TCRLA_Public/140516.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

           Friday, May 16, 2014, Vol. 15, No. 96


                            Headlines



A R G E N T I N A

TELECOM ARGENTINA: Incurs P$32 million Net Loss in 1Q 2014
TELECOM ARGENTINA: Moody's Assigns 'Caa1' Corp. Family Rating


B R A Z I L

MENDES JUNIOR: S&P Assigns 'B+' Global Scale Corp. Credit Rating
OGX PETROLEO: Batista Presents Defense in Insider-Trading Suit


C A Y M A N  I S L A N D S

SANTA REBECCA: Shareholder to Receive Wind-Up Report on June 18
SANTA RICARDA: Shareholder to Receive Wind-Up Report on June 18
SANTA ROBERTA: Shareholder to Receive Wind-Up Report on June 18
SANTA ROMANA: Shareholder to Receive Wind-Up Report on June 18
SANTA RUFINA: Shareholder to Receive Wind-Up Report on June 18


D O M I N I C A N   R E P U B L I C

DOMINICAN REPUBLIC: Despite Threats Social Security Won't Collapse


M E X I C O

CEMEX SAB: Confronts CEO Succession After Zambrano Dies at 70
MEXICANA AIRLINES: Owner Said to Seek Asylum in U.S.
ZAPOTLAN: Moody's Revises Outlook to Stable & Affirms B2 Rating


N I C A R A G U A

NICARAGUA: IMF Concludes Staff Visit to Nicaragua


P U E R T O   R I C O

BANCO POPULAR: Moody's Cuts Long-Term Deposit Ratings to 'Ba3'


                            - - - - -


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A R G E N T I N A
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TELECOM ARGENTINA: Incurs P$32 million Net Loss in 1Q 2014
----------------------------------------------------------
Telecom Argentina S.A.'s net financial results resulted in a loss
of P$32 million, a decrease of P$167 million or -123.7% in first
quarter 2014 versus first quarter 2013.

This was mainly due to losses for FX results of P$280 million in
first quarter 2014 that were impacted by a higher devaluation in
first quarter 2014 (23%) vs. first quarter 2013 (4%).

This is compared to the gain of P$13 million in first quarter
2013, but was partially compensated by higher gains in net
financial interest and on financial investments of P$190 million
in first quarter 2014 (+P$74 million vs. first quarter 2013) based
on a higher net financial position (cash).

A full text copy of the company's financial result is available
free at http://is.gd/9lloFS

                    About Telecom Argentina

Headquartered in Buenos Aires, Telecom Argentina S.A. --
http://www.telecom.com.ar/index-flash.html-- provides telephone-
related services, such as international long-distance service and
data transmission and Internet services, and through its
subsidiaries, wireless telecommunications services, international
wholesale services and telephone directory publishing.


TELECOM ARGENTINA: Moody's Assigns 'Caa1' Corp. Family Rating
-------------------------------------------------------------
Moody's Latin America Calificadora de Riesgo has assigned a first
time Corporate Family Rating of Caa1 on its Global Scale and
Ba1.ar on its Argentina National Scale to Telecom Argentina S.A.
(Telecom). The outlook is stable.

Ratings Rationale

The Caa1 Global Local Currency and the Ba1.ar Argentina National
Scale corporate family ratings mainly reflect Telecom strong
credit metrics in comparison to peers in this rating category and
sound capital structure with very low debt, being one the three
main players in Argentina in both fixed and mobile services, said
Moody's VP-Senior Analyst Gabriel Vigueras.

The assigned rating also takes into consideration Telecom's track
record of sustainable growth over the last few years, in the back
of a challenging economic and political environment in Argentina.
The company has maintained Debt/EBITDA ratio of 0.2 time as
adjusted by Moody's throughout the FY2010 to FY2013 period,
considering a minor debt denominated in Guaranies equivalent to
approx (USD36 million) with average maturity of 3.8 years and
operating leases of about USD228 million denominated in ARS. In
addition, the ratings reflect Telecom Argentina positive free cash
flow generation and its adequate level of liquidity supported by
its cash position of ARS5.2 billion (approx USD 800 million) as of
FY13.

The Caa1/Ba1.ar ratings are mainly constrained by (i) the highly
regulated nature of the Telecom industry in Argentina; (ii) the
potential for increasing competition; and (iii) the challenging
macroeconomic conditions in the country, including low expected
growth, high inflation and currency depreciation, which could
pressure operating performance and hamper business growth
opportunities for participants. The ratings also take into account
the company's limitation to add further products to its offer as
per guidelines from the regulator (impossibility to enter into Pay
TV as has been the trend for most of Telecom incumbents
participants in the industry worldwide) and heavy reliance in the
mobile business with a limited availability of further spectrum
allocation from the government. This is a concern given the delay
in spectrum auctions and the cap to 50 MHz per operator per area.
Moreover, the only spectrum planned to be auctioned over the last
years never took place and even when it was going to be assigned
to a government-owned entity called Argentina Satellite Solutions
Corporation (ARSAT), the assignment has not been confirmed yet.
Further spectrum allocation is crucial in Telecom's mobile
business, particularly if smartphones and 4G extension are at the
cornerstone of its business strategy in the following years.

Telecom Argentina Caa1 local currency rating reflects its global
default and loss expectation, while the Ba1.ar national scale
rating is based on the standing of Telecom Argentina's credit
quality relative to its domestic peers. Moody's National Scale
Ratings (NSRs) are intended to be relative measures of
creditworthiness among debt issues and issuers within a country,
enabling market participants to better differentiate relative
risks. NSRs in Argentina are designated by the ".ar" suffix.
Issuers or issues rated Ba1.ar present the average
creditworthiness relative to other domestic issuers. NSRs differ
from global scale ratings in that they are not globally comparable
to the full universe of Moody's rated entities, but only with
other rated entities within the same country.

The stable outlook for Telecom reflects Moody's view that the
creditworthiness of the company will remain sound over the next
quarters, with acceptable liquidity and low leverage.

An upgrade is unlikely in the near term. Longer term, upward
pressure could emerge if Argentina government's Caa1 bond rating
was upgraded. In addition, an upgrade of the ratings could result
from a continued strengthening of Telecom Argentina's top line
during 2014, at least close to inflation levels, while maintaining
its operating margins at or above 31% as adjusted by Moody's and
leverage below 0.2 times. Additionally, a more predictable outlook
for economic activity in Argentina would be important for a rating
upgrade.

Moody's cautions that a rating downgrade of the sovereign would
likely result in negative rating actions for Telecom Argentina in
the absence of any significant change in its underlying credit
quality. A downgrade could result from a significant increase in
debt, particularly if denominated in US dollars. Negative pressure
could also arise from an increase debt / EBITDA ratio consistently
above 2 times.

Headquartered in Buenos Aires, Telecom Argentina, S.A. is one of
the largest private sector companies in Argentina in terms of
revenues and number of employees. Telecom Argentina has a non-
expiring license to provide fixed-line telecommunications services
in the country, and it also offers other telephone-related
services such as international long-distance, data transmission,
IT solutions outsourcing and Internet services. Further, the
company also provides mobile telecommunications, which represent
the bulk of the revenues, and international wholesale services.
Telecom Argentina generated ARS 27 Billion in revenues and 31.4 %
of Moody's adjusted EBITDA margins in 2013. Over tha period, the
company generated 4% of its revenues in Paraguay, where it offers
mobile services through an LTE network since 2010.

Telecom Argentina share capital is comprised as follow: Nortel
Inversora (51% class A, 3.74% class B), Floating(45.23% class B
and ADS) being the balance class C shares. In turn, Nortel is
owned by Sofora Telecomunicaciones which major shareholders are
Telecom Italia (Ba1, neg) 68% and Argentina W (Werthein Group)
32%.


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B R A Z I L
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MENDES JUNIOR: S&P Assigns 'B+' Global Scale Corp. Credit Rating
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' global scale
and 'brBBB' national scale corporate credit ratings on Mendes
Junior Trading e Engenharia S.A. (MJTE). The outlook is
stable.

"Our 'B+' rating on MJTE is derived from a 'bb-' anchor, which is
based on the company's "weak" business risk profile and
"significant" financial risk profile assessments. We view MJTE's
liquidity as "less than adequate" and management and governance as
"fair," but these modifiers don't have an effect on the ratings.
We are assigning a "negative" assessment of capital structure,
which lowered our anchor by one notch. In our view, MJTE's short-
term debt concentration and its low capability to absorb
unpredicted downturns in cash flow generation in the next two
years could pose a risk to its credit quality," said S&P.

"Our "weak" business risk profile assessment reflects our view of
MJTE's relatively small scale in the Brazilian E&C industry
relative to its peers (a R$5 billion backlog in December 2013),
the concentration of backlog in public sector, and the execution
risk related to the growing backlog. Despite its lower relative
size, thanks to MJTE's track record of winning and executing
projects, we believe that it has the expertise and quality
standards to participate in high-profile projects. To support its
growth strategy, MJTE is seeking some opportunities in
international markets, which could result in higher operating
margins. New contracts in the oil & gas sector and in public-
private sectorpartnerships in the healthy segment could also
strengthen company's backlog in the coming years. Approximately
85% of company's backlog is concentrated with public entities.
Although MJTE is seeking to improve its geographical and client
diversification, we believe that its backlog will still be heavily
dependent on public infrastructure projects and the oil & gas
industry, particularly with Petrobras, in the next two years,
which could increase its volatility of profitability. On the other
hand, the company's technical capacity in the engineering industry
and good backlog executing track record should support its
expected growth for the coming years," said S&P.


OGX PETROLEO: Batista Presents Defense in Insider-Trading Suit
--------------------------------------------------------------
Dan Horch, writing for The New York Times' DealBook, reported that
the onetime Brazilian billionaire Eike Batista has begun his
formal defense against the insider trading allegations brought by
Brazil's main securities regulator, the C.V.M.

According to the report, federal prosecutors in the country are
also investigating Mr. Batista's actions. But Mr. Batista's
ultimate saving grace may be that no one in Brazil has ever gone
to jail for insider trading, and lawyers say that is unlikely to
change now. Based on the track record of previous cases, the worst
outcome Mr. Batista probably faces is a fine.

Ever since Mr. Batista's six publicly listed firms began their
stock market collapse last year, minority shareholders have
accused him of foul play, the report related.

This April, an internal committee at the C.V.M. recommended that
Mr. Batista be charged with insider trading and manipulating stock
market prices in his petroleum exploration company, OGX, the
report further related.  The federal prosecutor's office
subsequently opened a criminal investigation into the case.

Mr. Batista sold 126.6 million shares in OGX last May and June,
the report added.  On July 1, the company publicly acknowledged
that three of its most promising oil fields were probably not
viable, and its stock price plunged.

Based in Rio de Janeiro, Brazil, OGX Petroleo e Gas Participacoes
S.A., now known as Oleo e Gas, is an independent exploration and
production company with operations in Latin America.

OGX filed for bankruptcy in a business tribunal in Rio de Janeiro
on Oct. 30, 2013, case number 0377620-56.2013.8.19.0001.  The
bankruptcy filing puts $3.6 billion of dollar bonds into default
in the largest corporate debt debacle on record in Latin America.
The filing by the oil company that transformed Eike Batista into
Brazil's richest man followed a 16-month decline that wiped out
more than $30 billion of his personal fortune.

The filing, which in Brazil is called a judicial recovery, follows
months of negotiations to restructure the dollar bonds, in which
OGX sought to convert debt to equity and secure as much as $500
million in new funds. OGX said Oct. 29 that the talks concluded
without an agreement. The company's cash fell to about $82 million
at the end of September, not enough to sustain operations further
than December.

                     About OGX Petroleo

Based in Rio de Janeiro, Brazil, OGX Petroleo e Gas Participacoes
S.A., now known as Oleo e Gas, is an independent exploration and
production company with operations in Latin America.

OGX filed for bankruptcy in a business tribunal in Rio de Janeiro
on Oct. 30, 2013, case number 0377620-56.2013.8.19.0001.  The
bankruptcy filing puts $3.6 billion of dollar bonds into default
in the largest corporate debt debacle on record in Latin America.
The filing by the oil company that transformed Eike Batista into
Brazil's richest man followed a 16-month decline that wiped out
more than $30 billion of his personal fortune.

The filing, which in Brazil is called a judicial recovery, follows
months of negotiations to restructure the dollar bonds, in which
OGX sought to convert debt to equity and secure as much as $500
million in new funds. OGX said Oct. 29 that the talks concluded
without an agreement. The company's cash fell to about $82 million
at the end of September, not enough to sustain operations further
than December.



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C A Y M A N  I S L A N D S
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SANTA REBECCA: Shareholder to Receive Wind-Up Report on June 18
---------------------------------------------------------------
The shareholder of Santa Rebecca Shipping Company Limited will
receive on June 18, 2014, the liquidator's report on the company's
wind-up proceedings and property disposal.

The company's liquidator is:

          Commerce Corporate Services Limited
          P.O. Box 694 Grand Cayman
          Cayman Islands
          Telephone: 949 8666
          Facsimile: 949 0626


SANTA RICARDA: Shareholder to Receive Wind-Up Report on June 18
---------------------------------------------------------------
The shareholder of Santa Ricarda Shipping Company Limited will
receive on June 18, 2014, the liquidator's report on the company's
wind-up proceedings and property disposal.

The company's liquidator is:

          Commerce Corporate Services Limited
          P.O. Box 694 Grand Cayman
          Cayman Islands
          Telephone: 949 8666
          Facsimile: 949 0626


SANTA ROBERTA: Shareholder to Receive Wind-Up Report on June 18
---------------------------------------------------------------
The shareholder of Santa Roberta Shipping Company Limited will
receive on June 18, 2014, the liquidator's report on the company's
wind-up proceedings and property disposal.

The company's liquidator is:

          Commerce Corporate Services Limited
          P.O. Box 694 Grand Cayman
          Cayman Islands
          Telephone: 949 8666
          Facsimile: 949 0626


SANTA ROMANA: Shareholder to Receive Wind-Up Report on June 18
--------------------------------------------------------------
The shareholder of Santa Romana Shipping Company Limited will
receive on June 18, 2014, the liquidator's report on the company's
wind-up proceedings and property disposal.

The company's liquidator is:

          Commerce Corporate Services Limited
          P.O. Box 694 Grand Cayman
          Cayman Islands
          Telephone: 949 8666
          Facsimile: 949 0626


SANTA RUFINA: Shareholder to Receive Wind-Up Report on June 18
--------------------------------------------------------------
The shareholder of Santa Rufina Shipping Company Limited will
receive on June 18, 2014, the liquidator's report on the company's
wind-up proceedings and property disposal.

The company's liquidator is:

          Commerce Corporate Services Limited
          P.O. Box 694 Grand Cayman
          Cayman Islands
          Telephone: 949 8666
          Facsimile: 949 0626



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D O M I N I C A N   R E P U B L I C
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DOMINICAN REPUBLIC: Despite Threats Social Security Won't Collapse
------------------------------------------------------------------
Dominican Today reports that the Dominican Social Security System
(SDSS) will not collapse despite threats to its financial
sustainability, such as evasion, since 80% of workers who
currently pay into the Social Security Treasury (TSS) do so below
the minimum wage.

National Social Security Council (CNSS) Director Rafael Perez
Modesto affirmed that Dominican Republic has made progress in
social security, noting that from 2001 to 2004 just 7% of the
population was registered, "compared with 60% now," according to
Dominican Today.

"That's very significant if we note that we started without any
experience and we're above the average of Latin America countries,
which is 46%, which is the case of Mexico, which is ahead of us
100 years in social security, and Colombia, which has accumulated
a great experience," the report quoted Mr. Modesto as saying.

The report notes that Mr. Perez, interviewed by elcaribe.com.do on
Social Security's accomplishments during its 13 years, called
"extreme," recent opinions by some actors in the system, that
Social Security's current financial formula isn't sustainable and
is heading to collapse.  "It won't collapse, at least not under
the management of the team which currently runs it," Mr. Perez
said, the report relates.



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M E X I C O
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CEMEX SAB: Confronts CEO Succession After Zambrano Dies at 70
-------------------------------------------------------------
Brendan Case at Bloomberg News reports that Lorenzo Zambrano's
death at age 70 confronts Cemex SAB (CEMEXCPO)'s board with an
unfamiliar challenge: picking a new chief executive officer.

Cemex's board will meet in the coming days, the company said, with
no publicly anointed successor, according to Bloomberg News.

"The most important thing for me is that over the years, Cemex
dared to dream big," InSight Securities Inc. Chief Executive
Officer Carlos Legaspy, who oversees about $350 million in
emerging-market debt including Cemex bonds, told Bloomberg News by
telephone from Mexico City.  "They may not have made the best
business decisions in terms of timing, but they've done right to
their shareholders and right to their creditors and I think that's
an example and I think it's a legacy and a tribute to Lorenzo
Zambrano," Mr. Legaspy said, the report notes.

Zambrano was in Madrid for a "routine" company meeting and died of
heart failure, said Francisco Lebrija, a Cemex spokesman,
Bloomberg News discloses.

                        Cemex Management

Bloomberg News discloses that senior management at the 108-year
old cement maker founded by Zambrano's grandfather includes Chief
Financial Officer Fernando Gonzalez and six presidents for regions
such as the U.S., Mexico and Northern Europe, according to data
compiled by Bloomberg.  Francisco Garza is an adviser to the CEO
on institutional relations.  The Cemex board includes three
relatives of Zambrano, who was not married.

While Cemex probably has a succession plan, "there is likely to be
a certain amount of volatility" in the shares in the coming days
due to Zambrano's death, according to Fernando Bolanos, a Monex
Casa de Bolsa analyst who has a hold recommendation on the stock,
Bloomberg News notes.

First-quarter sales rose 8.2 percent to $3.59 billion as cement
volumes rose in all Cemex's regional markets, Bloomberg News
relays.  That still wasn't enough to snap a string of consecutive
quarterly losses that now stands at 18 following the global
economic slump and U.S. housing bust, Bloomberg News says.

                    'Extraordinary Businessman'

Mr. Zambrano, who became Cemex's chairman in 1995, was the
longest-tenured CEO at a major Mexican industrial company and one
of the country's most prominent business leaders.

Mr. Zambrano served as a director at many companies, and was on
boards including that of International Business Machines Corp. at
the time of his death.  Past board memberships include Grupo
Televisa SAB (TLEVICPO), Alfa SAB (ALFAA), Vitro SAB, Fomento
Economico Mexicano SAB (FEMSAUBD) and Citigroup Inc.'s Banamex
unit, Cemex said in a statement.


                          About CEMEX SAB

Mexican corporation CEMEX, S.A.B. de C.V., is a holding company
of entities which main activities are oriented to the
construction industry, through the production, marketing,
distribution and sale of cement, ready-mix concrete, aggregates
and other construction materials.  CEMEX is a public stock
corporation with variable capital (S.A.B. de C.V.) organized
under the laws of the United Mexican States, or Mexico.

                           *     *     *

As reported in the Troubled Company Reporter-Latin America on
March 27, 2014, Standard & Poor's Ratings Services assigned its
'B+' issue-level rating and a recovery rating of '3' to CEMEX
Finance LLC's proposed 10-year benchmark dollar bonds and EUR300
million senior secured notes due 2021.  The recovery rating of '3'
indicates that bondholders can expect a meaningful (50% to 70%)
recovery in the event of a payment default.


MEXICANA AIRLINES: Owner Said to Seek Asylum in U.S.
----------------------------------------------------
Anthony Harrup at The Wall Street Journal reports that the former
owner of bankrupt airline, Compania Mexicana de Aviacion or
Mexicana Airlines, who is wanted in Mexico in connection with the
collapse of the country's former flagship carrier, has requested
political asylum in the U.S., Mexican authorities said Wednesday.

Gaston Azcarraga, the former chairman of hotel chain Grupo Posadas
who led a group of investors in the purchase of the airline from
the Mexican government in 2006, was called by U.S. authorities
because his visa had expired and asked for asylum in the U.S.,
said a spokesman for the Mexican attorney general's office,
according to the Wall Street Journal.

The WSJ notes that a Mexican judge issued an arrest warrant for
Mr. Azcarraga in February on fraud charges related to operations
at Mexicana, and federal authorities requested Interpol's
intervention to help locate him.

An eventual extradition of Mr. Azcarraga to Mexico would first
depend on whether a U.S. judge grants the extradition request, the
spokesman added, WSJ relates.

                   About Mexicana Airlines

Compania Mexicana de Aviacion or Mexicana Airlines --
http://www.mexicana.com/--Mexico's largest airline, is a
privately held airline and a subsidiary of Nuevo Grupo
Aeronautico.  Founded in 1921, Mexicana is the oldest commercial
carrier in North America.  Charles Lindbergh piloted the first
trip for Mexicana between Brownsville, Texas, and Mexico City.

Grupo Mexicana de Aviacion is the parent of Compania Mexicana.
Two other units are Aerovias Caribe S.A. de C.V. (Mexicana Click)
and Mexicana Inter S.A. de C.V. (Mexicana Link).

The Mexicana group of airlines includes MexicanaClick (Click),
formerly Click Mexicana, and MexicanaLink (Link).  Click is
Mexicana's regional operator while Link operated as a feeder
airline for both Mexicana and Click.

Compania Mexicana de Aviacion or Mexicana Airlines filed for
bankruptcy in the U.S. and Mexico on Aug. 2, 2010.  In the U.S.,
the company filed in the U.S. Bankruptcy Court in Manhattan for
Chapter 15 bankruptcy protection (case no. 10-14182), and in
Mexico, it filed for the equivalent of Chapter 11.

Maru E. Johansen, foreign representative of Compania Mexicana,
estimated in the Chapter 15 petition that the company has assets
of US$500 million to US$1 billion and debts of more than US$1
billion.  William C. Heuer, Esq., at Duane Morris LLP, serves as
counsel to Ms. Johansen.

Mexicana de Aviacion stated that despite its bankruptcy filing,
it expects to continue to operate normally, and that such filings
did not affect the operations of Click Mexicana and Mexicana
Link, which are independent companies from Mexicana de Aviacion.


ZAPOTLAN: Moody's Revises Outlook to Stable & Affirms B2 Rating
---------------------------------------------------------------
Moody's de Mexico revised the outlook of the Municipality of
Zapotlan to stable from negative and affirmed its issuer rating at
B2 (Global Scale) and Baa3.mx (Mexico National scale)

Ratings Rationale

The decision to revise Zapotlan's outlook to stable from negative
is based on the following:

-- A steady reduction of debt levels started in 2012 thanks to a
    the adoption of a more conservative budgetary policy and cost
    containment measures. The current administration does not plan
    to contract additional debt for the remainder of its mandate,
    ending in 2015.

-- Successful measures to contain operating expenditures. Over
    the last two years, Zapotlan has contained operating
    expenditures, mostly personnel. Moody's expect operating
    expenditures to continue growing below operating revenues in
    2014 and 2015.

-- Two years of positive operating balances. Since 2012, Zapotlan
    has reverted a negative trend in its operating balances. Most
    of the improvement in Zapotlan's fiscal stance is the result
    of its policy to contain spending and, partly, through the
    sale of non-financial assets. Moody's expect Zapotlan to
    continue registering positive operating balances this year and
    in 2015 independently of further sales of nonfinancial assets.
    However, Moody's also note the continuous registry of negative
    consolidated balances, which has led to a deterioration of the
    municipality's net working capital.

What Could Change The Rating UP/DOWN

A continuous improvement in the gross operating and consolidated
balances, as well as further reductions in the net debt levels,
could exert upward pressure on Zapotlan's issuer rating.
Conversely, a deterioration in gross operating and consolidated
balance, and sharp increases in debt levels, could exert downward
pressure on Zapotlan's issuer rating.

The principal methodology used in this rating was Regional and
Local Governments published in Januray 2013.

The period of time covered in the financial information used to
determine the Municipality of Zapotlan el Grande's rating is
between January 1, 2009 and December 31, 2013.



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N I C A R A G U A
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NICARAGUA: IMF Concludes Staff Visit to Nicaragua
-------------------------------------------------
A staff team from the International Monetary Fund (IMF) led by
Przemek Gajdeczka visited Managua during May 6 to 14, 2014.  The
visit took place in the context of regular contacts with the
authorities to evaluate the performance of the Nicaraguan economy
and prepare the next Article IV Consultation.  The staff team met
with officials from the central bank, the ministry of finance,
other members of the economic cabinet, and representatives of the
private sector.  They reviewed recent economic developments and
discussed the economic outlook for Nicaragua.

After the visit, Mr. Gajdeczka issued the following statement.
"Over the past few years, Nicaragua's economy grew at relatively
high rates and macroeconomic stability strengthened.  In 2013, the
real growth of GDP was 4.6 percent and inflation was 5.7 percent.
In spite of a slowdown in tax revenue collections, the
consolidated public sector deficit after grants was in line with
the budget (1.4 percent of GDP) and the public debt ratio
declined.  At the same time, the external current account deficit,
while large, narrowed and the coverage of gross international
reserves remained stable at 3.7 months of imports (excluding
imports of export processing zones).  In 2013, growth in private
sector credit remained elevated (20 percent) while the
capitalization of the banking system remained above the regulatory
requirements.

"Nicaragua's economic outlook remains favorable. For 2014, the
staff team projects real GDP growth of 4.3 percent, inflation of
about 7 percent, and the consolidated public sector deficit below
2 percent of GDP.  Private sector credit growth is expected to
decline to levels consistent with the growth in the deposits of
commercial banks.  The external current account deficit will
increase somewhat but the coverage of gross international reserves
is expected to remain stable.  The main risks to these projections
stem from potential changes to the external environment, such as a
result of a slowdown in global economic activity or changes in the
availability of external financing.

"To maintain this favorable economic outlook it is necessary to
further strengthen public finances, continue modernizing the
functioning of the financial system, and implement additional
improvements to the electricity generation matrix.  The fiscal
outlook has strengthened as a result of the parametric changes
introduced to the pension system.  Going forward, improvements in
public finance management can be achieved through rationalizing
public spending and improving the presentation of fiscal and
quasi-fiscal operations in conformity with international
standards.  In addition, the financial system would benefit from a
strengthening of the payments system, the development of the
domestic bond market, and further enhancements in monetary and
inter-bank operations.

"The IMF team wishes to thank the government and representatives
of the civil society for their cooperation and the candor of the
conversations held during the mission. The next visit will be in
the context of the 2014 Article IV currently scheduled for the end
of the year."



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P U E R T O   R I C O
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BANCO POPULAR: Moody's Cuts Long-Term Deposit Ratings to 'Ba3'
--------------------------------------------------------------
Moody's Investors Service concluded the reviews for downgrade on
certain ratings of three Puerto Rican banks, including Popular,
Inc. (Popular), Banco Santander Puerto Rico (BSPR), and FirstBank
Puerto Rico (FirstBank). The actions conclude the reviews for
downgrade that were initiated on 11 February 2014. The affected
ratings are as follows:

List of Affected Ratings:

Banco Popular de Puerto Rico:

-- Standalone bank financial strength rating (BFSR) downgraded to
    D- from D; standalone baseline credit assessment (BCA) lowered
    to ba3 from ba2

-- Long-term deposit ratings downgraded to Ba3 from Ba2

-- Issuer and long-term OSO ratings downgraded to B1 from Ba3

-- All short-term ratings affirmed at Not Prime

-- Negative outlook assigned to all long-term ratings, including
    the standalone BFSR

Popular, Inc.:

-- Senior unsecured MTN program rating downgraded to (P)B2 from
    (P)B1

-- Subordinate MTN program rating downgraded to (P)B3 from (P)B2

-- Junior subordinate shelf rating downgraded to (P)Caa1 from
    (P)B3

-- Non-cumulative preferred stock rating downgraded to Caa2 (hyb)
    from Caa1 (hyb)

-- Negative outlook assigned to all long-term debt ratings

Popular North America, Inc.:

-- Senior unsecured debt rating downgraded to B2 from B1; senior
    unsecured MTN program rating downgraded to (P)B2 from (P)B1

-- Subordinate MTN program rating downgraded to (P)B3 from (P)B2

-- Negative outlook assigned to all long-term debt ratings

Popular Capital Trust I, Popular Capital Trust II, Popular Capital
Trust III, BanPonce Trust I, and Popular North America Capital
Trust I:

-- Preferred stock ratings downgraded to Caa1 (hyb) from B3 (hyb)

-- Preferred stock shelf ratings downgraded to (P)Caa1 from (P)B3

-- Negative outlook assigned to all long-term debt ratings

Banco Santander Puerto Rico:

-- Standalone BFSR downgraded to D from D+; standalone BCA
    lowered to ba2 from ba1

-- All long- and short-term supported deposit and debt ratings
    affirmed (deposits at Baa1/Prime-2)

-- Stable outlook assigned to all long-term ratings, including
    the standalone BFSR

FirstBank Puerto Rico:

-- Standalone BFSR confirmed at E+; standalone BCA unchanged at
    b2

-- Long-term deposit rating confirmed at B2

-- Issuer and long-term OSO ratings confirmed at B3

-- All short-term ratings affirmed at Not Prime

-- Negative outlook assigned to all long-term ratings, including
    the standalone BFSR

Rating Rationale

Moody's said the rating reviews focused on the potential effect of
further deterioration in Puerto Rico's weak economy and/or the
Commonwealth's (Ba2 negative) constrained fiscal condition on the
credit profiles of Popular, BSPR and FirstBank.

Puerto Rico's economy has been in recession since 2006, and it
continues to be challenged by high unemployment, low workforce
participation, high poverty levels compared to the US mainland, a
declining population, and weakness in its key pharmaceutical
sector. Accordingly, the prospects for future economic improvement
are uncertain. This economic weakness, combined with years of
deficit financing, pension underfunding and budgetary imbalance,
have now put the Commonwealth in a position where its debt and
fixed costs are high and rising, its liquidity is narrow, and its
market access is constrained.

Moody's said actions to address these issues in the coming years
will likely put additional stress on Puerto Rico's already-weak
economy and the banks' asset quality, which is currently weak. For
example, the recent budget proposal for fiscal-year 2015 includes
expenditure cuts that may have negative consequences for
unemployment and near-term economic growth, which increase the
likelihood of higher delinquencies by bank customers.

Popular

Moody's said the downgrade of Popular's ratings and the continued
negative rating outlook reflect the aforementioned vulnerability
in the bank's financial performance caused by further
deterioration in Puerto Rico's economy. Despite recent
improvement, Popular's still-high level of non-performing assets
could lead to greater losses if the recession continues. Popular's
ratings are underpinned by the bank's leading deposit market
position in Puerto Rico, which supports the bank's funding
profile, and its sound capital position. However, Popular's
dominant market position in the local banking system makes it more
exposed to macroeconomic shocks, which would likely affect large
portions of its retail and commercial banking portfolios. Moody's
added that Popular's direct and indirect exposure to Puerto Rico's
public sector is manageable at 29% of Tier 1 capital at first-
quarter end. This exposure consists largely of collateralized
loans or obligations that have a specific source of income or
revenues, such as taxes, identified for its repayment.

Banco Santander Puerto Rico

The downgrade of BSPR's standalone BFSR to D, which is the
equivalent of a standalone BCA of ba2, incorporates the potential
for weakening in the bank's financial performance as a result of
further deterioration in the economy. Despite the fact that BSPR's
asset quality has been consistently better than the other Puerto
Rican banks, Moody's is concerned that the bank's high level of
non-performing assets could lead to greater losses with further
deterioration in the economy. BSPR's stable outlook reflects the
bank's strong capital and funding positions, both of which have
benefited from BSPR's strategy to deleverage in recent years.
These positions better establish BSPR relative to the other banks
(that each have negative outlooks) to absorb additional stresses
that could result from continued macroeconomic weakness.

Moody's affirmed BSPR's supported deposit and debt ratings because
those ratings benefit from the bank's connection with its US
affiliate, Santander Bank, N.A. (deposits Baa1 stable). Moody's
believe that within a US banking family, the deposit ratings of
affiliates should be equalized because of regulatory powers
afforded by the cross-indemnification provisions of the Federal
Deposit Insurance Act. Following the affirmation, the outlook on
BSPR's supported ratings is stable.

FirstBank

The confirmation of FirstBank's ratings with a negative outlook
reflects Moody's view that the bank's low ratings already
incorporate its vulnerability to continued economic weakness and
to further deterioration in Puerto Rico's economy because of the
bank's high non-performing asset levels. The ratings also reflect
FirstBank's weak profitability and its reliance on brokered
deposits for funding.


                            ***********


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 conferences@bankrupt.com


                            ***********


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, and Peter A.
Chapman, Editors.

Copyright 2014.  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
202-241-8200.


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