Category: Corporate & Sovereign Strategy

Canadian clothing manufacturer Gildan has announced that as part of the restructuring of its textile operations, it will be consolidating all its vertically-integrated manufacturing of T-shirts, fleece, underwear and sports shirts into its offshore hubs in Central America and the Caribbean, and will expand capacity in those plants. The consolidation of operations will include the closure of two sewing plants in Mexico, among others, affecting around 1,300 employees, said Gildan in a press release.

TMT Motoco, the Brazil subsidiary of Michigan-based Tecumseh, filed for an in-court restructuring last week after its attempt to impose financial restructuring terms on two of its lenders was denied. The company, which has suspended operations, had already announced it had entered into an out-of-court restructuring with most of its other lenders. São Paulo-based Galeazzi Associados is advising TMT Motoco on the restructuring.

Belize’s new 2029 bonds, issued as part of its debt restructuring program, which closed February 20, have been assigned an ‘A’ rating by Fitch. Belize Sovereign Investments III Limited Notes (BSI III) issued approximately $86 million in two tranches of pari passu debt via a Cayman Island special purpose vehicle (SPV). Repayment of the notes is backed by two restructured government of Belize sovereign obligations as well as two insurance policies underwritten by Steadfast Insurance Company. Each obligation has its respective insurance policy which directly covers any non-payment by the government.

Mexican conglomerate Desc, one of the country’s largest, is to change its name as part of its corporate restructuring process, the company announced on Tuesday. Following the spin-off of its property business into a new entity called Dine, the remaining industrial and commercial business groupings will be known as Grupo KUO. Dine will be led by Andrés Baños Samblancat, while Juan Marco Gutiérrez Wanlass will become chief executive of KUO.

Belize successfully closed its debt restructuring, renegotiating over 98% of its debt with bondholders, the government announced. The debt swap, which closed February 20, earned Belize an overseas credit rating upgrade from Standard & Poor’s on Wednesday to ‘B’ from ‘SD’. S&P also raised Belize’s long-term local currency rating to ‘B’ from ‘CCC+’ and its short-term local currency sovereign rating to ‘B’ from ‘C’. At the end of last year, the authorities in Belize offered to swap outstanding commercial foreign debt – totaling around $497 million – for new dollar bonds maturing in 2029. The new bonds, which start to pay principal in 2019, will bear interest in the first three years after issuance at a fixed per annum rate of 4.25%. In years four to five, the rate will step up to 6.00%, and thereafter through the maturity of the bonds the interest rate will level off at 8.50% per annum. All coupons are to be paid in cash on their respective due dates.

Fitch has affirmed the foreign-currency issuer default ratings (IDRs) on Ecuador’s Banco del Pichincha’s as B- (minus) for long-term and B for the short-term. The rating outlook is negative. The affirmations reflect the Bank’s “strong franchise in Ecuador, its broad deposit base, its adequate liquidity and its improving financial performance,” according to Fitch. Pichincha’s ratings are above Ecuador’s sovereign ratings (long-term IDR CCC on a negative watch) because of its small exposure to government debt and its sound liquidity backed by high-quality assets. Concerns over tight capital, as well as the prevailing uncertainty in its operating environment, restrain Pichincha’s ratings, said the agency.

Belize’s debt restructuring launched at the end of last year and due to close on February 20 has earned the sovereign a ratings upgrade from Moody’s Investors Service. Moody’s announced Tuesday it had raised the country’s credit rating two notches to Caa1 from Caa3. It said the upgrade reflected the “improved liquidity following the restructuring of the government’s external commercial obligations, alleviating concerns about cash-flow over the next few years.” Moody’s also upgraded the Caa1 country ceiling for bonds to B2 and the Caa3 foreign currency country deposit ceiling to Caa1. The outlook on the ratings is stable.