/raid1/www/Hosts/bankrupt/TCRLA_Public/240305.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Tuesday, March 5, 2024, Vol. 25, No. 47
Headlines
A R G E N T I N A
ACINDAR: Halts Production Amid Sharp Drop in Sales
ARGENTINA: Around 400 Flights Cancelled as Aviation Workers Strike
ARGENTINA: Milei Won't Resubmit Reform Plan to Congress Until 2025
LA RIOJA: S&P Cuts LT ICR to 'SD' on Missed Debt Service Payment
B R A Z I L
BRAZIL: Inflation Slightly Below Expectations in Mid-February
LATAM AIRLINES: S&P Upgrades ICR to 'B+', Outlook Positive
D O M I N I C A N R E P U B L I C
[*] DOMINICAN REPUBLIC: Abinader Sends Economic Aid to Nagua
J A M A I C A
JAMAICA: Agri Sector Bemoans Decline of Traditional Produce
JAMAICA: DBJ Plans to Provide $40 Billion in Financing for 2024/25
P U E R T O R I C O
GRUPO HIMA: Seeks to Extend Plan Exclusivity to March 14
- - - - -
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A R G E N T I N A
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ACINDAR: Halts Production Amid Sharp Drop in Sales
--------------------------------------------------
Buenos Aires Times reports that steelmaker Acindar, from the
ArcelorMittal group, will suspend production at its five industrial
plants in Argentina for a month due to a drop in sales.
According to the firm, sales have dropped by roughly between 30 and
50 percent in recent months, forcing the stoppage, the report
relays.
Acindar has "decided to halt all activities" in the next weeks,
communications manager Carlos Velasco announced, according to
Buenos Aires Times.
The report notes that Velasco cited the economic crisis facing
Argentina, which is suffering from over 250-percent year-to-year
inflation in January. The nation's economy is expected to contract
by 2.8 percent this year, according to the International Monetary
Fund, the report relays.
The measure will be applied from March 18 to April 15 at the "five
locations" of the steelmaker, as detailed by its spokesman on the
radio, the report discloses.
The firm has facilities in Rosario and Villa Constitucion in the
province of Santa Fe; Villa Mercedes in the province of San Luis
and San Nicolas and La Tablada in Buenos Aires Province, the report
relays.
"The idea is to try to adjust stocks to the new level of activity,"
he added.
The spokesman of the company added that there will be no
dismissals, but that unused holiday time and compensatory time off
will be offered to the staff in lieu, the report says.
According to Acindar's website, the company has some 2,400
employees and 3,100 contractors in Argentina, the report notes.
Since taking office last December, President Javier Milei has
suspended all public works projects, including ongoing ones. The
order was issued immediately after he took office in December as
part of a promise to reduce inflation and introduce heavy austerity
in state spending, the report relays.
"We're in high inflation and a sharp drop of activity, and Acindar
does not fall outside that context," said Velasco, the report
notes.
Acindar is one of the two biggest steel firms in the country and
produces long steel to supply the civil construction, oil, energy,
auto, agricultural, and industrial sectors, the report discloses.
It was founded in 1942 by a group of businessmen, among them
engineer Arturo Acevedo.
ARGENTINA: Around 400 Flights Cancelled as Aviation Workers Strike
------------------------------------------------------------------
Buenos Aires Times reports that hundreds of flights were canceled
or rescheduled in Argentina as aviation workers called a 24-hour
strike in demand of better pay.
Airlines were forced to reschedule hundreds of flights at Ezeiza
International and Jorge Newbery airports as a result, according to
Buenos Aires Times.
Three groups - Asociacion del Personal Aeronautico (APA), Pilotos
de Lineas Aereas (APLA), la Union del Personal Superior y
Profesional de Empresas Aerocomerciales (UPSA) - walked off the job
after deeming a 12-percent wage re-composition offer presented by
companies in the sector insufficient, the report notes.
Inflation in January was 20.6 percent and year-to-year inflation is
over 254 percent, according to government data, the report says.
The union action affected state airline Aerolíneas Argentinas, the
local flagship carrier, the most but air traffic for all firms were
affected. Departure and arrival destinations were modified while
some flights were cancelled entirely, the report discloses.
Buenos Aires Times relays that in the case of Aerolineas
Argentinas, the strike forced the rescheduling of 330 flights,
which affects "nearly 24,000 passengers, out of which 18,000 are
from domestic flights, 3,000 from regional flights and a further
3,000 from international flights," a press release stated.
Only American Airlines and low-cost Flybondi were in operation at
Ezeiza, with other carriers affected by the decision of workers at
the Intercargo firm to join the action, the report relays.
Aeroparque Jorge Newbery airport in the capital was entirely shut
down.
"We had flights scheduled for Santiago, Chile for Aerolineas
Argentina. We came here and we find nothing," said Leonardo
Torres, a Chilean tourist looking for information at the airport,
the report notes.
"Last night, they let us know at 11.30pm by email, but we're abroad
and we don't know what to do now," he added.
Unions sid the walkout was communicated to firms well in advance,
giving them sufficient time to reschedule flights, which most
companies did, the report says.
"We were told there was a strike and nobody was flying out,"
complained Angela Alaiaga, a Bolivian tourist who was meant to
leave.
"We were given a code to communicate with Aerolíneas Argentinas,
we tried to communicate but that code couldn't be accessed, so we
don't know when we're flying," she added.
The two main low-cost companies operating in Argentina, FlyBondi
and JetSmart, were forced to adapt to the conditions, the report
discloses.
"Flybondi informs that it will move its entire operation for
February 28 to Ezeiza international airport due to the strike
announced by some aviation unions which, among other services, will
affect the handling service," read a press release, the report
relays.
JetSmart, in turn, offered to reschedule flights at no extra cost,
the report notes.
About Argentina
Argentina is a country located mostly in the southern half of South
America. Its capital is Buenos Aires. Javier Milei is the current
president of Argentina after winning the November 19, 2023 general
election. He succeeded Alberto Angel Fernandez 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.
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.
ARGENTINA: Milei Won't Resubmit Reform Plan to Congress Until 2025
------------------------------------------------------------------
Patrick Gillespie at Bloomberg News reports that Buenos Aires Times
relays that President Javier Milei intends to resubmit his shelved
reform package to Argentina's Congress in December 2025 after
midterm elections he expects will increase his party's
representation, according to an interview with the Financial
Times.
The so-called 'omnibus bill' - Milei's legislative centrepiece in
reforming Argentina's crisis-prone economy - got sent back to
committee in the lower house Chamber of Deputies after lawmakers
began voting it down article-by-article, according to Bloomberg
News. The La Libertad Avanza leader said that for now he will send
reforms to Congress one at a time instead of in large packages,
Bloomberg News relays. He'll also rely on decrees.
"There are other reforms which we can do by decree," Milei told the
FT, adding that he has unveiled 1,000 reforms but has another 3,000
to present, Bloomberg News notes.
Bloomberg News relays that Milei reiterated to the newspaper that
the International Monetary Fund estimates his government can lift
currency controls by the middle of this year. He also said
Argentina could return to international capital markets in 2025 if
his administration maintains a fiscal balance, Bloomberg News
discloses.
The president dismissed the possibility of social uprising or chaos
as a result of his economic shock therapy programme centred around
an aggressive austerity campaign, Bloomberg News relays.
"There is zero chance of a social uprising, unless there is a
politically motivated event or [one involving] foreign
infiltrators," Milei told the Financial Times, Bloomberg News
adds.
About Argentina
Argentina is a country located mostly in the southern half of South
America. Its capital is Buenos Aires. Javier Milei is the current
president of Argentina after winning the November 19, 2023 general
election. He succeeded Alberto Angel Fernandez 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.
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.
LA RIOJA: S&P Cuts LT ICR to 'SD' on Missed Debt Service Payment
----------------------------------------------------------------
S&P Global Ratings, on March 1, 2024, lowered its long-term issuer
credit rating on the Province of La Rioja to 'SD' from 'CC'. S&P
also lowered its issue rating on the province's 2028 bond to 'D'
from 'CC'.
Outlook
S&P doesn't assign outlooks to 'SD' or 'D' ratings because they
express a condition and not a forward-looking opinion of default
probability.
Upside scenario
S&P said, "We will raise our ratings on the province if it cures
the default or restructures its debt obligations.
Post-restructuring ratings tend to be in the 'CCC' or low 'B'
categories, reflecting the new debt conditions and our
forward-looking assessment on the issuer's capacity and willingness
to service its debt. Our assessment would capture the province's
intrinsic characteristics as well as weak macroeconomic prospects
in Argentina and lack of market access. However, the 'CCC-'
transfer and convertibility assessment of Argentina currently caps
the ratings on Argentine subsovereigns."
Rationale
S&P lowered its issuer credit rating to 'SD' following the missed
debt payment on the 2028 bond. The $26 million debt service payment
was due on Feb. 26, and the $15.9 million capital payment was not
made before the three-day grace period that expired on Feb. 29.
While all the Argentine provinces currently face similar
challenges, La Rioja is the first rated Argentine province to enter
into default in 2024. La Rioja defaulted on the same bond in 2020
and remained in restructuring negotiations for over a year. The
province has never made a capital payment on its single
international bond, originally issued in 2017.
A combination of factors led to a steep deterioration of the
province's financial and liquidity profile and the nonpayment.
These include a marked reduction in transfers, a hike in debt
service due to the schedule of payment and sharp depreciation of
the official exchange rate, and persistent expenditure pressures.
La Rioja is among the most exposed entities to nonautomatic
transfers--they represented 20% of total revenues.
The province intends to restructure the terms and conditions of the
bond. The bond indenture provides a collective action clause (CAC)
threshold of 75% of the bondholders. The likelihood of reaching a
CAC will influence the forward-looking assessment of the province's
creditworthiness because it would determine future contingent
liability from possible litigation by holdout creditors.
In accordance with S&P's relevant policies and procedures, the
Rating Committee was composed of analysts that are qualified to
vote in the committee, with sufficient experience to convey the
appropriate level of knowledge and understanding of the methodology
applicable. At the onset of the committee, the chair confirmed that
the information provided to the Rating Committee by the primary
analyst had been distributed in a timely manner and was sufficient
for Committee members to make an informed decision.
After the primary analyst gave opening remarks and explained the
recommendation, the Committee discussed key rating factors and
critical issues in accordance with the relevant criteria.
Qualitative and quantitative risk factors were considered and
discussed, looking at track-record and forecasts.
The committee's assessment of the key rating factors is reflected
in the Ratings Score Snapshot above.
The chair ensured every voting member was given the opportunity to
articulate his/her opinion. The chair or designee reviewed the
draft report to ensure consistency with the Committee decision. The
views and the decision of the rating committee are summarized in
the above rationale and outlook. The weighting of all rating
factors is described in the methodology used in this rating
action.
Ratings List
DOWNGRADED
TO FROM
LA RIOJA (PROVINCE OF)
Senior Unsecured D CC
DOWNGRADED; CREDITWATCH/OUTLOOK ACTION
TO FROM
LA RIOJA (PROVINCE OF)
Issuer Credit Rating SD/-- CC/Negative/--
===========
B R A Z I L
===========
BRAZIL: Inflation Slightly Below Expectations in Mid-February
-------------------------------------------------------------
globalinsolvency.com, citing Reuters, reports that Brazil's
inflation picked up in mid-February driven by higher education
prices, but landed slightly below market expectations, government
statistics agency IBGE said.
The IPCA-15 consumer price index rose 0.78% in the period, while
economists polled by Reuters expected an increase of 0.82%.
In the same period of the previous month, inflation had hit 0.31%,
according to globalinsolvency.com. In annual terms, inflation came
in at 4.49%, below the expected 4.52%, the report relays.
The agency said that eight out of the nine groups surveyed
registered an increase in prices in the period, with education
leading the way with a 5.07% jump mainly due to seasonal hikes in
school fees, the report relays.
The data showed that "core services inflation remained elevated,"
said William Jackson, chief emerging markets economist at Capital
Economics, the report discloses.
While the central bank is expected to cut its benchmark interest
rate by 50 base points in the next two meetings, "we suspect that
strong underlying price pressures will prevent the monetary policy
committee from lowering interest rates as far as most expect this
year," he said in a note to clients, 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).
LATAM AIRLINES: S&P Upgrades ICR to 'B+', Outlook Positive
----------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on Latam
Airlines Group S.A. by one notch to 'B+' from 'B'.
At the same time, S&P raised its issue-level rating on the
company's secured debt to 'BB' from 'BB-', stemming from higher
issuer credit rating. S&P kept the '1' recovery rating unchanged.
The positive outlook reflects S&P's expectation that the company
will be able to maintain relatively stable profitability with
EBITDA margins about 20% and FFO to debt near 30% over the next
couple of years.
S&P said, "Our upgrade of Latam Airlines Group S.A. (Latam) follows
the sharp improvement in its credit measures during 2023 and our
expectation that they will remain in good shape in the next two
years. The company's 2023 revenue and EBITDA have exceeded
pre-pandemic levels, and we forecast further expansion for 2024."
Air travel demand remains healthy, which coupled with rational
supply, kept yields high and underpins Latam's earnings.
Additionally, following its bankruptcy filing in 2020, Latam was
able to reduce its fleet cost and streamline its overall cost
structure. And through several cost-saving initiatives, including
digitalization and automatization of processes, the company has
offset cost inflation pressures.
S&P said, "We forecast EBITDA close to $2.7 billion in 2024 and
2025, compared with $2.4 billion in 2023. Furthermore, we expect
the company should be able to generate free operating cash flow
(FOCF) between $500 million and $700 million in the next two years.
As a result, we estimate the company's FFO to debt between 28% and
30% and S&P Global Ratings' gross adjusted debt to EBITDA of
2.5x-2.6x in 2024 and 2025. These measures are slightly stronger
than our previous forecasts and point to Latam's improved financial
risk profile and credit quality.
"Despite the region's modest economic growth, we believe that the
improved environment in terms of inflation and interest rates
should continue supporting air travel demand in a still
underpenetrated region. Even when we assume minor drops in yields
in the next two years from the record levels in 2023, we expect
revenue passenger kilometer (RPK) growth and yields to remain
healthy.
"Furthermore, the industry's supply will likely remain constrained
amid delays in aircraft manufacturers' deliveries, retirement of
less efficient aircraft, and overall lower competitive pressures in
the region. In the past year, we have witnessed the exit of
competitors in some markets like that of Ultra Air and Viva Air in
Colombia and Perú or Equair in Ecuador. In addition, some of
Latam's competitors are still facing tighter financial conditions,
prompting them to focus on enhancing cash flow or improving their
capital structures (i.e. Gol, the main competitor in Brazil, filed
for bankruptcy proceedings in January 2024). Thus, we continue
expecting a rational market. In this context, we forecast Latam to
expand capacity by about 13%. To support this endeavor, Latam has
received 30 new aircraft in 2023 (to renew and expand the fleet)
and launched 21 additional routes.
"Nevertheless, the industry's revenue and cost visibility is low
beyond a few months. The pressure on travelers' disposable incomes
or increases in fuel prices could significantly alter our
assumptions for 2024.
"During Chapter 11 proceedings, Latam was able to slash its debt.
We estimate Latam's adjusted debt (including operating leases) will
be about $7.0 billion for the next two years, down from $10.4
billion in December 2019, and there could be further minor debt
reductions in next two years if the company uses FOCF for that
purpose. However, the company's cost of debt remains high, and
Latam would face the scenario of refinancing the post-emergence
capital structure through better conditions and lower costs during
the next two years."
===================================
D O M I N I C A N R E P U B L I C
===================================
[*] DOMINICAN REPUBLIC: Abinader Sends Economic Aid to Nagua
------------------------------------------------------------
Dominican Today reports that the Minister of Agriculture, Limber
Cruz, delivered checks to 215 small agricultural producers for more
than nine million pesos in compensation for the damages suffered
during the atmospheric disturbance of last November.
The aid provided by the President of the Dominican Republic, Luis
Abinader, totaled 9,987,550.00 pesos destined to recover productive
activities as soon as possible, which constitutes a significant
relief for the productive class of the area, according to Dominican
Today.
"I always remember a word that President Luis Abinader tells me . .
. Limber, you can tell the farmers that they are not alone, they
have a President who will not allow production in the Dominican
Republic to collapse," said Cruz, the report notes.
He also announced the repair of 60 kilometers of country roads, for
which the Northeast Regional Directorate will start the yellow
tractors and equipment as soon as possible, the report relays.
The provincial governor of Maria Trinidad Sanchez, Gregoria Correa,
thanked the President and the Minister of Agriculture for the
prompt assistance to the productive sectors of María Trinidad
Sanchez, the report discloses.
According to a note sent by the Department of Communication of the
aforementioned ministry headed by journalist Erick Montilla, the
event was also attended by the Vice Minister of Agriculture
Production, Eulalio Ramirez; the regional director of Indrhi,
Aurelio Gomez; other authorities of the agricultural sector and
hundreds of producers of different crops, 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 December 4, 2023, the TCR-LA reported that Fitch Ratings has
affirmed Dominican Republic's Long-Term Foreign-Currency Issuer
Default Rating (IDR) at 'BB-' and revised the Outlook to Positive
from Stable. Fitch says the Positive Outlook reflects a trend
improvement in governance, and robust growth prospects that should
lead to continued gains in per capita income. According to Fitch,
growth has decelerated in 2023, but it expects Dominican Republic
to recover to high levels during 2024-2025. External liquidity
metrics have improved in recent years, and foreign currency share
of government debt is on a downward path.
In August 2023, Moody's Investors Service 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.
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J A M A I C A
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JAMAICA: Agri Sector Bemoans Decline of Traditional Produce
-----------------------------------------------------------
Kellaray Miles at Jamaica Observer reports that as production for a
number of traditional produce continues to trend downward, a number
of stakeholders in Jamaica's agricultural sector have expressed
concern for the future of food security locally.
President of the JAS Lenworth Fulton, in outlining some of the key
crops which included coffee, cocoa and sugar cane, said that output
could be improved if better policies are implemented to combat
current challenges, according to Jamaica Observer.
"While we are not doing that badly with domestic crops such as
roots and tubers, vegetables and cucurbits, we are in a very bad
state with our traditional crops. In the 1960s, this country
produced 562,000 tons of sugar which in 2023 moved down to 35,000
tons. When we look at banana we were in the 1960s also producing
265,000 tons, which today is now down to 70,000 tons. These are
just a few examples, as decline in a number of other areas across
milk and meat production also becomes impacted," Fulton said during
a Jamaica Observer Business Forum, the report notes.
Speaking on behalf of the Jamaica Cocoa Sector Development
Alliance, Dennis Buddo, calling it a sad day for cocoa in Jamaica,
said the production of this crop has since the mid-90s fallen from
a high of 2,700 tons of dry cocoa to 63 tons up to last year, the
report discloses.
"It's hard to even strike a percentage decline for this one, which
is one of our major original exportable crops in Jamaica. When it
gets down to this level, it's harder to get it back up but I'm
hoping for something serious to happen soon from the powers that be
as it can't just be all talk and no action," he said while
bemoaning what he considers to be gross years of neglect for the
sector, the report relays.
Jamaica Observer says that for Donald Salmon, president of the
Jamaica Coffee Growers Association (JCGA), who was also a guest at
the virtual forum, he said that for coffee, the crop has been in
decline since the turn of the century with the Blue Mountain Coffee
moving from 500,000 boxes to less than 300,000 presently and the
High Mountain coffee from 200,000 to less than 12,000 boxes per
year.
First vice-president of the JAS Denton Alvaranga, further
highlighting a significant drop in output from the important food
group of legumes and cereals, said that currently some 80 per cent
of the red peas we eat locally have to be imported at cost ranging
from approximately US$8 million annually, the report relays.
Similarly high imports for corn, which is a major ingredient in
animal feed, he said must be addressed, the report discloses.
Pointing to new opportunities in other crops such as yams, dasheen,
pineapple, onion, cassava, hot peppers, and ginger, he urged more
farmers to take advantage of the increased demands in these areas,
the report relays.
The stakeholders agreed that despite current efforts to ramp up
production in a number of the areas highlighted, modern-day
challenges including praedial larceny, climate change and pests
further weighs on not only the success of increasing output but
also having a sustainable supply needed to keep the nation properly
fed for the future, the report notes.
The JAS president, while lauding recent initiatives such as
backyard and school gardening programs being piloted by the
ministry as important, said that while these will help to keep
things growing at the domestic, household and community levels, it
won't do much in moving the needle commercially or with ensuring
national food security, the report discloses.
He said that with the sector at its lowest still being able to
contribute about 8 per cent to gross domestic product (GDP), much
more can be achieved if greater focus is given to strategies that
will increase output and making more funding mechanisms available
to farmers, the report relays.
"The remedy lies in government making loans available to our
farmers in the same way they make loans available to tourism and
business process outsourcing (BPO). What we need is for our
leaders to look on a set of policies geared towards a rebuilding of
the agricultural sector. An important part of this concerns the
number of import licence being granted," he said while noting a
growing number of products including coffee and coconut water as
some key crops being produced locally which is currently imported
in volumes, the report notes.
The availability of planting materials and equipping the sector to
attract more people, especially from the younger age cohorts, the
players believe will also go a far way in stemming a number of the
long standing issues which for decades have continued to negatively
impact the industry, the report notes.
"We need to have more policies which seeks to remove the
uncertainty from farming, to those that will attract more
investment, utilise greater technology while addressing food
security concerns," Salmon said, 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.
JAMAICA: DBJ Plans to Provide $40 Billion in Financing for 2024/25
------------------------------------------------------------------
RJR News reports that the Development Bank of Jamaica (DBJ) plans
to invest more than J$40 billion in 2024/2025.
The government body which provides financing to businesses through
approved financial institutions, says it also expects to disburse
$9.2 billion in loans for the fiscal year which begins April,
according to RJR News.
In the latest Public Bodies estimates, the DBJ says it plans to
execute the privatisation of a number of government entities, the
report notes.
The transactions include: Braco Village Resorts, Jamaica Mortagage
Bank, Montpelier (Agriculture Lands), White Marl Complex, Nutrition
Products Limited and Agriculture Marketing Corporation, the report
relays.
The DBJ also has plans to work on public private partnerships
involving projects with the National Solid Waste Management
Authority and the Soapberry Wastewater Treatment Plant, 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.
=====================
P U E R T O R I C O
=====================
GRUPO HIMA: Seeks to Extend Plan Exclusivity to March 14
--------------------------------------------------------
Grupo Hima San Pablo, Inc., and its affiliates asked the U.S.
Bankruptcy Court for the District of Puerto Rico to extend their
exclusivity periods to file a plan of reorganization and obtain
acceptance thereof to March 14 and May 13, 2024, respectively.
This is the Debtors' second request for extension of the Exclusive
Periods and comes almost five months after the Petition Date. The
Debtors have made significant strides forward thus far. But, as
would be expected given the scope of what must be achieved in this
chapter 11 case, much work remains.
The Debtors anticipate that a second request of a 45-day extension
of the Exclusive Periods will allow them sufficient time to
complete the sale process, evaluate the potential claims, develop
and reconcile the sale strategy, conclude its negotiations with the
UCC and secured lender, with their intent to build up a plan to be
proposed to their creditors.
The Debtors claim that they have cooperated and worked
constructively and in good faith with all of its officers in the
five months since the filing to comply with all requirements,
filing and duties, and resolve all or almost all matters that have
come into play through consent. To this date the Debtors' efforts
have been aimed towards preserving Debtors' operations, reconciling
them with this ongoing proceeding and pushing to conclude the sale
process.
The Debtors point out that conversations are aimed towards
negotiating certain carveouts or access to funds to craft a plan of
reorganization. Debtors simply seek this timeframe to shift their
gaze and resources towards crafting, developing a plan to be
proposed to their creditors. These efforts are and will be pursued
in open communication with the secured creditor and the unsecured
creditors' committee.
Accordingly, the Debtors are currently sustaining negotiations with
the secured creditor and the UCC, which ultimately will aid and
dictate the contents of a plan. Currently, this is an ongoing
process and work remains to be done, and such work requires an
extension of the Debtors' Exclusive Periods.
Attorneys for the Debtor:
Wigberto Lugo Mender, Esq.
Alexis A. Betancourt Vincenty, Esq.
Lugo Mender Group, LLC
100 Carr. 165 Suite 501
Guaynabo, PR 00968-8052
Tel: (787) 707-0404
Fax: (787) 707-0412
Email: wlugo@lugomender.com
About Grupo Hima San Pablo
Grupo HIMA San Pablo, Inc. serves as a diversified healthcare
services holding company pursuant to a corporate reorganization of
several businesses related by common ownership. Through its
subsidiaries and affiliates, Grupo HIMA San Pablo primarily owns
and operates hospital facilities and other healthcare related
businesses. As of August 2023, the HIMA GROUP operates four
hospitals, with over 1,200 licensed beds, including an Oncological
Hospital, a multi-specialty physician practice management company,
Home Care Service (including infusion therapies and wound care), a
free-standing ambulatory center and a 16-ambulance service
company.
Grupo HIMA San Pablo and its affiliates filed Chapter 11 petitions
(Bankr. D. P.R. Lead Case No. 23-02510) on Aug. 15, 2023. In the
petition signed by its chief executive officer, Armando J.
Rodriguez-Benitez, Grupo HIMA San Pablo disclosed $500 million to
$1 billion in assets and $100 million to $500 million in
liabilities.
Judge Enrique S. Lamoutte Inclan oversees the cases.
Wigberto Lugo Mender, Esq., at Lugo Mender Group, LLC and
Pietrantoni Mendez & Alvarez, LLC serve as the Debtors' bankruptcy
counsel and special counsel, respectively.
The U.S. Trustee for Region 21 appointed an official committee of
unsecured creditors on Sept. 7, 2023. Porzio, Bromberg & Newman,
P.C. is the committee's legal counsel.
Edna Diaz De Jesus is the patient care ombudsman appointed in the
Debtors' Chapter 11 cases.
*********
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 2024. All rights reserved. ISSN 1529-2746.
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