TCRLA_Public/140709.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

            Wednesday, July 9, 2014, Vol. 15, No. 134


                            Headlines



B E R M U D A

FLOATEL INTERNATIONAL: S&P Assigns 'B' CCR; Outlook Stable


B R A Z I L

DESENVOLVE SP: Moody's Affirms Ba1 Long-Term Issuer Rating
* BRAZIL: Top Five Economists Pare Forecast for Real's Decline


C A Y M A N  I S L A N D S

AGILITY HOLDINGS: Members' Final Meeting Set for July 17
GIT PRE-IPO: Creditors' Proofs of Debt Due July 21
LILY POND: Creditors' Proofs of Debt Due July 28
MAN INVESTMENT: Creditors' Proofs of Debt Due July 28
MAPLERIDGE CAYMAN: Creditors' Proofs of Debt Due July 28

RP MAC: Creditors' Proofs of Debt Due July 28
RWC SAMSARA: Creditors' Proofs of Debt Due July 28
SECOND ET: Creditors' Proofs of Debt Due July 28
VECTOR CAYMAN: Creditors' Proofs of Debt Due July 28
ZIR INTERNATIONAL: Creditors' Proofs of Debt Due July 24


C H I L E

* CHILE: Economy Grew Less-Than-Expected 2.3% in May From Year Ago


D O M I N I C A N   R E P U B L I C

XSTRATA PLC: Gov't 'Steadfast' Against Glencore's Planned Mine


G U A T E M A L A

* GUATEMALA: Concluding Statement of the 2014 Article IV Mission


M E X I C O

ALESTRA S: Moody's Withdraws Ba3 Corporate Family Rating
SATELITES MEXICANOS: Moody's Withdraws Ba1 Corp. Family Rating


P E R U

LOS PORTALES: Fitch Withdraws 'B+/RR4(EXP)' Rating on $200MM Bond


P U E R T O   R I C O

PUERTO RICO: Electric Power Authority Given More Time to Pay Debt


V E N E Z U E L A

VENEZUELA: Delta Air Joins AA in Cutting Flights to Country


                            - - - - -


=============
B E R M U D A
=============


FLOATEL INTERNATIONAL: S&P Assigns 'B' CCR; Outlook Stable
----------------------------------------------------------
Standard & Poor's Ratings Services said that it assigned its 'B'
long-term corporate credit rating to Bermuda-based accommodation
rig owner Floatel International Ltd.  The outlook is stable.

At the same time, S&P assigned a 'B' issue rating to Floatel's
$650 million term loan B.  The recovery rating is '3', indicating
S&P's expectation of meaningful (50%-70%) recovery in the event of
a payment default.

The ratings on Floatel reflect S&P's assessment of the group's
"weak" business risk profile and "highly leveraged" financial risk
profile, under S&P's criteria.

S&P's assessment of Floatel's business risk profile as "weak"
reflects Floatel's participation in the highly competitive and
cyclical offshore oilfield services industry, limited
diversification due to the low--albeit expanding--number of rigs
in operation (three with an additional two rigs on order), and
relatively aggressive and largely debt-funded growth strategy.
Geographic and customer diversification is limited due to the low
number of vessels, but customers are largely blue-chip exploration
and production companies.

Relative strengths include Floatel's young, competitive, high-
quality fleet--all rigs were delivered from 2010 onward--and
strong contract backlog of about $1.2 billion (including
$428 million of options).  This leads to good earnings and cash
flow visibility and reflects high demand for capacity.  Low
operating costs and an experienced management team also support
Floatel's adjusted EBITDA margins of about 50% in each of the last
three years.  In S&P's view, operational risk is somewhat lower
than that of other offshore operators, as once the accommodation
rig is hooked up to the operating facility, there appears to be
limited risk of downtime.  Conversely, Floatel's accommodation
vessels do not add as much value as other offshore operators (for
example, contract drillers).

S&P's assessment of Floatel's financial risk profile as "highly
leveraged" reflects its view of the group's highly debt-leveraged
capital structure, and aggressive financial policies as a result
of part-private-equity ownership.  It also reflects S&P's
forecasts that material investment in new rigs will result in
negative free operating cash flows (FOCF) and an increase in debt
over the medium term.  Maintenance capital expenditure (capex) is
low, so Floatel could generate substantial cash flow once the new
rigs are operational, although the company will likely continue to
expand over the long term.

S&P assess the company's management and governance as "fair,"
reflecting its experienced management team.

S&P's base-case scenario incorporates the following assumptions:

   -- All rigs are currently under long-term contracts; hence
      S&P's forecast predominantly reflects the agreed day rates
      and mobilization fees.  S&P assumes 97.5% utilization in
      contracted periods, but less in uncontracted periods to
      reflect uncertainty.

   -- S&P expects the new "Endurance" and "Triumph" rigs to be
      fully operational in 2015 and 2016, respectively.

   -- Private equity joint owner Oaktree has confirmed no
      intention to pay dividends, but any change in this policy
      would represent a downside to S&P's forecasts.

   -- Maintenance capex requirements are less than $4 million-$6
      million per vessel per year.  S&P expects capex on the two
      rigs on order to be about $62 million in 2014 and $589
      million in 2015.

   -- Management completed a rights issue in 2012 to raise $42
      million (to finance the initial payment on Endurance) and
      forecasts a further $80 million issue in 2015.  S&P do not
      include the latter in its forecasts as it is currently
      uncertain, but S&P could take a positive view of the rights
      issue if Floatel uses the proceeds to pay off debt.

Based on these assumptions, S&P arrives at the following credit
measures at year-end 2014:

   -- Standard & Poor's-adjusted debt to EBITDA of above 6x;
   -- Funds from operations (FFO) to debt of about 10%; and
   -- Negative FOCF as a result of the major capex program.

The stable outlook reflects S&P's view that Floatel's credit
metrics will remain commensurate with a "highly leveraged"
financial risk profile.  S&P's base-case scenario assumes that the
company's EBITDA margins will remain broadly stable over the next
12 months, supported by Floatel's strong contract backlog.  S&P
anticipates that liquidity will remain adequate over the next 12
months.

S&P could lower the rating if any unexpected operational issues
occur on one of Floatel's three operational rigs, which lead to a
materially worse performance than in S&P's base-case forecasts.
S&P might also consider a downgrade if any liquidity issues arise,
for example if the company orders further rigs without adequate
financing in place, or if S&P's assessment of the company's
liquidity weakens.

S&P sees an upgrade as relatively remote for the time being, given
Floatel's debt-funded, aggressive growth strategy.  Sustained
deleveraging and stronger credit metrics than S&P currently
anticipates could prompt it to raise the ratings if Floatel
significantly reduces its debt and generates positive FOCF.  In
S&P's view, an improvement in Floatel's financial risk profile
would be the most likely cause of an upgrade.



===========
B R A Z I L
===========


DESENVOLVE SP: Moody's Affirms Ba1 Long-Term Issuer Rating
----------------------------------------------------------
Moody's America Latina has affirmed all ratings assigned to
Desenvolve SP -- Agencia de Fomento do Estado de Sao Paulo S.A.
(Desenvolve SP), including the long and short-term issuer ratings
of Ba1 and Not Prime, respectively, and the Brazilian national
scale issuer ratings of Aa2.br and BR-1, long and short-term,
respectively. The outlook on these ratings is stable. At the same
time, Moody's raised Desenvolve SP's standalone baseline credit
assessment (BCA) to ba3 from b1.


At this time, Moody's withdraws the Not Prime short-term foreign
currency rating due to clerical error.

The following ratings have been affirmed:

Long-term local currency issuer rating of Ba1, stable outlook

Short-term local currency issuer rating of Not Prime

Long-term Brazilian national scale issuer rating of Aa2.br ,
stable outlook

Short-term Brazilian national scale issuer rating of BR-1

Rating Rationale

In raising Desenvolve SP's standalone baseline credit assessment
to ba3 from b1, Moody's acknowledges the consistent evolution of
its local franchise, in line with the social and economic
development policies defined by its controlling shareholder, the
State government of Sao Paulo. In the four years of operations,
Desenvolve SP has grown its loan book particularly by granting
project and equipment financing to small businesses located in the
state of Sao Paulo. As its core business, this portfolio accounted
for about 90% of the entity's total loans at the end of 2013,
consisting of granular and well collateralized loans, which have
ensured adequate earnings generation. The standalone rating,
however, reflects the entity's still limited funding structure,
basically made of equity and long-term on-lendings from the
federal development bank BNDES (Baa2, stable).

The affirmation of the Ba1 supported issuer rating also reflects
the challenging macroeconomic environment that should continue to
affect Desenvolve SP's assets quality indicators and constrain its
expansion prospects. Asset quality has been volatile since the
agency's inception, reflecting the unseasoned credit risk
associated with the long-term nature of its small business loan
portfolio, as well as the developing target market and risk
management. Despite the moderation in loan growth in 2013 and
2014, Desenvolve SP's robust expansion in 2012 continues to affect
delinquency rates, which reached 4.23% as of December 2013.

Moody's notes that high levels of capitalization and adequate
reserves would be sufficient to absorb unexpected credit losses
arising from a seasoning portfolio, were the economy to remain
sluggish. Management is focused on enhancing the risk tools and
increasing the granularity of the loan book as it limits loan size
and diversifies into different economic sectors, leveraging from
its relationship with the local government and its strategic
direction.

The principal methodology used in rating Government Related
Issuers in Brazil is Moody's "Government-Related Issuers:
Methodology Update," published July 2010.

The last rating action on Desenvolve SP was on 13 September 2012,
when Moody's upgraded the supported global and national scale
local currency issuer ratings, following the upgrade of the state
of Sao Paulo to Ba1 from Ba2.

Desenvolve SP is a development agency owned by the State of Sao
Paulo (Baa2; stable), reporting total assets of BRL 1,334.4
million (USD 564.7 million) and equity of BRL 1,035 million (USD
438 million) as of December 31 2013.


* BRAZIL: Top Five Economists Pare Forecast for Real's Decline
--------------------------------------------------------------

Filipe Pacheco at Bloomberg News reports that the five most-
accurate economists surveyed by Brazil's central bank pared their
expectation for the real's decline by year-end even as the median
outlook of about 100 analysts was unchanged.

The central bank said in a survey published July 8, that the
median forecast for the currency at year-end from its top five
economists was 2.25 per U.S. dollar, compared with 2.30 a week
earlier, according to Bloomberg News.  The median forecast from
about 100 economists surveyed by the central bank stayed at 2.40
percent, Bloomberg News notes.  The real dropped 0.3 percent at
2.2213 on July 8 at 2:48 p.m. in Sao Paulo, the biggest decline
among 16 major currencies tracked by Bloomberg, on concern gross
domestic product growth will slow further, notes the report.

Brazil announced June 24 that it was extending until Dec. 31 its
daily offer of $200 million of foreign-exchange swaps each
business day, Bloomberg News notes.  The program supporting the
currency and limiting import price increases had been scheduled to
finish at the end of June, Bloomberg News relates.

"The central bank has demonstrated it is interested in having the
dollar close to 2.20," Silvio Campos Neto, an economist at
Tendencias Consultoria Integrada in Sao Paulo, said in a telephone
interview with Bloomberg News.  "The intervention program keeps
the currency at this level," Bloomberg News quoted Mr. Neto as
saying.  The firm was one of the five most-accurate in May,
according to the central bank, the report adds.



==========================
C A Y M A N  I S L A N D S
==========================



AGILITY HOLDINGS: Members' Final Meeting Set for July 17
--------------------------------------------------------
The members of Agility Holdings Limited will hold their final
meeting on July 17, 2014, to receive 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


GIT PRE-IPO: Creditors' Proofs of Debt Due July 21
--------------------------------------------------
The creditors of GIT PRE-IPO Private Equity Fund SPC are required
to file their proofs of debt by July 21, 2014, to be included in
the company's dividend distribution.

The company commenced wind-up proceedings on June 17, 2014.

The company's liquidator is:

          Richard Fear
          c/o Daniel Woolston
          Telephone: (345) 814 7782
          Facsimile: (345) 945 3902
          P.O. Box 2681 Grand Cayman KY1-1111
          Cayman Islands


LILY POND: Creditors' Proofs of Debt Due July 28
------------------------------------------------
The creditors of Lily Pond MAC Limited are required to file their
proofs of debt by July 28, 2014, to be included in the company's
dividend distribution.

The company commenced liquidation proceedings on June 13, 2014.

The company's liquidators are:

          Keiran Hutchison
          Robin Lee Mcmahon
          c/o Barry MacManus
          Ernst & Young Ltd
          62 Forum Lane, Camana Bay
          P.O. Box 510 Grand Cayman KY1-1106
          Cayman Islands
          Telephone: (345) 814 8997
          Facsimile: (345) 814 8529


MAN INVESTMENT: Creditors' Proofs of Debt Due July 28
-----------------------------------------------------
The creditors of Man Investment Strategies Holding Ltd. are
required to file their proofs of debt by July 28, 2014, to be
included in the company's dividend distribution.

The company commenced liquidation proceedings on June 13, 2014.

The company's liquidators are:

          Keiran Hutchison
          Robin Lee Mcmahon
          c/o Barry MacManus
          Ernst & Young Ltd
          62 Forum Lane, Camana Bay
          P.O. Box 510 Grand Cayman KY1-1106
          Cayman Islands
          Telephone: (345) 814 8997
          Facsimile: (345) 814 8529


MAPLERIDGE CAYMAN: Creditors' Proofs of Debt Due July 28
--------------------------------------------------------
The creditors of Mapleridge Cayman Fund Limited are required to
file their proofs of debt by July 28, 2014, to be included in the
company's dividend distribution.

The company commenced liquidation proceedings on June 13, 2014.

The company's liquidators are:

          Keiran Hutchison
          Robin Lee Mcmahon
          c/o Barry MacManus
          Ernst & Young Ltd
          62 Forum Lane, Camana Bay
          P.O. Box 510 Grand Cayman KY1-1106
          Cayman Islands
          Telephone: (345) 814 8997
          Facsimile: (345) 814 8529


RP MAC: Creditors' Proofs of Debt Due July 28
---------------------------------------------
The creditors of RP Mac Cayman Fund Limited are required to file
their proofs of debt by July 28, 2014, to be included in the
company's dividend distribution.

The company commenced liquidation proceedings on June 13, 2014.

The company's liquidators are:

          Keiran Hutchison
          Robin Lee Mcmahon
          c/o Barry MacManus
          Ernst & Young Ltd
          62 Forum Lane, Camana Bay
          P.O. Box 510 Grand Cayman KY1-1106
          Cayman Islands
          Telephone: (345) 814 8997
          Facsimile: (345) 814 8529


RWC SAMSARA: Creditors' Proofs of Debt Due July 28
--------------------------------------------------
The creditors of RWC Samsara Cayman Fund Limited are required to
file their proofs of debt by July 28, 2014, to be included in the
company's dividend distribution.

The company commenced liquidation proceedings on June 13, 2014.

The company's liquidators are:

          Keiran Hutchison
          Robin Lee Mcmahon
          c/o Barry MacManus
          Ernst & Young Ltd
          62 Forum Lane, Camana Bay
          P.O. Box 510 Grand Cayman KY1-1106
          Cayman Islands
          Telephone: (345) 814 8997
          Facsimile: (345) 814 8529


SECOND ET: Creditors' Proofs of Debt Due July 28
------------------------------------------------
The creditors of Second ET Main Cayman Fund Limited are required
to file their proofs of debt by July 28, 2014, to be included in
the company's dividend distribution.

The company commenced liquidation proceedings on June 13, 2014.

The company's liquidators are:

          Keiran Hutchison
          Robin Lee Mcmahon
          c/o Barry MacManus
          Ernst & Young Ltd
          62 Forum Lane, Camana Bay
          P.O. Box 510 Grand Cayman KY1-1106
          Cayman Islands
          Telephone: (345) 814 8997
          Facsimile: (345) 814 8529


VECTOR CAYMAN: Creditors' Proofs of Debt Due July 28
----------------------------------------------------
The creditors of Vector Cayman Fund Limited are required to file
their proofs of debt by July 28, 2014, to be included in the
company's dividend distribution.

The company commenced liquidation proceedings on June 13, 2014.

The company's liquidators are:

          Keiran Hutchison
          Robin Lee Mcmahon
          c/o Barry MacManus
          Ernst & Young Ltd
          62 Forum Lane, Camana Bay
          P.O. Box 510 Grand Cayman KY1-1106
          Cayman Islands
          Telephone: (345) 814 8997
          Facsimile: (345) 814 8529


ZIR INTERNATIONAL: Creditors' Proofs of Debt Due July 24
--------------------------------------------------------
The creditors of Zir International Ltd. are required to file their
proofs of debt by July 24, 2014, to be included in the company's
dividend distribution.

The company commenced wind-up proceedings on June 17, 2014.

The company's liquidator is:

          Buchanan Limited
          c/o Allison Kelly
          Telephone: (345) 949-0355
          Facsimile: (345)949-0360


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C H I L E
=========


* CHILE: Economy Grew Less-Than-Expected 2.3% in May From Year Ago
------------------------------------------------------------------
Javiera Quiroga at Bloomberg News reports that Chile's economy
grew less than analysts expected in May, fueling expectations of a
steep drop in interest rates.

The Imacec (CLIMYOYN) index, a proxy for gross domestic product,
expanded 2.3 percent from a year earlier, the central bank said,
according to Bloomberg News.  The median forecast of 15 economists
surveyed by Bloomberg was for growth of 2.9 percent.  Economic
activity rose 0.6 percent from the previous month, Bloomberg News
notes.

"The outlook for consumer spending in the next few months doesn't
look good," Ruben Catalan, an economist at Banco de Credito e
Inversiones in Santiago, said in an e-mailed message to Bloomberg.
The slowdown "will eventually force the central bank to resume its
cycle of rate cuts" to a low of 3 percent or 3.25 percent in the
first half of next year, Mr. Catalan said, Bloomberg News relates.

Bloomberg News notes that the central bank left its key rate
unchanged at 4 percent for the third consecutive month in June in
its first split decision since April 2008.  The newest member of
the board, Pablo Garcia, voted for a quarter-point reduction,
citing slowing economic growth and the need for further economic
stimulus, Bloomberg News relates.

The central bank has cut the benchmark rate four times since
October as investment fell and consumer spending growth began to
ease, Bloomberg News discloses.

Chile's economy grew 2.6 percent in the first quarter from a year
earlier, the slowest pace in four years, and down from 4.1 percent
last year and 5.4 percent in 2012, reports Bloomberg News.  The
jobless rate rose to 6.3 percent in the three months through May,
from 6.1 percent in the previous three months, Bloomberg News
says.

                           Slower Growth

Bloomberg News relates that manufacturing rose 1.2 percent in May
from the year earlier, after contracting in eight of the past 12
months on an annual basis.  Retail sales grew to 4.9 percent over
the same period, after rising 1.6 percent in April, the least
since 2009, Bloomberg News notes.

According to the report, policy makers cut their growth forecast
for this year on July 16 for the third consecutive quarter to 2.5
percent to 3.5 percent from a previous estimate of 3 percent to 4
percent.  They cited a continued slowdown in activity, weaker
consumer demand and a drop in investment, which a cyclical decline
in the mining industry didn't fully explain, Bloomberg News says.

Bloomberg News relays that consumer prices rose 4.7 percent in May
from a year earlier, exceeding the central bank's 2 percent to 4
percent target range for a second straight month.  Central bank
President Rodrigo Vergara said on June 20 that inflation probably
will stay above 4 percent until November before it starts slowing
toward 3 percent in the first half of 2015, Bloomberg News adds.


===================================
D O M I N I C A N   R E P U B L I C
===================================


XSTRATA PLC: Gov't 'Steadfast' Against Glencore's Planned Mine
--------------------------------------------------------------
Dominican Today reports that while Congress plays ping pong with
the bill to declare Loma Miranda National Park and awaits the next
legislature in the Senate, Environment Minister Bautista Rojas
said the government is still steadfast against Glencore Falcondo's
planned mine.

Mr. Rojas said that has been the official position for more than
one year, after receiving the study by the UN Development Program,
which found no conditions for such exploitation, according to
Dominican Today.  "Those conditions haven't changed thus far," the
report quoted Minister Rojas as saying.

Interviewed on Telesistema Channel 11, the official said he doubts
that those conditions could change, the report relates.

As to the bill now in Congress, Minister Rojas said his agency has
only been to providing information requested by lawmakers, the
report notes.

Minister Rojas discarded that President Danilo Medina would exert
his influence for the planned mine and praised the environmental
organizations that defend Loma Miranda, the report notes.

As reported in the Troubled Company Reporter-Latin America on
Jan. 22, 2014, Dominican Today said that Chief Executive Officer
of Xstrata PLC's Falcondo reiterated that the company's presence
in the country depends on a long term mining, with cheap
electricity available, to produce and compete in world markets.
David Soares said they pin their hopes of extracting nickel at the
controversial site of Loma Miranda, between La Vega and Bonao
(central), for which they expect to get the mining permit,
according to Dominican Today.  But environmental and civil society
groups could keep them from carrying out the project, after the
Chamber of Deputies agreed with the protesters and passed a bill
which declares Loma Miranda a protected area, arguing that much of
the Cibao region's (north) water depends on it, the report
related.

Xstrata PLC is the operator of Falconbridge Dominicana, C. por A.
("Falcondo") with an 85.26% ownership.  Falcondo is a ferronickel
surface mining operation located in the Dominican Republic with
operations dating since 1971.

Headquartered in Zug, Switzerland, Xstrata PLC is a major producer
of coal, copper, nickel, primary vanadium and zinc and the largest
producer of ferrochrome


=================
G U A T E M A L A
=================


* GUATEMALA: Concluding Statement of the 2014 Article IV Mission
----------------------------------------------------------------
The International Monetary Fund summarizes preliminary findings
and recommendations of the mission that visited Guatemala during
June 24-July 7 to conduct the 2014 Article IV consultation.

              Recent Developments, Outlook, and Risks

1. The Guatemalan economy continues its solid expansion.  Emerging
from the 2008-09 global financial crisis, activity rebounded
quickly.  Strong domestic demand, rising export prices, and
counter-cyclical policies supported the recovery.  Growth has now
eased back to potential and the output gap is closed.  Prudent
macroeconomic policies have helped maintain relatively low
inflation and a strong foreign reserve position.  The financial
system appears robust, the current account deficit is stable, and
the macro outlook is broadly positive.
2. Economic developments since the 2013 Article IV Consultation
have been positive.

Growth has returned to trend. After decelerating somewhat in 2012
following the powerful bounce back from the global crisis in
earlier years, real GDP expanded by 3 3/4 percent in 2013,
slightly higher than the estimated long-run rate, thus lifting
supply to capacity. Growth was supported by buoyant private
consumption and credit, despite less favorable external conditions
and the roya coffee disease.

Inflation stayed within the target range and has declined in early
2014.  Headline inflation edged up in 2013 owing to fast rising
food prices, but remained within the target range of 3-5 percent.
Once these temporary pressures subsided, inflation (including core
measures) decelerated markedly in the first half of 2014, driven
mainly by declining commodity prices and a positive domestic food
supply shock.

The balance of payments was stable in 2013 and competitiveness
continues to be broadly adequate.  The current account deficit was
virtually unchanged in 2013 and remains comfortably financed by
steady FDI and public sector borrowing.  In contrast to other
countries in the region, Guatemala did not experience pressures in
the foreign exchange market since the Fed's announcement of
tapering.  Quantitative indicators point to comfortable levels of
international reserves.  The mission also assesses competitiveness
to be broadly adequate, though with some signs of erosion,
including a loss of world market share by exports over the last
decade.

The fiscal deficit declined in 2013, amid revenue and financing
shortfalls. Revenue underperformance induced by the disappointing
results of the 2012 tax reform were more than offset by
expenditure cuts driven by delays in Congressional approval of
external loans. As result, the overall deficit of the central
government, slightly above 2 percent of GDP, fell below the budget
target of 2 1/2 percent of GDP.

3. The economic outlook remains benign.  The mission expects
growth to remain broadly in line with its trend rate of 3 1/2
percent, supported by buoyant domestic demand, while inflation
converges toward the center of the target range.  The external
current account deficit, largely financed by FDI, is expected to
stay at about 2 1/2 percent of GDP over the medium term,
underpinned by relatively stable trade balance and remittances.

Modest fiscal expansion through the 2015 election cycle is
projected to be followed by measured consolidation, with the
central government deficit stabilizing at 2 percent of GDP by 2019
and public debt rising slowly to about 27 percent of GDP.

4. However, risks are tilted to the downside, owing both to global
uncertainties and domestic policy constraints.  The mission views
external risks related to the normalization of U.S. monetary
policy as balanced.  If exit is orderly, the net impact of faster
U.S. growth and tighter global financial conditions should be
positive in the short term.  At the same time, extreme bouts of
volatility in world financial markets could still inflict serious
damage on Guatemala.  Other external risks to growth include a
deeper-than-anticipated slowdown in emerging markets, less
favorable than expected developments in Europe, and disruptions in
commodity markets due to geopolitical tensions.  On the domestic
front, lasting difficulties in implementing the tax reform and a
continuation of the political impasse on the budget may endanger
much needed government programs.  Conversely, if further possible
revenue shortfalls were not met with spending cuts, the hard-won
fiscal consolidation could be derailed, lowering Guatemala's
resilience to shocks.  In the longer term, persistent problems in
revenue mobilization and entrenchment of the serious security
situation could deter growth and threaten social cohesion.

                            Policies

                      Near-term Policy Mix

5. Fiscal policy is broadly adequate, but consolidation of the tax
reform, timely approval of multilateral loans, and adoption of a
budget for 2015 are critical. With the output gap essentially
closed, a broadly neutral fiscal stance, as envisioned in the
"continuing resolution" 2014 budget currently in force, is
appropriate.  However, efforts to address implementation setbacks
to the 2012 tax reform are urgently needed, notably by
strengthening taxpayer compliance, particularly in customs.
Timely approval of multilateral loans will also be important to
support effective spending execution.  Passing the 2015 budget in
a timely manner will facilitate adequate targeting of outlays. In
thier view, this would help safeguard priority social programs and
investment in the event of continued revenue shortfalls.
Eliminating the stock of domestic spending arrears (not legally
recognized) will require a reliable and audited estimate of their
outstanding amount and a transparent strategy for their clearance.
While important steps have already been undertaken, further
improvements in public financial management are also called for to
avoid incurrence of new arrears.

6. Monetary policy is slightly accommodative after the recent
policy rate cuts, calling for heightened vigilance for any
incipient inflationary pressures.  Headline inflation is currently
close to the bottom of the target range, inflation expectations
have lately declined close to the mid-point of the target range,
and core inflation remains low.  After the cumulative cuts of 75
basis points in the last nine months which have brought the policy
rate to 41/2 percent, the mission assesses the monetary stance to
be somewhat supportive, though still generally appropriate.  With
the domestic output gap closed, food prices starting to rise in
the region, and increasing risks of an upturn in import prices,
the mission considers that under current conditions there is no
room for additional cuts to the policy rate.  Moreover, the
authorities should stand ready to increase the rate promptly to
anchor better expectations, if signs of an inflation upswing
emerge.

                  Increasing Resilience to Shocks

7. The 2013 budget outcome was generally consistent with long-term
sustainability but is unlikely to be maintained once financing
constraints are resolved.  After rising steadily since the 2008
crisis, the debt-to-GDP ratio nearly stabilized in 2013 at a
relatively low level by international standards.  This was the
result of a lower-than-expected deficit driven not by structural
fiscal consolidation, but rather by the political impasse in
Congress that delayed loan approval and thus forced spending cuts.
Unless revenues pickup more than anticipated, deficits will once
again expand and debt ratios resume their steady ascent once these
artificial funding problems are resolved.

8. The mission stresses that continued increases in the burden of
public debt are a source of vulnerability.  In thier view,
Guatemala could not comfortably rely on borrowing to support
prolonged expansionary counter-cyclical policies.  Funding risks
could rapidly escalate, especially given the country's low
government revenues and high debt-to-revenue ratios.  An increase
in risk aversion in international capital markets may render
government and bank funding more expensive.  A shallow domestic
financial market and political rigidities that curtail access to
multilateral lending provide thin coverage against spikes in
global risk aversion.

9. Hence, fiscal sustainability should be gradually bolstered over
the medium term.  Stabilizing the debt-to-GDP ratio at its current
level would require a permanent improvement in the primary balance
of about 1/2 percent of GDP-the sustainability gap. This gap would
be larger if the actuarial deficit of the social security system
were taken into account.  With no pressing cyclical need for
tightening and risks to growth weighed to the downside, the
mission recommends a moderately paced and modestly frontloaded
adjustment beginning in 2015.  This would strike the right balance
between reducing the sustainability gap and limiting the negative
impact on growth.

10. The mission urges additional efforts to mobilize revenue
beyond budget consolidation needs in order to support social and
growth objectives.  Guatemala needs not only to achieve long-term
fiscal sustainability, but also to maintain macro stability while
addressing pressing social needs and enhancing growth potential.
Meeting these objectives will depend upon raising the currently
low level of government revenues to support priority public
spending.  In particular, we advocate improving tax
administration, reducing tax expenditures, and realigning VAT
rates with those prevailing in the region. Lowering the currently
high degree of revenue earmarking will also be important to widen
the fiscal adjustment toolbox. Regarding the draft competitiveness
law (Ley de Inversion y Empleo), the mission is concerned that tax
exemptions and other special treatments included in the current
proposal could threaten fiscal revenue.  More generally,
developing a deeper social consensus on the urgency of critical
spending needs will be critical to overcome strong political
resistance to revenue increases.

11. In addition, it will be essential to reinforce budgetary
management and improve the efficiency of public expenditure.
Delays in Congressional endorsement of multilateral loans in 2013
highlighted the need to streamline such approvals to prevent
expenditure under-execution and provide greater room for counter-
cyclical policies, if needed in the future.  The mission believes
that a key element of this reform would be a requirement for
Congress to approve all government financing - including external
loans - as part of any overall budget package. The recently
approved amendments to the Organic Budget Law, canenhance
transparency and efficiency of public spending, and help
reallocate resources toward high priority areas.  In turn, this
would strengthen the credibility of government policies and break
the widespread culture of tax avoidance.

12. The mission calls for further strengthening of the monetary
policy transmission mechanism, not least by continued progress
towards exchange rate flexibility.  Guatemala's annual inflation
has been relatively low and within the central bank's target band
for several years now.  Nonetheless, the transmission channels of
monetary policy remain feeble, while pass-through effects from
commodity prices continue to influence inflation heavily.  In
order to reinforce inflation as the primary objective of monetary
policy, the mission supports a gradual enhancement of exchange
rate flexibility.  This would also contribute to de-dollarizing
credit by forcing agents to internalize FX risks.  Development of
public debt and private securities markets would also be helpful,
not least to facilitate monetary operations.  To this end, it is
important to finalize the draft capital markets law in compliance
with IOSCO best practices and enact it.  In addition, the mission
recommends that the central bank balance sheet be strengthened by
refunding the bank's operational losses.

13. The fast rise of private credit, though it has now moderated,
calls for greater vigilance.  In particular, the slant of new
loans toward foreign currency and consumer financing cause some
concern.  While credit expansion above that of nominal GDP is
consistent with desirable financial deepening, continuation over a
long period of very high rates of credit growth could eventually
undermine financial stability.  The mission stresses that macro-
prudential measures, notably higher capital requirements for FX
loans to non-exporters, should be considered to guard against
these risks, if signs of deterioration in credit quality emerge.
Extension of the loan register system to non-bank lenders would
improve monitoring of household leverage.

14. Efforts to bolster regulation and supervision of the financial
system should progress further. Guatemala's financial system is
shallow and its deepening will require moderate but sustained
growth of credit over that of nominal GDP, which in turn calls for
upgrading the regulatory and supervisory framework.  The mission
appreciates that significant administrative and legislative
reforms have been undertaken, but notes that additional
improvements are still needed.

Although capital levels seem adequate, there is a need to
strengthen consolidated supervision and supervision of financial
entities that pose material risks to conglomerates, as well as to
tighten definitions of related parties, in order to mitigate risks
of overestimating capital levels. Moreover, it would be desirable
to step-up the ring-fencing of on-shore banks with respect to the
operations of off-shore banks, (acting in Guatemala but
incorporated in other countries).

Preliminary estimates of core tier 1 capital in the banking
system, its high profitability, and excess systemic and individual
liquidity levels indicate that the time is ripe to require capital
and liquidity buffers that could raise resilience to adverse
shocks.  In this regard, a phased move to Basel III standards
appears the right course of action.  Filling in data gaps and
adopting robust methodologies for financial stability analysis
should be a priority in the policy agenda.

Ongoing financial integration among CAPDR countries can bring
important economic benefits but also poses challenges for
consolidated and transnational supervision. To capitalize on the
opportunities, it is hence critical to implement regulation and
supervision arrangements that minimize regulatory gaps, arbitrage,
and cross-border contagion.

15. Enhanced social spending, structural reforms, and greater
regional integration would pave the way toward high inclusive
long-term growth. Notwithstanding the progress made toward meeting
the Millennium Development Goals targets, poverty remains
widespread and security concerns are very serious.  In thier view,
higher social spending would not only help reduce poverty but also
build a skilled and productive labor force, thereby fostering
competitiveness and sustaining growth.  There is also scope to
enhance productivity through structural reforms to improve the
business climate, reduce anti-competitive practices, limit the
influence of vested interests, and combat crime.  Greater regional
integration through the completion of the customs union,
harmonization of trade rules, and further integration of services
and factor markets would also boost Guatemala's growth potential.


===========
M E X I C O
===========


ALESTRA S: Moody's Withdraws Ba3 Corporate Family Rating
--------------------------------------------------------
Moody's Investors Service withdrew the Ba3 corporate family rating
on Alestra, S. de R.L. de C.V. due to business reasons. There were
no ratings assigned to specific debt instruments.

Ratings Rationale

Moody's has withdrawn the rating for its own business reasons.

Moody's last rating action on Alestra was on October 29, 2013 when
the agency upgraded the corporate family rating to Ba3 from B1.

Alestra, which started operations in 1996, is a Mexican
information technology and telecommunications company providing
bundled products including voice, data, Internet and information
technology services to enterprises within Mexico. The company is
owned by Alfa , a large Mexican conglomerate. For the full year
ended in 2013, Alestra's reported revenues were MXN 5,067 million
(around USD 394 million).


SATELITES MEXICANOS: Moody's Withdraws Ba1 Corp. Family Rating
--------------------------------------------------------------
Moody's Investors Service withdrew the Ba1 corporate family rating
on Satelites Mexicanos, S.A. de C.V. due to business reasons.
There were no ratings assigned to specific debt instruments.

Ratings Rationale

Moody's has withdrawn the rating for its own business reasons.

Moody's last rating action on Satmex was on February 10, 2014,
when the agency upgraded the corporate family rating to Ba1 from
Caa1 and changed the outlook to stable from rating under review
for upgrade.

Based in Mexico, Satmex is a satellite operator providing fixed
satellite services (standard C- and Ku-band services) to local and
international broadcasting and telecom firms as well as to
government-related entities. Satmex operates three satellites in
geo-synchronous orbital slots allocated to Mexico, covering the
Americas. The company's satellite fleet includes Satmex 5, Satmex
6 and the recently launched Satmex 8. For the full year ended on
December 31, 2013, the company reported revenues of USD 133
million, of which fixed satellite services represented around 90%.
On May 15, 2014, Satmex repaid all its outstanding debt and
starting January 2014, the company will fully consolidate within
the accounts of Eutelsat Communications.


=======
P E R U
=======


LOS PORTALES: Fitch Withdraws 'B+/RR4(EXP)' Rating on $200MM Bond
-----------------------------------------------------------------
Fitch Ratings has withdrawn the expected rating of 'B+/RR4(EXP)'
of Los Portales's proposed bond issuance of up to USD200 million.
The withdrawal of the rating follows unfavorable market conditions
to sell the notes.  As there is no set time frame for resuming the
issuance process, no rating is required at this time. Fitch will
provide investors with further information on the notes if and
when the issuer resumes the sale process.

Fitch continues to rate Los Portales S.A. follows:

-- Foreign currency Issuer Default Rating (IDR) 'B+';
-- Local currency IDR 'B+'.



=====================
P U E R T O   R I C O
=====================


PUERTO RICO: Electric Power Authority Given More Time to Pay Debt
-----------------------------------------------------------------
Michael Corkery, writing for The New York Times' DealBook,
reported that Puerto Rico's struggling electric power authority
has reached a temporary deal with some of its lenders, buying the
agency a little more time as it sorts out its troubled finances.
According to the report, banks providing credit lines are allowing
the Puerto Rico Electric Power Authority to delay certain payments
for three more weeks, the agency said on July 7.

                          *     *     *

As reported by the Troubled Company Reporter Latin America on
July 3, 2014, Michael Corkery of The New York Times' DealBook said
Puerto Rico's electrical utility is running out of money and time
to negotiate a deal with its lenders.  The report said the Puerto
Rico Electric Power Authority must repay $146 million to Citigroup
over the next two months for a credit line used to buy oil to
generate electricity.  It is also  uncertain whether the authority
will be able to renew a $550 million credit line from Scotiabank
for fuel purchases, the DealBook said, citing people briefed on
the matter.



=================
V E N E Z U E L A
=================


VENEZUELA: Delta Air Joins AA in Cutting Flights to Country
-----------------------------------------------------------
Mary Schlangenstein at Bloomberg News reports that Delta Air Lines
Inc. joined American Airlines in cutting the number of flights
between the U.S. and Venezuela because of a dispute over cash
trapped in the country.

Delta will go from once daily flights between Atlanta and Caracas
to one weekly round trip starting Aug. 1, said Sarah Lora, a
spokeswoman for the carrier, according to Bloomberg News. Atlanta-
based Delta has provided uninterrupted service to Venezuela for 15
years, Mr. Lora said, Bloomberg News relates.

Bloomberg News discloses that the change will further isolate
Venezuela, where at least a dozen carriers have cut capacity,
sales or service in protest over strict currency controls that
prevent them from repatriating earnings from tickets sold there
without government authorization.

"Delta will remain in the market to serve valued customers,
however, the debt created over the past several years due to
currency issues made us take a business decision to minimize our
risk," Ms. Lora said, declining to disclose how much money the
airline has stuck in Venezuela, Bloomberg News relays.

American Airlines Group Inc., the U.S. carrier with the most
flights to Venezuela, reduced its weekly trips to 10 from 48 as of
July 1, Bloomberg News notes.  The Fort Worth, Texas-based airline
had $750 million locked in Venezuela as of March 31, Bloomberg
News adds.


                            ***********


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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