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/raid1/www/Hosts/bankrupt/TCRLA_Public/230830.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, August 30, 2023, Vol. 24, No. 174 Headlines A R G E N T I N A ARGENTINA: IMF to Allow Currency Intervention to Hold Range B R A Z I L AMERICANAS SA: Ends Joint Venture With Fuel Distributor Vibra C H I L E CHILE: Economy Shrinks as Mining Growth Prevents Deeper Pain J A M A I C A JAMAICA: Manufacturing Industry Declines Marginally in Q2 M E X I C O PETROLEOS MEXICANOS: $152MM Bank Debt Trades at 19% Discount P U E R T O R I C O GGG INVESTMENTS: Taps Alexis Fuentes-Hernandez as Attorney T R I N I D A D A N D T O B A G O CARIBBEAN AIRLINES: Granted Injunction Against Pilots on Sickout V E N E Z U E L A VENEZUELA: US Proposes Sanctions Relief for Fair Elections - - - - - ================= A R G E N T I N A ================= ARGENTINA: IMF to Allow Currency Intervention to Hold Range ----------------------------------------------------------- Patrick Gillespie at Bloomberg News reports that the International Monetary Fund will allow Argentina to intervene in currency markets if the peso drifts above or below a certain range, a key policy change as the US$44-billion program faces rising uncertainty before October presidential elections. Economy Minister Sergio Massa announced the IMF approved Argentina propping up the peso in certain instances, according to Bloomberg News. Massa told reporters after meeting with IMF Managing Director Kristalina Georgieva in Washington that only his economic team and IMF staff will know the range that will define when Argentina can intervene in order to avoid market speculation and manoeuvres, the report notes. Argentina has multiple exchange rates with the official controlled by the government, the report discloses. It wasn't immediately clear if Massa was referring to intervention in the parallel exchange rates used for financial transactions, which are more volatile, the report says. The IMF's executive board approved a US$7.5-billion disbursement to Argentina as part of the larger program, which refinances payments Argentina owes the institution from a previous bailout that failed to stabilise the economy in 2018, recounts the report. Massa said the August disbursement was the second-largest in IMF history, the report relays. While the IMF confirmed the disbursement, fine print details of the program were not yet public from the Fund by the time Massa held a press conference, the report discloses. Argentina's previous government attempted a similar system of trying to keep the official exchange rate within a range, or "non-intervention zone," the report notes. However, that administration made the currency range public everyday, a level of transparency Massa intends to avoid this time around. Massa, who is also running for president in this year's election, blamed the IMF for what he called imposing a devaluation on the government in order to receive the disbursement, the report notes. Argentina's Central Bank devalued the peso 18 percent on August 14 after a shocking primary election result where outsider candidate Javier Milei took the lead. The currency devaluation spurred sharp price spikes that will fuel inflation already over 100 percent, the report relays. Massa added Argentina would receive another IMF disbursement in November of about US$2.75 billion pending another staff-level agreement and board approval, 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. S&P Global Ratings, on June 13, 2023, raised its local currency sovereign credit ratings on Argentina to 'CCC-/C' from 'SD/SD' and its national scale rating to 'raCCC+' from 'SD'. S&P also affirmed its 'CCC-/C' foreign currency sovereign credit ratings on Argentina. The outlook on the long-term ratings is negative. S&P's 'CCC-' transfer and convertibility assessment is unchanged. None of its rated bond issues are affected. S&P said the negative outlook on the long-term ratings is based on the risks surrounding pronounced economic imbalances and policy uncertainties before and after the 2023 national elections. Divisions within the government coalition, and infighting among the opposition, constrain the sovereign's ability to implement timely changes in economic policy. Fitch Ratings also upgraded on June 13, 2023, Argentina's Long-Term Foreign Currency (FC) Issuer Default Rating (IDR) to 'CC' from 'C' and affirmed the Long-Term Local Currency (LC) IDR at 'CCC-'. Fitch typically does not assign Outlooks to sovereigns with a rating of 'CCC+' or below. The upgrade of the FC IDR reflects that Fitch no longer deems a default-like process to have begun, as the authorities have not signaled a clear intention to follow through with an intra-public debt swap announced in March. The new 'CC' rating signals a default event of some sort appears probable in the coming years, regardless of the outcome of upcoming elections. The affirmation of the LC IDR at 'CCC-' follows the peso debt swap in June that Fitch did not deem to be a "distressed debt exchange" (DDE). 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 R A Z I L =========== AMERICANAS SA: Ends Joint Venture With Fuel Distributor Vibra ------------------------------------------------------------- Carolina Pulice and Peter Frontini at Reuters reports that Brazilian retailer Americanas said it has terminated a partnership on convenience stores with fuel distributor Vibra Energia SA. Vibra had already warned that it would seek to end the tie-up, called Vem Conveniencia SA, after Americanas sought bankruptcy protection in January amid an accounting scandal, according to Reuters. Americanas said in a securities filing that under the termination agreement, it will receive 192 million reais ($40 million)from Vibra, who will keep the Vem brand and its convenience stores, the report notes. In a separate filing, Vibra said it "expects to continue the growth it has already seen and further develop its convenience business," the report adds. About Americanas SA Americanas was one of the largest diversified retail chains in Brazil, with a wide platform of physical stores, robust e-commerce, fintech, and has just entered into the niche food retail. It is listed on B3, being indirectly controlled by billionaire Jorge Paulo Lemann, Carlos Alberto Sicupira and Marcel Telles. The retailer nosedived in January 2023 after becoming mired in an accounting scandal. The firm filed for bankruptcy at a court in Rio de Janeiro on Jan. 19, 2023. Americanas sought protection under Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 23-10092) on Jan. 25, 2023. White & Case LLP, led by John K. Cunningham, is the U.S. counsel. ========= C H I L E ========= CHILE: Economy Shrinks as Mining Growth Prevents Deeper Pain ------------------------------------------------------------ Bloomberg News reports that Chile's economy shank less than forecast in the second quarter as growth in the mining industry softened the blow from a prolonged retail slump on the eve of interest rate cuts. Gross domestic product fell 0.3% in the April-June period from the prior three months, less than the -0.6% median forecast of analysts in a Bloomberg survey. From a year ago, the economy dropped 1.1%, the central bank reported, according to Bloomberg News. Meanwhile, GDP growth in the first quarter was revised to 0.4%, half of the original 0.8% increase. Chile's economy is on track for near-zero growth this year, the worst performance of all major Latin American countries except for Argentina, according to estimates compiled by Bloomberg, the report notes. Sectors from commerce to services have lost momentum in recent months, with both families and businesses pinched by above-target inflation and tight monetary conditions, the report relays. According to Bloomberg, This report dates from the period immediately prior to the start of central bank rate cuts in July. Mining in the world’s largest copper producer rose 1.1% on the quarter, while all other activities declined by 0.5%, according to the central bank, Bloomberg News relays. Mining output has been volatile in Chile in recent months as the industry overhauls some of its aging mines to counter declining ore quality. "The level of real GDP is some 2% lower than its post-pandemic peak in Q4 2021," William Jackson, Chief Emerging Markets Economist at Capital Economics, wrote in a note, says the report. "This weakness should give the central bank more room to cut interest rates." Central bankers led by Rosanna Costa cut borrowing costs by 100 basis points on July 28 and indicated more big reductions are coming as the economy continues to cool while inflation slows toward target, says Bloomberg News. Layoffs During the second quarter, construction fell by 0.7%, while the category including wholesale, retail, restaurants and hotels tumbled by 3.4%, the report relays. Going forward, the South American country faces headwinds from uneven global growth, including woes in China, which is Chile's top trading partner, Bloomberg News says. Those concerns have weighed on the prices of raw materials including copper, its top export. Locally, President Gabriel Boric's administration is working to lure more foreign direct investment, Bloomberg News relates. More than 50 firms from around the world have expressed interest in participating in Chile's new public-private lithium model, Karla Flores, head of InvestChile, said in a recent interview. Meanwhile, the government is struggling to advance its reform agenda, which includes a proposal for greater state participation in pensions, as well as a plan to boost tax income, the report notes. The administration is renewing talks with opposition lawmakers, and analysts expect the legislation will get watered down again. Chile's economy will expand just 0.2% this year, according to Finance Ministry estimates published in July, recounts Bloomberg News. ============= J A M A I C A ============= JAMAICA: Manufacturing Industry Declines Marginally in Q2 ---------------------------------------------------------- RJR News reports that Jamaica's manufacturing industry declined marginally in the second quarter of this calendar year. Dr. Wayne Henry, Director General of the Planning Institute of Jamaica (PIOJ), said real value added for the industry fell by 0.6 per cent, according to RJR News. Lower output was estimated for the food, beverages and tobacco sub industry, while the other manufacturing sub-industry is estimated to have remained flat, the report notes. "Within the food, beverages and tobacco sub-industry, lower production was recorded for animal feeds, down 0.7%, sugar, down 19.5%, dairy products, down 13.5%, bakery products, down 1.2%, and rum and alcohol, down 25.9%, the report discloses. For the other manufacturing sub-industry, higher output was recorded within the chemicals and chemicals products component, with fertiliser up 31.1%, paint up 57.9%, and aluminum sulphate up 9.4%," Dr. Henry reported, RJR News relates. The production of some fuel products also declined due to lower production of heavy fuel oil, down 14%, automotive diesel oil, down 10.2%, and gasoline, down 4.6%, the report says. The PIOJ head said the lower output of petroleum products resulted from reduced operating days of the Petrojam refinery which closed for 33 days to facilitate maintenance, the report notes. The refinery closed for 31 days in the corresponding quarter of 2022, the report adds. About Jamaica Jamaica is an island country situated in the Caribbean Sea. Jamaica is an upper-middle income country with an economy heavily dependent on tourism. Other major sectors of the Jamaican economy include agriculture, mining, manufacturing, petroleum refining, financial and insurance services. Standard & Poor's credit rating for Jamaica stands at B+ with negative outlook (April 2020). Moody's credit rating for Jamaica was last set at B2 with stable outlook (December 2019). Fitch's credit rating for Jamaica was last reported at B+ with stable outlook (April 2020). In March 2022, Fitch Ratings affirmed Jamaica's Long-Term Foreign Currency Issuer Default Rating (IDR) at 'B+'. The Rating Outlook is Stable. =========== M E X I C O =========== PETROLEOS MEXICANOS: $152MM Bank Debt Trades at 19% Discount ------------------------------------------------------------ Participations in a syndicated loan under which Petroleos Mexicanos is a borrower were trading in the secondary market around 81.4 cents-on-the-dollar during the week ended Friday, August 25, 2023, according to Bloomberg's Evaluated Pricing service data. The $152.2 million facility is a Term loan that is scheduled to mature on January 28, 2031. The amount is fully drawn and outstanding. Petroleos Mexicanos operates as an oil and gas exploration and production services. The Company offers pipeline carriage, petrochemical distributor and shipping centers, logistics, and fuel commercialization services. Petroleos Mexicanos serves customers in Mexico. ===================== P U E R T O R I C O ===================== GGG INVESTMENTS: Taps Alexis Fuentes-Hernandez as Attorney ---------------------------------------------------------- GGG Investments, Inc. received approval from the U.S. Bankruptcy Court for the District of Puerto Rico to hire Alexis Fuentes-Hernandez, Esq., at Fuentes Law Offices, LLC to handle its Chapter 11 case. Mr. Fuentes-Hernandez will be paid an hourly fee of $250 for his services. The retainer fee is $10,000. In a court filing, Mr. Fuentes-Hernandez disclosed that he is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. Mr. Fuentes-Hernandez maintains an office at: Alexis Fuentes-Hernandez, Esq. Fuentes Law Offices, LLC P.O. Box 9022726 San Juan, PR 00902-2726 Tel: (787) 722-5215, 5216 Fax: (787) 722-5206 Email: alex@fuentes-law.com About GGG Investments GGG Investments, Inc. filed Chapter 11 petition (Bankr. D. P.R. Case No. 23-02407) on Aug. 4, 2023, with $100,001 to $500,000 in both assets and liabilities. Judge Maria De Los Angeles Gonzalez oversees the case. Alexis Fuentes-Hernandez, Esq., at Fuentes Law Offices, LLC represents the Debtor as bankruptcy counsel. ===================================== T R I N I D A D A N D T O B A G O ===================================== CARIBBEAN AIRLINES: Granted Injunction Against Pilots on Sickout ---------------------------------------------------------------- RJR News reports that the Industrial Court of Trinidad and Tobago has granted an injunction to the state-owned Caribbean Airlines whose services have been severely affected by a sickout by pilots. The sick out has resulted in the cancellation of several domestic, regional and international flights, according to RJR News. The injunction was granted against the Trinidad and Tobago Airlines Pilots Association (TTALPA), preventing its president, executive members as well as their agents from taking or continuing to take and/or participating in industrial action including calling in sick en masse, the report notes. The court has also ordered that TTALPA instruct or direct CAL workers who are its members to immediately report for duty as rostered and as they are required to do in the normal course of their employment, the report discloses. The airline is currently in negotiations with the Trinidad and Tobago Airline Pilots Association over a collective agreement for the period 2015-2016, the report says. The TTALPA has denied that there has been a sickout or industrial action, saying it was unaware of any strike action being taken by the pilot body, the report relays. No flights into and out of Jamaica were not affected by the industrial action, the report adds. About Caribbean Airlines Caribbean Airlines Limited - http://www.caribbean-airlines.com/- provides passenger airline services in the Caribbean, South America, and North America. The company also offers freighter services for perishables, fish and seafood, live animals, human remains, and dangerous goods. In addition, it operates a duty free store in Trinidad. Caribbean Airlines Limited was founded in 2006 and is based in Piarco, Trinidad and Tobago. Caribbean Airlines is among many airlines whose business has been greatly affected in 2020 by the slowdown of international travel caused by the COVID-19 pandemic. The government of Trinidad & Tobago guaranteed a US$65 million loan for the airline, and that funding has helped with the airlines' cash flow shortfall since May 2020. In September 2020, the airline related it will be taking cost-cutting measures to help keep it afloat. The measures, which was to affect some 1,700 employees, included salary deductions, no-pay leaves and lay-offs. ================= V E N E Z U E L A ================= VENEZUELA: US Proposes Sanctions Relief for Fair Elections ---------------------------------------------------------- Trinidad Express reports that the Biden administration is in talks with Venezuela to explore a temporary lifting of crippling sanctions in exchange for allowing fair elections next year. The preliminary discussions involve senior officials from both nations, including Venezuela's head of congress Jorge Rodriguez, according to people familiar with the process, who asked not to be identified, according to Trinidad Express. Washington has floated the idea of sanctions relief to persuade the regime of President Nicolas Maduro to hold a competitive presidential vote in 2024, and free political prisoners, the report notes. Sanctions have aggravated Venezuela's economic and humanitarian crisis by hindering oil sales, though failed in their original objective of ousting Maduro, the report discloses. Maduro, who has used prior elections to incite violence, misappropriate state funds and coerce voters, will have to make big concessions in order to reach a deal with the US to lift some or all sanctions, even if temporarily, the report says. The socialist leader has yet to set a date for the vote or invite foreign observers, the report notes. Most of the restrictions were put in place by the 2017-2021 administration of US President Donald Trump, who took a hard-line approach to the socialist government, the report relays. "Maduro is highly resistant to holding competitive elections," said Eurasia Group analyst Risa Grais-Targow, the report says. Widely expected to run for a third term next year, Maduro "may be willing to entertain minor concessions, but anything that would lead to a truly fair vote is just too risky, given the costs of losing power," Grais-Targow said, the report discloses. In prior elections, Maduro's government has taken advantage of its near total control of the nation's media for campaign air time, the report relays. On election day, it sets up check points near polling stations that reward government supporters with handouts, like bags of food, and serve as a not-so-subtle reminder that it's watching who casts ballots, the report discloses. In more recent instances, the government has resorted to barring opposition candidates such as Maria Corina Machado, the report says. "Should Venezuela take concrete actions toward restoring democracy, leading to free and fair elections, we are prepared to provide corresponding sanctions relief," said Adrienne Watson, a spokeswoman for the White House's National Security Council, in a written response to questions, the report relays. Any deal would come at a critical time, since Venezuela is soon to announce a new electoral board set to oversee the election, the report notes. The ongoing talks are separate from official conversations between the Venezuelan government and opposition, which are stalled since November and mediated by Norway, the report says. Press officials for Venezuela's presidency and Jorge Rodríguez did not respond to requests for comments. The Biden administration also has practical and humanitarian reasons to want to see the economic and political crises in Venezuela resolved, the report discloses. More than seven million of the nation's citizens have abandoned the country in the past decade, with many making the dangerous trek thousands of miles north through Central America and Mexico, to the US border, the report notes. More than 50,000 have travelled to the US since October under the parole process, according to the US Department of Homeland Security, the report says. Venezuelan immigrants are an important voting bloc in Florida, a state that's often been pivotal in deciding the presidential winner in elections of recent decades, the report relays. Trump won the state in 2020, appealing to those voters by railing against socialism, the report discloses. The state's governor Ron DeSantis and the mayor of Miami are both seeking the Republican nomination, the report adds. About Venezuela Venezuela, officially the Bolivarian Republic of Venezuela, is a country on the northern coast of South America, consisting of a continental landmass and a large number of small islands and islets in the Caribbean sea. The capital is the city of Caracas. Hugo Chavez was president to Venezuela from 1999 to 2013. The Chavez presidency was plagued with challenges, which included a 2002 coup d'etat, a 2002 national strike and a 2004 recall referendum. Nicolas Maduro was elected president in 2013 after the death of Chavez. Maduro won a second term at the May 2018 Venezuela elections, but this result has been challenged by countries including Argentina, Chile, Colombia, Brazil, Canada, Germany, France and the United States who deemed it fraudulent and moved to recognize Juan Guaido as president. The presidencies of Chavez and Maduro have challenged Venezuela with a socioeconomic and political crisis. It is marked by hyperinflation, climbing hunger, poverty, disease, crime and death rates, social unrest, corruption and emigration from the country. Moody's has withdrawn 'C' local currency and foreign currency ceilings for Venezuela in September 2022. Standard & Poors has also withdrawn its 'SD/D' foreign currency sovereign credit ratings and 'CCC-/C' local currency ratings on Venezuela in September 2021 due to lack of sufficient information. Fitch withdrew its own 'RD/C' Issuer Default Ratings on Venezuela in June 2019 due to the imposition of U.S. sanctions on the country's government. ********* 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 * * *