing power, Bloomberg News discloses. Moreover, this year's
presidential election adds uncertainty to economic activity, as
investors eagerly await the potential reversal of an unconventional
set of economic strategies like price freezes and byzantine
currency controls, Bloomberg News notes.
Economists surveyed by Argentina's Central Bank anticipate that
gross domestic product will shrink three percent this year,
followed by another decline in GDP in 2024, Bloomberg News adds.
About Argentina
Argentina is a country located mostly in the southern half of South
America. Its capital is Buenos Aires. Alberto Angel Fernandez is
the current president of Argentina after winning the October 2019
general election. He succeeded Mauricio Macri in the position.
Argentina has the third largest economy in Latin America. The
country's economy is an upper middle-income economy for fiscal year
2019, according to the World Bank. Historically, however, its
economic performance has been very uneven, with high economic
growth alternating with severe recessions, income maldistribution
and in the recent decades, increasing poverty.
Last March 25, 2022, Argentina finalized agreement with the IMF for
a new USD44 billion Extended Funding Facility (EFF) intended to
fund USD40 billion in looming repayments of the defunct Stand-By
Arrangement (SBA), with an extra USD4 billion in up-front net
financing. This has averted the risk of a default to the IMF
and is facilitating a parallel rescheduling of Paris Club debt.
S&P Global Ratings, on March 29, 2023, lowered its long-term
foreign currency sovereign credit rating on Argentina to 'CCC-'
from 'CCC+'. S&P also affirmed its 'C' short-term foreign currency
sovereign credit rating and its 'CCC-/C' local currency ratings on
Argentina. The outlook on the long-term ratings is negative. S&P
also lowered the transfer and convertibility assessment to 'CCC-'
from 'CCC+'. The negative outlook on the long-term ratings
reflects risks surrounding pronounced economic imbalances and
policy uncertainties before and after the 2023 national elections.
Divisions across the political spectrum constrain the sovereign's
ability to implement timely changes in economic policy. Global
capital markets are closed to Argentina. In the local market, swaps
are being deployed to manage large maturities before placing debt
through traditional auctions. The central bank continues to play a
key role as a backstop for local debt management in the secondary
market. The ongoing severe drought has exacerbated pressures in the
already disrupted foreign exchange (FX) market.
Fitch Ratings, on the other hand, downgraded Argentina's Long-Term
Foreign Currency Issuer Default Rating (IDR) to 'C' from 'CCC-',
and has affirmed the Long-Term Local Currency IDR at 'CCC-' on
March 24, 2023. Fitch's downgrade of Argentina's rating to 'C' from
'CCC-' follows an executive decree that forces domestic
public-sector entities into operations involving their holdings of
sovereign debt securities, which would involve unilateral exchanges
and forced currency conversion that constitute default events under
Fitch's criteria. The 'C' rating reflects Fitch's view that default
is thus imminent. Fitch said the rating would be downgraded to
'Restricted Default' (RD) upon execution of the exchanges.
Moody's Investors Service, in September 2022, affirmed Argentina's
Ca foreign-currency and local-currency long-term issuer and senior
unsecured ratings. The outlook remains stable. The decision to
affirm the Ca ratings balances Argentina's limited market access,
weak governance, and history of recurrent debt restructurings with
recent efforts to marshal fiscal and monetary measures to start
addressing underlying macroeconomic imbalances in the context of
the IMF program that was approved in 2022, according to Moody's.
DBRS, Inc. confirmed Argentina's Long-Term Foreign Currency Issuer
Rating at CCC and downgraded its Long-Term Local Currency Issuer
Rating to CCC from CCC (high) on March 3, 2023.
ARGENTINA: Paid IMF as Negotiations to Continue in Washington
-------------------------------------------------------------
Buenos Aires Times reports that Argentina's government made two
payments owed to the International Monetary Fund before a deadline
as discussions for a new staff-level agreement will continue in
Washington.
The International Monetary Fund said negotiations between its staff
and Argentine officials will continue in the coming days, according
to a statement by Julie Kozack, the IMF director of communications.
Argentina "remains current on their financial obligations to the
Fund," Kozack said, according to Buenos Aires Times.
"IMF staff and the Argentine authorities will continue to advance
their work in the coming days, with the aim of reaching agreement
on the fifth review of the Fund-supported programme," said the IMF
official, the report notes.
"Technical discussions continue on a policy package to safeguard
economic stability in the context of a challenging situation,
partly affected by the historic drought," Kozack added.
"Discussions are focused on strengthening macroeconomic policies to
support reserve accumulation and improve fiscal sustainability,
while protecting the most vulnerable. The Argentine authorities
continue to remain current on their financial obligations to the
Fund," concluded the statement, the report says.
The country used US$1 billion in yuan from a currency swap line
with China and US$1.7 billion of special drawing rights (SDRs)
issued by the International Monetary Fund for the repayment, the
report notes.
In a separate statement, Argentina's Economy Ministry said a team
led by senior officials Leonardo Madcur and Gabriel Rubinstein will
travel to Washington to close a staff-level agreement. Talks have
dragged on for weeks for a new deal on the country's US$44-billion
program, the report discloses.
Argentina's currency is the worst performer in emerging markets
this year. The Central Bank's dollar reserves are at their lowest
level since 2016, and when stripping out the swap line, gold and
multilateral financing, its liquid cash reserves are in negative
territory, the report adds.
About Argentina
Argentina is a country located mostly in the southern half of South
America. Its capital is Buenos Aires. Alberto Angel Fernandez is
the current president of Argentina after winning the October 2019
general election. He succeeded Mauricio Macri in the position.
Argentina has the third largest economy in Latin America. The
country's economy is an upper middle-income economy for fiscal year
2019, according to the World Bank. Historically, however, its
economic performance has been very uneven, with high economic
growth alternating with severe recessions, income maldistribution
and in the recent decades, increasing poverty.
Last March 25, 2022, Argentina finalized agreement with the IMF for
a new USD44 billion Extended Funding Facility (EFF) intended to
fund USD40 billion in looming repayments of the defunct Stand-By
Arrangement (SBA), with an extra USD4 billion in up-front net
financing. This has averted the risk of a default to the IMF
and is facilitating a parallel rescheduling of Paris Club debt.
S&P Global Ratings, on March 29, 2023, lowered its long-term
foreign currency sovereign credit rating on Argentina to 'CCC-'
from 'CCC+'. S&P also affirmed its 'C' short-term foreign currency
sovereign credit rating and its 'CCC-/C' local currency ratings on
Argentina. The outlook on the long-term ratings is negative. S&P
also lowered the transfer and convertibility assessment to 'CCC-'
from 'CCC+'. The negative outlook on the long-term ratings
reflects risks surrounding pronounced economic imbalances and
policy uncertainties before and after the 2023 national elections.
Divisions across the political spectrum constrain the sovereign's
ability to implement timely changes in economic policy. Global
capital markets are closed to Argentina. In the local market, swaps
are being deployed to manage large maturities before placing debt
through traditional auctions. The central bank continues to play a
key role as a backstop for local debt management in the secondary
market. The ongoing severe drought has exacerbated pressures in the
already disrupted foreign exchange (FX) market.
Fitch Ratings, on the other hand, downgraded Argentina's Long-Term
Foreign Currency Issuer Default Rating (IDR) to 'C' from 'CCC-',
and has affirmed the Long-Term Local Currency IDR at 'CCC-' on
March 24, 2023. Fitch's downgrade of Argentina's rating to 'C' from
'CCC-' follows an executive decree that forces domestic
public-sector entities into operations involving their holdings of
sovereign debt securities, which would involve unilateral exchanges
and forced currency conversion that constitute default events under
Fitch's criteria. The 'C' rating reflects Fitch's view that default
is thus imminent. Fitch said the rating would be downgraded to
'Restricted Default' (RD) upon execution of the exchanges.
Moody's Investors Service, in September 2022, affirmed Argentina's
Ca foreign-currency and local-currency long-term issuer and senior
unsecured ratings. The outlook remains stable. The decision to
affirm the Ca ratings balances Argentina's limited market access,
weak governance, and history of recurrent debt restructurings with
recent efforts to marshal fiscal and monetary measures to start
addressing underlying macroeconomic imbalances in the context of
the IMF program that was approved in 2022, according to Moody's.
DBRS, Inc. confirmed Argentina's Long-Term Foreign Currency Issuer
Rating at CCC and downgraded its Long-Term Local Currency Issuer
Rating to CCC from CCC (high) on March 3, 2023.
=============
B O L I V I A
=============
BOLIVIA: Moody's Confirms 'Caa1' Issuer Ratings, Outlook Negative
-----------------------------------------------------------------
Moody's Investors Service has confirmed the Government of Bolivia's
Caa1 long-term local and foreign currency issuer and senior
unsecured debt ratings, and changed the outlook to negative from
ratings under review, concluding the review for downgrade that was
initiated on March 24, 2023.
The confirmation of the rating reflects Moody's assessment that
intense external liquidity pressures that were observed at the
beginning of the year have eased supporting the sovereign's ability
to service its external debt payments. Congressional approval of
the Gold Law, which allows the central bank to convert a portion of
its large gold holdings into liquid foreign-exchange reserves,
along with funding from official bilateral and multilateral sources
should provide sufficient hard currency resources to ensure
repayment of the sovereign's external debt obligations over the
near to medium term.
The Caa1 rating indicates that material credit risks remain on
account of: (i) a still-weak external liquidity position; (ii) a
steady deterioration of the fiscal position over the past years
that Moody's does not expect to reverse; and (iii) weak policy
effectiveness and governance. A history of relatively strong, but
moderating, economic growth and high debt affordability, given
reliance on concessional financing, supports Bolivia's credit
profile.
The negative outlook reflects ongoing credit risks associated with
Bolivia's high exposure to domestic political and economic shocks,
as well as persistent downside fiscal and external risks in the
absence of policies that would effectively address underlying
credit challenges.
Bolivia's local and foreign currency country ceilings of B2 and
Caa1, respectively, remain unchanged. The relatively narrow
two-notch gap between the local currency ceiling and issuer rating
reflects the risks that political events could disrupt the
policymaking environment given weak institutions and a significant
government footprint in the economy. The two-notch gap between the
foreign currency and local currency ceiling reflects material
transfer and convertibility risks given persistent balance of
payment pressures and very low policy effectiveness.
RATINGS RATIONALE
RATIONALE FOR CONFIRMATION AT Caa1
NEAR-TERM EXTERNAL LIQUIDITY PRESSURES HAVE EASED
The confirmation of Bolivia's Caa1 rating reflects Moody's
assessment that external liquidity pressures have materially eased
supporting the sovereign's ability to service its debt in full and
on a timely basis. Congressional approval of the Gold Law in May
allows the central bank to sell a portion of its gold holdings
($2.5 billion as of February 2023, the latest publicly available
reserves data) and use the proceeds to increase its liquid
foreign-exchange reserves. The law also authorizes the central bank
to purchase gold from local miners in local currency. In addition,
around $600 million in loans from official bilateral and
multilateral development institutions are set to be disbursed in
2023, providing further support to Bolivia's external liquid
reserves position.
Moody's believes these developments will provide the sovereign with
sufficient hard currency to ensure full and timely repayment of its
external debt obligations and will reduce the risk of disorderly
balance-of-payments adjustments in its external accounts.
The majority of Bolivia's external debt obligations are with
multilateral development institutions on concessional terms. Total
principal and interest due on Bolivia's sovereign international
bonds are relatively modest, amounting to $303 million in 2023 and
$109 million annually in 2024- and 2025; these payments are
projected to rise to $435 million, $420 million and $677 million in
2026, 2027 and 2028, respectively.
WEAK CREDIT FUNDAMENTALS UNDERPIN Caa1 RATING
The Caa1 rating reflects Bolivia's weak credit fundamentals
following a period of persistent fiscal deficits and deteriorating
debt metrics. External liquidity pressures amid declining liquid
international reserves in past years have further undermined the
country's sovereign credit profile, which is also constrained by
weak governance and moderate economic strength.
Overall, macroeconomic policies have not been proactive in
addressing fiscal or external imbalances. The government's fiscal
stance has led to rising debt ratios, and there is limited evidence
that it is willing or able to adopt measures that will reverse the
deterioration in Bolivia' credit profile. Over the past decade, the
country's non-financial public sector debt increased to around 81%
of GDP in 2022 from 36% in 2013. Moody's expects the debt burden to
gradually increase over the medium term, driven by ongoing
government fiscal deficits.
Meanwhile, Bolivia's liquid foreign-exchange reserves declined to
$361 million as of February 2023 from a high of $13.2 billion at
the end of 2014. Although, Moody's expects the Gold Law and
incoming loans from official lenders to buffer the country's liquid
reserves and support its reserves adequacy through 2024, longer
term structural challenges remain.
Underlying credit weaknesses have been only partially mitigated by
high debt affordability, which results from Bolivia's relatively
high reliance on concessional multilateral debt, a track record of
low inflation and the country's relatively dynamic, but declining,
economic growth.
Moody's low assessment of Bolivia's institutions and governance
strength reflects the presence of a weak institutional framework
and ongoing governance challenges, that led to a slow response to
the country's increasing external and fiscal challenges. Political
event risk is high, a condition that has led to repeated periods of
political instability, recurring policy uncertainty, and, at times,
social unrest.
RATIONALE FOR THE NEGATIVE OUTLOOK
The negative outlook reflects the risk of potential further
deterioration of the sovereign credit profile, in the absence of
significant efforts by policymakers to implement macroeconomic
policies that prove effective in durably reversing the weakening of
the country's external account, fiscal position and economic growth
dynamics. Despite prospects of an improved near-term external
liquidity position, credit challenges remain, including declining
reserves and production in the hydrocarbon sector, as well as
latent risks related to domestic political events.
Although Moody's expects the Gold Law and incoming loans from
official lenders to materially buffer the country's liquid
reserves, over the medium term, maintenance of the exchange rate
peg to the US dollar, combined with more limited earnings from
declining hydrocarbon sector exports and maturing external debt
payments, will further pressure liquid foreign exchange reserves,
absent structural policy adjustments. Downside risks would emerge
if the authorities are unable to prevent further declines in liquid
foreign exchange reserves. A material increase in domestic
political risks that significantly increased policy uncertainty
would also heighten credit risks.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE CONSIDERATIONS
Bolivia's ESG Credit Impact Score is very highly negative (CIS-5)
reflecting its very weak governance profile which significantly
weighs on the rating.
Bolivia's exposure to environmental risks is highly negative (E-4
issuer profile score), driven by risks related to carbon transition
and natural resources management. The government and overall
economy's high reliance on hydrocarbon sector revenues and exports
exposes the sovereign to significant carbon transition risks.
Natural resources mining, water management, increased deforestation
and forest fires in the Bolivian Amazon rainforest also contribute
to material environmental risks.
Exposure to social risks is highly negative (S-4 issuer profile
score) and stems from a long history of relatively high levels of
poverty, economic inequality, and social exclusion. Despite
material improvements in recent years, Bolivia is characterized by
relatively high levels of poverty, limited educational outcomes,
and lack of sufficient access to basic services and housing. Like
many other emerging economies, Bolivia benefits from a benign
demographic structure.
The influence of governance on Bolivia's credit profile is very
highly negative (G-5 issuer profile score) reflecting very weak
policy effectiveness, weak institutional arrangements, a high
incidence of corruption, and weak rule of law.
GDP per capita (PPP basis, US$): 9,910 (2022) (also known as Per
Capita Income)
Real GDP growth (% change): 3.5% (2022) (also known as GDP Growth)
Inflation Rate (CPI, % change Dec/Dec): 3.1% (2022)
Gen. Gov. Financial Balance/GDP: -5.8% (2022) (also known as Fiscal
Balance)
Current Account Balance/GDP: -0.3% (2022) (also known as External
Balance)
External debt/GDP: 35.6% (2022)
Economic resiliency: b2
Default history: No default events (on bonds or loans) have been
recorded since 1983.
On June 27, 2023, a rating committee was called to discuss the
rating of the Bolivia, Government of. The main points raised during
the discussion were: The issuer's economic fundamentals, including
its economic strength, have not materially changed. The issuer's
institutions and governance strength, have not materially changed.
The issuer's fiscal or financial strength, including its debt
profile, has not materially changed. The issuer's susceptibility to
event risks has not materially changed.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
WHAT COULD LEAD TO A DOWNGRADE
Indications of the sovereign's decreased ability – or willingness
– to meet its external debt repayments would lead to a downgrade.
Particularly significant in this respect would be evidence that the
authorities are unable to prevent further declines in Bolivia's
liquid foreign exchange reserves, as this would materially increase
credit risks. Domestic political risks that lead to increased
policy uncertainty and undermine the government's ability to
improve fiscal and external imbalances would exert additional
negative credit pressures.
WHAT COULD LEAD TO AN UPGRADE
The negative outlook indicates that an upgrade is unlikely in the
foreseeable future. Moody's could change Bolivia's outlook to
stable if policymakers implemented policy measures that proved
effective in substantially reducing fiscal and external imbalances,
including by fostering a sustained increase in liquid foreign
exchange reserves. Implementation of structural reforms that
improve medium-term growth prospects through the diversification of
the economy and reduced dependence on the hydrocarbon sector would
provide additional support to Bolivia's credit profile.
The principal methodology used in these ratings was Sovereigns
published in November 2022.
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B R A Z I L
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BRAZIL: Bank Lending Delinquency Reaches Highest Level in May
-------------------------------------------------------------
globalinsolvency.com, citing Reuters, reports that Brazil's
delinquency rate reached its highest level in over five years in
May, accompanied by a rise in average consumer interest rates,
reflecting deteriorating credit conditions, according to data
released by the central bank.
A broad measure of default rates for non-earmarked credit,
encompassing both individuals and businesses, increased from 4.8%
in April to 4.9% in May, the worst reading since February 2018. In
May of last year, the delinquency rate stood at 3.7%, according to
globalinsolvency.com.
The rising non-payment rate has been driven by higher borrowing
costs, as the central bank has maintained its benchmark interest
rate at a 13.75% cycle-high since September to curb inflationary
pressures, the report notes.
While the average interest rate for non-earmarked credit grew to
45.4% per year in May, it surged to 455.1% for revolving credit
card debt, while delinquency in this credit category only reached
54%, 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 was sworn in on January 1, 2023, as
the 39th president of Brazil, succeeding Jair Bolsonaro.
As recently reported in the Troubled Company Reporter-Latin
America, Fitch Ratings, in December 2022, affirmed Brazil's
Long-Term Foreign Currency Issuer Default Rating (IDR) at 'BB-'
with a Stable Outlook. The ratings are constrained by high
government indebtedness, a rigid fiscal structure, weak economic
growth potential, and a record of governability challenges that
have hampered efforts to address these fiscal and economic issues
and clouded policy predictability. The Stable Outlook reflects
Fitch's expectation that growth will slow in the coming year and
that recent fiscal improvement will erode under a new government,
but within a margin consistent with the current rating, and from a
better starting point than previously expected. Uncertainty is
elevated regarding the plans of the incoming government and the
extent to which these could ease or aggravate fiscal and economic
challenges. However, Fitch does not expect policies that
jeopardize broad economic stability.
Standard & Poor's affirmed its 'BB-/B' long- and short-term
foreign and local currency sovereign credit ratings on Brazil, and
the outlook remains stable (June 2022). The stable outlook
reflects S&P's base-case assumption that Brazil will maintain its
fiscal anchors over the next two years despite an increasing
interest burden, preventing significant fiscal slippage and
limiting the rise in its already high debt burden.
Moody's credit rating for Brazil was last set at Ba2 in 2018 with
stable outlook. Moody's affirmed the Ba2 issuer ratings and
senior unsecured bond ratings in April 2022.
DBRS's credit rating for Brazil is BB (low) with stable outlook
(March 2018).
BRAZIL: Central Bank Sees Chance of Rate Cut in August
------------------------------------------------------
globalinsolvency.com, citing Bloomberg News, reports that Brazil's
central bank said it may be able to start cutting interest rates in
August after President Luiz Inacio Lula da Silva and top members of
his economic team demanded clarity about the timing of an expected
monetary easing cycle.
While policymakers hadn't ruled out an August rate cut in a short
statement issued together with their June 21 decision, the minutes
of that meeting published were much more explicit about that
possibility, according to globalinsolvency.com.
The change in tone followed growing outrage in the administration
about the board's decision to hold borrowing costs at 13.75%,
without clearly saying when cuts could start, the report notes.
The minutes revealed a disagreement among policymakers led by
Roberto Campos Neto about how explicit they should be about their
next steps, the report discloses.
Part of the board was "more cautious," arguing that easing
inflation estimates and "more evidence" of lower price pressures
were needed before they could clearly indicate looser monetary
policy, the report says.
Yet the "the prevailing assessment was that the continuation of the
ongoing disinflationary process, with its consequent impact on
expectations," may allow for the beginning of a "parsimonious
process of inflection at the next meeting," central bankers wrote,
the report relays.
Copom, as the board is known, still warned that "premature" rate
cuts could accelerate inflation, hurting the monetary authority's
credibility as well as financial conditions, 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 was sworn in on January 1, 2023, as
the 39th president of Brazil, succeeding Jair Bolsonaro.
As recently reported in the Troubled Company Reporter-Latin
America, Fitch Ratings, in December 2022, affirmed Brazil's
Long-Term Foreign Currency Issuer Default Rating (IDR) at 'BB-'
with a Stable Outlook. The ratings are constrained by high
government indebtedness, a rigid fiscal structure, weak economic
growth potential, and a record of governability challenges that
have hampered efforts to address these fiscal and economic issues
and clouded policy predictability. The Stable Outlook reflects
Fitch's expectation that growth will slow in the coming year and
that recent fiscal improvement will erode under a new government,
but within a margin consistent with the current rating, and from a
better starting point than previously expected. Uncertainty is
elevated regarding the plans of the incoming government and the
extent to which these could ease or aggravate fiscal and economic
challenges. However, Fitch does not expect policies that
jeopardize broad economic stability.
Standard & Poor's affirmed its 'BB-/B' long- and short-term
foreign and local currency sovereign credit ratings on Brazil, and
the outlook remains stable (June 2022). The stable outlook
reflects S&P's base-case assumption that Brazil will maintain its
fiscal anchors over the next two years despite an increasing
interest burden, preventing significant fiscal slippage and
limiting the rise in its already high debt burden.
Moody's credit rating for Brazil was last set at Ba2 in 2018 with
stable outlook. Moody's affirmed the Ba2 issuer ratings and
senior unsecured bond ratings in April 2022.
DBRS's credit rating for Brazil is BB (low) with stable outlook
(March 2018).
===============
C O L O M B I A
===============
COLOMBIA: Fitch Affirms 'BB+' Foreign Currency IDR, Outlook Stable
------------------------------------------------------------------
Fitch Ratings has affirmed Colombia's Long-Term Foreign-Currency
Issuer Default Rating (IDR) at 'BB+' with a Stable Outlook.
KEY RATING DRIVERS
Stable Credit Fundamentals: Colombia's ratings reflect the
country's track record of macroeconomic and financial stability
underpinned by an independent central bank with an inflation
targeting regime and a free-floating currency. The ratings are
constrained by the high albeit falling fiscal deficits, which have
already resulted in relatively large increases in debt and interest
burdens in recent years, as well as high commodity dependence and
weaker external accounts.
Uncertain Reform Agenda Path: President Petro's early success
building a congressional coalition after he took office in August
2022 and passing a major tax reform in November 2022 has run into
roadblocks heading into mid-2023. His proposed healthcare reform
divided his coalition and resulted in its collapse. As a result,
Petro's political capability to pass healthcare, pension and labor
reforms has become more uncertain. A proposed labor reform was
voted down in the Congress in June 2023, although the president
pledges to resubmit this. Petro's healthcare and pension reforms
will also face an uphill battle in Congress, but compromises on
some of their more controversial aspects could facilitate passage.
Policy uncertainties are expected to remain over the coming year,
most importantly for the extractive industries. However, the Petro
administration has pledged to adhere to Colombia's fiscal and
monetary framework, including the independence of the central bank
and the updated fiscal rule.
Sharp Economic Slowdown in 2023-24: Fitch expect growth to slow
significantly to 1.5% in 2023 from 7.3% in 2022 on the back of
aggressive monetary tightening and major fiscal adjustment,
including the reduction of the fuel subsidy. Growth is expected to
remain lackluster at 1.2% in 2024 given the lagged impact of tight
monetary policy that will weigh on domestic demand and weaker
global growth will negatively impact exports and oil prices as
well. Fitch believe that political uncertainty will likely weigh on
investment over the next two years. Fitch expect growth to reach
2.8% in 2025, slightly below Fitch assessment of potential, on the
back of rate cuts and a pick-up in global growth.
Inflation Proves Sticky: Inflationary pressures intensified in 2022
as a result of local supply shocks, adverse weather impacting food
prices, the spike in commodity prices, and peso depreciation.
Furthermore, the government has begun to unwind fuel subsidies
leading to higher end-user prices. Indexation is prevalent in
Colombia and is adding to inertia. Fitch expect inflation to reach
9% by year-end 2023, after peaking at 13.3% in March 2023. Fitch
expect inflation to fall to 5% in 2024, still above the central
bank's 3+/-1% target. Risks to inflation are tilted upwards given
the prevalence of indexation, continued unwinding of fuel subsidies
and threats from the El Nino phenomenon.
Tight Monetary Policy: The central bank has hiked its policy rate
aggressively to 13.25% by a cumulative 1150bp since October 2021.
Fitch believe that the central bank has reached its terminal rate
for the tightening cycle, having last increased the policy rate by
25bp in April and remaining on hold since. Despite this highly
restrictive stance, one-year inflation expectations remain elevated
at over 6%, and two-year expectations are slightly above the upper
band of the bank's target. Fitch believe the central bank will
begin cutting interest rate in 4Q23 as both headline inflation and
expectations show sustained falls.
Fiscal Adjustment Underway: Fitch expects Colombia's general
government (GG) deficit (including central and subnational
governments, social security, and the FEPC oil price stabilization
fund) to fall significantly in 2023 to 3.6% of GDP from 6.5% in
2022. Two tax reforms passed in 2021 and 2022 focused on corporate
income are set to begin raising revenues in 2023 and eventually
yield revenues estimated at just over 2% of GDP. The government has
also begun to reduce the fuel subsidy that will save an estimated
1% of GDP in spending in 2023. This subsidy reached close to 2.5%
of GDP in 2022.
Fitch expect the GG deficit to reach 3.7% of GDP in 2024, little
changed from 2023. At the central government level, which is the
focus of the fiscal framework, Fitch expect the deficit to rise to
5% of GDP from 4.3% of GDP in 2023. This is somewhat worse than the
official projection (4.5%), assuming weaker economic growth,
additional spending pressures and smaller gains from tax
administration measures. The government estimates roughly 1.7% of
GDP in additional tax collection from improved tax administration
and litigation measures, especially given the expansion of capacity
of the tax collection agency (DIAN), but there is significant
uncertainty around their success.
Debt Largely Stabilizing: GG debt to GDP is expected to fall to
54.1% of GDP in 2023, in part due to fiscal adjustment underway as
well as the continued high nominal GDP growth due to elevated
inflation. However, Fitch expect the debt to GDP ratio to begin to
climb gradually in 2024 and 2025 due to slower nominal GDP growth,
absent further fiscal consolidation. The government expects to
comply with the fiscal rule, reaching a primary central government
surplus by 2025 and reducing its benchmark net debt/GDP ratio to
55% of GDP by 2033 (from 57.9% in 2022).
Current Account Deficit Narrowing: The current account deficit
(CAD) has begun to adjust significantly in 2023 as imports
contract, profits accruing to foreign firms moderate and tourism
and remittances grow. Fitch are expecting it to fall to 4.0% of GDP
in 2023 from 6.2% of GDP in 2022, and to 3.5% of GDP in 2024.
Foreign direct investment performed well in 2022 reaching over
USD13 billion in net terms and covering over 60% of the CAD. Fitch
expect FDI to moderate in 2023-24 but to continue to cover around
half of the CAD. We expect little fluctuation in international
reserves (USD56.7 billion at year-end 2022) over the next two years
and external liquidity metrics to continue to cover nearly six
months of CXP. Furthermore, the IMF in April 2022 approved a new
two-year flexible credit line with Colombia for USD9.8 billion, a
reduction from the augmented line of USD17.2 billion extended in
September 2020 amid the pandemic.
ESG - Governance: Colombia has an ESG Relevance Score (RS) of '5'
for both Political Stability and Rights and for the Rule of Law,
Institutional and Regulatory Quality and Control of Corruption.
Theses scores reflect the high weight that the World Bank
Governance Indicators (WBGI) have in Fitch proprietary Sovereign
Rating Model. Colombia has a medium WBGI ranking at 43.4 reflecting
a recent track record of peaceful political transitions, moderate
institutional capacity, and established rule of law. Its governance
ranking is negatively impacted by a history of armed conflict and
drug-related violence.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
Public Finances: A sustained deterioration in Colombia's general
government debt-to-GDP ratio relative to the 'BB' peer median, for
example from persistent high fiscal deficits;
Macro: Deterioration of investment and medium-term growth prospects
with adverse social ramifications, such as high unemployment and
poverty levels;
External Finances: Marked increase in external vulnerabilities, for
example due to renewed large current accounts deficits, a sharp
fall in foreign direct investment and/or increase in net external
debt-to-GDP.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
Public Finances: Achievement of fiscal consolidation consistent
with a steadily declining general government debt-to-GDP ratio and
enhanced fiscal policy credibility;
Macro: Higher sustained medium-term economic growth above
Colombia's historical averages, accompanied by broader
macro-financial stability;
Structural: Improvement in governance indicative of better social
cohesion.
SOVEREIGN RATING MODEL (SRM) AND QUALITATIVE OVERLAY (QO)
Fitch's proprietary SRM assigns Colombia a score equivalent to a
rating of 'BB+' on the Long-Term Foreign-Currency (LT FC) IDR
scale.
In accordance with its rating criteria, Fitch's sovereign rating
committee decided not to adopt the score indicated by the SRM as
the starting point for its analysis because in Fitch view the SRM
output has migrated to 'BB+', but in Fitch view this is potentially
a temporary deviation. Consequently, the committee decided to adopt
'BB' as the starting point for its analysis, unchanged from the
prior committee].
Fitch's sovereign rating committee adjusted the output from the
adopted SRM score to arrive at the final LT FC IDR by applying its
QO, relative to SRM data and output, as follows:
Macro: +1 notch added to offset the deterioration of inflation and
GDP growth volatility variables in the SRM due to the current
position in the economic cycle, which Fitch expects will be
temporary, and would otherwise add excess volatility to the rating.
Colombia has a track record of stable economic growth, with only
two years of contractions in the past 50 years.
Fitch's SRM is the agency's proprietary multiple regression rating
model that employs 18 variables based on three-year centred
averages, including one year of forecasts, to produce a score
equivalent to a LT FC IDR. Fitch's QO is a forward-looking
qualitative framework designed to allow for adjustment to the SRM
output to assign the final rating, reflecting factors within Fitch
criteria that are not fully quantifiable and/or not fully reflected
in the SRM.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Sovereigns, Public Finance
and Infrastructure 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 three notches over three years. The complete span of
best- and worst-case scenario credit ratings for all rating
categories ranges from 'AAA' to 'D'. Best- and worst-case scenario
credit ratings are based on historical performance.
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF
RATING
The principal sources of information used in the analysis are
described in the Applicable Criteria.
ESG CONSIDERATIONS
Colombia has an ESG Relevance Score of '5' for Political Stability
and Rights as World Bank Governance Indicators have the highest
weight in Fitch's SRM and are therefore highly relevant to the
rating and a key rating driver with a high weight. As Colombia has
a percentile rank below 50 for the respective Governance Indicator,
this has a negative impact on the credit profile.
Colombia has an ESG Relevance Score of '5' for Rule of Law,
Institutional & Regulatory Quality and Control of Corruption as
World Bank Governance Indicators have the highest weight in Fitch's
SRM and are therefore high relevant to the rating and are a key
rating driver with a high weight. As Colombia as a percentile rank
below 50 for the respective Governance Indicators, this has a
negative impact on the credit profile.
Colombia has an ESG Relevance Score of '4[+]'for Human Rights and
Political Freedoms as the Voice and Accountability pillar of the
World Bank Governance Indicators is relevant to the rating and a
rating driver. As Colombia has a percentile rank above 50 for the
respective Governance Indicator, this has a positive impact on the
credit profile.
Colombia has an ESG Relevance Score of '4[+]' for Creditor Rights
as willingness to service and repay debt is relevant to the rating
and is a rating driver for Colombia, as for all sovereigns. As
Colombia has track record of 20+ years without a restructuring of
public debt and captured in Fitch SRM variable, this has a positive
impact on the credit profile.
Except for the matters discussed above, the highest level of ESG
credit relevance, if present, is a score of 3. This means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity(ies), either due to their nature or to the way in which
they are being managed by the entity(ies).
ECOPETROL SA: S&P Rates $1.2BB Senior Unsecured Notes 'BB+'
-----------------------------------------------------------
S&P Global Ratings assigned its 'BB+' issue-level rating to
Ecopetrol S.A.'s (BB+/Stable/--) $1.2 billion senior unsecured
notes due Jan. 19, 2029. The notes will rank pari passu with all of
Ecopetrol's other present and future senior, unsecured, and
unsubordinated obligations.
S&P said, "In addition, our ratings on Ecopetrol are unaffected by
the company's reopening of its existing $2.0 billion senior
unsecured notes due 2033 by an additional $300 million.
"We view these transactions as credit-neutral based on our belief
that the company will use the proceeds to finance its investment
plan for growth. We maintain our forecast of adjusted
debt-to-EBITDAX ratio below 2x in the next 12-18 months."
===================================
D O M I N I C A N R E P U B L I C
===================================
DOMINICAN REPUBLIC: Signs Cooperation Memorandum with Singapore
---------------------------------------------------------------
Dominican Today reports that the Minister of Environment and
Natural Resources of the Dominican Republic and the Minister of
Commerce and Industry of Singapore have established a significant
agreement by signing a memorandum for international cooperation.
This partnership aims to facilitate the generation and sale of
carbon credits while promoting investment, job creation in the
green economy, and technological exchange for sustainable
development, according to Dominican Today.
During a virtual meeting attended by technical delegations from
both countries, Miguel Ceara Hatton, the Dominican minister,
emphasized the vulnerability of island states to the impacts of
climate change, as indicated in the sixth IPCC report, Dominican
Today discloses. Rising sea levels, changes in rainfall patterns,
and temperature fluctuations pose significant risks, including food
insecurity, health issues, and reduced water security, the report
relays.
In the meeting, Ceara Hatton was accompanied by Milagros de Camps,
the Vice Minister for Climate Change, while Mr. Gan Kim Yong was
joined by Fam Wee Wei, the director of the Industry Division, along
with Assistant Principal Dorothy Lee, Senior Assistant Director
Deanna Tan, and Assistant Director Lydia Tang, Dominican Today
discloses.
The signed agreement demonstrates the shared commitment of both
countries to global climate action and the promotion of sustainable
development that benefits their citizens, the report relays. Ceara
Hatton highlighted the Dominican Republic's efforts in achieving
emissions reduction goals, such as transforming the country's
energy matrix, developing the National REDD+ Strategy, and
establishing a Measurement, Reporting, and Verification System, the
report notes. The nation is committed to implementing Nationally
Determined Contributions (NDCs) by adapting mechanisms and actions
according to its unique characteristics and capabilities, the
report relays.
Through collaboration with Singapore, Ceara Hatton expressed
confidence in gaining knowledge and experience that will enhance
mitigation strategies and foster sustainable development within the
Dominican Republic, the report says. Recognizing the critical
nature of the current climate situation, he emphasized the need for
cooperative efforts to mitigate the impacts of climate change and
ensure a brighter future for future generations, the report
discloses.
Mr. Gan Kim Yong also acknowledged the urgency of addressing
climate change, describing it as an existential challenge that
demands effective collaboration among countries, the report notes.
He emphasized the commitment of Singapore and the Dominican
Republic to their climate goals and global climate action, the
report relays. This memorandum marks the initial step toward
carbon credit initiatives between the two countries and will
facilitate pilot projects to stimulate investment, job creation,
technology collaboration, and sustainable development within their
communities, 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 To 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.
DOMINICAN REPUBLIC: Water Service Shortage Worsens in the Country
-----------------------------------------------------------------
Dominican Today reports that the limited distribution of drinking
water or, in some cases, the lack of supply of this liquid has been
a persistent reality in sectors of greater Santo Domingo, as
Listín Diario has verified in multiple visits.
The social development accompanied by improvised urbanization has
generated hundreds of thousands of citizens without an underground
drinking water supply, according to Dominican Today. This creation
is the responsibility of the Corporation of Aqueduct and Sewerage
of Santo Domingo (CAASD), the report notes.
However, other sectors lack this right despite having this
distribution system, the report relays. The situation has worsened
even more due to the seasonal drought, the report discloses.
This reality has forced the communities to buy water trucks from
companies incorporated by the Federacion Nacional de Transporte
Dominicano (Fenatrado), whose union has dozens of trucks available
to market the liquid to impoverished neighborhoods, the report
relays.
This business is, to a certain extent, linked to the CAASD since
the water extracted by these companies comes from the cisterns or
submersible pumping stations that the public institution has
installed in different parts of the Capital, and which, in turn, it
administers, the report notes.
According to union workers, the truck owners must pay CAASD
representatives or employees, who control the cisterns, an amount
of RD$100 or RD$200, depending on the truck size, the report says.
The purchased drinking water is then marketed to the community for
a cost ranging from RD$1,500 to RD$2,800, according to a driver who
works at one of the CAASD supply points near the Quisqueya Juan
Marichal Stadium, the report dicloses.
However, the public entity indicates that the Fenatrado union has
to make three daily trips in vulnerable areas due to the lack of
this liquid, which they analyze, the report relays.
The CAASD has pointed out that in periods like these, where the
country is going through a seasonal drought, the requirement has
increased, so they have had up to 150 trucks, with three trips per
unit, the report notes.
The rental of these trucks costs RD$1,900, according to information
provided by the institution, the report says.
"We have a link, a contract to be contractors to give free services
to the people and they (CAASD) reimburse us," said another driver,
who preferred to remain anonymous for security reasons, the report
discloses.
There is Also Free
Failures in the distribution system have caused water shortages in
several neighborhoods, which has led to the creation of businesses
to distribute this liquid, the report notes.
The CAASD provides free services with its own tanker trucks to
counteract these irregularities, the report relays. However, this
operation has not been well supported by the citizens, the report
discloses.
This reality has been exposed by community members of the 24 de
Abril sector of the National District in a publication entitled
"Residents of the 24 de Abril sector suffer hardships due to lack
of water in the "letter carrier" street," the report relays.
Luis Alberto, a resident of this area, said that when the CAASD
usually provides the service, it only does so for no more than 10
to 15 minutes, the report notes. "On June 13, it arrived at 6:00
in the morning, and by 6:10, it was gone," he testified, and that
he woke up early to fill his water tanks but was unsuccessful.
Sector 24 de Abril, National District
Residents indicated that the entity sends weekly water trucks to
the street to distribute it in a few portions, but they have no
interest in finding a solution to the problem, the report relays.
They do not go
Charlie Tavares pointed out that Caasd has not gone to the
neighborhood to explain the reason for the limitation of the water
service, the report discloses.
The CAASD
The areas of preference to receive drinking water because "they
face the greatest problem with the supply, as a result of the
drought" are the Los Alcarrizos, Pedro Band, and Santo Domingo
Oeste municipalities, 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 To 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.
===============
P A R A G U A Y
===============
PARAGUAY: S&P Assigns 'BB' Rating on US$500MM Notes Due 2033
------------------------------------------------------------
S&P Global Ratings assigned its 'BB' issue rating to Paraguay's
US$500 million notes due 2033, at a 5.85% interest rate. The rating
on the notes is the same as the long-term foreign currency
sovereign credit rating on Paraguay (BB/Stable/B).
The sovereign will use the bulk of the issuance proceeds for
general budgetary purposes. Paraguay has repurchased US$70 million
of outstanding bonds due 2026, as part of a liability management
operation.
S&P said, "Our sovereign ratings reflect Paraguay's long-standing
commitment to macroeconomic stability and fiscal prudence, which
have been key to promoting balanced growth. We expect the economy
to rebound 5% in 2023, following 0.1% growth in 2022 due to adverse
weather conditions that year. The ratings also incorporate
Paraguay's low debt burden -- although it's exposed to exchange
rate risk--and small fiscal deficits. However, while monetary
flexibility is strengthening, it's constrained by high
dollarization.
"In our opinion, President-elect Santiago Peña's administration,
scheduled to take office this August, will extend the track record
of cautious macroeconomic policies, while advancing on the targets
of the IMF's Policy Coordination Instrument (PCI). That said, we
think that political disagreements might slow the advancement of
new policies."
=====================
P U E R T O R I C O
=====================
PUERTO RICO: Oversight Board Plans to Cut PREPA Bond Offer by Half
------------------------------------------------------------------
Michelle Kaske of Bloomberg News reports that Puerto Rico's
financial oversight board is considering slashing -- by about half
-- the amount of new bonds it claims the island's bankrupt power
utility can repay, a potential offering that bondholders will most
likely reject.
The federally appointed board calculates that Puerto Rico's
Electric Power Authority, called Prepa, can only repay $2.5 billion
to its creditors, less than half the $5.68 billion offered in its
March debt-restructuring plan. It's far below the $10 billion it
owes, including nearly $9 billion to bondholders and fuel-line
lenders.
About Puerto Rico
Puerto Rico is a self-governing commonwealth in association with
the United States. The chief of state is the President of the
United States of America. The head of government is an elected
Governor. There are two legislative chambers: the House of
Representatives, 51 seats, and the Senate, 27 seats. The
governor-elect is Ricardo Antonio "Ricky" Rossello Nevares, the
son
of former governor Pedro Rossello.
In 2016, the U.S. Congress passed PROMESA, which, among other
things, created the Financial Oversight and Management Board and
imposed an automatic stay on creditor lawsuits against the
government, which expired May 1, 2017.
The members of the oversight board are: (i) Andrew G. Biggs, (ii)
Jose B. Carrion III, (iii) Carlos M. Garcia, (iv) Arthur J.
Gonzalez, (v) Jose R. Gonzalez, (vi) Ana. J. Matosantos, and (vii)
David A. Skeel Jr.
On May 3, 2017, the Commonwealth of Puerto Rico filed a petition
for relief under Title III of the Puerto Rico Oversight,
Management, and Economic Stability Act ("PROMESA"). The case is
pending in the United States District Court for the District of
Puerto Rico under case number 17-cv-01578. A copy of Puerto Rico's
PROMESA petition is available at
http://bankrupt.com/misc/17-01578-00001.pdf
On May 5, 2017, the Puerto Rico Sales Tax Financing Corporation
(COFINA) commenced a case under Title III of PROMESA (D.P.R. Case
No. 17-01599). Joint administration has been sought for the Title
III cases.
On May 21, 2017, two more agencies -- Employees Retirement System
of the Government of the Commonwealth of Puerto Rico and Puerto
Rico Highways and Transportation Authority (Case Nos. 17-01685 and
17-01686) -- commenced Title III cases.
U.S. Chief Justice John Roberts named U.S. District Judge Laura
Taylor Swain to preside over the Title III cases.
The Oversight Board has hired as advisors, Proskauer Rose LLP and
O'Neill & Borges LLC as legal counsel, McKinsey & Co. as strategic
consultant, Citigroup Global Markets as municipal investment
banker, and Ernst & Young, as financial advisor.
Martin J. Bienenstock, Esq., Scott K. Rutsky, Esq., and Philip M.
Abelson, Esq., of Proskauer Rose LLP; and Hermann D. Bauer, Esq.,
at O'Neill & Borges LLC are onboard as attorneys.
Prime Clerk LLC is the claims and noticing agent. Prime Clerk
maintains the case web site
https://cases.primeclerk.com/puertorico
Jones Day is serving as counsel to certain ERS bondholders.
Paul Weiss is counsel to the Ad Hoc Group of Puerto Rico General
Obligation Bondholders.
*********
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
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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.
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