/raid1/www/Hosts/bankrupt/TCRLA_Public/240430.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, April 30, 2024, Vol. 25, No. 87
Headlines
A R G E N T I N A
ARGENTINA: Milei's Team Sees Inflation Slowing Faster Than Expected
B O L I V I A
BOLIVIA: Moody's Cuts Issuer & Sr. Unsecured Debt Ratings to Caa3
B R A Z I L
AMERICANAS SA: Faria Aims For 'Equally Distributed' Pain
BRAZIL: Inflation Slows Again, Central Bank Still Worried
GOL LINHAS: Hogan Lovells Updates List of Secured Noteholders
C A Y M A N I S L A N D S
GLOBAL AIRCRAFT: Moody's Affirms B2 Rating on Sr. Unsecured Notes
D O M I N I C A N R E P U B L I C
BANCO DE RESERVAS: Fitch Affirms BB- LongTerm IDR, Outlook Positive
BANCO MULTIPLE: Fitch Affirms 'BB-' LongTerm IDR, Outlook Positive
[*] DOMINICAN REPUBLIC: Growth Estimate Rises
E C U A D O R
ECUADOR: IMF Reaches New 48-Month Extended Fund Facility Deal
J A M A I C A
[*] JAMAICA: BOJ Processed 212 Applications for Money Service Firms
[*] JAMAICA: JDIC Seeks to Protect Against Financial Crises
P U E R T O R I C O
BOWLING CENTER: Taps Luis R. Carrasquillo as Financial Consultant
- - - - -
=================
A R G E N T I N A
=================
ARGENTINA: Milei's Team Sees Inflation Slowing Faster Than Expected
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Ignacio Olivera Doll at Bloomberg News reports that President
Javier Milei's economic team sees monthly inflation slowing much
faster this year than analysts anticipate, a rare insight into his
advisers' projections as he tries to pull the country out of
crisis.
Consumer price increases are forecast to slow to 3.8 percent by
September, according to a presentation seen by Bloomberg News
that's dated April 4 and authored by the office of Economic Policy
Secretary Joaquin Cottani, a top deputy to Economy Minister Luis
Caputo.
Analysts surveyed by Argentina's Central Bank in March saw monthly
inflation at 6.2 percent by September, according to Bloomberg News.
Similarly, Milei's team projects Argentina's economy will contract
2.8 percent this year, less than the 3.5 percent drop seen by more
than three dozen analysts polled by the monetary authority,
Bloomberg News notes.
The report was presented to foreign investors during a trip to
Buenos Aires, according to a person with direct knowledge, who
asked not to be named discussing private matters, Bloomberg News
relays.
An Economy Ministry spokeswoman said the projections aren't
official because they weren't published online and in Spanish,
Bloomberg News says.
Bloomberg News discloses that Cottani's report details Milei's
drastic austerity measures. Capital spending declined 85% in the
first quarter from a year ago when adjusted for inflation,
according to the projections.
Milei's proposals provoked a large, peaceful protest in Buenos
Aires against spending cuts for public universities, which the
president decried as a politically motivated event, Bloomberg News
relays. His government slashed federal funding for universities by
72 percent in the first quarter, according to a data analysis by
Buenos Aires-based consulting firm Equilibra, Bloomberg News
discloses.
Beyond spending cuts, ministry officials project an US$18.7-billion
trade surplus this year, Bloomberg News says. They also predict
the peso's real exchange rate -- a metric comparing the peso's
value to other currencies -- will be 17 percent below its average
of the past decade if the Central Bank maintains its slow
devaluation, or crawling peg, of two percent per month, Bloomberg
News notes.
Cottani also plotted the expected evolution of the central bank's
interest-bearing liabilities under the assumption that the policy
rate would be reduced to 50% by May from 70% currently, according
to the presentation, Bloomberg News relays.
In a separate report, Argentina's Central Bank detailed projections
for net international reserves -- a key benchmark in the
government's US$44-billion International Monetary Fund program and
a barometer for lifting currency controls that deter foreign
investment, Bloomberg News notes.
When taking into account the monetary authority's short-term debt
from bond auctions meant to facilitate imports, net reserves were
negative US$4.2 billion as of April 19, the bank said on its
website, Bloomberg News discloses.
While net reserves were positive by a different criteria used by
the IMF earlier this year, it's unclear if the Washington-based
lender will adapt its methodology to include the central bank's new
debt liabilities, Bloomberg News relays.
The Central Bank presentation was shown in Washington when Caputo,
who publicly declines to provide forecasts in interviews with
Argentine media, participated in events on the sidelines of the
Fund's spring meetings. Caputo's comments at a JPMorgan Chase & Co
session there helped lift the country's sovereign bond prices,
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 March 15, 2024, raised its local currency
sovereign credit ratings on Argentina to 'CCC/C' from 'SD/SD' and
its national scale rating to 'raB+' from 'SD'. S&P also raised its
long-term foreign currency sovereign credit rating to 'CCC' from
'CCC-' and affirmed its 'C' short-term foreign currency rating. The
outlook on the long-term ratings is stable. In addition, S&P
revised its transfer and convertibility assessment to 'CCC' from
'CCC-'.
S&P said the stable outlook on the long-term ratings balances the
risks posed by pronounced economic imbalances and policy
uncertainties with the favorable change in near-term debt service
obligations. S&P also expect no further debt exchanges that it
would likely consider to be distressed.
Fitch Ratings upgraded on June 13, 2023, Argentina's Long-Term
Foreign Currency (FC) Issuer Default Rating (IDR) to 'CC' from
'C'and affirmed the Long-Term Local Currency (LC) IDR at 'CCC-'.
Fitch typically does not assign Outlooks to sovereigns with a
rating of 'CCC+' or below.
The upgrade of the FC IDR reflects that Fitch no longer deems a
default-like process to have begun, as the authorities have not
signaled a clear intention to follow through with an intra-public
debt swap announced in March. The new 'CC' rating signals a default
event of some sort appears probable in the coming years, regardless
of the outcome of upcoming elections. The affirmation of the LC IDR
at 'CCC-' follows the peso debt swap in June that Fitch did not
deem to be a "distressed debt exchange" (DDE).
Moody's Investors Service, in September 2022, affirmed Argentina's
Ca foreign-currency and local-currency long-term issuer and senior
unsecured ratings. The outlook remains stable. The decision to
affirm the Ca ratings balances Argentina's limited market access,
weak governance, and history of recurrent debt restructurings with
recent efforts to marshal fiscal and monetary measures to start
addressing underlying macroeconomic imbalances in the context of
the IMF program that was approved in 2022, according to Moody's.
DBRS, Inc. confirmed Argentina's Long-Term Foreign Currency Issuer
Rating at CCC and downgraded its Long-Term Local Currency Issuer
Rating to CCC from CCC (high) on March 3, 2023.
=============
B O L I V I A
=============
BOLIVIA: Moody's Cuts Issuer & Sr. Unsecured Debt Ratings to Caa3
-----------------------------------------------------------------
Moody's Ratings has downgraded the Government of Bolivia's
long-term local and foreign currency issuer and senior unsecured
debt ratings to Caa3 from Caa1 and changed the ratings outlook to
stable from negative.
The downgrade of the ratings reflects Moody's assessment that
ongoing governance challenges and heightened domestic political
risk have exacerbated external liquidity pressures to critical
levels as a result of a persistent decline in foreign-exchange
reserves which threaten a balance of payments crisis. Congressional
approval of a new Gold Law provided temporary liquidity relief in
2023 allowing the central bank to convert a portion of its large
gold holdings into liquid foreign-exchange reserves, but the level
of reserves has continued to decline and the legal limit on central
bank gold sales has nearly been reached. Pending loans from
multilateral and bilateral development institutions, an important
source of hard currency for the sovereign, had not been approved by
Congress until only very recently due to political infighting
between different factions of the ruling government party. The
loans provide essential financing for Bolivia's current account
deficit in the short term, but do not address the country's
longer-term external financing needs. Although principal payments
on Bolivia's two outstanding international sovereign bonds will not
come due until 2026, persistent external liquidity pressures have
increased sovereign credit risks.
The stable outlook reflects Moody's view that upside and downside
risks to Bolivia's credit profile remain balanced. Incoming hard
currency loan disbursements from multilateral development
institutions, recent government measures aimed at shoring up
foreign exchange reserves, combined with the favorable structure of
Bolivia's external debt obligations will help mitigate some of the
current near-term credit pressures. However, Moody's expects
significant credit challenges to remain, including very low
foreign-exchange reserve levels, declining production levels in the
hydrocarbon sector, and elevated domestic political risk.
Bolivia's local and foreign currency country ceilings were lowered
to Caa1 and Caa2 from B2 and Caa1, respectively. The two-notch gap
between the local currency ceiling and issuer rating reflects the
risks that political developments could disrupt the policymaking
environment given weak institutions and a significant government
footprint in the economy. The one-notch gap between the foreign
currency and local currency ceiling reflects material transfer and
convertibility risks given persistent balance of payment pressures
and very low policy effectiveness.
RATINGS RATIONALE
EXTERNAL LIQUIDITY PRESSURES HAVE INCREASED SHARPLY TO CRITICAL
LEVELS
The downgrade of Bolivia's ratings to Caa3 from Caa1 reflects
Moody's assessment that external liquidity pressures have reached
critical levels, driven by a material decline in foreign-exchange
reserves that heightens sovereign credit risks, threatening a
balance of payments crisis.
As of end-December 2023, Bolivia's net international reserves
(including gold) had fallen to $1.7 billion, covering less than two
months of imports, from about $3.0 billion in May 2023, even after
the central bank (Banco Central de Bolivia) received Congressional
approval to begin selling a portion of its gold reserves through a
new Gold Law. Bolivia has not published updated data on
international reserves since December 2023.
The Gold Law was designed to help stabilize the country's low level
of liquid foreign-exchange reserves, by allowing the central bank
to convert a portion of its relatively large gold stock into liquid
foreign-exchange reserves. However, gold reserves declined to about
$1.6 billion from $2.6 billion during this time and
foreign-exchange reserves did not stabilize, but declined to $166
million from $295 million. Meanwhile, according to the law, the
central bank must legally hold 22 tonnes of gold (around $1.3
billion) as strategic reserves. Given this restriction, as of
end-2023, the central bank could only sell additional gold reserves
equivalent to around $300 million in available foreign-exchange.
This is set against Moody's forecast of a current account deficit
of more than $2 billion in 2024, only a small portion of which is
likely to be financed by Foreign Direct Investment.
Throughout much of 2023 and early 2024, political divisions within
the government's ruling party, Movimiento al Socialismo (MAS), have
exacerbated the country's economic woes and prevented Congressional
approval of the disbursement of around $750 million in external
loans from multilateral and official bilateral development
institutions that could have provided swift support to Bolivia's
liquid foreign-exchange reserves. Moody's estimates that in total
these loans could cover up to one month of imports. Although the
majority of these loans have recently been approved by Congress,
the situation underscores Bolivia's elevated political risk and
very weak institutions and governance framework. Moreover, without
a significant compression of imports, additional financing and/or a
change in the law governing the central bank's gold holdings, none
of which is likely to happen in the near future, the decline in
foreign-exchange reserves will probably continue pushing them to
even lower levels.
Overall, recent developments have increased the risk of a
disorderly balance of payments adjustment and of Bolivia not having
sufficient hard currency to ensure full and timely repayment of its
external debt obligations and imports.
WEAK POLICYMAKING AND POLITICAL DIVISIONS CONTINUE TO UNDERMINE
BOLIVIA'S CREDIT PROFILE
Bolivia's Caa3 rating reflects persistent external and fiscal
deficits, which have led to deteriorating fiscal strength,
reflecting weak policymaking and governance.
After non-financial public sector debt increased more than two-fold
over the past decade to around 84% of GDP in 2023, Moody's expects
the debt burden to gradually rise over the medium term driven by a
fiscal stance that will lead to elevated and persistent government
fiscal deficits above 5% of GDP. Underlying credit weaknesses will
be present on the fiscal front in spite of relatively high debt
affordability, which is a product of Bolivia's high reliance on
concessional multilateral sources of debt.
The deterioration in Bolivia's fiscal position reflects the
authorities' inability to address fiscal imbalances through major
adjustments in expenditures and revenue. In February 2024,
President Luis Arce announced various measures to reduce fiscal
spending, support private-sector growth, and shore up foreign
exchange reserves. Among the measures are the easing of export
restrictions, the introduction of fuel auctions and reduction of
transaction costs on foreign-exchange operations. However, Moody's
believes that the scope of these measures is insufficient to fully
offset current trends and sustainably reduce fiscal and external
imbalances. At this stage, there are no indications that the
government will adopt major policy changes that would durably
reverse the deterioration in Bolivia's credit profile.
RATIONALE FOR THE STABLE OUTLOOK
The stable outlook on the rating reflects Moody's view that upside
and downside risks to Bolivia's credit profile remain balanced.
Disbursements of pending multilateral development loans will
provide much-needed access to hard currency that will help support
Bolivia's foreign-exchange reserves. In addition, recent government
measures aimed at easing export restrictions, reducing imports and
public spending, and supporting private-sector growth may help to
mitigate some of the pressures on the country's external position.
Meanwhile, the overall structure of Bolivia's external debt
obligations remains favorable with the vast majority (around 70%)
owed to multilateral development institutions on concessional
terms. Total principal and interest due on Bolivia's sovereign
international bonds are modest over the short term, amounting to
around $109 million annually in 2024- and 2025, and are projected
to rise to $435 million, $420 million and $677 million in 2026,
2027 and 2028, respectively.
At the same time, Moody's expects significant credit challenges to
remain, including very low foreign-exchange reserve levels,
declining production in the hydrocarbon sector, and heightened
domestic political risk. The authorities' decision to maintain
Bolivia's exchange rate peg to the US dollar, combined with
structurally lower export earnings from declining production levels
in the hydrocarbon sector and maturing external debt payments, will
continue to pressure foreign-exchange reserves, absent major policy
adjustments. If these pressures persist, Bolivia could ultimately
experience a disorderly balance of payments adjustment, an abrupt
change in the fixed exchange rate regime, and possibly a default on
its international sovereign bonds.
Ongoing divisions within the ruling MAS party will likely continue
to hamper the government's ability to implement more significant
measures that would help to durably address the country's growing
economic challenges, prolonging policy uncertainty and credit
risks. Moody's expects these divisions to persist and to likely
intensify political and social risks as Bolivia gets closer to its
general election in 2025.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE CONSIDERATIONS
Bolivia's ESG Credit Impact Score is CIS-5, indicating that the
sovereign rating is lower than it would have been if ESG risk
exposures did not exist and that the negative impact is more
pronounced than for issuers scored CIS-4. For Bolivia, this
reflects its very weak governance profile which significantly
weighs on the rating.
Bolivia's exposure to environmental risks is highly negative (E-4),
driven by risks related to carbon transition and natural resources
management. The government and overall economy's high reliance on
hydrocarbon sector revenues and exports exposes the sovereign to
significant carbon transition risks. Natural resources mining,
water management, increased deforestation and forest fires in the
Bolivian Amazon rainforest also contribute to material
environmental risks.
Bolivia's exposure to social risks is highly negative (S-4),
stemming from a long-history of relatively high levels of poverty,
economic inequality, and social exclusion. Despite material
improvements in recent years, Bolivia is characterized by
relatively high levels of poverty, limited educational outcomes,
and lack of sufficient access to basic services and housing. Like
many other emerging economies, Bolivia benefits from a benign
demographic structure.
The influence of governance on Bolivia's credit profile is very
highly negative (G-5), reflecting very weak policy effectiveness,
weak institutional arrangements, a high incidence of corruption and
a generally weak rule of law on overall governance.
SUMMARY OF MINUTES FROM RATING COMMITTEE
GDP per capita (PPP basis, US$): 9,941 (2022) (also known as Per
Capita Income)
Real GDP growth (% change): 3.5% (2022) (also known as GDP Growth
Inflation Rate (CPI, % change Dec/Dec): 3.1% (2022)
Gen. Gov. Financial Balance/GDP: -5.8% (2022) (also known as
Fiscal Balance)
Current Account Balance/GDP: -0.4% (2022) (also known as External
Balance)
External debt/GDP: 36.2% (2022)
Economic resiliency: b2
Default history: No default events (on bonds or loans) have been
recorded since 1983.
On April 23, 2024, a rating committee was called to discuss the
rating of the Bolivia, Government of. The main points raised during
the discussion were: The issuer's economic fundamentals, including
its economic strength, have not materially changed. The issuer's
institutions and governance strength, have not materially changed.
The issuer's fiscal or financial strength, including its debt
profile, has materially decreased. The issuer's susceptibility to
event risks has not materially changed.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
WHAT COULD LEAD TO A DOWNGRADE
Indications of decreased ability – or willingness – on the part
of the sovereign to meet external debt repayments would lead to a
downgrade. Particularly significant in this respect would be
evidence that the authorities are unable to prevent further
declines in liquid foreign-exchange reserves. Domestic political
risks that increase policy uncertainty and undermine the
government's ability to adopt measures that reduce external and
fiscal imbalances would exert additional pressures on Bolivia's
credit profile.
WHAT COULD LEAD TO AN UPGRADE
Moody's could upgrade Bolivia's ratings if policymakers are able to
implement policy measures that foster a sustained increase in
liquid foreign-exchange reserves and prove effective in
substantially reducing external and fiscal imbalances. Over time,
implementation of structural reforms that reduce Bolivia's
dependence on the hydrocarbon sector, diversify the economy, and
improve medium-term growth prospects would provide additional
support to Bolivia's credit profile.
The principal methodology used in these ratings was Sovereigns
published in November 2022.
===========
B R A Z I L
===========
AMERICANAS SA: Faria Aims For 'Equally Distributed' Pain
--------------------------------------------------------
Bloomberg News reports that in a conference room of the run-down
headquarters of Brazilian retailer Americanas SA, Camille Loyo
Faria agrees that the office has seen better days.
It's "ugly, as a company in judicial recovery should be," the chief
financial officer says, according to the report.
The 50-year-old started at the Rio de Janeiro-based company on Feb.
1, 2023, in the wake of its bankruptcy protection measure and
accounting fraud that eventually reached 25 billion reais ($4.8
billion) -- one of the biggest-ever in Brazil, the report notes.
It's just the latest company that Faria has helped pull out of
distress, the report relays. "It's like scorched earth," she said
of restructuring processes, in a rare interview. "I'm eerily calm
in moments of heightened stress, and that allows me to disconnect
and think with a cool head. That helps to have the courage to take
risks," she added.
The former investment banker -- with stints at Morgan Stanley,
Banco Bradesco SA and Bank of America Merrill Lynch -- has now been
involved with two of Brazil's largest restructurings, the other
being at telecom operator Oi SA, the report notes. She has
established herself as a skilled negotiator to close difficult
deals. Or as she puts it, she knows how to "equally distribute the
pain," the report adds.
About Americanas SA
Americanas was one of the largest diversified retail chains in
Brazil, with a wide platform of physical stores, robust e-commerce,
fintech, and has just entered into the niche food retail. It is
listed on B3, being indirectly controlled by billionaire Jorge
Paulo Lemann, Carlos Alberto Sicupira and Marcel Telles.
The retailer nosedived in January 2023 after becoming mired in an
accounting scandal. The firm filed for bankruptcy at a court in
Rio de Janeiro on Jan. 19, 2023.
Americanas sought protection under Chapter 15 of the 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: Inflation Slows Again, Central Bank Still Worried
---------------------------------------------------------
Bloomberg News reports that Brazil's inflation cooled more than
expected in early April, but fell short of soothing policymakers'
fears about lingering price pressures on Latin America's largest
economy.
Official data released showed prices increased 0.21% in the first
two weeks of April from a month earlier, less than all estimates in
a Bloomberg survey, whose median forecast was 0.29%.
Annual inflation came in at 3.77%. Swap rates on the contracts due
in January 2026, which indicate market sentiment about monetary
policy at the end of next year, sank 12 basis points in morning
trading following the price data release, according to the report.
Policymakers have been lowering borrowing costs and plan to cut the
key rate by another half-point next month. Their subsequent moves
are less clear, the report notes. Inflation has come down
significantly since its double-digit peak in 2022, but pressures
stemming from tensions in the Middle East and surprisingly strong
domestic growth drivers, including hiring, have caused concern that
price increases could pick up again, the report adds.
About Brazil
Brazil is the fifth largest country in the world and third largest
in the Americas. Luiz Inacio Lula da Silva won the 2022 Brazilian
general election. He was sworn in on January 1, 2023, as the 39th
president of Brazil, succeeding Jair Bolsonaro.
S&P Global Ratings raised on Dec. 19, 2023, its long-term global
scale ratings on Brazil to 'BB' from 'BB-'. The outlook on the
long-term ratings is stable. S&P affirmed Brazil's global scale
short-term ratings at 'B' and its national scale long-term rating
at 'brAAA'. S&P also raised the transfer and convertibility
assessment on the country to 'BBB-' from 'BB+'. S&P said, "The
stable outlook reflects our expectation that Brazil will maintain
a
strong external position, thanks to strong commodity output and
limited external financing needs. We also believe Brazil's
institutional framework can sustain stable and pragmatic
policymaking based on extensive checks and balances across the
executive, legislative, and judicial branches of government. We
expect a very gradual fiscal correction but anticipate fiscal
deficits will remain large."
Fitch Ratings affirmed on Dec. 15, 2023, Brazil's Long-Term
Foreign-Currency Issuer Default Rating (IDR) at 'BB' with a Stable
Outlook. Fitch said Brazil's ratings are supported by its large and
diverse economy, high per-capita income, and deep domestic markets
and a large cash cushion that support the sovereign's financing
flexibility and its high local-currency debt share. Strong external
finances support resilience to shocks, underpinned by a flexible
exchange rate, robust international reserves and a sovereign net
external creditor position. The ratings are constrained by weak
economic growth potential, relatively low governance scores, high
and rising government debt/GDP, and budgetary rigidities. A new
fiscal framework introduced this year aims to anchor a gradual
consolidation process and address these fiscal weaknesses, but its
effectiveness is increasingly unclear.
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).
GOL LINHAS: Hogan Lovells Updates List of Secured Noteholders
-------------------------------------------------------------
In the Chapter 11 cases of GOL Linhas Aereas Inteligentes S.A., et
al., the Gol 2026 Senior Secured Notes Ad Hoc Group filed a second
verified statement pursuant to Rule 2019 of the Federal Rules of
Bankruptcy Procedure.
The Ad Hoc Group consists of holders of the 8.00% senior secured
notes due 2026 issued by Gol Finance (Luxembourg).
The Gol 2026 Senior Secured Notes Ad Hoc Group submits this Second
Verified Statement to update the holdings of disclosable economic
interest held by its members.
Hogan Lovells does not undertake to represent the interests of any
creditor, party in interest, or other entity other than the Gol
2026 Senior Secured Notes Ad Hoc Group. Neither the Gol 2026 Senior
Secured Notes Ad Hoc Group nor any member of the Gol 2026 Senior
Secured Notes Ad Hoc Group represents or purports to represent
any other member, or other person, in connection with the Debtors'
chapter 11 cases.
In addition, each member of the Gol 2026 Senior Secured Notes Ad
Hoc Group (a) does not assume any fiduciary or other duties to any
other member of the Gol 2026 Senior Secured Notes Ad Hoc Group or
any other person and (b) does not purport to act or speak on
behalf of any other member of the Gol 2026 Senior Secured Notes
Ad Hoc Group or any other person in connection with these
chapter 11 cases.
The names and addresses of each of the members of Gol 2026 Senior
Secured Notes Ad Hoc Group, together with the nature and amount of
the disclosable economic interests held by each of them in relation
to the Debtors as of April 18, 2024, are as follows:
1. Global Investment Opportunities ICAV
Arkaim Advisors Ltd
35 Shelbourne Rd, Ballsbridge,
Dublin, D04 A4E0, Ireland
* $5,500,000.00 of the 8.00% Senior Secured Notes due
2026 issued by Gol Finance (Luxembourg) (the "Gol 2026
SSNs")
2. Seamrog Distressed Credit and Special Situations Sub-
Fund
FPP Asset Management,
Berkeley Square House,
Berkeley Square, Mayfair
W1J 6DB, London, United Kingdom
* $6,335,000.00 of the Gol 2026 SSNs
* $2,624,081.00 of the 11.50% Senior Secured Notes due
2028 issued by Abra Global Finance (the "Abra SSNs")
3. ICU Trading Ltd
ICU Trading Ltd
Petoussis Building, 18
Evagora Papachristoforou,
Office 101B, 3030, Limassol, Cyprus
* Gol 2026 SSNs ($3,000,000.00)
* Abra SSNs ($2,386,706.00)
4. Plenisfer Investments SGR S.p.A.
The Stable Yard
58-60 Petty France London
SW1H 9EU United Kingdom
* Gol 2026 SSNs ($21,564,000.00)
5. Avenue Capital Management II, L.P.
11 West 42nd Street, 9th
Floor New York, NY 10036
* Gol 2026 SSNs ($10,000,000.00)
6. Contrarian Capital Management, LLC
411 West Putnam Ave, Suite
425, Greenwich, CT 06830
* Gol 2026 SSNs ($10,723,000.00)
7. Shiprock Capital Master Fund LP
C/O Walkers Corporate Limited,
190 Elgin Avenue,
George Town, Cayman,
KY1-9008, KY
* Gol 2026 SSNs ($41,444,000.00)
8. Livello Capital Special Opportunities Master Fund LP
C/O Livello Capital Management LP
104 West 40th Street 19th Floor
NY, NY 10018
* Gol 2026 SSNs ($7,625,000.00)
9. Sandglass Capital Advisors LLC (as Investment Adviser
on behalf of the Sandglass Funds)
1133 Broadway, Suite 1528,
New York, NY 10010
* Gol 2026 SSNs ($16,830,000.00)
* Abra SSNs ($14,577,332.00)
10. IPG Investment Advisors, LLC
501 West Broadway, Suite
1350, San Diego, CA, 92101
* Gol 2026 SSNs ($3,785,000.00)
Counsel to the Gol 2026 Senior Secured Notes Ad Hoc Group:
HOGAN LOVELLS US LLP
John D. Beck, Esq.
Pieter Van Tol, Esq.
Jennifer Y. Lee, Esq.
390 Madison Avenue
New York, New York 10017
Telephone: (212) 918-3000
Facsimile: (212) 918-3100
Email: john.beck@hoganlovells.com
pieter.vantol@hoganlovells.com
jennifer.lee@hoganlovells.com
- and -
David P. Simonds, Esq.
Edward J. McNeilly, Esq.
1999 Avenue of the Stars, Suite 1400
Los Angeles, California 90067
Telephone: (310) 785-4600
Facsimile: (310) 785-4601
Email: david.simonds@hoganlovells.com
edward.mcneilly@hoganlovells.com
About Gol GOLL4.SA
GOL Linhas Aereas Inteligentes S.A. provides scheduled and
non-scheduled air transportation services for passengers and cargo;
and maintenance services for aircraft and components in Brazil and
internationally. The company offers Smiles, a frequent-flyer
program to approximately 20.5 million members, allowing clients to
accumulate and redeem miles. It operates a fleet of 146 Boeing 737
aircraft with 674 daily flights. The company was founded in 2000
and is headquartered in Sao Paulo, Brazil.
GOL Linhas Aereas Inteligentes S.A. and its affiliates and its
subsidiaries voluntarily filed for Chapter 11 protection (Bankr.
S.D.N.Y. Lead Case No. 24-10118) on Jan. 25, 2024.
GOL Linhas estimated $1 billion to $10 billion in assets as of the
bankruptcy filing.
The Debtors tapped Milbank Llp as counsel, Seabury Securities Llc
as restructuring advisor, financial advisor and investment banker,
Alixpartners, LLP, as financial advisor, and HUGHES Hubbard & Reed
LLP as aviation related counsel. Kroll Restructuring
Administration LLC is the claims agent.
===========================
C A Y M A N I S L A N D S
===========================
GLOBAL AIRCRAFT: Moody's Affirms B2 Rating on Sr. Unsecured Notes
-----------------------------------------------------------------
Moody's Ratings has affirmed the B2 long-term rating on the senior
unsecured notes issued by Global Aircraft Leasing Co., Ltd. (GALC),
the entity that holds Bohai Leasing Co., Ltd.'s (Bohai) 70%
shareholder interest in commercial aircraft leasing company Avolon
Holdings Limited (Avolon, Baa3 stable). The outlook has been
changed to negative from stable.
RATINGS RATIONALE
Moody's revised GALC's outlook to negative from stable to reflect
the mounting refinancing risk associated with the approaching
September 2024 maturity of the company's $1.9 billion (as of
December 31, 2023) senior unsecured notes. Refinancing the GALC
notes is made more challenging by higher prevailing interest rates
than on the existing notes. Management has stated its intention to
raise additional capital through public or private debt offerings
and that its directors are assessing options before deciding how to
proceed. Management also represents that in the event that the debt
cannot be refinanced on acceptable terms, there are other options
available including the sale of assets in respect to the overall
consolidated Bohai group. Downside recovery risks to GALC's
creditors are mitigated by the value of GALC's 70% ownership
interest in Avolon, which likely well exceeds the $1.9 billion owed
on the notes. Avolon reported total shareholders' equity of $8.2
billion as of December 31, 2023.
The interest payments on GALC's notes are serviced by cash from
dividends received by GALC from Avolon. As permitted by the note
terms, GALC has paid-in-kind (PIK) the notes' interest on several
payment dates, including the most recent March 15, 2024 payment
date.
Moody's affirmation of the B2 rating assigned to the GALC notes
reflects the financial profile and performance of Avolon, including
its strong liquidity and capital management, its relatively young
commercial aircraft fleet albeit with a higher proportion of
wide-body aircraft compared to Moody's-rated peers, and its
established competitive position as one of the largest aircraft
leasing companies globally. Moody's expects that strong demand for
leased aircraft and continued aviation recovery in Asia, where
Avolon has a greater presence than most peers, will help to propel
Avolon's profitability and cash flow metrics.
The GALC notes' rating reflects GALC's higher governance risks
compared to Avolon, which contributes to GALC having a higher
probability of default on its notes. The notes' rating also
incorporates the structural subordination of GALC's creditors to
Avolon's creditors, which elevates the potential loss severity of
GALC's senior creditors in the event of default.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
A rating upgrade is unlikely given the negative outlook, but GALC's
rating could be upgraded if: 1) Avolon's rating are upgraded due to
an improvement in its intrinsic credit profile; 2) Bohai's
intentions with respect to refinancing or repaying the GALC bond at
maturity become more transparent and certain; or 3) GALC's
governance risks decline.
GALC's rating could be downgraded if: 1) Avolon is downgraded, 2)
Bohai is unable to refinance or repay the GALC bonds; or 3) GALC's
cushion with respect to its bond covenants materially
deteriorates.
The principal methodology used in this rating was Finance Companies
Methodology published in November 2019.
===================================
D O M I N I C A N R E P U B L I C
===================================
BANCO DE RESERVAS: Fitch Affirms BB- LongTerm IDR, Outlook Positive
-------------------------------------------------------------------
Fitch Ratings has affirmed Banco de Reservas de la Republica
Dominicana, Banco de Servicios Multiples' (Banreservas) Local and
Foreign Currency Long-Term Issuer Default Ratings (IDRs) at 'BB-'.
The Rating Outlook is Positive. Fitch has also affirmed the
Banreservas' Viability Rating (VR) at 'b+' and National Ratings and
those of its subsidiaries, Inversiones y Reservas, S.A. (I&R) and
Fiduciaria Reservas, S.A. (Fidureservas) at 'AA+(dom)' and
'F1+(dom)'. The Rating Outlook for the National Ratings is Stable.
KEY RATING DRIVERS
Support Driven: Banreservas' IDRs and National Ratings reflect
Fitch's assessment of the Dominican Republic government's
reasonable ability and propensity to support the bank due to its
systemic importance, policy role and full ownership by the
government.
Government Support Rating: The 'bb-' Government Support Rating
(GSR) reflects Banreservas' systemic importance with assets market
share of 32.3% of the banking system, its policy role by collecting
funds for the government's single treasury account to pay debt
obligations, its role as a provider of public sector loans, and its
100% government ownership. The GSR also reflects moderate
probability of support being forthcoming because of uncertainties
about the ability or propensity of the Dominican Republic due to
its speculative-grade IDR, should it be needed.
Positive Outlook: The IDR's Positive Outlook is aligned with that
of the sovereign, reflecting the trend of improvement in the
country's governance that, in Fitch's opinion, will be accompanied
by further growth prospects of the country. These improvements will
allow the financial system to continue generating consistent
business volumes and will support to maintain double-digit growth
and a healthy financial profile. National ratings are not
impacted.
Strong Franchise: Banreservas's 'b+' VR reflects the strength of
the bank's business profile market by its largest franchise in the
Dominican Republic with a market share by assets of 32.3% of the
banking system at YE 2023. It enjoys a leadership position in the
commercial and consumer segments.
Improved Asset Quality: At YE 2023, the 90-day nonperforming loan
(NPL) ratio remained stable at 0.7% (YE 2022: 0.7%), mainly
reflecting the conservative underwriting standards, the exhaustive
collection practices, particularly in the retail segment,
charge-offs, and loan portfolio growth. The loan loss allowances
coverage of impaired loans is high but reduced to 641.6% at YE
2023, reflecting the use of voluntary provisions created in
previous years. Fitch revised this factor's outlook to positive,
expecting the NPL ratio to remain sound in 2024, reflecting an
improved operating environment (OE) and sound underwriting
standards.
Sound Profitability: The operating profit to risk-weighted assets
(RWA) ratio remained sound at 5.0% at YE 2023 (4.6% at YE 2022),
mainly due to low loan impairment charges and the improvement in
the net interest margin in a high-interest environment. Fitch
revised the profitability's Outlook to Positive, expecting that it
will remain sound and high in 2024, due low cost of credit, and
strong interest and non-interest income.
Adequate Capitalization: The Fitch Core Capital (FCC) to RWA ratio
improved to 16.5% at YE 2023 from 15.5% at YE 2022, reflecting the
high capital internal generation and lower asset growth, both more
than compensated for the higher RWA. The bank's loss-absorbing
capacity benefits from maintaining ample reserve coverage. Fitch
expects Banreservas' capitalization to remain adequate and
commensurate with current ratings, sustained by moderate expected
growth and sound earnings generation.
Sound Liquidity: Liquidity declined in 2023, reflecting high loan
growth, but remains sound. The loan-to-customer deposit ratio
deteriorated to 63.9% at YE 2023 from 56.4% at YE 2022, as customer
deposits grew slower at 6.4% compared to the previous year (YE
2022: 11.5%) and the loan portfolio grew faster. However, this
ratio compares favorably with the banking system average of 82.1%
at YE 2023. Fitch believes that liquidity will remain sound,
benefiting from an ample and stable deposit base.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
IDRs and VR
- Banreservas' IDRs and VR would mirror any downgrade in the
Dominican Republic's sovereign ratings and Country Ceiling;
- Banreservas' IDRs are sensitive to a change in Fitch's perception
of the Dominican sovereign's propensity to support the bank;
- Banreservas' VR could be downgraded if there is a relevant
deterioration in asset quality or profitability, or sustained
pressures on the FCC to RWA ratio to below 9.0%;
GSR
- Banreservas' GSR would be affected if Fitch negatively changes
its assessment of the Dominican government's propensity to provide
timely support to the bank. This could also arise in the event of a
sovereign negative rating action.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
IDRs and VR
- Banreservas' IDRs could be upgraded if there is a similar
sovereign rating action;
- Banreservas' VR could be upgraded by the confluence of
improvements in the OE and/or the financial profile of the bank.
GSR
- Banreservas' GSR could be upgraded if the sovereign rating is
upgraded.
OTHER DEBT AND ISSUER RATINGS: KEY RATING DRIVERS
Banreservas' outstanding subordinated debt includes two domestic
issuances of DOP10 billion and DOP20 billion due in 2024 and 2032,
respectively. Subordinated bonds are basic issues as they do not
have loss absorption capacity features. These issuances are two
notches below the national long-term rating, reflecting the
baseline notching for loss severity of two notches, due to its
subordination nature and no coupon deferral.
OTHER DEBT AND ISSUER RATINGS: RATING SENSITIVITIES
- The subordinated debt rating would be downgraded if Banreservas'
National Long-Term rating is downgraded;
- The subordinated debt rating would be upgraded if Banreservas'
National Long-Term rating is upgraded.
I&R and Fidureservas' national ratings are aligned with those of
Banreservas, their sole shareholder, reflecting Fitch's opinion
about the bank's propensity and capacity to support I&R and
Fidureservas, if needed. In Fitch's view, both entities are key and
integral part of Banreservas' business as they provide trust,
investment and trading services to its core clients. Furthermore, a
clear commercial identification among these entites with
Banreservas, and the reputational risk to which it would be exposed
in the event of an I&R and Fidureservas default results in a high
probability of shareholder support, should it be required.
VR ADJUSTMENTS
Fitch has assigned a Business Profile score of 'bb' that is above
the 'b' category implied score due to the following adjustment
reasons: Market Position (positive).
Fitch has assigned a Funding and Liquidity score of 'bb-' that is
above the 'b' category implied score due to the following
adjustment reasons: Deposit Structure (positive).
PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS
Banreservas' ratings are driven by the Dominican Republic sovereign
rating. Inversiones y Reservas and Fidureservas' ratings are driven
by Banreservas' ratings.
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 Prior
----------- ------ -----
Fiduciaria
Reservas, S. A. Natl LT AA+(dom)Affirmed AA+(dom)
Natl ST F1+(dom)Affirmed F1+(dom)
Banco de
Reservas de la
Republica
Dominicana,
Banco de
Servicios
Multiples
(BANRESERVAS) LT IDR BB- Affirmed BB-
ST IDR B Affirmed B
LC LT IDR BB- Affirmed BB-
LC ST IDR B Affirmed B
Natl LT AA+(dom)Affirmed AA+(dom)
Natl ST F1+(dom)Affirmed F1+(dom)
Viability b+ Affirmed b+
Government Support bb- Affirmed bb-
Subordinated Natl LT AA-(dom)Affirmed AA-(dom)
Inversiones y
Reservas, S.A. Natl LT AA+(dom)Affirmed AA+(dom)
Natl ST F1+(dom)Affirmed F1+(dom)
BANCO MULTIPLE: Fitch Affirms 'BB-' LongTerm IDR, Outlook Positive
------------------------------------------------------------------
Fitch Ratings has affirmed Banco Multiple BHD S.A.'s (BHD)
Long-Term Local and Foreign Currency Issuer Default Ratings (IDRs)
at 'BB-'. The Rating Outlooks on the IDRs are Positive. Fitch has
also affirmed BHD's Viability Rating (VR) at 'bb-' and Long-term
National Ratings at 'AA+(dom)'. The Rating Outlook on the Long-term
National Rating is Stable. Fitch also affirmed the Long-term
National Rating for BHD's related entity, BHD Puesto de Bolsa,
S.A.'s (BHDPB), at 'AA+(dom)'. BHDPB's Outlook is Stable.
KEY RATING DRIVERS
Positive Outlook: BHD's VR drives its Long-Term IDRs and National
Ratings. The Positive Outlook for the IDRs is aligned with that of
the sovereign, which reflects improvement in the country's
governance that Fitch expects will bring additional growth
prospects. These improvements could ultimately result in an
operating environment (OE) assessment of 'bb-', allowing the banks
to continue generating consistent business volumes and supporting
the financial system in maintaining double-digit growth and a
healthy financial profile. The National Ratings are not affected by
the Positive Outlook on the IDR.
Operating Environment: BHD's ratings consider Fitch's assessment of
the OE and its implications on financial entities performance.
Fitch considers that the OE conditions are favorable for the
financial system to maintain an adequate performance, characterized
by stable interest margins and good levels of credit growth.
Strong Franchise and Diversified Business Model: BHD is the third
largest bank in the Dominican Republic, with a market share of
16.0% by assets as of YE23. BHD's loan portfolio is fairly
diversified, with commercial loans accounting for 59.7% of total
loans, 29.2% consumer and 11.1% mortgages. Its business model has
been stable through time; BHD has a long track record of earnings
stability, which has proven to be resilient amid economic cycles.
Stable Asset Quality Amid Growth: BHD has consistently maintained
adequate and relatively stable asset quality metrics. As of YE23,
its 90-day NPL ratio stood at 1.6% (YE22: 1.3%) due to the
deterioration of the consumer and SME segments. This deterioration
was partially diluted by the BHD's double-digit loan portfolio
growth, but Fitch believes the change is immaterial and that the
NPL ratio is still appropriate for the bank's business model. Fitch
anticipates that the bank's asset quality will remain stable over
the medium term, driven by growth prospects and robust risk
management practices.
Improvements in Profitability Metrics: In 2023, BHD's profitability
improved due to an increase in interest income from loans,
attributed to a double-digit growth of its loan portfolio.
Additionally, the bank kept funding costs under control, which
allowed net interest margin to remain stable. Profitability also
has benefited from moderate impairment charges and operational
expenses. As of YE23 the bank's operational profit-to-risk-weighted
assets (RWA) ratio increased to 3.7% from 2.9% in 2022. Fitch
anticipates that BHD's profitability metrics will remain stable,
underpinned by a robust interest margin and continued control over
impairment charges.
Adequate Capitalization: BHD's capitalization ratios have remained
stable, reflecting adequate internal capital generation. As of
YE23, the Fitch Core Capital (FCC) ratio stood at 13.4%, lower than
the 14.5% recorded in the previous year, resulting from increased
RWA driven by the bank's double-digit loan growth. Despite this,
BHD's capitalization metrics remain commensurate with its business
model, risk profile, and current ratings. The bank's loss-absorbing
capacity benefits from adequate reserve coverage, which has proven
to be a good cushion during times of crisis.
Robust Funding and Liquidity Position: BHD's funding structure and
liquidity position remain sound, with adequate ability to meet its
short-term obligations and sustain its operations, which is
reflected by a solid loans-to-deposit ratio of 84.1% at YE23
(four-year avg.: 77.4%). In addition, BHD maintains access to local
capital debt markets and wholesale funding. Liquidity remains
commensurate with the bank's current ratings, and Fitch does not
anticipate any changes to the bank's funding liquidity structure.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Negative changes to BHD's IDRs and VR would mirror any movement
in the Dominican Republic's sovereign ratings and Country Ceiling.
- Downgrades to BHD's VR could result from significant pressure on
the bank's financial profile, such as significant asset quality or
profitability deterioration combined with an FCC-to-RWA ratio
consistently below 10%.
- A downgrade to BHD's Government Support Rating (GSR) could occur
if the sovereign's ability to support the bank weakens, as
reflected in a sovereign downgrade, or if the sovereign's
propensity to support the bank becomes less likely.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- The VR could be upgraded by the confluence of improvement in the
OE and the bank's financial profile.
- An upgrade to BHD's GSR is possible in the event of a sovereign
upgrade if it coincides with strengthening of the sovereign's
ability and propensity to support the bank.
OTHER DEBT AND ISSUER RATINGS: KEY RATING DRIVERS
Subordinated Debt: BHD's outstanding domestic subordinated debts
include two domestic issuances, one for up to DOP10 billion due
2030 and another one of up to DOP10 billion due 2028. Subordinated
bonds are basic issues as they do not have loss absorption capacity
features. The bank's subordinated debt rating is two notches below
its National Long-Term rating, 'AA+(dom)', reflecting the baseline
notching for loss severity of two notches, due to its subordination
nature and no coupon deferral.
OTHER DEBT AND ISSUER RATINGS: RATING SENSITIVITIES
- BHD's subordinated debt rating is sensitive to any downgrade of
the bank's IDR and National Long-Term Rating.
- BHD's subordinated debt rating is sensitive to any upgrade of the
bank's IDR and National Long-Term Rating. Consequently, there is
limited upside potential.
SUBSIDIARIES & AFFILIATES: KEY RATING DRIVERS
National Ratings: The ratings of BHD Puesto de Bolsa, S.A. (BHDPB),
a related entity of BHD, reflect Fitch's opinion of the propensity
and ability of its sole shareholder, Centro Financiero BHD (CFBHD),
to support its subsidiary, if needed. In Fitch's view, CFBHD's
creditworthiness is highly linked to that of BHD. BHDPB is a key
and integral part of CFBHD's diversified financial business model
as it provides specific financial products. Moreover, a clear
branding identification between this entity with BHD and CFBHD, and
the reputational risk to which they would be exposed in the event
of potential financial difficulties at BHDPB, ultimately result in
a high probability of direct or indirect support from BHD and CFBHD
should it be required.
SUBSIDIARIES AND AFFILIATES: RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- BHDPB's ratings are sensitive to a negative change in BHD's
ratings or a change in the ability or propensity of CFBHD to
provide support.
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- There is limited upside potential for BHDPB's national ratings.
VR ADJUSTMENTS
Fitch has assigned a Business Profile score of 'bb'; this is above
the 'b' category implied score due to the following adjustment
reason: Business Model (positive).
Fitch has assigned a Funding and Liquidity score of 'bb-'; this is
above the 'b' category implied score due to the following
adjustment reason: Deposit Structure (positive).
PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS
BHDPB's ratings are driven by BHD's ratings.
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 Prior
----------- ------ -----
BHD Puesto de
Bolsa, S.A. Natl LT AA+(dom)Affirmed AA+(dom)
Natl ST F1+(dom)Affirmed F1+(dom)
Banco Multiple
BHD, S.A. LT IDR BB- Affirmed BB-
ST IDR B Affirmed B
LC LT IDR BB- Affirmed BB-
LC ST IDR B Affirmed B
Natl LT AA+(dom)Affirmed AA+(dom)
Natl ST F1+(dom)Affirmed F1+(dom)
Viability bb- Affirmed bb-
Government Support b+ Affirmed b+
Subordinated Natl LT AA-(dom)Affirmed AA-(dom)
[*] DOMINICAN REPUBLIC: Growth Estimate Rises
---------------------------------------------
Dominican Today reports that new estimate reveals that the economy
has become more vigorous and forces the Central Bank to be cautious
about touching interest rates.
In its most recent report, the International Monetary Fund (IMF)
estimates that the Dominican Republic's economy will grow 5.4% in
2024 (it had projected 5.2% in October 2023), according to
Dominican Today. That growth brings it down to 5.0 percent in both
2025 and 2029, the report notes.
The new estimate is revealing that the Dominican economy has become
more vigorous and forces the Central Bank to be cautious in
touching interest rates, even more so if one takes into account the
surprising growth of the U.S. economy and an upward movement of
prices in the U.S. market, the report relays.
Given the behavior of prices and GDP in the United States, some
analysts have even raised the possibility that the Federal Reserve
will raise interest rates, contrary to the desire to start the
cycle with a decrease in the cost of money, the report notes.
The estimated growth for the Dominican Republic is one of the
highest among Latin American countries, 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.
=============
E C U A D O R
=============
ECUADOR: IMF Reaches New 48-Month Extended Fund Facility Deal
-------------------------------------------------------------
IMF staff and the Ecuadorian authorities have reached a staff-level
agreement on a set of policies to underpin a 48-month arrangement
under the EFF in the amount of SDR 3 billion (about US$4 billion
and 430 percent of quota). This arrangement, which is subject to
IMF Management and Executive Board approval, would provide support
for Ecuador's economic policies over the next four years.
Mr. Varapat Chensavasdijai, the IMF's mission chief for Ecuador,
issued the following statement at the conclusion of discussions
with the authorities:
"I am pleased to announce that IMF staff and the Ecuadorian
authorities have reached an agreement in support of Ecuador's
economic policy plan. Amid a challenging macroeconomic outlook, our
objective has been and remains to support the authorities' efforts
to improve the living standards of all Ecuadorians, with a focus on
protecting the most vulnerable and promoting sustainable growth.
"The IMF staff welcomes the reform efforts taken by the authorities
to help strengthen fiscal sustainability, safeguard macroeconomic
stability, and foster a stronger and more inclusive economy. The
authorities have put together a robust plan and have started to
take important policy steps to address the liquidity and fiscal
situation."
"The staff team would like to thank the authorities for the
productive collaboration and constructive and candid policy
dialogue."
=============
J A M A I C A
=============
[*] JAMAICA: BOJ Processed 212 Applications for Money Service Firms
-------------------------------------------------------------------
RJR News reports that the Bank of Jamaica says in 2023, some 212
applications were processed for money service businesses.
The central bank says 166 new applications were received, from
seven remittance entities and six cambios, according to RJR News.
Forty-six applications were carried over from the previous year,
the report notes.
The BOJ says the processing of 27 applications was discontinued due
to the failure of the applicants to satisfy the Bank's eligibility
requirements, the report relays.
Thirty applications were withdrawn by the applicants, the report
says.
Of the remaining 155 applications which met the criteria for
processing, 140 were approved, while 15 were being processed as at
the end of December 2023, 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: JDIC Seeks to Protect Against Financial Crises
-----------------------------------------------------------
RJR News reports that the Jamaica Deposit Insurance Corporation
(JDIC) says it will be looking to establish newer protection
schemes to minimise the potential occurrence and impact of
financial crises.
The public body during the fiscal year 2024/25 will also be looking
to implement protection schemes for non-deposit-taking financial
institutions, financial consumer protection, and financial
inclusion strategies, according to RJR News.
The JDIC is also exploring targeted engagements to minimize the
occurrence and impact of financial crises, including liquidity,
capital adequacy, crises management, and effective resolution
frameworks for financial institutions, 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
=====================
BOWLING CENTER: Taps Luis R. Carrasquillo as Financial Consultant
-----------------------------------------------------------------
Bowling Center, Inc. seeks approval from the U.S. Bankruptcy Court
for the District of Puerto Rico to employ CPA Luis R. Carrasquillo
& Co., PSC as its financial consultant.
The firm will render these services:
(a) provide advice in strategic planning and the preparation
of the Debtor's plan of reorganization and business plan;
(b) participate in negotiations with the Debtor's creditors;
and
(c) assist the Debtor's counsel in investigating its pre- and
post-petition financial transactions and disbursements and
undertake the corresponding actions.
The hourly rates of the firm's professionals are as follows:
Luis R. Carrasquillo $200
Marcelo Gutierrez $160
Ramon Villafane $160
Zoraida Delgado Diaz $110
Arnaldo Morales $100
Maria Vera $75
David Sanchez Diaz $85
Jean Aponte $65
Enid Olmeda $75
Luis R. Guzman $40
Rosalie Hernandez Burgos $40
Kelsie M. Lopez, Esq. $50
The Debtor has agreed to give the firm an advance retainer of
$10,000.
Luis Carrasquillo Ruiz, CPA, a partner at CPA Luis R. Carrasquillo
& Co., disclosed in a court filing that the firm is a
"disinterested person" as the term is defined in Section 101(14) of
the Bankruptcy Code.
The firm can be reached through:
Luis R. Carrasquillo Ruiz, CPA
CPA Luis R. Carrasquillo & Co., PSC
28th Street, TI-26,
Turabo Gardens Avenue, Caguas PR 00725
Telephone: (787) 746-4555
Facsimile: (787) 746-4564
Email: luis@cpacarrasquillo.com
About Bowling Center
Bowling Center, Inc. in Carolina, PR, filed its voluntary petition
for Chapter 11 protection (Bankr. D.P.R. Case No. 24-00215) on
January 25, 2024, listing $3,592,343 in assets and $2,581,376 in
liabilities. Roger Acosta Hernandez, president, signed the
petition.
The Debtor tapped Charles A. Cuprill, PSC Law Offices as legal
counsel and CPA Luis R. Carrasquillo & Co., PSC as financial
consultant.
*********
S U B S C R I P T I O N I N F O R M A T I O N
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Chapman, Editors.
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