/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/230913.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, September 13, 2023, Vol. 24, No. 184 Headlines A R G E N T I N A BLOCKFI INC: Federal Counsel Wants Alleged Scammers' Full Deposits CAPEX S.A.: S&P Affirms 'CCC-' ICR on Debt Exchange Completion YPF SA: Argentina Ordered to Pay US$16 Billion in US Suit B R A Z I L BRAZIL: Industrial Output Falls More Than Expected in July ITAU UNIBANCO: Fitch Affirms 'B' Rating on Subordinated T1 Notes C A Y M A N I S L A N D S EDO SUKUK: Fitch Gives 'BB(EXP)' Rating to Trust Cert. Programme C O L O M B I A COLOMBIA: IDB OKs $100M Loan for Sustainability in Barranquilla J A M A I C A [*] JAMAICA: Capital Goods Import Spending for Jan-April up 18.5% P U E R T O R I C O BED BATH & BEYOND: 200-220 West 26 Says Disclosure Inadequate T R I N I D A D A N D T O B A G O TRINIDAD & TOBAGO: Country at a Crossroad - - - - - ================= A R G E N T I N A ================= BLOCKFI INC: Federal Counsel Wants Alleged Scammers' Full Deposits ------------------------------------------------------------------ Rick Archer of Law360 reports that counsel for the federal government told a New Jersey bankruptcy judge federal prosecutors should be allowed to seize the full amount a pair of alleged scammers deposited with BlockFi, even if other depositors will be receiving less in the crypto platform's Chapter 11 case. About BlockFi Inc. BlockFi is building a bridge between digital assets and traditional financial and wealth management products to advance the overall digital asset ecosystem for individual and institutional investors. BlockFi was founded in 2017 by Zac Prince and Flori Marquez and in its early days had backing from influential Wall Street investors like Mike Novogratz and, later on, Valar Ventures, a Peter Thiel-backed venture fund as well as Winklevoss Capital, among others. BlockFi made waves in 2019 when it began providing interest-bearing accounts with returns paid in Bitcoin and Ether, with its program attracting millions of dollars in deposits right away. BlockFi grew during the pandemic years and had offices in New York, New Jersey, Singapore, Poland and Argentina. BlockFi worked with FTX US after it took an $80 million hit from the bad debt of crypto hedge fund Three Arrows Capital, which imploded after the TerraUSD stablecoin wipeout in May 2022. BlockFi had significant exposure to the companies founded by former FTX Chief Executive Officer Sam Bankman-Fried. BlockFi received a $400 million credit line from FTX US in an agreement that also gave FTX the option to acquire BlockFi through a bailout orchestrated by Bankman-Fried over the summer. BlockFi also had collateralized loans to Alameda Research, the trading firm co-founded by Bankman-Fried. BlockFi is the latest crypto firm to seek bankruptcy amid a prolonged slump in digital asset prices. Lenders Celsius Network LLC and Voyager Digital Holdings Inc. also filed for court protection this year. Kirkland & Ellis is also advising Celsius and Voyager in their separate Chapter 11 cases. BlockFi Inc. and eight affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D.N.J. Lead Case No. 22-19361) on Nov. 28, 2022. In the petitions signed by their chief executive officer, Zachary Prince, the Debtors reported $1 billion to $10 billion in both assets and liabilities. Judge Michael B. Kaplan oversees the cases. The Debtors taped Kirkland & Ellis and Haynes and Boone, LLP as general bankruptcy counsels; Walkers (Bermuda) Limited as special Bermuda counsel; Cole Schotz, P.C., as local counsel; Berkeley Research Group, LLC as financial advisor; Moelis & Company as investment banker; and Street Advisory Group, LLC, as strategic and communications advisor. Kroll Restructuring Administration, LLC, is the notice and claims agent. CAPEX S.A.: S&P Affirms 'CCC-' ICR on Debt Exchange Completion -------------------------------------------------------------- S&P Global Ratings affirmed its 'CCC-' issuer credit and issue-level ratings on Argentina-based oil and gas producer and integrated electricity generator Capex S.A. S&P's transfer and convertibility (T&C) assessment of Argentina continues to cap the ratings on Capex. S&P also kept the company's 'b-' stand-alone credit profile (SACP) unchanged. The outlook remains negative and reflects that on Argentina. It indicates the potentially harsher restrictions to access and/or transfer funds abroad in the near future, including additional central bank regulations, that could force Argentine entities to push forward payments in foreign-currency debt. Capex completed its exchange offer after receiving an acceptance of 82.6% among its 2024 senior noteholders, who received the new 2028 senior secured notes or cash consideration. Out of the aggregate amount of $238 million, noteholders of less than 10% of the amount opted for the cash consideration, while almost 75% opted for new 2028 notes. By doing so, Capex has now enhanced its capital structure and liquidity position and extended its weighed average maturities beyond four years from 1.5 years previously. S&P said, "Following the successful restructuring, we observed an improvement in the sources-to-uses ratio, which according to our updated base-case scenario, will be about 1.2x in the next 12 months, up from less than 1.0x as of July 2023. Nevertheless, while we believe that the company has sufficient liquidity to meet the maturity of the 2024 notes (close to $40 million), we still see some risks regarding the company's ability to access the foreign-exchange (FX) market, given the central bank's current restrictions. Consequently, we will monitor the company's response to this situation closer to the maturity date. Furthermore, Capex has recently issued two new notes totaling $70 million, with maturities of 36 and 48 months, respectively, which will be used to fund operations. "Our 'CCC-' rating on Capex mainly reflects that its operations are located in Argentina, exposing the company to worsening business conditions and exchange rates, rising interest rates, and the peso's sharp depreciation, which could dent some of the company's segment revenues and margins. Therefore, Capex's SACP is 'b-', and we continue to cap the ratings at our 'CCC-' T&C assessment of the sovereign. Furthermore, the sovereign's fragile external position has resulted in severe restrictions on accessing FX markets to service debt or import goods and services, while Argentina's current electoral cycle has increased uncertainty. Risks of additional restrictions on external debt and interest servicing or imports remain very high." YPF SA: Argentina Ordered to Pay US$16 Billion in US Suit --------------------------------------------------------- Bob Van Voris, Emily Siegel, Chris Dolmetsch & Jonathan Gilbert at Bloomberg News report that Argentina was ordered to pay at least US$8.4 billion in damages and US$7.6 billion in interest in a US lawsuit over its 2012 re-nationalisation of state oil company YPF SA, a sharp blow as the Latin American country's financial situation has grown increasingly precarious. US District Judge Loretta Preska in Manhattan set a formula for the award to entities backed by litigation funder Burford Capital, according to Bloomberg News. The judgment originally stated that the Argentine government had control of YPF from April 2012 but that a prejudgment interest rate of eight percent should run from May 2023, the report notes. The second date was subsequently corrected to May 2012, almost doubling the size of the award to US$16 billion, the report relays. Argentina's government called the award "unprecedented and erroneous" in a statement and said it would appeal, the report discloses. A challenge will likely delay payment for months or even years but could also complicate the country's efforts to return to global debt markets, the report says. "This case over the rights of former shareholders of an Argentine company under the Argentine company's bylaws does not belong in a US court," the government said, the report relates. Burford, which acquired the right to pursue the claims for US$16.6 million in 2015, has said it would collect the biggest share of the award. Shares in the firm jumped as much as 28 percent in US trading to reach their highest level since August 2019, the report relays. "I'm pleased to see this extraordinary win and the value it could create for our shareholders once we complete the litigation process and collect from Argentina," Burford Chief Executive Officer Christopher Bogart said in a statement, says the report. "The Ruling is a major milestone for Burford and we continue to see momentum in our overall portfolio and continued demand for our capital and services," he added. The judgment offers some vindication for the firm's business model, the report discloses. Major litigation funders have touted their ability to strategically invest in lawsuits they predict will deliver outsized recoveries, but many have struggled to identify such opportunities, the report says. Argentina on August 14 devalued its peso after running low on US dollars to back the currency, the report recalls. The dire state of the nation's cash-strapped economy is the central issue in the ongoing presidential election, the report says. With dollar reserves at their lowest since 2006, it's unclear how the next government will be able to pay large maturities to bondholders next year. Argentina also owes tens of billions of dollars to the International Monetary Fund, the report notes. But it was the actions of the Argentine government a decade ago which factored in Preska's judgment, says Bloomberg News. She already ruled in March that then-president Cristina Fernandez de Kirchner's administration failed to fairly compensate shareholders when it took over YPF, the nation's largest oil company, the report discloses. That left only the amount of damages to be determined during a three-day trial in July, the report relays. Argentina had asked the judge to limit the award to less than $5 billion, while the plaintiffs asked for US$16 billion, recounts the report. Argentina seized control of 51 percent of YPF in 2012 after accusing the majority shareholder, Spanish company Repsol SA, of failing to invest sufficient resources into oil production, the report notes. At the time, Argentina was already fighting claims by investors led by Paul Singer's Elliott Management over its 2001 default on $95 billion in sovereign debt, and the YPF takeover further contributed to a perception of the country as an inhospitable place for foreign investment, the report relays. Preska found that the by-laws of the company, which had been privatised in the 1990s, required any future re-nationalisation to be accompanied by a tender offer at a predetermined price, the report discloses. But when an expropriation came in 2012, Deputy Economy Minister Axel Kicillof called the requirement a "bear trap" that only "fools" would expect Argentina and YPF to honor, according to a court filing, the report relays. After finding Argentina liable in March, Preska ordered a trial to determine damages based on the date on which the nation took control of YPF and the amount of any prejudgment interest, Bloomberg News notes. Argentina aggressively fought the Burford-backed suit, including an unsuccessful bid to have the US Supreme Court throw out the case, adds the report. The case is Petersen Energia Inversora SAU. v. Argentine Republic, 15-cv-02739, US District Court, Southern District of New York (Manhattan). About YPF SA As reported in the Troubled Company Reporter-Latin America on April 3, 2023, S&P Global Ratings lowered its local and foreign currency ratings on YPF SA to 'CCC-' from 'CCC+'. The outlook on these ratings is now negative. The downgrade follows a similar action on S&P's long-term foreign currency ratings and T&C on Argentina, following announced plans that, if implemented, would oblige some nonfinancial public-sector entities to exchange or sell their holdings of global- and local-law dollar-denominated bonds issued during the 2020 restructuring for other locally issued peso debt, likely dollar- and/or inflation-linked bonds. In S&P's view, the lack of clarity and the apparent motivation for the potential transaction underscore heightened credit vulnerabilities, in particular given the increasing pressures from the severe drought that Argentina is facing, which further constrains the already disrupted FX market. This expected greater pressure on the FX markets also explains S&P's downward revision of the T&C assessment to 'CCC-'. =========== B R A Z I L =========== BRAZIL: Industrial Output Falls More Than Expected in July ---------------------------------------------------------- Reuters reports that industrial production in Brazil slipped by more than expected in July, data from government statistics agency IBGE showed, providing an initial sign the sector may cap economic growth in the third quarter. Industry was key for the surprisingly strong growth recorded by Latin America's largest economy in the three months through June, but overall it has been stuttering this year as the sector grapples with high interest rates, according to Reuters. In July, IBGE said, industrial output was down 0.6% from June, missing the median forecast of a 0.3% drop in a Reuters poll of economists, the report notes. Three of the four main categories surveyed fell in the period, IBGE added in a statement, with capital goods and consumer durable goods production posing the largest drags as they slipped 7.4% and 4.1%, respectively, the report relays. According to IBGE, industrial production in July also slipped 1.1% from a year earlier, while market expectations stood at a 0.5% decrease, the report says. In 2023 so far, it is down 0.4% on a yearly basis, the agency added, the report adds. "High interest rates and weakening external demand are keeping the sector under pressure, offsetting the boost from relatively resilient domestic demand," Reuters quotes Pantheon Macroeconomics' Andres Abadia as saying. He expects, however, activity to improve as the second half progresses thanks to falling interest rates, as the central bank recently kicked off a monetary easing cycle, and low input costs, adds the report. 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. Fitch Ratings upgraded on July 26, 2023, Brazil's Long-Term Foreign-Currency Issuer Default Rating (IDR) to 'BB', from 'BB-', with a Stable Outlook. The upgrade reflects better-than-expected macroeconomic and fiscal performance amid successive shocks in recent years, proactive policies and reforms that have supported this, and Fitch's expectation that the new government will work toward further improvements. In mid-June 2023, S&P Global Ratings, revised the outlook on its long-term global scale ratings on Brazil to positive from stable. S&P affirmed its 'BB-/B' long- and short-term foreign and local currency sovereign credit ratings on Brazil. S&P also affirmed its 'brAAA' national scale rating, and the outlook remains stable. The transfer and convertibility assessment remains 'BB+'. The positive outlook reflects signs of greater certainty about stable fiscal and monetary policy that could benefit Brazil's still-low GDP growth prospects. Continued GDP growth plus the emerging framework for fiscal policy could result in a smaller government debt burden than expected, which could support monetary flexibility and sustain the country's net external position. 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 Inc., on August 15, 2023, upgraded Brazil's Long-Term Foreign and Local Currency - Issuer Ratings to BB from BB (low). At the same time, DBRS Morningstar confirmed Brazil's Short-term Foreign and Local Currency - Issuer Ratings at R-4. The trend on all ratings is Stable.(March 2018). ITAU UNIBANCO: Fitch Affirms 'B' Rating on Subordinated T1 Notes ---------------------------------------------------------------- Fitch Ratings has affirmed Itau Unibanco Holding S.A.'s (IUH) Tier 1 perpetual capital securities at 'B'. The notes were issued between 2018 and 2020 under IUH's USD100 billion global medium-term note program. KEY RATING DRIVERS The ratings on the notes are four notches below IUH's Viability Rating (VR) of 'bb+' in accordance with Fitch's criteria for assessing and rating bank subordinated and hybrid securities. The notching reflects the notes' higher expected loss severity relative to senior unsecured creditors (two notches) and higher non-performance risk (two notches). The notching for loss severity reflects the notes write-down feature if IUH's common equity Tier 1 (CET1) ratio falls below 5.125% The notching for non-performance risk reflects Fitch's baseline notching for non-performance risk relative to the bank's VR. According to Fitch's Criteria, the baseline notching for non-performance risk can be reduced where there are very high constraints to non-performance or, conversely, wider notching can be applied where capital buffers over coupon omission triggers are low. Neither case applies with these notes. IUH's notes will defer coupon payments on a non-cumulative basis when certain conditions are met (i.e. if regulatory capital ratios falls below minimum levels or due to insufficient funds from profits and profit reserves available for distribution). The notching of AT1 notes reflects Fitch's expectation that IUH will maintain adequate capital buffers above regulatory requirements. IUH had buffers of about 360bp above its minimum capital requirement (including buffer requirements) at end-June 2023, representing a buffer of about BRL46 billion above coupon restriction points. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade IUH's ratings of additional Tier 1 securities are sensitive to changes in IUH's VR. A downgrade of IUH"s VR would cause a similar downgrade to IUH's ratings. Although not Fitch's base case, the ratings of the additional Tier 1 securities are also sensitive to Fitch's assessment of their incremental non-performance risk relative to the risk captured in IUH's VR. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade IUH's ratings of additional Tier 1 securities are sensitive to changes in IUH's VR. An upgrade of IUH's VR would cause a similar upgrade to IUH's ratings. Although not Fitch's base case, the ratings of the additional Tier 1 securities are also sensitive to Fitch's assessment of their incremental non-performance risk relative to the risk captured in IUH's VR. Entity/Debt Rating Prior ----------- ------ ----- Itau Unibanco Holding S.A. Subordinated LT B Affirmed B =========================== C A Y M A N I S L A N D S =========================== EDO SUKUK: Fitch Gives 'BB(EXP)' Rating to Trust Cert. Programme ---------------------------------------------------------------- Fitch Ratings has assigned Energy Development Oman SAOC's (EDO, BB/Positive) trust certificate issuance programme an expected rating of 'BB(EXP)'. The programme is issued on behalf of EDO Gas SPC via the special-purpose vehicle EDO Sukuk Limited and guaranteed by EDO, which is the sole owner of EDO Gas. The expected rating is in line with EDO's Long-Term Issuer Default Rating (IDR) and senior unsecured rating of 'BB'. The Recovery Rating is 'RR4'. EDO Sukuk Limited is also the trustee of the programme and an exempted company with limited liability incorporated in the Cayman Islands and has been incorporated solely for the purpose of participating in the transactions contemplated by the transaction documents to which it is a party and its shares are held by MaplesFS Limited as share trustee. EDO Gas is the obligor, seller, lessee, buyer and servicing agent and EDO guarantees EDO Gas's payment obligations under the trust certificate issuance programme. The assignment of the final rating is contingent on the receipt of final programme documents materially conforming to information already reviewed. If these conditions are not met, or if the programme is not put into place, Fitch will review the rating. KEY RATING DRIVERS The trust certificate issuance programme's rating is aligned with that of the ultimate parent and guarantor's IDR. This reflects Fitch's view that default of these senior unsecured obligations would reflect the default of EDO in accordance with the agency's rating definitions. Fitch has given no consideration to any underlying assets or any collateral provided, as Fitch believes the trustee's ability to satisfy payments due on the certificates ultimately depends on EDO Gas satisfying its unsecured payment obligations to the trustee under the transaction documents described in the base offering circular. In addition to EDO Gas's propensity to ensure repayment of the trust certificates, in Fitch's view, EDO Gas is required to ensure full and timely repayment of EDO Sukuk Limited's obligations, due to EDO Gas's various roles and obligations under the sukuk structure and documentation, especially but not limited to the below features: - Pursuant to the master lease agreement, master murabaha agreement and the servicing agency agreement, the rental due on a rental payment date, will be an amount equal to the periodic distribution amount, less any murabaha profit instalment, which when taken together with such murabaha profit instalment will be sufficient to fund the periodic distribution amounts payable by the trustee in respect of the relevant trust certificates - On any dissolution or default event, the aggregate amounts of deferred sale price then outstanding will become immediately due and payable; and the trustee will have the right under the purchase undertaking to require EDO Gas to purchase all of its rights, title, interest, benefit and entitlement, present and future, in to and under the relevant lease assets at the exercise price - The exercise price payable by EDO Gas under the purchase undertaking to the trustee, together with the aggregate amount of the deferred sale price then outstanding, if any, are intended to fund the dissolution amount payable by the trustee under the trust certificates. The dissolution amount should equal the sum of the outstanding face amount of such trust certificate; and any due and unpaid periodic distribution amounts for such certificates, or such other amount specified in the applicable pricing supplement - On the occurrence of a total loss event or partial loss event, if there is a shortfall from the insurance proceeds, EDO Gas undertakes to pay the loss shortfall amount directly into the transaction account. If the servicing agent is not in compliance with the obligation to insure the assets against total loss or partial loss events, it shall immediately deliver written notice to the trustee and the delegate of such non-compliance and the details thereof, and this will constitute a company event - The payment obligations of EDO Gas under the servicing agency agreement, purchase undertaking, master lease agreement, and the master murabaha agreement are direct, unconditional, unsubordinated, and unsecured obligations, and at all times will rank at least equally with all other present and future unsecured and unsubordinated obligations of EDO Gas from time to time outstanding. Furthermore, EDO guarantees EDO Gas's payment obligations under the programme on a senior unsecured basis thus ranking them equally with EDO's existing debt obligations - Additionally, EDO has agreed to unconditionally and irrevocably guarantee the due and punctual performance by EDO Gas of all of its payment obligations under the transaction documents to which the obligor is a party. To the extent that EDO Gas does not pay any sum payable by it under the transaction documents by the time and on the date specified for such payment, the guarantor shall pay that sum as directed. The obligations of the guarantor under the guarantee will be direct, unconditional, unsubordinated and unsecured obligations, which at all times rank at least equally with all other present and future unsecured and unsubordinated obligations of the guarantor from time to time outstanding - The sukuk documentation includes an obligation on EDO Gas to ensure that at all times, the tangible asset ratio - defined as total value of the lease assets/aggregate value of the lease assets and the deferred sale price outstanding - is more than 50%. Failure of EDO Gas to comply with this obligation will not constitute an obligor event. If the tangible asset ratio falls below 33% (tangibility event), the certificate holders shall have the option to require the redemption of all or any of their trust certificates at the dissolution amount and the trust certificates will be delisted. In this event, there would be implications for the tradability and listing of the trust certificates - Fitch expects the tangibility ratio will be above 50% through the life of any trust certificates issued under the programme. The obligor will have a large base of unencumbered tangible assets, of which a material portion comprises moveable assets that will be initially earmarked for the programme but immoveable assets may also be deemed eligible later on, if needed. As such, the asset base of EDO Gas is sufficiently strong to support the trust certificate programme - In the unlikely event of EDO Gas having insufficient headroom Fitch expects support from EDO owing to the senior unsecured guarantee it provides. Therefore the sukuk rating is equalised with that of the ultimate parent. As of end-2022, EDO had OMR87.7 million (USD227.8 million) of cash on its balance sheet and as of early 2023 has an undrawn OMR150 million (USD389.6 million) revolving credit facility. This, alongside with strong cash flow available to creditors, provides adequate liquidity support for the trust certificate issuance programme - The terms of the trust certificates include a negative pledge provision, company event, change-of-control clause, restrictive covenants with respect to the trustee, and a cross-acceleration clause. Certain transaction documents are governed by English law, while others are governed by Omani law. Fitch does not express an opinion on whether the relevant transaction documents are enforceable under any applicable law. However, Fitch's rating on the trust certificates reflects the agency's belief that EDO Gas would stand behind its obligations. Fitch does not express an opinion on the trust certificates' compliance with sharia principles when assigning ratings to the trust certificates. DERIVATION SUMMARY The programme's ratings are derived from the guarantor's Long-Term IDR. KEY ASSUMPTIONS The programme is issued on behalf of EDO Gas SPC via the special-purpose vehicle EDO Sukuk Limited and guaranteed by EDO, which is the sole owner of EDO Gas. RATING SENSITIVITIES EDO Sukuk Limited Factors That Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade: - An upgrade of EDO's IDR would lead to similar action on the programme's rating Factors That Could, Individually Or Collectively, Lead To Negative Rating Action/Downgrade: - A downgrade of EDO's IDR would lead to similar action on the programme's rating. The programme's rating may also be sensitive to adverse changes to the roles and obligations of EDO Gas and EDO under the trust certificates' structure and documents EDO Factors That Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade: - Positive rating action on Oman would be mirrored on EDO's rating - The 'bbb+' Standalone Credit Profile (SCP) is capped by limitations of the company's business profile Factors That Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade: - EDO's rating is on Positive Outlook, therefore, Fitch does not expect a negative rating action at least in the short term. However, the Outlook revision to Stable on Oman will be replicated for EDO. - Negative rating action on Oman would be mirrored on EDO's rating - Weakening linkages between Oman and EDO (which Fitch’s belief is unlikely), coupled with significant deterioration of the latter's SCP - Funds from operations gross leverage and/or EBITDA net leverage rising above 1.5x on a sustained basis due to, for example, sustained negative free cash flow (FCF) driven by high capex or large acquisitions, which may be negative for the SCP but not necessarily for the IDR LIQUIDITY AND DEBT STRUCTURE Strong Liquidity: As of end-2022 EDO had cash and cash equivalents of USD228 million. Together with the USD390 million undrawn revolving credit facilities obtained in early 2023 EDO has sufficient liquidity to cover two-year debt maturities of USD428 million. Fitch expects EDO to maintain a robust liquidity profile given its strong pre-dividend FCF, proven access to international debt markets and strong linkage with the sovereign. Fitch expects EDO's flexible dividend policy will allow for liquidity preservation during periods of restricted capital-market access and/or lower prices. ISSUER PROFILE EDO is Oman's national energy company and the EDO Group owns participating interests in two concessions, accounting for approximately 65% of Oman's oil and gas production. EDO Gas SPC is a newly formed, wholly-owned subsidiary of EDO to which the entirety of EDO's gas concession was transferred alongside all related contractual obligations, undertakings, and related tangible and intangible assets. PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS EDO's Long-Term IDR is constrained by the rating of its sole shareholder, the government of Oman (BB/Positive). The expected rating of the trust certificate issuance programme is in line with EDO's Long-Term IDR and senior unsecured rating. ESG CONSIDERATIONS The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' 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. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Recovery ----------- ------ -------- EDO Sukuk Limited senior unsecured LT BB(EXP)Expected Rating RR4 =============== C O L O M B I A =============== COLOMBIA: IDB OKs $100M Loan for Sustainability in Barranquilla --------------------------------------------------------------- The lnter-American Development Bank (IDB) has approved a $100 million loan and $6.12 million grant designed to make the city of Barranquilla a more equitable and sustainable place. This operation aims to promote sustainable use of strategic ecosystems, increase equitable access to public spaces with a focus on social inclusion, and help integrate migrants and vulnerable groups. To promote sustainable use of strategic ecosystems, the program will build environmental protection barriers to stabilize the coastline and slow mangrove deforestation. The loan's funds will also be used to create new parks, designed in tandem with the community, and restore recreation areas. The operation aims to build a more equitable city that gives migrants and vulnerable people in Barranquilla access to social services and includes them in the economy. Barranquilla is the fourth most populous city in Colombia and plays a key role in internationalizing the country's economy. As it grows, the city needs good planning and sustainable investment over the long term in order to navigate the difficulties of climate change. The municipality is also the fourth largest recipient of immigrants in the country, creating challenges for social integration and the economy. Because of its universal scope, the program will directly benefit all 1,243,000 inhabitants of Barranquilla. Its actions to reclaim public spaces will encompass 138 parks, squares, and green areas in the city, generating a significant positive impact for citizens. Additionally, an estimated 19,000 people will benefit from the initiatives to support immigrants and their host communities. The IDB loan has a 24.5 year repayment period, a 5.5 year grace period, and an interest rate based on the Secured Overnight Financing Rate (SOFR). ============= J A M A I C A ============= [*] JAMAICA: Capital Goods Import Spending for Jan-April up 18.5% ----------------------------------------------------------------- RJR News reports that Jamaica spent US$230.4 million on the import of "Capital goods (excluding Motor Cars)", for the first four months of the year. STATIN says this reflects an 18.5 per cent increase compared to 2022, according to RJR News. Imports of 'Capital Goods (except Transport Equipment)' increased by 21.9 per cent to US$187 million, the report relays. This was due mainly to higher imports of general industrial machinery and equipment, as well as professional, scientific and controlling instruments and apparatus, 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. ===================== P U E R T O R I C O ===================== BED BATH & BEYOND: 200-220 West 26 Says Disclosure Inadequate ------------------------------------------------------------- 200-220 West 26 LLC filed an objection to the final approval of the Amended Disclosure Statement and to the confirmation of the Amended Joint Chapter 11 Plan of Bed Bath & Beyond Inc. and Its Debtor Affiliates. The objecton respectfully sets forth the following: 200-220 West 26 is the landlord of the premises leased by Buy Buy Baby Inc. ("Buy Buy Baby"), one of the jointly administered debtors, located at 200-220 West 26th Street, New York, New York. The obligations of Buy Buy Baby under the lease were guaranteed by Bed Bath & Beyond Inc. ("BBBY"). This lease has been rejected by the Debtors and the rejection has been approved by this Court. 200-220 West 26 has filed proofs of claim against Buy Buy Baby and BBBY and will file an additional proof of claim against Buy Buy Baby for rejection damages prior to the deadline for doing so. 200-220 West 26 objects to the Disclosure Statement and the Plan because the Plan provides for what has been described as "de facto substantive consolidation" even though the Plan and Disclosure Statement expressly state that no substantive consolidation is provided. The reason the Plan provides for "de facto substantive consolidation" is that the unsecured claims against all of the Debtors -- all 74 of them -- are classified in a single class and receive the same treatment under the Plan, irrespective of the Debtors against which the claims are asserted. In essence, the assets and liabilities of the Debtors have been pooled for purposes of distribution. According to the Landlord, the Disclosure Statement contains no information regarding the separate assets and liabilities of each Debtor and whether a creditor with a claim against one or more particular Debtors will be harmed or benefited from this pooling of assets for distribution. This does not allow 200-220 West 26 to make an informed decision whether to accept or reject the Plan. Because the Plan pools the assets and liabilities of all the Debtors for purposes of distribution while at the same time purporting to preserve the separate identities of the Debtors for other purposes, including avoidance actions, such as constructive fraudulent transfer actions in which one related Debtor paid the debt owed by a different related Debtor ("Wrong Debtor Paid Avoidance Actions"), the Landlord says the Plan represents an abuse and has not been proposed in good faith. Attorneys for 200-220 West 26 LLC: Alec P. Ostrow, Esq. Walter E. Swearingen, Esq. BECKER, GLYNN, MUFFLY, CHASSIN & HOSINSKI LLP 299 Avenue, 16th Floor New York, NY 10171 Phone: (212) 888-3033 E-mail: aostrow@beckerglynn.com wswearingen@beckerglynn.com 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. ===================================== T R I N I D A D A N D T O B A G O ===================================== TRINIDAD & TOBAGO: Country at a Crossroad ----------------------------------------- Nirvana Satnarine-Singh and Victor Gauto at Trinidad and Tobago Express reports that high energy prices supported economic recovery in 2022. Trinidad and Tobago benefited from higher-than-expected commodity prices in 2022, which supported economic growth, contributed to increasing exports, boosted the fiscal outturn, and reduced the debt to GDP ratio, according to Trinidad and Tobago Express. With energy prices falling below budgeted assumptions for 2023, medium-term growth projections have moderated, the report notes. Production of the country's main exported energy commodities have fallen below "boom" level, constraining output of the petrochemical industry, the report relays. Even so, the non-energy sector pushed overall recovery as the services sector grew at dynamic rates through most of 2022, the report says. The unemployment rate fell almost on par with the pre-pandemic rate and commercial banks' lending to the private sector has recovered strongly, the report notes. Economic Recovery The economic recovery for 2022 is estimated to have moderated as energy prices slowed globally, the report says. According to the IMF, GDP grew by 2.5 per cent in 2022, relates the report. This is below their previously forecast four per cent but above the Government's GDP growth projection of two per cent, the report discloses. Official data shows GDP growth for the first three quarters of the year was three per cent, the report says. The Quarterly Economic Activity index reports a slight contraction of 0.7 per cent in 2022 Q4 and an average growth rate of 3.1 per cent for the year, the report notes. GDP growth was supported by dynamic growth in the non-energy sector but endured challenges in the energy sector, the report relays. In the medium-term, GDP growth is expected to average 2.5 per cent in 2022-2026, the report notes. The volume of exports of goods and services as a component of GDP growth, grew by an average of 33 per cent in 2021-2022 after falling by 26 per cent in 2020, the year of the pandemic, the report discloses. Part of the gain is projected to recede in 2023 with a contraction in the volume of exports of goods and services by 20 per cent, before stabilizing at an average growth rate of one per cent in 2024-2028, potentially related to supply constraints in the oil and gas industry, the report relays. Government revenues are intrinsically linked to the level of economic activity and exports, with revenues growing by 47 per cent in 2022 before stabilizing at a projected average of three per cent in 2024-2028, the report discloses. The recovery in 2022 was mainly driven by the non-energy sector, the report says. The IMF estimated the non-energy sector to have grown by 4.3 per cent while the energy sector contracted by 1.8 per cent, the report notes. In fact, official statistics state that the non-energy sector, which accounted for 70 per cent of real GDP in the first three quarters of 2022, outperformed the energy sector in the first half of 2022, the report relays. While the non-energy sector grew by an average of 4.9 per cent in the first three quarters of 2022, the energy sector contracted slightly by 0.7 per cent, the report discloses. However, in 2022 Q3 the energy sector had a strong recovery, expanding by 5.4 per cent compared to 1.2 per cent in the non-energy sector, the report says. Within the non-energy sector, the manufacturing and selected services sectors had strong performances, averaging growth rates of almost 18 per cent and 6.4 per cent, respectively, the report notes. These are both relatively large sectors of the economy, as manufacturing represented eight per cent of the economy and the selected services, which include finances, transportation, and information and communication, among others, represented almost 30 per cent of the economy, the report relays. Another important sector representing 18 per cent of the economy, wholesale and retail (excluding petroleum distribution), grew by 19 per cent in 2022 Q2 and averaged of 4.4 per cent in the first three quarters (calculated based on CSO data), the report notes. Both daily natural gas and methanol production improved by five per cent in 2022, year over year, the report discloses. However, for 2022, ammonia production levels fell by five per cent and urea by 31 per cent relative to 2021, the report relays. These trends have continued into the first quarter of 2023, the report recalls. High levels of overall deficits receded in 2022, contributing to a reduced public debt to GDP ratio, the report notes. After two years of fiscal deficits averaging almost 10 per cent of GDP in 2020 and 2021, high energy prices supported closing 2022 with a fiscal surplus of 0.6 per cent of GDP, the report relays. The price of natural gas averaged 66 per cent more in 2022 relative to 2021, the report says. The budget surplus along with higher levels of nominal GDP, growing at an average of almost 15 per cent in 2020- 2021, along with stable levels of debt contributed to decreasing the ratios of debt to GDP from 79.5 per cent in 2021 to 66.5 per cent in 2022, the report discloses. For 2023, expenditures are projected to be at least eight per cent higher the previous budget, the report says. Revenue for the first half of the fiscal year ending in 2023 (Sept.- Oct) was 48 per cent of total estimated revenues and 46 per cent of expenditures have been realized, suggesting the outturns are tracking the budget closely, the report notes. Under current conditions of moderating energy prices, the overall balance is expected to fall to a deficit of 0.8 per cent of GDP in 2023, the report relays. The IMF projects that the fiscal balance is expected to average 1.9 per cent of GDP in 2024-2028 while public debt is projected to average 72.5 per cent of GDP, the report notes. The Heritage and Stabilization Fund (HSF), which played a significant role for pandemic response, received deposits as a result of higher-than expected revenues in 2022, the report relays. The HSF, which holds oil and gas related government savings, supported government efforts during the pandemic, the report discloses. In 2020, 40 per cent of the fiscal deficit was financed by the HSF, totalling US$ 980 million, the report notes. Similarly, in 2021, 50 per cent of the deficit was financed with resources from the HSF for a total of US$ 900 million, the report says. However, in 2022, energy windfall revenues allowed US$345 million to be paid back into the HSF, reflecting the significance of the HSF for fiscal policy, the report relays. The report notes that the balance of the HSF has been exposed to global trends in asset prices, such that its net valuation declined between 2020 and 2022 Q3. Since 2022 Q3 the net asset value has been recovering, increasing from US$ 4.7 billion in September 2022 to US$ 5.5 billion in June 2023, the report relays. Unemployment Rates and Labor Force Participation The unemployment rate fell to 4.7 per cent in 2022 Q4 and remained stable at 4.9 per cent in 2023 Q1, relative to 7.2 per cent recorded at the height of the pandemic- in 2020 Q4, the report notes. This is faintly above the 3.8 per cent and 4.3 per cent unemployment rates of 2018 and 2019, respectively, the report says. Recovery in labour force participation is also lagging, with around 55 per cent of the working population joining the workforce in 2022 and early 2023, compared to 57-59 per cent between 2018 and 2019, the report relays. The gap between female and male unemployment remained almost unchanged when comparing pre and post pandemic periods, with the female unemployment rate surpassing the male rate by 1.6 percentage points at the end of March 2023, the report discloses. The unemployment rate of females was recorded at 5.8 per cent while the unemployment rate of males was 4.2 per cent in March 2023, the report relates. The participation rate of females fell to 45 per cent, compared to 47 per cent in 2022 Q4, while the male labour force participation rate increased to 65.6 per cent from 62.3 per cent in 2022 Q4, the report notes. Domestic price levels were mainly influenced by external factors which spilled over to affect food and transportation costs, the report discloses. After having relatively moderate inflation rates in 2021, in 2022 inflations increased, following global trends affected by energy price spikes, the report relays. The annual inflation rate climbed through 2022 reaching 8.7 per cent in December, the report relates. This increase in prices were moderate compared to some other countries in the Caribbean which experienced double digit inflation for some parts of 2022, the report notes. The government reduced the fuel subsidy in September 2022 to strengthen its fiscal position, which could have contributed to higher prices levels, the report discloses. The IMF's 2023 Article IV recognized that most of Trinidad & Tobago's inflation was driven by external factors such as higher international inflation rates and food prices, the report relays. Food and transportation prices drove price increases since they reached the highest inflation rates among the other categories, reaching 17.3 per cent and 14.6 per cent, respectively in December 2022 before starting to decline in 2023, the report notes. For 2023, prices have cooled, declining to 5.7 per cent in May 2023, the report discloses. The Central Bank maintained the monetary/repo policy rate of 3.5 per cent since reducing the rate from five per cent in March 2020, the report relays. With many advanced economies tightening monetary policies in response to high inflation rates, the government maintained its position of keeping the monetary policy rate low to continue supporting private sector recovery, reflected in relatively high rates of private sector lending growth, the report discloses. Lending to the private sector climbed in 2022 but moderated in 2023, the report relays. Private sector credit growth, year over year, increased from 3.0 per cent in January 2022 to 6.7 per cent in November before declining slightly to 6.2 per cent in April 2023, higher than the average rate of 1.2 per cent in 2021, the report says. Within private sector lending, the category with greatest average growth was business lending which averaged 10.8 per cent in 2022 and 7.2 per cent from January to April in 2023, the report relays. In 2023, mortgage lending growth averaged 5.5 per cent while consumer lending averaged 5.5 per cent, the report notes. Regulatory capital to risk weighted asset was of 16.7 per cent at the end of March 2023, above the minimum requirement of 10 per cent, the report discloses. The percentage of non-performing loans remained stable around 3.2 per cent since 2016, the report relays. Banks' profitability increased from a return on equity ratio of 11.9 per cent in December 2020 to 16.10 per cent in March 2023, the report relates. Uncertainty of the global economy presents downside risks to the economy, the report notes. Natural gas prices plummeted to US$2.10 per mmbtu in May 2023 and crude oil prices are now estimated to average US$73.13 per barrel in 2023, then fall further in 2024, the report discloses. In the short term, GDP growth and debt targets are dependent on increasing energy sector production, the report says. The authorities have therefore introduced several incentives to promote exploration, the report relays. Thrusts towards digitization and renewable energy projects can boost activity in the non-energy sector and promote diversification, the report notes. This article was originally published in the Caribbean Economics report published by the Inter-American Development Bank titled "Global and Regional Economies at a Crossroads," the report adds. ********* 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. 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