TCRLA_Public/131226.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

           Thursday, December 26, 2013, Vol. 14, No. 254



* PETROBRAS ARGENTINA: S&P Cuts Foreign Currency Rating to 'CCC+'


JBS SA: CVM Grants Registration of Tender Offer of Vigor Shares
RODOPA INDUSTRIA: S&P Withdraws 'CCC' Corporate Credit Rating

C A Y M A N  I S L A N D S

ANDESCORP INVESTMENTS: Members Receive Wind-Up Report
ARSENAL INVESTMENTS: Members Receive Wind-Up Report
CF FUND: Sole Member Receives Wind-Up Report
FONDELEC E.E.E.G.P.: Members Receive Wind-Up Report
GALENA INSURANCE: Shareholder Receives Wind-Up Report

JUNTOS BALANCE: Shareholders Receive Wind-Up Report
LADY LUCK: Members Receive Wind-Up Report
LDEP-NT: Shareholders Receive Wind-Up Report
LHFP-NT: Shareholders Receive Wind-Up Report
LIEP-NT: Shareholders Receive Wind-Up Report

ON WINGS: Members Receive Wind-Up Report
TV RECOVERY: Shareholders Receive Wind-Up Report
WM INVESTMENTS: Members Receive Wind-Up Report

E L  S A L V A D O R

EL SALVADOR: S&P Affirms 'BB-/B' Sovereign Credit Ratings


* HONDURAS: To Join Electricity Market With $22.9MM IDB Financing


JAMAICA: Bad Debts in Commercial Banks Rise to Over J$20 Billion




PARAGUAY: IMF Article IV Staff Mission Gives Concluding Statement

T R I N I D A D  &  T O B A G O

CL FIN'L: St Lucia Seeks to Comfort CLICO Policy Holders

                            - - - - -


* PETROBRAS ARGENTINA: S&P Cuts Foreign Currency Rating to 'CCC+'
Standard & Poor's Ratings Services lowered the local currency
ratings to 'CCC+' from 'B-' and affirmed its 'CCC+' foreign
currency ratings on the following Argentine entities:

   -- CLISA-Compania Latinoamericana de Infraestructura y
      Servicios S.A.;

   -- Raghsa S.A.;

   -- Aeropuertos Argentina 2000 S.A. (AA2000);

   -- Hidroelectrica Piedra del Aguila S.A. (HPDA); and

   -- Transportadora de Gas del Sur S.A. (TGS).

In addition, S&P affirmed its 'B-' local currency and 'CCC+'
foreign currency ratings on the following entities:

   -- Alto Palermo S.A.;

   -- IRSA Inversiones y Representaciones S.A.; and

   -- Capex S.A.

S&P removed the local currency ratings on all these entities from
CreditWatch negative, where it placed them on Sept. 13, 2013.  The
outlook is now negative.

In addition, S&P lowered both its local and foreign currency
ratings on Industrias Metalurgicas Pescarmona S.A. (IMPSA) to
'CCC+' from 'B-'.  At the same time, S&P lowered its foreign
currency rating on its wholly-owned subsidiary, WPE International
Cooperatief U.A. (WPEIC), to 'CCC+' from 'B-' and assigned a
'CCC+' local currency rating.  S&P also removed these ratings from
CreditWatch negative, where it placed them on Sept. 13, 2013.  The
outlook is now negative.

S&P also lowered its local currency rating to 'B-' from 'B' and
foreign currency rating to 'CCC+' from 'B-' on Alto Parana S.A.
At the same time, S&P removed these ratings from CreditWatch
negative, where it placed them on Sept. 13, 2013.  The outlook is
now negative.

In addition, S&P lowered its foreign currency rating on Petrobras
Argentina S.A. to 'CCC+' from 'B-' and removed it from CreditWatch
negative, where S&P placed it on Sept. 13, 2013.  The outlook is
now negative.

Finally, S&P affirmed its senior unsecured 'BBB-' rating on Alto
Parana and 'BBB' rating on Petrobras Argentina's guaranteed notes,
reflecting the rating of the guarantors (their respective

The downgrade of CLISA, Raghsa, AA2000, HDP, and TGS reflects
S&P's belief that these entities won't be able to generate enough
local currency resources to honor all of their financial
obligations under a sovereign default scenario.  Therefore, S&P is
now aligning its local currency ratings on these entities to their
respective foreign currency ratings and to the sovereign rating
and Transfer & Convertibility Assessment (T&C) on Argentina.

The local ratings affirmation on Alto Palermo, IRSA, and Capex
reflects S&P's opinion that these entities have certain mitigating
factors (in particular, existing liquidity sources including cash
in hand and liquid assets in foreign currency) that would allow
them to meet their financial obligations, at least for some
additional time, while withstanding the above mentioned
macroeconomic conditions under a sovereign default scenario.  As a
result, the local currency ratings on these three entities remain
one notch above their foreign currency ratings, which are still
capped by S&P's T&C assessment on Argentina.

The downgrade of IMPSA and WPEIC reflects the group's ongoing
financial performance deterioration including weaker credit
metrics, weak liquidity, and increased refinancing risk.

The foreign currency downgrade of Alto Parana and Petrobras
Argentina reflects S&P's opinion that these entities won't be able
to continue honoring their existing or potential foreign currency
nonguaranteed obligations under a scenario of restrictions to
access foreign currency and/or restrictions on transferring money
abroad.  As a result, S&P's foreign currency ratings on these
entities are now the same as its T&C risk assessment for
zrgentina.  S&P views Alto Parana as a "moderately strategic"
subsidiary for Celulosa Arauco y Constituci˘n and Petrobras
Argentina as a "nonstrategic" subsidiary for Petroleos Brasileiros
S.A.  According to S&P's criteria, its assessment of their group
status doesn't merit a higher rating than the sovereign rating and
T&C assessment.  The ratings on both companies' guaranteed notes
remain unchanged, reflecting the rating of their guarantors
(parent companies).

The local currency downgrade of Alto Parana reflects S&P's opinion
that the company's very low debt level, which the parent doesn't
guarantee, would allow it to withstand, at least for some
additional time, a sovereign default scenario by generating enough
local currency to cover its financial obligations.

The outlook on all the entities is now negative, reflecting that
of the sovereign.  It also reflects S&P's views that credit
quality for the Argentine corporate sector may continue to
deteriorate based on a weaker operating environment (including
high inflation and gradual devaluation of Argentine peso), a
challenging refinancing scenario, and increased regulatory risk.


JBS SA: CVM Grants Registration of Tender Offer of Vigor Shares
The Brazilian Securities and Exchange Commission (CVM) granted the
registration of the public tender offer for the acquisition by FB
Participacoes S.A., controlling shareholder of Vigor Alimentos
S.A. and JBS S.A., of common shares issued by Vigor in exchange
for common shares issued by JBS, in accordance with CVM Ruling No.
361, dated as of March 5, 2002, as amended as a result of the
approval of the applicable registration exemptions related to the
Tender Offer by the CVM's Board of Commissioners at the meeting
held on December 17, 2013.

In view of the above, the Tender Offer notice ("Offer Notice")
will be published within the term established by CVM Ruling 361,
and will set forth all of the terms and conditions of the Tender

Vigor recommends its shareholders to read the Offer Notice and
JBS' Reference Form for the analysis of the Tender Offer.
Such documents are available at CVM's and the Sao Paulo Stock
Exchange - BM&FBOVESPA's websites.

Vigor and JBS will keep their shareholders and the market informed
on the results of the Tender

Headquartered in Sao Paulo, Brazil, JBS S.A. is the world's
largest protein producer in terms of revenues, slaughter capacity
and production. It is the leader beef, chicken and leather player
and a leading lamb producer on a global basis, besides being the
third largest pork producer in the USA. The company has large
scale and diversification, with presence in more than 100

                           *     *     *

As reported in the Troubled Company Reporter-Latin America on
Oct. 24, 2013, Fitch Ratings affirmed the foreign and local
currency Issuer Default Ratings (IDRs) of JBS S.A. (JBS) at 'BB-'
as well as its 'A-(bra)' national scale rating.  Fitch has also
affirmed at 'BB-' rating on the notes due in 2016 issued by JBS
and the 'A-(bra)' rating of its debentures due in 2015.

RODOPA INDUSTRIA: S&P Withdraws 'CCC' Corporate Credit Rating
Standard & Poor's Ratings Services lowered its global scale
corporate credit and debt ratings on Rodopa Industria e Comercio
de Alimentos Ltda to 'CCC' from 'B'.  In addition, S&P lowered its
national scale corporate credit rating on the company to 'brCCC'
from 'brBB+'.  The outlook on the corporate credit ratings is
negative.  S&P then withdrew all the ratings at the issuer's

The downgrade reflects the company's decision to cease operations
and lease all of its operating units to JBS (BB/Stable/--).  This
transaction is still subject to Brazilian antitrust approval.  S&P
expects Rodopa to pay down its short- to medium-term obligations
with its current cash position of about R$86 million as of
June 30, 2013, and with the release of its working capital,
including its inventories, accrued taxes, and accounts receivable.
S&P believes the company's current assets are enough to cover all
of its short- to medium-term liabilities, such as short-term debt
and accounts payable.  However, the negative outlook reflected the
uncertainties regarding Rodopa's ability to meet the interest and
principal under its $100 million privately placed unsecured notes
(which correspond to almost all its noncurrent liabilities), given
the operating challenges to convert its other noncurrent assets
(such as plants, fields, and buildings) into liquid cash.
According to the latest information, S&P can't envision a clear
default scenario in the short term.

Rodopa's initial plan was to almost double its slaughtering
capacity within three years to strengthen its competitive position
in a commodity market and enhance its efficiency.  However,
according to management, the company found it difficult to
compete, expand, and issue new debt at attractive rates, and
decided to exit the business and lease its plants.

S&P now sees the company's liquidity as "weak" given that Rodopa
will discontinue its operations.  S&P expects Rodopa to use its
cash position, positive working capital, and low funds from
operations generation to liquidate its short- to medium-term
liabilities.  Rodopa could liquidate its long-term liabilities--
which total about R$260 million and mainly consist of the
privately placed unsecured notes--with the remaining cash and its
noncurrent assets, which are evaluated in more than R$280 million.

The negative outlook reflected S&P's expectations of operating
challenges until 2017, when Rodopa is expected to liquidate its
$100 million privately placed notes, considering the risks to
convert its assets into liquid cash to pay down its liabilities.
It also have reflected S&P's concerns regarding company's ability
to renegotiate covenants to prevent a debt acceleration trigger on
the bond during the period of the asset transfer.

C A Y M A N  I S L A N D S

ANDESCORP INVESTMENTS: Members Receive Wind-Up Report
The members of Andescorp Investments Limited received on Dec. 10,
2013, the liquidator's report on the company's wind-up proceedings
and property disposal.

The company's liquidator is:

          Buchanan Limited
          P.O. Box 1170, George Town
          Grand Cayman
          Cayman Islands

ARSENAL INVESTMENTS: Members Receive Wind-Up Report
The members of Arsenal Investments Limited received on Dec. 16,
2013, the liquidator's report on the company's wind-up proceedings
and property disposal.

The company's liquidator is:

          CDL Company Ltd.
          P.O. Box 31106 Grand Cayman KY1-1205
          Cayman Islands

CF FUND: Sole Member Receives Wind-Up Report
The sole member of CF Fund Holdings Ltd. received on Dec. 19,
2013, the liquidator's report on the company's wind-up proceedings
and property disposal.

The company's liquidator is:

          Lee Shick
          20 Cecil Street
          #21-02 Equity Place 049705

FONDELEC E.E.E.G.P.: Members Receive Wind-Up Report
The members of Fondelec E.E.E.G.P. Corp. received on Dec. 17,
2013, the liquidator's report on the company's wind-up proceedings
and property disposal.

The company's liquidator is:

          Csaba Soos
          c/o Colin Berryman
          Telephone: +1 (345) 949 8599
          Facsimile: +1 (345) 949 4451
          Harbour Place, 4th Floor
          103 South Church Street
          P.O. Box 10240 Grand Cayman KY1-1002
          Cayman Islands

GALENA INSURANCE: Shareholder Receives Wind-Up Report
The shareholder of Galena Insurance Corporation SPC received on
Dec. 20, 2013, the liquidator's report on the company's wind-up
proceedings and property disposal.

The company's liquidator is:

          Bruce Putterill
          607 West Bay Road #15
          P.O. Box 30867 Grand Cayman KY1-1104
          Cayman Islands
          Telephone: (345) 525-2069
          Facsimile: (345) 949-4772

JUNTOS BALANCE: Shareholders Receive Wind-Up Report
The shareholders of Juntos Balance Fund Limited received on
Dec. 10, 2013, the liquidator's report on the company's wind-up
proceedings and property disposal.

The company's liquidator is:

          Gene Dacosta
          Telephone: (345) 814 7765
          Facsimile: (345) 945 3902
          P.O. Box 2681 Grand Cayman KY1-1111
          Cayman Islands

LADY LUCK: Members Receive Wind-Up Report
The members of Lady Luck Holdings Limited received on Dec. 10,
2013, the liquidator's report on the company's wind-up proceedings
and property disposal.

The company's liquidator is:

          Buchanan Limited
          P.O. Box 1170, George Town
          Grand Cayman KY1-1102
          Cayman Islands

LDEP-NT: Shareholders Receive Wind-Up Report
The shareholders of LDEP-NT received on Dec. 11, 2013, the
liquidator's report on the company's wind-up proceedings and
property disposal.

The company's liquidator is:

          Jonathan Bernstein
          Telephone: (345) 949 4900
          Facsimile: (345) 949 4901
          c/o Appleby (Cayman) Ltd.
          P.O. Box 190 Clifton House
          75 Fort Street
          Grand Cayman, KY1-1104
          Cayman Islands

LHFP-NT: Shareholders Receive Wind-Up Report
The shareholders of LHFP-NT received on Dec. 11, 2013, the
liquidator's report on the company's wind-up proceedings and
property disposal.

The company's liquidator is:

          Jonathan Bernstein
          Telephone: (345) 949 4900
          Facsimile: (345) 949 4901
          c/o Appleby (Cayman) Ltd.
          P.O. Box 190 Clifton House
          75 Fort Street
          Grand Cayman, KY1-1104
          Cayman Islands

LIEP-NT: Shareholders Receive Wind-Up Report
The shareholders of LIEP-NT received on Dec. 11, 2013, the
liquidator's report on the company's wind-up proceedings and
property disposal.

The company's liquidator is:

          Jonathan Bernstein
          Telephone: (345) 949 4900
          Facsimile: (345) 949 4901
          c/o Appleby (Cayman) Ltd.
          P.O. Box 190 Clifton House
          75 Fort Street
          Grand Cayman, KY1-1104
          Cayman Islands

ON WINGS: Members Receive Wind-Up Report
The members of On Wings of Destiny Limited received on Dec. 10,
2013, the liquidator's report on the company's wind-up proceedings
and property disposal.

The company's liquidator is:

          Buchanan Limited
          P.O. Box 1170, George Town
          Grand Cayman KY1-1102
          Cayman Islands

TV RECOVERY: Shareholders Receive Wind-Up Report
The shareholders of TV Recovery Ltd. received on Dec. 13, 2013,
the liquidator's report on the company's wind-up proceedings and
property disposal.

The company's liquidator is:

          Ian Patrick Pilgrim
          Mayflower Management Services (Bermuda) Limited
          102 St. James Court Flatts
          Smiths FL04
          Telephone: +1 (441) 542 6330

WM INVESTMENTS: Members Receive Wind-Up Report
The members of WM Investments received on Dec. 16, 2013, the
liquidator's report on the company's wind-up proceedings and
property disposal.

The company's liquidator is:

          CDL Company Ltd.
          P.O. Box 31106 Grand Cayman KY1-1205
          Cayman Islands

E L  S A L V A D O R

EL SALVADOR: S&P Affirms 'BB-/B' Sovereign Credit Ratings
Standard & Poor's Ratings Services affirmed its 'BB-/B' long- and
short-term sovereign credit ratings on the Republic of El
Salvador.  The outlook on the long-term rating remains negative.

S&P's 'AAA' transfer and convertibility (T&C) assessment for El
Salvador is unchanged.


Many years of low GDP growth in El Salvador have contributed to a
steady increase in the government's debt burden, raising its
vulnerability to potential adverse external shocks.  S&P expects
that per capita real GDP growth will be modest in 2013, about
1.3%, and rise toward 2% in the coming two years.  Low economic
growth and political pressure for social spending have contributed
to fiscal slippage in recent years, despite rising tax revenues.
As a result, S&P projects that net general government debt could
rise to 47% of GDP in 2013.

Failure to reduce fiscal deficits, which have averaged 4% of GDP
since 2010, would result in a continued rise in the government's
debt burden.  Moreover, the resulting large borrowing requirements
would expose the sovereign to growing vulnerability to potentially
adverse shifts in market sentiment.  Relatively low foreign direct
investment is leading to higher reliance on external debt to fund
the country's persistent current account deficit, likely exceeding
6% of GDP in 2013 and declining only moderately toward 4% of GDP
next year.

El Salvador's limited monetary and fiscal flexibility and its high
general government and external debt burdens constrain the
ratings.  Total investment has remained below 15% of GDP for many
years, thereby limiting GDP growth and contributing to fiscal
strains.  The country formally adopted the U.S. dollar as its
currency in 2001.  Dollarization has lowered inflation and helped
stabilize the market, though it has also imposed monetary
inflexibility.  El Salvador's well-regulated banking system, as
well as its political commitment to addressing fiscal and external
imbalances, supports the ratings.

The local currency rating on El Salvador is 'BB-', and the T&C
assessment is 'AAA'.  These reflect the country's adoption of full
dollarization in 2001.  S&P thinks El Salvador is unlikely to de-
dollarize because most policymakers consider the costs of doing so
much greater than the disadvantages of limited monetary


The negative outlook reflects the at least one-in-three likelihood
of a downgrade in the next 12 months if political polarization
continues to constrain investment and GDP growth, resulting in a
higher burden of fiscal and external debt.  S&P expects that El
Salvador will see an orderly political transition to the next
presidential administration in early 2014.  However, continued
political polarization could sustain risk aversion and stall
economic reforms, leading to continued low private investment and
sluggish economic performance.

Conversely, an improvement in political dialogue and a more
cohesive decision-making process after the elections could improve
conditions for economic growth.  Effective implementation of laws
to promote public-private partnerships would facilitate higher
fiscal revenues, making it easier to stabilize the budget deficit
and the burden of government and external debt.  Similarly,
efforts to strengthen El Salvador's legal and regulatory
environment could increase the country's long-term growth
prospects.  S&P could revise the outlook to stable as a result.

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 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.


Ratings Affirmed

El Salvador (Republic of)
Sovereign Credit Rating                    BB-/Negative/B
Transfer & Convertibility Assessment       AAA
Senior Unsecured                           BB-


* HONDURAS: To Join Electricity Market With $22.9MM IDB Financing
With Honduran President Porfirio Lobo Sosa as a witness of honor,
Finance Minister Wilfredo Cerrato and Inter-American Development
Bank President Luis Alberto Moreno signed an agreement for US$22.9
million in financing for a project to upgrade Honduras' power
infrastructure and support its participation in Central America's
regional electricity market.

The regional electricity market, known by its Spanish acronym MER,
was established under a framework agreement among six Central
American countries in order to optimize the use of their energy
resources and reduce electricity costs by taking advantage of
economies of scale.

All six countries are also partners in SIEPAC, the Central
American electric interconnection system.  The IDB contributed
US$271.5 million in loans to finance the construction of the
system's 1,793-kilometer power transmission line.

The new financing provided by the IDB to Honduras will support a
project to strengthen the regional network by building a permanent
link to a line connecting the Honduran and the Guatemalan grids.
The project will also finance institutional capacity building to
enable the Honduran power utility, ENEEE, to participate
effectively in the MER.

Under the project, a new substation will be built for the power
line between San Buenaventura in Honduras and Panaluya in
Guatemala.  This will technically close the loop between the
Honduran, Guatemalan and Salvadoran grids, making the regional
network more robust.

In addition, ENEE will strengthen its management, as well as
establish an electricity transactions unit in order to better
participate in the MER.

Once the new infrastructure is completed and operational, regional
electricity transactions are expected to triple by 2017.

The IDB financing consists of a 30-year, US$16 million loan with a
fixed interest rate plus a 40-year, US$6.9 million loan with a
fixed annual interest rate of 0.25 percent.


JAMAICA: Bad Debts in Commercial Banks Rise to Over J$20 Billion
RJR News reports that the Bank of Jamaica has released information
showing that bad debts in commercial banks rose to more than J$20
billion at the end of September.

That was a nine per cent expansion in the bad debt portfolio of
commercial banks, according to RJR News.

The report relates that the Bank of Jamaica said the overall bad
debt portfolio at the institutions it supervises, was J$26.7
billion, down 5 per cent from September last year.


Standard & Poor's Ratings Services withdrew its 'B+' corporate
credit and issue ratings on Corporacion Interamericana de
Entretenimiento S.A.B. de C.V at the company's request, as its
outstanding $13.7 million senior unsecured bonds were prepaid on
Dec. 16, 2013.


PARAGUAY: IMF Article IV Staff Mission Gives Concluding Statement
An International Monetary Fund (IMF) mission visited Paraguay
during December 2-12 for discussions with government officials,
the private sector, the donor community and other stakeholders, as
part of the IMF's annual Article IV consultations with its member
countries.  At the conclusion of the visit, mission Chief Ugo
Fasano issued the statement:

"Paraguay has strong economic fundamentals-low debt, sizeable
official reserves, and a manageable fiscal deficit.  The main
challenge ahead is to improve social and economic development,
which has lagged behind the region amid widespread structural
weaknesses.  The authorities have crafted a good economic plan and
have made a solid start by enacting important pieces of
legislation.  Implementation of the legislative and economic
reform agenda, particularly in the context of a less favorable
external environment and longstanding institutional weaknesses,
will be critical.

"The government's economic plan would help buttress Paraguay's
growth potential and reduce poverty over the medium term.  This
plan rightfully focuses on fostering investment in infrastructure,
improving the business climate, modernizing the public sector, and
maintaining fiscal prudence.  In support, the central bank will
remain focused on maintaining stable, low inflation within an
inflation-targeting (IT) regime, while further strengthening
financial supervision in line with international best practices.
If fully implemented, these reforms together with sustained
macroeconomic stability could lead to higher investment though, at
this stage, it is debatable by how much and how fast it can be
executed, given a softer external environment and weaknesses in
institutional capacity.  So far, indications of interest by local
and foreign investors have been encouraging.

"A brisk economic expansion is expected to continue over the
medium term, amid low inflation and fiscal and external deficits
(Tables 1 and 2):

* Growth.  After contracting by 1.2 percent in 2012, activity grew
by 14.9 percent (y/y) in the first three quarters of 2013, as
agricultural output recovered from last year's drought.  While
economic activity might have slowed somewhat recently (in part a
reflection of rising smuggling from Argentina), the mission still
expects overall 2013 growth to remain robust at 12.7 percent, with
non-agricultural output growing by 5.2 percent, slightly above
potential.  Real GDP is projected to expand on average by about
4.5 percent in the period 2014-18 given robust agriculture and
livestock sectors and expected higher investment in export-
oriented industries and infrastructure (overall investment would
increase by about 4.0 percentage points of GDP over the period).

* Inflation.  Higher food prices, notably meat, have been pushing
inflation up during much of 2013, with accumulated headline
inflation reaching 3.7 percent in the period January-November.
End-2013 inflation should be slightly above 4.0 percent, and hover
at about the central bank's target rate of 5.0 percent next year
and over the medium term.

* The central government deficit. The mission expects the fiscal
deficit to stay low over the medium term in line with the ceilings
imposed by the fiscal responsibility law, keeping the current low
debt, broadly stable in percent of GDP.  Given past under-
execution of capital spending, we estimate a deficit of 1.8
percent of GDP in 2014-just 0.1 percentage points above the 2013
estimated outcome.  The deficit will likely decline over the
medium-term to about 1.0 percent of GDP, as a result of rising tax
collection-though less rapidly than envisaged by the government
given tax and customs administration resource constraints-and
restrained growth in current primary spending, in particular the
wage bill.  This would imply a broadly neutral fiscal stance in
the coming years.  Deficit financing will be provided by foreign
sources (multilaterals) and in a lesser extent through domestic
debt issuances.

* The external current account balance.  Despite continued real
effective appreciation of the guarani, buoyant agricultural and
meat exports would cause the current account surplus to widen to
close to 1.0 percent of GDP by the end of 2013.  However in 2014,
the current accounts will likely swing to a deficit of about 0.8
percent of GDP, owing to some softening in soybean and beef prices
even as volumes expand further.  Over the medium term, private
sector net savings would contribute to maintaining the current
account deficit low at about 1.0 percent of GDP, despite negative
public sector net savings and some projected deterioration in
Paraguay's terms of trade.  The expected increase in foreign
direct investment (FDI) in response to the development strategy
would keep official reserves at a relatively high level through
2018 (equivalent to over four months of imports).
Overall, the risks to the outlook are balanced.  The main downside
risks stem from possible lower regional growth, negative price
shocks to Paraguay's main commodity exports, tighter global
financial conditions, and/or internal disruptions related to
weather and labor and other supply bottlenecks.  Upside risks
include faster than expected progress on the implementation of the
government's reform agenda. Supply constraints, coupled with
possible increases in food and administrated prices, pose an
upside risk to inflation.

"Against this background, the mission discussed with the
authorities policies to: (a) manage shocks and maintain
macroeconomic stability; (b) cement stability via strengthened
fiscal, monetary and financial policy frameworks; and (c) promote
strong, sustainable and inclusive growth.

A. Managing shocks and maintaining stability.

While macroeconomic policies have been broadly appropriate in
2013, it would be prudent to move to a neutral monetary stance in
the short-term.  In light of inflationary pressures, brisk credit
growth, and expected robust economic activity, the mission
welcomed the recent policy rate increase bringing it closer to the
estimated neutral real interest rate of about 2 percent.  As this
may increase the central bank's quasi-fiscal deficit, which has
already reached about 0.6 percent of GDP in 2012 from 0.3 percent
in 2010, we would recommend increasing the remuneration rate on
the recapitalization bonds, which currently pay only 0.25 percent
per year.  Fiscal policy is expected to remain broadly neutral
anchored on the rules established in the fiscal responsibility

Exchange rate flexibility and monetary policy remain the first
line of defense against potential external shocks.  Despite low
public debt, active fiscal policy should be a last resort in the
face of potential shocks and designed such that it does not reduce
future budget flexibility (as was the case in 2012 with the large
increase in the wage bill).  Strong fundamentals and greater
exchange rate flexibility provide the government with better
buffers to cope with these temporary external shocks than in the

Although the banking sector remains sound, closer monitoring is
warranted if credit growth increases further.  The banking sector
has continued to show adequate profitability, liquidity and
capitalization in 2013.  After increasing since 2008, non-
performing loans (NPLs) have remained relatively stable over the
past year at about 2.3 percent as of September, which is below
regional levels.  However, in a relatively short period of time,
credit to the private sector, including consumer loans, has
doubled in percent of GDP since 2007-08, reaching 34 percent in
2013, rising faster than in other countries in the region.

B. Cementing sound fundamentals.

Fiscal framework

The mission welcomed recent significant improvements in the fiscal
framework.  The fiscal responsibility law should reduce fiscal
policy uncertainty.  In addition, efforts to broaden the tax base-
through a revised tax on agricultural profits and generalized VAT
along with a new personal income tax-will add much needed revenues
to maintain fiscal sustainability over the medium-term in light of
rising social expenditures.  The laws on public-private
partnerships (PPPs) and joint ventures may improve the quality of
investment, ease financial constraints, and foster private sector
participation in infrastructure projects.

Nonetheless, the mission encourages the authorities to continue
their efforts in further strengthening:

* The fiscal rule: As the government gains experience with the
fiscal responsibility law, it would seem appropriate to expand the
coverage of the deficit rule beyond the central government; making
the triggers to invoke escape clauses more specific; and improving
the reporting requirements to encourage public accountability and
transparency.  The mission expects that the issuance of the
regulations of the law will clarify some of these issues.

* Public financial management: Strong budget institutions are
needed to further enhance the credibility of fiscal policy and
improve the quality of spending.  To this end, strengthening
budget design, control and monitoring, with a stronger emphasis on
results, and adopting a medium-term expenditure framework should
be a priority, as much as mobilizing additional resources.  It is
also important to efficiently use limited public resources, with
the Treasury moving from the present system of cash rationing to a
modern cash management system.  The mission welcomed the recently
enacted state financial administration modernization law that
establishes a Treasury Single Account and opens the possibility to
issue short-term government debt.

* Public investment management, planning and regulatory capacity
needs to be strengthened to increase the execution rate of
projects and ensure that PPPs provide high-quality infrastructure
services efficiently. PPP projects should be included in the
national public investment system (SNIP), and the regulation of
the law must provide clear guidelines for the specification,
renegotiation and termination of contracts in line with
international best practices.  The mission conquers with the
authorities that initial emphasis of PPPs should be on sound
projects that address clear bottlenecks in transportation and
power infrastructure, as they are likely to have high economic
rates of return.  In addition, it would be important to aim at
transparent fiscal accounting and comprehensive disclosure of all
fiscal contingencies related to the ongoing initiatives to
encourage private sector participation in infrastructure and other
public projects.

* Tax policy and revenue administration: Despite some progress
over the past decade, tax collection efforts remain relatively low
(estimated at about 51 percent of its potential vis-…-vis a
regional average of 71 percent).  Thus, implementation of new
information systems, improved taxpayer controls via database
crosschecks and the use of risk management systems are urgently
required to improve revenue administration.  The mission
encourages the authorities to raise the VAT on financial services
from its current 5 percent to the 10 percent general rate, and
complete as soon as possible the assessment of property values to
further increase revenue. Fund technical assistance (TA)
recommendations in these areas provide an adequate reform guide.

* Pension reform could reduce potentially large fiscal
liabilities, improve national savings, and foster the development
of domestic capital markets.  The mission welcomed efforts
underway to draft new framework legislation and establish a
pension regulator.

Monetary Framework

The mission congratulated the authorities on the significant
advances made in implementing an inflation-targeting (IT) regime.
The BCP has taken several important steps, including the
publishing a bi-annual inflation report, implementing a new Real
Time Gross Settlements (RTGS) payments system, as well as refining
its liquidity management and forecasting framework, and monetary
policy instruments.  Additional advances would help achieve the
BCP's goal of moving to a full-fledged IT regime, including
developing an active money market by increasing the predictability
of its operations and available instruments.  Continuing with a
market based process of financial de-dollarization would further
enhance Paraguay's monetary policy framework.  In particular, well
designed macro-prudential rules could be used to reduce foreign
exchange risk and further entrench a de-dollarization process.

The mission welcomed recent steps taken by the central bank to
establish a foreign exchange (FX) intervention policy that is more
transparent, better communicated and more consistent with a full-
fledged IT regime.  The BCP has intervened in the market since
last July only through its pre-announced "sales program" and
indicated that it would only adjust this program to offset
excessive FX volatility. As a result, the central bank has only
accumulated US$16 million in international reserves since July
2013.  However, to avoid affecting market expectations on the
exchange rate, the mission recommends that the central bank
disclose, well in advance, the size of its sale program (in
addition to the nature and frequency as it currently does).  This
will require improved coordination and communication between the
Ministry of Finance and the BCP on government's financial

Financial sector framework

The supervisory-regulatory framework of the banking system has
undergone major improvements in recent years.  The mission
welcomes ongoing efforts to align bank and BCP legislation with
international best practices in risk-based supervision and
prudential norms.  Moreover, efforts are also needed to improve
the availability of credit information on borrowers, and to
strengthen the bank supervisor's loan classification system.  The
mission welcomed efforts underway with Fund TA to migrate to
international accounting standards (i.e. IFRS) for banks and in
supervisory reporting.  The supervisory approach and soundness of
cooperatives are expected to strengthen as a result of new legal
requirements (e.g., increased capital adequacy and provisioning)
to be enacted early next year.  This, in turn, would make possible
setting up a liquidity assistance facility and a deposit insurance
scheme for cooperatives, in line with the 2010 FSAP update

The authorities' anti-money laundering plan (AML/CFT) launched in
June 2013 needs to be activated as soon as possible.  There are
legal and operational shortcomings in controlling the cross border
physical transportation of cash and bearer negotiable instruments
while corruption continues to be a serious obstacle for effective
actions. In this context, the authorities' agreement with the
Central Bank of Brazil on measures to control cross-border cash
flows is a welcomed advancement.  Additional Fund TA is available
to support the authorities as they continue to implement the plan.

C. Achieving development goals.

Paraguay faces widespread structural weaknesses that have hindered
productivity and growth potential.  These include poor quality of
infrastructure, education and the legal system.  In fact, the
country ranks relatively low in the World Economic Forum's Global
Competitiveness Index (119/148) and the World Bank's Doing
Business Indicators (109/185).  The authorities' reform agenda
rightly targets key areas to lift productivity, a key driver of
long-term growth prospects and sustainable improvements in living
standards. Growth prospects could improve further if structural
reforms deepen and/or expand to other areas.

Labor market inefficiencies, in particular, will have to be
addressed to support the development strategy. The large informal
sector in Paraguay has hindered productivity and overall economic
growth.  To some extent, this informality has flourished given
labor market institutions that are weak by international
standards, with structural rigidities linked to hiring and firing
practices and redundancy costs. Efforts to increase female labor
force participation-a large part of the informal sector -- and to
improve the quality of training would also help raise productivity
and lower poverty.

Civil service and public enterprise (PE) reforms are needed to
improve efficiency and cost effectiveness.  The civil service
should seek to attract and maintain qualified personnel at a
competitive salary while at the same time opening the fiscal space
to increase essential social and infrastructure spending.  PEs
play an important role in key sectors, and increasing their
efficiency can help ease constraints their capacity to invest.
Thus, the government should continue improving public enterprise
monitoring and performance and consider increasing water and
electricity rates and eliminating the general diesel fuel subsidy-
while including targeted safety net measures to ensure that the
most vulnerable are protected.  In addition, it would be crucial
to establish a long-term development plan to make sure that PEs
can accompany the robust growth outlook, particularly in the
energy sector, to avoid bottlenecks.

"The mission commended the government's focus on reducing poverty.
While sustained strong economic growth is no doubt an essential
condition for reducing poverty, the mission welcomed the holistic
approach that the government is implementing to tackle several key
dimensions of poverty: vulnerability (social safety nets through
conditional cash transfer programs and targeted subsidies), social
exclusion (increase access to basic services such as schooling,
health, safe water and sewerage, and electricity) and economic
exclusion (expand opportunities to increase earnings, such as by
improving rural roads and enhancing small-scale farmers'
earnings).  To succeed, assuring the long-term sustainability of
all these initiative will be crucial."

T R I N I D A D  &  T O B A G O

CL FIN'L: St Lucia Seeks to Comfort CLICO Policy Holders
-------------------------------------------------------- reports that the St. Lucia government in November
said it would continue to work with other Caribbean countries
affected by the collapse of the Trinidad-based insurance
conglomerate, Colonial Life Insurance Company (CLICO) in seeking
to ease the problems of policy holders.

Prime Minister Dr. Kenny Anthony, who is also the finance
minister, said that since the collapse of the Trinidad-based CL
Financial, the parent company of CLICO in 2009, "CLICO
International Life Insurance Limited has experienced serious
liquidity problems," according to

Dr. Anthony said in May 2010, the Registrar of Insurance
intervened in the operations of the St. Lucia branch operations
and imposed a prohibition to writing any new contract of insurance
and to refrain from any action that was adverse to the
policyholders, the report recalls.

The report discloses that Dr. Anthony said that in April 2011, the
Eastern Caribbean Supreme Court appointed Richard Surage of PKF
Professional Services as judicial manager for the branch and that
over the past months, the Eastern Caribbean governments and the
court appointed judicial managers "have considered several
restructuring options and their financing implications.

"We continue to work assiduously with the objective of deriving a
regional solution which is optimal for policyholders in all
practical circumstances," Dr. Anthony said, adding the St. Lucia
government "continues to work closely with the government of
Barbados and other OECS governments in an effort to secure the
most advantageous and beneficial interest of our policyholders,"
the report notes.

"Government recognizes the burden which policyholders have had to
endure and the tolerance and patience exhibited thus far," the
report quoted Dr. Anthony as saying.

"Government therefore remains committed to arriving at a practical
solution at the earliest. However, the reality of the situation is
that the issues surrounding the collapse of CLICO cannot be fully
resolved without our regional partners," Dr. Anthony added, the
report relays.

Last year, the report notes, St. Vincent and the Grenadines Prime
Minister Dr. Ralph Gonsalves said that CLICO's total exposure
amounted to 16 per cent of the gross domestic product (GDP) for
member countries of the Eastern Caribbean Currency Union (ECCU).

Dr. Gonsalves, the report relays, said this would translate in the
region of US$800 million in liabilities in CLICO Trinidad, CLICO
Barbados and also British American Insurance Company (BAICO).

The report notes that CLICO operations are being sold off or
placed in government custody across its regional markets; a move
taken by different countries to protect policyholders after the
Trinidad-owned insurance group ran into liquidity troubles at the
close of 2008.

CLICO and its parent CL Financial were rescued by the Trinidad
government, which is now selling off businesses owned by the
conglomerate, the report adds.

                         About CL Financial

CL Financial Limited is a privately held conglomerate in Trinidad
and Tobago.  Founded as an insurance company by Cyril Duprey,
Colonial Life Insurance Company was expanded into a diversified
company by his nephew, Lawrence Duprey.  CL Financial is now one
of the largest local conglomerates in the region, encompassing
over 65 companies in 32 countries worldwide with total assets
standing at roughly US$100 billion.

                            *     *     *

As reported in the Troubled Company Reporter-Latin America on
Aug. 6, 2013, said that over TT$8 billion worth
of Colonial Life Insurance Company Limited's (CLICO) profitable
business will be transferred to Atruis, a new company that will be
owned by the state.  CLICO is a subsidiary of CL Financial
Limited.  The Trinidad Express said that the Cabinet approved the
transfer as the Finance and General Purposes Committee continues
to discuss a letter of intent hammered out by the Ministry of
Finance and CL Financial's 400 shareholders, which envisions
taxpayers will recover the more than TT$20 billion Government has
injected since 2009 to keep CL subsidiary CLICO and other
companies afloat, according to noted that CLICO financially caved in on itself
at the end of 2008 after the investment instruments of major
policyholders matured and they wanted hundreds of millions of
dollars they were owed. related that at its annual general meeting in
Sept. 2013, CL Financial shareholders voted to extend the
agreement with Government until August 25, 2014, while Cabinet
decides on a new framework accord to recover the debt owed to
Government through divestment of CL subsidiaries, including
Methanol Holdings, Republic Bank, Angostura Holdings, CL World
Brands and Home Construction Ltd.

Proceeds from the divestment of these assets will go toward
Government's recovery of the billions it pumped into CLICO, said.


Monday's edition of the TCR-LA delivers a list of indicative
prices for bond issues that reportedly trade well below par.
Prices are obtained by TCR-LA editors from a variety of outside
sources during the prior week we think are reliable.   Those
sources may not, however, be complete or accurate.  The Monday
Bond Pricing table is compiled on the Friday prior to publication.
Prices reported are not intended to reflect actual trades.  Prices
for actual trades are probably different.  Our objective is to
share information, not make markets in publicly traded securities.
Nothing in the TCR-LA constitutes an offer or solicitation to buy
or sell any security of any kind.  It is likely that some entity
affiliated with a TCR-LA editor holds some position in the
issuers' public debt and equity securities about which we report.

Tuesday's edition of the TCR-LA features a list of companies with
insolvent balance sheets obtained by our editors based on the
latest balance sheets publicly available a day prior to
publication.  At first glance, this list may look like the
definitive compilation of stocks that are ideal to sell short.
Don't be fooled.  Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets.  A company may establish reserves on its balance sheet for
liabilities that may never materialize.  The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.

Submissions about insolvency-related conferences are encouraged.
Send announcements to


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, Valerie U. Pascual, Julie Anne L. Toledo, Frauline S.
Abangan, and Peter A. Chapman, Editors.

Copyright 2013.  All rights reserved.  ISSN 1529-2746.

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.

Information contained herein is obtained from sources believed to
be reliable, but is not guaranteed.

The TCR Latin America subscription rate is US$775 per half-year,
delivered via e-mail.  Additional e-mail subscriptions for members
of the same firm for the term of the initial subscription or
balance thereof are US$25 each.  For subscription information,
contact Peter A. Chapman at 215-945-7000 or Nina Novak at

                   * * * End of Transmission * * *