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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, November 28, 2023, Vol. 24, No. 238
Headlines
A R G E N T I N A
ARGENTINA: Milei's Dollarization, Central Bank Closure Plan on Hold
B R A Z I L
AMERICANAS SA: Bondholders Move Judicial Recovery Decision to Dec 4
BRAZIL: Adjusts 2023 GDP Growth Forecast Down to 3%
BRAZIL: Barreirinhas Notes Declining Control Over Tax Revenue
D O M I N I C A N R E P U B L I C
DOMINICAN REPUBLIC: Insurance Firms Reassure Clients After Flood
J A M A I C A
JAMAICA: Should Prioritize Upskilling Local Workers, PIOJ Says
M E X I C O
TV AZTECA: US Judge Dismisses Involuntary Bankruptcy Case
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A R G E N T I N A
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ARGENTINA: Milei's Dollarization, Central Bank Closure Plan on Hold
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Patrick Gillespie, Kevin Simauchi & Giovanna Bellotti Azevedo at
Bloomberg News report that in the blink of an eye, Argentine
President-elect Javier Milei pivoted away from advisers advocating
for his most dramatic campaign promises, choosing Wall Street
veterans closer to former leader Mauricio Macri.
Milei's boldest campaign proposals - dollarisation and closing the
Central Bank - appear at least on hold for now amid a staffing
shake up, according to Bloomberg News. Milei distanced himself
from his dollarisation guru, Emilio Ocampo, and another hawkish
adviser from early in the campaign, Carlos Rodriguez, announced on
X he was departing. Milei had repeatedly said he'd name Ocampo to
lead Argentina's Central Bank, emphasising closing the institution
was "non-negotiable," Bloomberg News discloses.
In their place, Milei's economic team is being led by Luis Caputo
and Demian Reidel, two former Wall Street veterans who held key
posts during Macri's Presidency from 2015 to 2019, Bloomberg News
relays. Local media also reported Milei would appoint his former
rival during the election, Patricia Bullrich, as security minister,
a post she held in Macri's government too, Bloomberg News says.
Argentina's dollar bonds extended their rally on signs of Milei's
more moderate stance, Bloomberg News discloses. Securities due
2030, some of the most liquid, jumped more than two cents to change
hands at roughly 36.6 cents on the dollar, Bloomberg News says.
Notes maturing in 2046 gained more than five cents, trading at
still-distressed levels of 33 cents on the dollar, Bloomberg News
notes.
As Milei gets closer to Macri's team, it's a sign that while the
president-elect "will bring change, it might not be as radical a
change as espoused during his campaign," said Jeff Grills, the head
of emerging markets debt at Aegon Asset Management in Chicago,
Bloomberg News says. "It's also a holiday-shortened week, so any
buying will exacerbate moves a bit as there isn't much flow to
offset the demand for Argentina being seen today," Grills added.
Speculation of Caputo joining Milei's government as Finance
Minister demonstrates Macri's support, "filling most of the blanks
and significantly reducing the feeling of jump to the void,"
according to Javier Casabal, a fixed income strategist at Adcap
securities, Bloomberg News relays.
To be sure, Milei still maintains that he will close the central
bank, a decision he sees as "non-negotiable" according to a
statement published by his office on X "in response to rumors being
spread," Bloomberg News discloses.
The president-elect still has to officially confirm who will be the
key members of his economic team, Bloomberg News notes.
Milei also softened his stance on China and Brazil after
threatening to cut diplomatic ties on the campaign trail, Bloomberg
News relays. He even thanked Xi Jinping for a congratulatory
letter, invited Brazil's Luiz Inacio Lula da Silva to his
inauguration and took a call from Pope Francis, who he'd lambasted
in the past. Even though Milei called the Chinese government "an
assassin," his foreign policy adviser, Diana Mondino, said the
media over-blew the comments, Bloomberg News notes.
From economics to foreign policy, the new tone shows Milei's
pragmatic approach to governing a fragmented Congress where he'll
need the business-friendly opposition party to get any reforms
done, 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 will be succeeded by Javier Milei who won the
presidential election on November 19, 2023. Milei is scheduled to
be sworn in as President of Argentina on December 10, 2023.
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.
The IMF's executive board completed on August 23, 2023, the fifth
and six reviews of Argentina's 30-month Extended Fund Facility
(EFF), and 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
stabilize the economy in 2018. Argentina would receive another IMF
disbursement in November of about US$2.75 billion pending another
staff-level agreement and board approval.
S&P Global Ratings, on June 13, 2023, raised its local currency
sovereign credit ratings on Argentina to 'CCC-/C' from 'SD/SD' and
0its 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.
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B R A Z I L
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AMERICANAS SA: Bondholders Move Judicial Recovery Decision to Dec 4
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Tais Fuoco of Bloomberg News reports that bondholders of the 14th
issuance of Americanas postponed the decision on company's judicial
recovery plan until Dec. 4, 2023.
They met Wednesday, November 21, 2023, to approve or reject the
retailer's judicial recovery plan. The 100% of bondholders present
decided to postpone this item on the agenda until Dec. 4, 2023,
according to the minutes of the meeting.
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 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.
BRAZIL: Adjusts 2023 GDP Growth Forecast Down to 3%
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Richard Mann at Rio Times Online reports that the Brazilian
Ministry of Finance has lowered its 2023 GDP growth forecast for
the country from 3.2% to 3%.
For 2024, the growth estimate is now 2.2%, down from 2.3%,
according to Rio Times Online. This update was released in the
MacroFiscal Bulletin.
The government expects a 4.66% inflation rate in 2023, the report
relys. Based on the National Broad Consumer Price Index (IPCA),
this rate is a decrease from the previous 4.85% prediction, the
report discloses.
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).
BRAZIL: Barreirinhas Notes Declining Control Over Tax Revenue
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Lachlan Williams at Rio Times Online reports that Robinson
Barreirinhas, Brazil's Federal Revenue Secretary, underscores the
challenge Brazil faces in controlling its tax revenue due to over
200 special tax regimes.
These tax regimes, which are quite complex, lead to a loss of tax
revenue, according to Rio Times Online.
Barreirinhas points out that these special exemptions weaken
Brazil's fiscal management, the report notes. He links this
problem to recent changes in fiscal policies, the report relays.
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).
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D O M I N I C A N R E P U B L I C
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DOMINICAN REPUBLIC: Insurance Firms Reassure Clients After Flood
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Dominican Today reports that the Dominican Chamber of Insurers and
Reinsurers (Cadoar) has expressed support for those affected by the
recent floods caused by heavy rains in the Dominican Republic.
Franklin Glass, the Executive President of Cadoar, emphasized their
commitment to assisting policyholders in recovery efforts,
according to Dominican Today. He reassured clients that member
companies are dedicated to fulfilling their insurance obligations,
the report notes. Glass encouraged policyholders to initiate the
claims process with their insurers or intermediaries, ensuring
proper documentation of damages, the report relays.
Cadoar has mobilized specialized teams to accelerate claim
assessments and payments, aiding in quick recovery, the report
discloses. Glass highlighted Cadoar's collaboration with
authorities and organizations to support policyholders during this
challenging period, the report says.
The organization represents various insurance companies, including
Atlantica Seguros, Seguros Ademi, and many others, all committed to
providing support and services to those impacted by the floods, 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.
TCR-LA reported in April 2019 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.
On August 14, 2023, the TCR-LA reported that Moody's Investors
Service has changed the outlook on the Government of Dominican
Republic's ratings to positive from stable and affirmed the local
and foreign-currency long-term issuer and senior unsecured ratings
at Ba3. Moody's said the key drivers for the outlook change to
positive are: (i) sustained high growth rates have enhanced the
scale and wealth levels of the economy; and (ii) a material decline
in the government debt burden coupled with improved fiscal policy
effectiveness will support medium-term debt sustainability.
The affirmation of the Ba3 ratings balances the Dominican
Republic's strong economic growth dynamics and relatively contained
susceptibility to event risks, with a comparatively weaker fiscal
position, reflecting long-standing credit challenges which include:
(i) a shallow revenue base compared to peers, (ii) weak debt
affordability metrics, and (iii) high exposure to foreign currency
borrowing.
S&P Global Ratings, in December 2022, raised its long-term foreign
and local currency sovereign credit ratings on the Dominican
Republic to 'BB' from 'BB-'. The outlook on the long-term ratings
is stable. S&P affirmed its 'B' short-term sovereign credit
ratings. S&P also revised its transfer and convertibility (T&C)
assessment to 'BBB-' from 'BB+'. The stable outlook reflects S&P's
expectation of continued favorable GDP growth and policy continuity
over the next 12-18 months that will likely stabilize the
government's debt burden.
In February 2023, S&P said its BB ratings reflect the country's
fast-growing and resilient economy. It also incorporates the
country's historical political and social challenges in passing
structural reforms to contain fiscal deficits, despite recent
improvements in the electricity sector. The ratings are constrained
by relatively high debt, a hefty interest burden, and limited
monetary policy flexibility.
Fitch Ratings, in December 2022, affirmed the Dominican Republic's
Long-Term Foreign Currency Issuer Default Rating (IDR) at 'BB-'
with a Stable Rating Outlook.
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J A M A I C A
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JAMAICA: Should Prioritize Upskilling Local Workers, PIOJ Says
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RJR News reports that the Planning Institute of Jamaica (PIOJ) says
priority should be given to upskilling local employees, including
those in the business process outsourcing (BPO) sector.
PIOJ Director General Dr. Wayne Henry made the suggestion amid
public discussion about private sector entities calling for the use
of migrant workers to fill the need for more labor in some areas,
according to RJR News.
But Dr. Henry noted that discussions are also taking place
regarding training and upskilling local workers, the report relays.
"In the tourism sector, in the BPO, you've seen initiatives and
programs to bring greater training and certification in the labour
market, and so the key is to continue to ramp that up," he
proposed, 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.
In October 2023, Moody's upgraded the Government of Jamaica's
long-term issuer and senior unsecured ratings to B1 from B2, and
senior unsecured shelf rating to (P)B1 from (P)B2. The outlook has
been changed to positive from stable. The upgrade of Jamaica's
rating to B1 reflects the government's sustained commitment to
fiscal consolidation and debt reduction. The positive outlook
reflects Moody's assessment that a continuation of the favorable
fiscal trajectory will further increase Jamaica's credit
resilience.
S&P Global Ratings raised on September 13, 2023, its long-term
foreign and local currency sovereign credit ratings on Jamaica to
'BB-' from 'B+', and affirmed its short-term foreign and local
currency sovereign credit ratings at 'B'. The stable outlook
reflects S&P's expectation that the government will remain
committed to prudent fiscal policies and reducing debt, as well as
supportive economic policies including a flexible exchange rate
regime and effective monetary policy.
In March 2022, Fitch Ratings affirmed Jamaica's Long-Term Foreign
Currency Issuer Default Rating (IDR) at 'B+'. The Rating Outlook is
Stable.
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M E X I C O
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TV AZTECA: US Judge Dismisses Involuntary Bankruptcy Case
---------------------------------------------------------
Cassandra Garrison at Reuters reports that a U.S. judge has
dismissed an involuntary bankruptcy case against Mexican
broadcaster TV Azteca (AZTECACPO.MX), controlled by Mexican
billionaire Ricardo Salinas Pliego, stemming from a petition filed
by bondholders over missed payments.
The decision by Judge Lisa G. Beckerman, posted and reviewed by
Reuters, granted TV Azteca's motion to dismiss on grounds that the
petitioning creditors' claims are subject to a bona fide dispute,
according to Reuters.
"The petitioning creditors cannot voluntarily disclaim their
entitlement to a redemption premium so that their claims are not
subject to a bona fide dispute," the decision said, the report
notes.
TV Azteca issued $400 million in unsecured notes in 2017, and
according to creditors' claims, began missing payments in 2021, the
report recalls.
A spokesperson for TV Azteca declined to comment.
In March, a group of three creditors - Luxembourg-based Plenisfer
Investments SICAV, New York-based Cyrus Capital Partners and
Sandpiper Ltd, registered in the Cayman Islands - filed a petition
in the United States for TV Azteca to enter bankruptcy
involuntarily, alleging the broadcaster is not paying an owed
$63.32 million, recounts the report.
They are represented by New York law firm Akin Gump, which also
represented a group of bondholders in a similar suit against
Mexican nonbank lender Credito Real CREAL.MX, which collapsed after
defaulting on a bond last year, the report notes.
About TV Azteca
TV Azteca is one of the two largest producers of Spanish-language
television programming in the world, operating four television
networks in Mexico: Azteca uno, Azteca 7, adn40 and a mAis +,
through more than 300 owned and operated stations across the
country. The company also owns TV Azteca Digital, operator of
several of the most visited digital platforms and social networks
in Mexico.
TV Azteca is a Grupo Salinas company (www.gruposalinas.com), a
group of dynamic, fast growing, and technologically advanced
companies focused on creating economic value through market
innovation and goods and services that improve standards of living;
social value to improve community wellbeing; and environmental
value by reducing the negative impact of its business activities.
Created by Mexican entrepreneur Ricardo B. Salinas
(www.ricardosalinas.com), Grupo Salinas operates as a management
development and decision forum for the top leaders of member
companies. These companies include TV Azteca (www.TVazteca.com;
www.irtvazteca.com), Grupo Elektra (www.grupoelektra.com.mx),
Banco Azteca (www.bancoazteca.com.mx), Purpose Financial
(havepurpose.com), Afore Azteca (www.aforeazteca.com.mx), Seguros
Azteca (www.segurosazteca.com.mx), Punto Casa de Bolsa
(www.puntocasadebolsa.mx), Totalplay (irtotalplay.mx;
www.totalplay.com.mx) and Totalplay Empresarial
(totalplayempresarial.com.mx). TV Azteca and Grupo Elektra trade
shares on the Mexican Stock Market and in Spains' Latibex market.
Each of the Grupo Salinas companies operates independently, with
its own management, board of directors and shareholders. Grupo
Salinas has no equity holdings. The group of companies shares a
common vision, values, and strategies for achieving rapid growth,
superior results and world-class performance.
Involuntary Chapter 11
On March 20, 2023, Plenisfer Investments SICAV â€"
Destination
Value Total Return, Cyrus Opportunities Master Fund II, Ltd., and
Sandpiper Limited (collectively, the "Petitioning Creditors") filed
involuntary Chapter 11 petitions against TV Azteca, S.A.B. de C.V.
and thirty-four TV Azteca subsidiaries in the United States
Bankruptcy Court for the Southern District of New York. Nos.
23-10385 & 23-10419 (Bankr. S.D.N.Y. Mar. 20, 2023).
On Nov. 20, 2023, the U.S. Bankruptcy Court for the Southern
District of New York granted the Alleged Debtors' motion to dismiss
the involuntary Chapter 11 cases, finding that the Petitioning
Creditors' claims are subject to a bona fide dispute.
AKIN GUMP STRAUSS HAUER FELD is representing the Petitioning
Creditors in the U.S. cases. PAUL WEISS RIFKIND WHARTON GARRISON
LLP is serving as attorneys for the Alleged Debtors.
*********
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
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Information contained herein is obtained from sources believed to
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balance thereof are US$25 each. For subscription information,
contact Peter A. Chapman at 215-945-7000.
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