TCRLA_Public/140711.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, July 11, 2014, Vol. 15, No. 136


                            Headlines



A R G E N T I N A

BANCO DE SERVICIOS: Moody's Rates AR$150MM Expected Issuance Caa1
CONTROL UNION: Moody's Assigns Caa1 Corporate Family Rating


B R A Z I L

CAIXA ECONOMICA: Moody's Assigns Ba3 (hyp) Rating to Tier 2 Notes
CEMIG DISTRIBUICAO: Moody's Lowers Global Issuer Rating to Ba1


C A Y M A N  I S L A N D S

BOWAY LTD: Creditors' Proofs of Debt Due July 21
CORPORATE WORLD: Creditors' Proofs of Debt Due July 28
DYNAMIC GROWTH: Commences Liquidation Proceedings
DYNAMIC GROWTH MASTER: Commences Liquidation Proceedings
ERMITAGE GLOBAL: Creditors' Proofs of Debt Due July 31

MSL CHARTER: Creditors' Proofs of Debt Due July 21
OASIS MANAGEMENT: Commences Liquidation Proceedings
TRIANGULAR ISM: Commences Liquidation Proceedings
TRUESDALE LTD: Creditors' Proofs of Debt Due July 21
WESTPORT GLOBAL: Creditors' Proofs of Debt Due July 23


D O M I N I C A N   R E P U B L I C

AES DOMINICANA: Fitch Affirms 'B' IDR; Outlook Stable
ITABO DOMINICANA: Fitch Affirms 'B' IDR; Outlook Stable


G U Y A N A

GUYANA: To Get $16MM IDB Loan for Water & Sanitation Services


J A M A I C A

DIGICEL GROUP: To Postpone Blocking of VoIP in Trinidad & Tobago
UC RUSAL: Paulwell Puts Firm on Notice


M E X I C O

GRUPO FERTINAL: S&P Affirms 'CCC+' CCR; Outlook Negative


P U E R T O   R I C O

PUERTO RICO ELECTRIC: S&P Lowers Rating on Revenue Bonds to 'B-'
PUERTO RICO: Fitch Lowers Rating on $13.4BB GO Bonds to 'BB-'


S T.  L U C I A

* ST. LUCIA: PM Agonises Over Ways to Cut Fiscal Deficit


T R I N I D A D  &  T O B A G O

CARIBBEAN AIRLINES: Faces TT$100 Million Loss


                            - - - - -


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A R G E N T I N A
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BANCO DE SERVICIOS: Moody's Rates AR$150MM Expected Issuance Caa1
------------------------------------------------------------------
Moody's Latin America Agente de Calificacion de Riesgo assigned a
Caa1 global local-currency debt rating to Banco de Servicios y
Transacciones S.A. (BST)'s eight expected issuance of Ar$150
million, which will be due in 21 months, under the Ar$ 500 million
multicurrency MTN Program. At the same time, Moody's assigned
Baa3.ar national scale local currency debt rating to the expected
issuance. The outlook for all ratings is stable.

The following ratings were assigned to BST's expected issuance:

Eight Issuance up to AR$ 150 million expected debt issuance:

Caa1 Global Local Currency Debt Rating, with stable outlook

Baa3.ar Argentina National Scale Local Currency Debt Rating, with
stable outlook

Ratings Rationale

Moody's explained that the local currency senior unsecured debt
rating derives from BST's Caa1 global local currency deposit
rating. Moody's also noted that seniority was taken into
consideration in the assignment of the debt ratings.

BST's caa1 baseline credit assessment reflects the entity's
business model, which is highly dependent on the domestic
macroeconomic and financial environment, its small franchise,
wholesale funding structure and limited profitability. The rating
is however supported by the bank's highly granular loan book and
adequate asset quality. BST's business is composed of a wholesale
operation, including trading activities, investment banking
services, corporate finance, and also factoring activities and
leasing to small businesses; and the consumer finance operation,
through personal loans and credit cards. BST also provides
fiduciary services and engages in loan securitization.

Banco de Servicios y Transacciones is headquartered in Buenos
Aires, with assets of Ar$2,574 million and equity of Ar$ 181
million as of March, 2014.


CONTROL UNION: Moody's Assigns Caa1 Corporate Family Rating
-----------------------------------------------------------
Moody's Latin America Agente de Calificacion de Riesgo assigned a
Caa1 corporate family rating to Control Union Argentina S.A. (CUA)
and a Baa2.ar national scale corporate family rating. The outlook
for the ratings is stable.

Moody's assigned the following ratings to Control Union Argentina
S.A.:

Corporate Family Rating: Caa1, stable outlook

National Scale Corporate Family Rating: Baa2.ar, stable outlook

Ratings Rationale

In assigning a Caa1 corporate family rating to CUA, Moody's is
reflecting the company's leading position as the main warrant and
certificate of deposits issuer in the Argentinean market, with a
65% of market share, as well as its regional presence in Uruguay
and Paraguay through subsidiaries. CUA's corporate family rating
of Caa1 derives from its baseline credit assessment (BCA) of caa1.

CUA issues certificates of deposit and commercial and financial
warrants, which are supported by the clients' inventory stored in
the warehouses. CUA plays an important role in the agribusiness
sector given the few financing resources available for production
activities, as it allows its customer access to better funding
conditions and loans.

The rating also consider the company's high operational costs
given its business model, and captures the challenging operating
environment of Argentina, characterized by economic deceleration,
increasing inflation, and growing policy uncertainty, which can
affect the entity's business volumes. Nevertheless, in the current
deteriorating financial context, CUA benefits from higher demand
for warrants on the part of financial institutions to support
their loans.

CUA's diversification by product and geography underpins its
profitability and sets it apart from peers in the local warrant
industry. The economies of scale the company has achieved also
allow it to perform better surveillance and coverage of non-
proprietary warehouses. The rating incorporates the company's
moderate earning power generation, largely focused in
agribusiness, as well as the volatility of its earnings. Net
income of Ar$9.5 million as of YE 2013, was 32% lower than the net
income registered the previous year, although pre-provision income
to total assets ratio remains relatively stable, in the 30%-32%
range.

CUA's business model is supported by its 17-year track record in
the warrant and quality certificates markets. As of December 2013,
it had assets under management of Ar$2.1 billion, and,
shareholders' equity of Ar$43.4million. CUA is 50% owned by
Control Union World Group, and the remaining stake is in the hands
of local shareholders. CUA's ratings also reflect its conservative
capitalization wherein shareholders' equity represented 46.8% of
total assets as of end December 2013.


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B R A Z I L
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CAIXA ECONOMICA: Moody's Assigns Ba3 (hyp) Rating to Tier 2 Notes
-----------------------------------------------------------------
Moody's Investors Service (Moody's) has assigned a Ba3 (hyb)
rating to the proposed USD-denominated non-viability Tier 2
subordinated notes to be issued by Caixa Economica Federal (Caixa,
Baa2 local currency deposit rating; D/ba2 bank financial strength
rating; stable outlook). The proposed notes will be due in 2024
with a call option in five years. The outlook on the ratings is
stable.

The capital securities are Basel III-compliant, and the terms and
conditions have been defined with the purpose of considering the
instrument as Tier 2 capital .

The rating is subject to receipt of final documentation, the terms
and conditions of which are not expected to change in any material
way from the draft documents that Moody's has reviewed.

The following rating was assigned to Caixa Economica Federal's
non-viability subordinated securities:

- Subordinated Foreign Currency Debt Rating: Ba3(hyb), outlook
stable

Ratings Rationale

In line with Moody's "Global Banks" methodology for rating
contractual non-viability securities, the rating of these
securities is notched from Caixa's adjusted baseline credit
assessment (adjusted BCA) of ba2. In the case of Caixa, the bank's
adjusted BCA is the same as its BCA because parental and/or
cooperative support is not applicable. The securities constitute
contingent capital in Caixa's equity structure and are designed to
absorb losses at or close to the point of non-viability (PONV).
Therefore, we have assumed that Caixa would share potential losses
in a non-viability-like event with the hybrid bondholders.

The Ba3 (hyb) rating assigned to the proposed contractual non-
viability subordinated notes is notched at one level below the
adjusted BCA of ba2. This reflects the risk of full or partial
write-downs to bondholders in the event that Caixa's common equity
Tier 1 ratio falls below 4.5%, or if a decision is made to make a
public sector capital injection -- or equivalent support; or if
the Central Bank makes a discretionary evaluation, determining
that a write-down is necessary.

Moody's unsupported ba2 standalone credit assessment for Caixa
incorporates the credit risks stemming from rapid loan growth,
well above the system's levels, as well as the benefits that the
bank's access to core funding provides in support of new business
origination. Over the past two quarters, Caixa's loan growth has
decelerated to a still-high year-over-year 33.9% in March 2014,
down from levels of 43% CAGR over the past five years. At the same
time, delinquency ratios have remained relatively stable at 3% of
total loans since the end of 2012, which indicates some
deterioration in the portfolio, as the bank expanded into new and
unseasoned business lines. Caixa's fast growth pace has also led
to declining core capital ratios, with tangible common equity
measured as a percentage of risk weighted assets reaching 5% in
March 2014.

Rating Methodology & Last Rating Action

The Credit Ratings for Caixa's Tier 2 Subordinated were assigned
in line with Moody's existing Credit Rating Methodology entitled
"Global Banks", dated May 2013. Moody's noted that on 1 May 2014
it released a request for comment in which the rating agency has
requested market feedback on potential changes to its Credit
Rating Methodology for non-viability contingent capital
securities.

If the revised Credit Rating Methodology is implemented as
proposed, the Credit Rating for these hybrid instruments may not
be affected. Please refer to Moody's Request for Comment, titled
"Moody's Proposed Approach for Rating Bank 'High Trigger'
Contingent Capital Securities and Revisions to Framework for
Rating Non-viability Contingent Capital Securities: A Proposed
Update to Moody's Global Banks Rating Methodology," for further
details regarding implications of the proposed Credit Rating
Methodology changes on Moody's Credit Ratings.

The principal methodology used in this rating was Global Banks
published in May 2013.

The last rating action on Caixa Economica Federal occurred on 3
October 2013, when Moody's changed the outlook on its ratings to
stable from positive as a result of the change in the sovereign
ratings' outlook.

Caixa Economica Federal is headquartered in Brasilia, Brazil, and
reported total assets of BRL910.1 billion (USD403.3 billion) and
equity of BRL34.7 billion (USD 5.4 billion) as of March 31 2014.


CEMIG DISTRIBUICAO: Moody's Lowers Global Issuer Rating to Ba1
--------------------------------------------------------------
Moody's America Latina took the following rating actions related
to Companhia Energetica de Minas Gerais (CEMIG, the Holding
Company), CEMIG Distribuicao (CEMIG-D), and CEMIG Geracao e
Transmissao (CEMIG-GT):

(i) CEMIG (Holding Company): issuer ratings confirmed at Ba1
(global scale) and Aa2.br (national scale), with stable outlook.

(ii) CEMIG-D: issuer ratings downgraded to Ba1 from Baa3 (global
scale), and to Aa2.br from Aa1.br (national scale), with negative
outlook. Senior unsecured ratings confirmed at Baa3 (global scale)
and Aa1.br (national scale).

(iii) CEMIG-GT: issuer ratings confirmed at Baa3 (global scale)
and Aa1.br (national scale), with stable outlook. Senior unsecured
ratings confirmed at Baa3 (global scale) and Aa1.br (national
scale), with stable outlook.

This concludes the review for possible downgrade that commenced on
February 3rd.

Ratings Rationale

The downgrade of CEMIG-D's issuer ratings to Ba1/Aa2.br with
negative outlook reflects primarily the deterioration of the
credit metrics of the Company, on a stand-alone basis, as a result
of the negative impact of the Third Periodic Tariff Review, which
took effect in April 2013, and the lower than expected tariff
adjustment that took place in April 2014. Moody's also foresee
that CEMIG-D, similarly to other distribution companies in Brazil,
may continue to face liquidity pressure in 2014 (and possibly
beyond) due to the higher costs related to the purchase of thermal
power electricity as a result of persistently tighter electricity
supply conditions due to drought conditions, and the potential
time lag of the relief that is expected to be provided by the
Federal Government.

The confirmation of CEMIG-D's Baa3 and Aa1.br senior unsecured
ratings and stable outlook (including the ratings of CEMIG-D's
BRL2 billion senior unsecured debentures issued in January 2013)
reflect the underlying guaranty of the parent Holding Company and
Moody's opinion about CEMIG's Baa3 rating on a consolidated basis,
which Moody's expect will continue in the foreseeable future.

The confirmation of CEMIG-GT's Baa3 and Aa1.br issuer and senior
unsecured ratings (including the ratings of CEMIG-GT's BRL1.35
billion senior unsecured debentures issued in January 2012 as well
as the BRL1.10 billion senior unsecured debentures issued in
January 2010, which are both guaranteed by the Holding Company)
reflects Moody's opinion about CEMIG's strategy to offset the
potential significant negative impact from the loss of generation
capacity (equivalent to 1,819 MW average energy) as a result of
Provisional Measure #579 (pending court decisions), the return to
the Federal Government of 18 generation concessions (equivalent to
642 MW average energy) by 2017 as well as the significant
reduction of operating revenues (BRL336 million per year) and
EBITDA since CEMIG accepted the accelerated renewal of its
transmission concessions. CEMIG's strategy aims at contracting
electricity to meet power purchase commitments with consumers in
the free market (ACL) to replace the potential loss of 2,461 MW
average energy by 2017, thus ensuring a steadier and more
predictable stream of operating cash flows.

The confirmation of CEMIG's Ba1/Aa2.br ratings with stable outlook
results from the structural subordination of the holding company
relative to its operating subsidiaries but still affirms Moody's
opinion about CEMIG's Baa3 rating on a standalone consolidated
basis and the high level of continued support from the State of
Minas Gerais (Baa3/stable) according to Moody's methodology for
government related issuers. Moody's ratings also take into account
a relatively more conservative dividend distribution policy during
the next few years due to the negative impacts of the Third Tariff
Review, lower transmission revenues and lower level of generation
assets as well as sound corporate governance.

In 2013, CEMIG's electricity distribution business accounted for
about 35% (including Light's participation) of the group's
consolidated EBITDA, whereas generation accounted for 58%.
According to CEMIG, its business portfolio aims at having the
generation business correspond to 40% of the group's consolidated
EBITDA, transmission 20% , and, distribution, in conjunction with
other businesses, 40%. On the other hand, CEMIG plans to increase
its activities in the natural gas distribution business through
GASMIG, a subsidiary jointly controlled with Gaspetro.

According to Moody's standard adjustments, from the last twelve
months ended on December 31, 2011 (FY2011) to the last twelve
months ended on March 31, 2014 (LTM 03/31/2014), CEMIG-D's Cash
Flow from Operations pre-Working Capital (CFO pre-W/C) has fallen
nearly 40%, from BRL1,486.6 million to BRL908.6 million, while
indebtedness relative to EBITDA (Debt/EBITDA) has steadily
deteriorated from 2.8 times to 6.1 times. During this period: (i)
(CFO pre-W/C)-to-Debt has decreased to 12.2% from 28.2%; (ii) (CFO
pre-W/C minus Dividends-to-Debt) ratio fell to 10.3% from 20.9%;
and (iii) (CFO pre-WC + Interest)/Interest (or CFO pre-WC Interest
Coverage) declined to 3.2x from 5.0x.

During the same period, according to Moody's standard adjustments,
CEMIG-GT's: (i) CFO pre-W/C increased to BRL 3,022.9 million from
BRL1,909.2 million, a 58% increase; (ii) CFO pre-W/C minus
Dividends-to-Debt ratio increased to 52.5% from 7.0%; (iii) CFO
pre-WC Interest Coverage increased to 9.3x from 3.4x; (iv) CFO
pre-WC-to-Debt increased to 61.3% from 21.1%; and (v) Debt/EBITDA
decreased to 1.2 times from 2.9 times.

For the 3-year period ended on December 31, 2013, according to
Moody's standard adjustments, some of CEMIG's CFO metrics on a
consolidated basis, deteriorated primarily due to the performance
of CEMIG-D as well as less conservative dividend distributions
over the period, so that: (i) CFO pre-W/C decreased to BRL 3.7
billion from BRL 4.87 billion; (ii) CFO pre-W/C minus Dividends-
to-Debt ratio fell to 7.2% from 15.2%; (iii) CFO pre-W/C Interest
Coverage increased to 5.4x from 4.4x; and (iv) CFO pre-W/C-to-Debt
increased slightly to 29.2% from 26.1%. As per Moody's standard
adjustments, in the LTM ended on 12/31/2013, CEMIG had
consolidated net operating revenues of BRL 13,743 million
(excluding construction revenues), EBITDA of BRL 5,228 million, an
increase of 6.5% and 31.7%, respectively, when compared with the
LTM ended on 12/31/2012.

In accordance with Moody's methodology for government related
issuers, or GRIs, the implied Baa3 consolidated rating of CEMIG
reflects the combination of the following inputs:

- Baseline Credit Assessment (BCA) of 10 (mapping to a baa3)

- High Level of Dependence (70%)

- Strong Level of Support (51%-70%)

- The Baa3 rating of the State of Minas Gerais which has a stable
outlook.

CEMIG is a GRI as defined in Moody's rating methodology
"Government-Related Issuers: Methodology Update", published in
July 2010. Moody's methodology for GRIs is to systematically
incorporate into the rating both the stand-alone credit risk
profile or Baseline Credit Assessment (BCA) of the company as well
as an assessment of the likelihood that its government owner would
provide extraordinary support to the company's obligations. The
BCA of a GRI is expressed on a 1-21 scale or as a range within the
1-21 scale, according to the issuer's preference, where one
represents the equivalent risk of an Aaa, two a Aa1, three a Aa2
and so forth.

CEMIG is an integrated power utility group, with equity stakes in
more than 200 companies, operating in the electricity generation,
transmission and distribution sectors. CEMIG is publicly traded on
the local (BM&FBOVESPA), New York (NYSE) and Madrid (LATIBEX)
stock exchanges. The government of the State of Minas Gerais holds
50.96% of CEMIG's voting capital and 22% of its total capital.
CEMIG is currently the largest integrated electricity utility in
Brazil.

CEMIG-D is one of the largest distribution companies in Brazil,
with a total concession area of 567 thousand square kilometers
(Km2), serving 774 cities, and 7.8 million consumers. Presently,
CEMIG-D accounts for 50% of CEMIG's consolidated net sales, 18% of
consolidated EBITDA, and 29% of consolidated indebtedness. CEMIG-D
is CEMIG's second largest company in terms of EBITDA, following
CEMIG-GT, which accounts for approximately 52% of CEMIG's
consolidated EBITDA. CEMIG is currently one of the largest
Brazilian electricity generation groups, with total installed
capacity of 7,142 MW. CEMIG controls CEMIG-D and CEMIG-GT owning
100% of their voting capital.


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C A Y M A N  I S L A N D S
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BOWAY LTD: Creditors' Proofs of Debt Due July 21
------------------------------------------------
The creditors of Boway Ltd 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 9, 2014.

The company's liquidator is:

          Ogier
          c/o Justin Savage
          Telephone: (345) 815 1816
          Facsimile: (345) 949-9877
          89 Nexus Way, Camana Bay
          Grand Cayman KY1-9007
          Cayman Islands


CORPORATE WORLD: Creditors' Proofs of Debt Due July 28
------------------------------------------------------
The creditors of Corporate World Opportunities 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 5, 2014.

The company's liquidator is:

          K.D. Blake
          c/o James Macfee
          Century Yard, Cricket Square
          Elgin Avenue, Grand Cayman
          P.O. Box 493 Grand Cayman KY1-1106
          Cayman Islands
          Telephone: +1 (345) 914-4465/ +1 (345) 949-4800
          Facsimile: +1 (345) 949-7164


DYNAMIC GROWTH: Commences Liquidation Proceedings
-------------------------------------------------
On June 19, 2014, the sole shareholder of Dynamic Growth
Opportunities Offshore, Ltd resolved to voluntarily liquidate the
company's business.

Creditors are required to file their proofs of debt to be included
in the company's dividend distribution.

The company's liquidator is:

          1832 Asset Management L.P
          Simon Mielniczuk
          1832 Asset Management L.P
          40 King Street West, 52nd Floor
          Toronto, Ontario, M5H 1H1
          Canada
          Telephone: +1 (416) 365 5142


DYNAMIC GROWTH MASTER: Commences Liquidation Proceedings
--------------------------------------------------------
On June 19, 2014, the sole shareholder of Dynamic Growth
Opportunities Master, Ltd. resolved to voluntarily liquidate the
company's business.

Creditors are required to file their proofs of debt to be included
in the company's dividend distribution.

The company's liquidator is:

          1832 Asset Management L.P
          Simon Mielniczuk
          1832 Asset Management L.P
          40 King Street West, 52nd Floor
          Toronto, Ontario, M5H 1H1
          Canada
          Telephone: +1 (416) 365 5142


ERMITAGE GLOBAL: Creditors' Proofs of Debt Due July 31
------------------------------------------------------
The creditors of Ermitage Global Multi-Strategy Fund are required
to file their proofs of debt by July 31, 2014, to be included in
the company's dividend distribution.

The company commenced liquidation proceedings on June 9, 2014.

The company's liquidator is:

          K.D. Blake
          c/o Jason Robinson
          P.O. Box 493 Grand Cayman KY1-1106
          Cayman Islands
          Telephone: +1 (345) 815-2600 / +1 (345) 949-4800
          Facsimile: +1 (345) 949-7164


MSL CHARTER: Creditors' Proofs of Debt Due July 21
--------------------------------------------------
The creditors of MSL Charter Corp. 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 18, 2014.

The company's liquidator is:

          Jeffrey Soffer
          19950 West Country Club Drive, Tenth Floor
          Aventura, FL 33180, USA
          Telephone: +1 (305) 937 6262
          Facsimile: +1 (305) 682 4109


OASIS MANAGEMENT: Commences Liquidation Proceedings
---------------------------------------------------
On June 19, 2014, the shareholders of Oasis Management Holdings II
Ltd. resolved to voluntarily liquidate the company's business.

Creditors are required to file their proofs of debt to be included
in the company's dividend distribution.

The company's liquidator is:

          Phillip Meyer
          c/o Oasis Management (Hong Kong) LLC
          Suite 2136, The Center
          99 Queen's Road Central
          Hong Kong


TRIANGULAR ISM: Commences Liquidation Proceedings
-------------------------------------------------
On June 19, 2014, the sole shareholder of Triangular ISM Fund Ltd
resolved to voluntarily liquidate the company's business.

Creditors are required to file their proofs of debt to be included
in the company's dividend distribution.

The company's liquidator is:

          Alun Davies
          Walkers
          190 Elgin Avenuem George Town
          Grand Cayman KY1-9001
          Cayman Islands
          Telephone: (345) 914 6365


TRUESDALE LTD: Creditors' Proofs of Debt Due July 21
----------------------------------------------------
The creditors of Truesdale Ltd. 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 9, 2014.

The company's liquidator is:

          Ogier
          c/o Justin Savage
          Telephone: (345) 815 1816
          Facsimile: (345) 949-9877
          89 Nexus Way, Camana Bay
          Grand Cayman KY1-9007
          Cayman Islands


WESTPORT GLOBAL: Creditors' Proofs of Debt Due July 23
------------------------------------------------------
The creditors of Westport Global Capital Ltd are required to file
their proofs of debt by July 23, 2014, to be included in the
company's dividend distribution.

The company commenced wind-up proceedings on April 3, 2014.

The company's liquidator is:

          Ogier
          c/o Anna Cummings
          Telephone: 815 1858
          Facsimile: 949-9877
          89 Nexus Way, Camana Bay
          Grand Cayman KY1-9007
          Cayman Islands


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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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AES DOMINICANA: Fitch Affirms 'B' IDR; Outlook Stable
-----------------------------------------------------
Fitch Ratings has affirmed AES Andres Dominicana SPV's (AES
Dominicana) Foreign Currency Issuer Default Rating (IDR) at 'B'
with a Stable Outlook.  Concurrently, Fitch has upgraded AES
Andres national long-term rating to 'A(dom)' from 'A-(dom)';
Stable Outlook.

KEY RATING DRIVERS

AES Dominicana's ratings reflect the Dominican Republic's (DR)
electricity sector's high dependency on transfers from the central
government to service its financial obligations, a condition that
links the credit quality of the distribution companies (EDEs) and
generation companies to that of the sovereign.  Low collections
from end-users, high electricity losses and subsidies have
undermined distribution companies' cash generation capacity,
exacerbating generation companies' dependence on public funds to
cover the gap produced by insufficient payments received from
distribution companies.  AES Dominicana's ratings also consider
its solid asset portfolio, strong balance sheet, and well-
structured purchase power agreements (PPAs).

The upgrade of AES Andres national long-term rating also reflects
its improving revenue diversification given its growing sales of
natural gas to non-related parties and the fact that the company
owns and operate the only LNG import facility in the country.

Sector's Dependence on Government Transfers


High energy distribution losses (above 30% in last five years),
low level of collections and important subsidies for end users
have created a strong dependence on government transfers.  This
dependence has been exacerbated by country's exposure to
fluctuations in fossil-fuel prices and energy demand growth (4.8%
CAGR in 2009 - 2013).  The regular delays in government transfers
pressure working capital needs of generators and add volatility to
their cash flows.  This situation increases the risk of the
sector, especially at a time of rising fiscal vulnerabilities
affecting the Central Government's finances.

High-Quality Asset Base

AES Dominicana's ratings reflect its high-quality generation
assets, which consist of Andres and Dominican Power Partners DPP
with an aggregate installed generating capacity of 555 MW.  Andres
is the company's newest and most efficient power plant, and ranks
among the lowest-cost electricity generators in the country.
Andres' combined-cycle plant burns natural gas and is expected to
be fully dispatched as a base-load unit as long as the liquefied
natural gas (LNG) price is not more than 15% higher than the price
of imported fuel oil No. 6. By 2017, the aggregate capacity of AES
Dominicana will increase in approximately 100 MW as result of the
development of a combined cycle facility in DPP's power plant.
The construction of this project would start in third quarter of
2014.

Strong Credit Metrics

The company presents strong credit metrics for the rating
category.  At March 2014, total debt to EBITDA was 0.7x, while net
total debt to EBITDA was 0.0x.  AES Dominicana plans to reduce DPP
capital to approximately USD 89 million during 2014.  Fitch
believes this transaction will not materially affect the combined
financial profile.  In 2013, EBITDA increased to USD 220 million
from USD 182 million and the EBITDA margin to 35.5% from 33.9%.
This improvement was driven mainly by higher sales of electricity
in the spot market and higher sales of natural gas.

Cash Flow Volatility Persists

The deficit of the sector and delays in government transfers
continue to pressure the company's cash flow.  For the LTM March
2014, AES Dominicana generated USD157 million of cash flow from
operations (CFFO), above the USD45 million posted in FY2012.  This
increase was mainly explained by lower inventories, increased
payables, higher income and lower income taxes paid.  Days of
sales (DOS) outstanding totalled 107 days for Andres and 93 for
DPP at March 2014 (125 and 122 at December 2013).  Fitch does not
expect significant reductions in the collection period in the
short to medium term given the deficit of the sector.

Debt Structure Adds Flexibility

The company's debt structure with a single maturity in 2020
provides ample financial flexibility and eliminates liquidity
risk.  As of March 31, 2014, AES Dominicana had cash and
marketable security holdings of USD178 million.

RATING SENSITIVITIES

A positive rating action could follow if the DR's sovereign
ratings are upgraded or if the electricity sector achieves
financial sustainability through proper policy implementation.  A
further increase of sales of natural gas outside the electricity
sector may also impact positively the ratings.

A negative rating action would follow if the DR's sovereign
ratings are downgraded, if further deterioration of the sector's
key performance indicators reinforces the dependence on government
transfers or if the company's operational and financial
performance deteriorates to the point of increasing the ratio of
Debt-to-EBITDA to 5x for a sustained amount of time.

Fitch has affirmed the following:

AES Andres Dominicana

   -- Long-Term FC IDR at 'B'; Outlook Stable;
   -- Senior Unsecured notes rating at 'B/RR4'.

Fitch has upgraded the following:

AES Andres B.V.

   -- Long-Term National rating to 'A(dom)' from 'A-(dom)';
Outlook Stable.


ITABO DOMINICANA: Fitch Affirms 'B' IDR; Outlook Stable
-------------------------------------------------------
Fitch Ratings has affirmed ITABO Dominicana SPV's (ITABO) foreign
currency and local currency Issuer Default Ratings (IDRs) at 'B'.
The Rating Outlook is Stable

KEY RATING DRIVERS

ITABO's ratings reflect the electricity sector's high dependency
on transfers from the central government to service its financial
obligations, a condition that links the credit quality of the
distribution companies (EDEs) and generation companies to that of
the sovereign.  Low collections from end-users as well as high
electricity losses and subsidies have undermined distribution
companies' cash generation capacity, exacerbating generation
companies' dependence on public funds to cover the gap produced by
insufficient payments received from distribution companies.
ITABO's ratings also consider its low-cost generation portfolio,
strong balance sheet and well-structured purchased power
agreements (PPAs), which contribute to strong cash flow generation
and bolster liquidity.

Sector's Dependence on Government Transfers

High energy distribution losses (above 30% in the last five
years), low level of collections and important subsidies for end
users have created a strong dependence on government transfers.
This dependence has been exacerbated by country's exposure to
fluctuations in fossil-fuel prices and robust energy demand growth
(4.8% CAGR in 2009-2013).  The regular delays in government
transfers pressure working capital needs of generators and add
volatility to their cash flows.  This situation increases the
sector's risk, especially at a time of rising fiscal
vulnerabilities affecting the Central Government's finances.

Low-Cost Asset Portfolio

ITABO's ratings incorporate its strong competitive position as one
of the lowest cost thermoelectric generators in the country,
ensuring the company's consistent dispatch of its generation
units.  The company operates two low-cost coal-fired thermal
generating units and a third peaking plant that runs on Fuel Oil
#2 (San Lorenzo) and sells electricity to three distribution
companies in the country through long-term U.S. dollar-
denominated PPAs.  The company expects to remain as a base load
generator even after a 700 MW coal generation project, sponsored
by the government, begins operations by 2017.  Fitch expects the
impairment of the San Lorenzo plant, which occurred in 2013, will
not materially affect the company's cash-generation capacity.

Adequate Credit Metrics

The company presents strong credit metrics for the rating
category.  Leverage, measured as total debt to EBITDA, fell to
1.8x at March 2014 from 2.4x at Dec. 2012.  In the same period,
EBITDA increased to USD63.7 million from USD 54.1 million, while
the EBITDA margin fell to 28.6% from 22.5%.  This improvement was
driven mainly by lower prices of coal and lower purchases of
energy in the spot market (as a result of increased generation
resulting from fewer plant stoppages).  Net results for 2013 were
affected by a reversion of interest expenses of USD10.4 million
and an asset impairment of USD 16.2 million (San Lorenzo unit).
CFFO improvement

For the LTM ended in March 2013, ITABO generated USD60.2 million
of cash flow from operations (CFFO), above the USD33 million
posted in FY2012.  This improvement derived from the increased
EBITDA and the sale of long-term receivables owed by DisCos for
USD21.1 million.  However, like other generators in the country,
the company struggles to collect receivables from distribution
companies.  At the end of first-quarter 2014, days of sale (DOS)
stood at 91 days (vs. 143 in December 2013).  Fitch expects the
continuation of arrears accumulation to add further volatility to
ITABO's cash flow generation in the future.

Debt Structure Adds Flexibility

The company's debt structure is quite manageable with a six-year
average life which properly contributes to the reduction of
liquidity risk.  As of March 31, 2014, ITABO's cash and marketable
security holdings stood at USD88 million, providing ample
liquidity cushion to meet operational and financial needs.

RATING SENSITIVITIES

A positive rating action could follow if the Dominican Republic's
sovereign ratings are upgraded or if the sector achieves financial
sustainability through proper policy implementation.

A negative rating action would follow if the Dominican Republic's
sovereign ratings are downgraded, if further deterioration of the
sector's key performance indicators reinforces the dependence on
government transfers, or if the company's operational and
financial performance deteriorates to the point of increasing the
ratio of debt to EBITDA to 5x in a sustained fashion.

Fitch has affirmed the following ratings:

   -- ITABO Dominicana SPV's foreign currency IDR at 'B', Stable
       Outlook;

   -- Empresa Generadora de Electricidad Itabo, S.A.'s foreign
      currency and local currency IDRs at 'B', Stable Outlook;

   -- ITABO Dominicana SPV's outstanding notes due in 2020 at
      'B/RR4'.


===========
G U Y A N A
===========


GUYANA: To Get $16MM IDB Loan for Water & Sanitation Services
-------------------------------------------------------------
Guyana will strengthen and improve access to drinking water and
sanitation services with a US$16,838,250 loan approved by the
Inter-American Development Bank (IDB).  The program will also
receive support from the Caribbean Investment Fund of the European
Union totaling US$14,838,250.

The initiative is known as the Program to Improve Water and
Sanitation Infrastructure and Supply.  It calls for infrastructure
projects to build, upgrade and expand water treatment plants and
enhance access to adequate sanitation through measures to
strengthen the supplier Guyana Water Incorporated (GWI), the
design and implementation of a program to monitor non-registered
water and a public awareness campaign on the use of water and
proper hygiene practices.

Despite progress over the past decade in access to safe sources of
water and sanitation, water and sewage services in Georgetown and
other coastal areas still face constant institutional, financial
and operational challenges.  For instance, the quality of water
supply services is hindered by a deterioration in water
distribution networks, with 50 percent to 70 percent of water used
going unaccounted for at the national level (and more than 70
percent in Georgetown).  Furthermore, the current sewage system
covers just 48,000 people living in Georgetown - about 6.5% of the
national population.  The rest of the population seeks individual
solutions, but in some cases, these arrangements are not adequate.

The program is expected to increase the percentage of households
with 24-hour access to water and water pressure that is in line
with national standards, reduce the percentage of water that goes
unaccounted for and raise the number of homes with improved access
to drinking water and proper sanitation arrangements.

The IDB loan is for 30 years and comes from its Ordinary Capital
and Fund for Special Operations.  It has a grace period of five
years and a fixed interest rate (and a rate of 0.25 percent rate
in the case for the funds of the Fund for Special Operations).


=============
J A M A I C A
=============


DIGICEL GROUP: To Postpone Blocking of VoIP in Trinidad & Tobago
----------------------------------------------------------------
RJR News reports that the Telecommunications Authority of Trinidad
and Tobago has asked Digicel to hold off on blocking certain
third-party Voice over Internet Protocol (VoIP) applications, as
it has done in Jamaica, while an investigation is done.

A report in the Trinidad Express newspaper said Digicel Group has
acceded to the request, effective Tuesday, July 8, according to
RJR News.  Digicel reportedly said it welcomed the TATT
investigation, the report relates.

The telecommunications company has already blocked its customers
in Jamaica and Haiti from accessing the free call applications.
They include Viber, Tango and Nimbuzz, the report notes.

Selby Wilson, Chairman of the TATT, described the block as a
retrograde step, the report notes.

                     About Digicel Group

Headquartered in Jamaica, Digicel Group Limited provides mobile
telecommunications services in the Caribbean and the Central
American markets.   The company's services include rollover
minutes, GPRS data services, prepaid roaming, SMS to e-mail, and
multimedia messaging, as well as broadband.

                        *     *     *

As reported in the Troubled Company Reporter-Latin America on May
27, 2014, Fitch Ratings has affirmed the ratings of Digicel Group
Limited (DGL) and its subsidiaries Digicel Limited (DL) and
Digicel International Finance Limited (DIFL), collectively
referred as 'Digicel' as:

DGL
--Long-term Issuer Default Rating (IDR) at 'B' with a Stable
  Outlook;
--USD 2 billion 8.25% senior subordinated notes due 2020 at 'B-
  /RR5';
--USD 1 billion 7.125% senior unsecured notes due 2022 at 'B-
  /RR5'.

DL
--Long-term IDR at 'B' with a Stable Outlook;
--USD 800 million 8.25% senior notes due 2017 at 'B/RR4';
--USD 250 million 7% senior notes due 2020 at 'B/RR4';
--USD 1.3 billion 6% senior notes due 2021 at 'B/RR4'.

DIFL
--Long-term IDR at 'B' with a Stable Outlook;
--Senior secured credit facility at 'B+/RR3'.


UC RUSAL: Paulwell Puts Firm on Notice
--------------------------------------
RJR News reports that Jamaica Mining Minister Phillip Paulwell has
said that the Jamaican Government is taking steps to ensure that
UC Rusal, the Russian aluminum company, does not continue to "hold
Jamaica at ransom" over the reopening of the Kirkvine and Alpart
alumina refineries.

Mr. Paulwell told the Jamaican House of Representatives that, with
new developments in the global bauxite sector, Jamaica needs to
make decisions in its best interest to get the plants up and
running again, according to RJR News.

Accordingly, Mr. Paulwell said that the government had placed UC
Rusal on notice, by letter dated July 1, "that it is my intention
to revoke the special mining leases, in respect of the Alpart and
Kirkvine refineries, in the event that bona fide mining operations
do not commence within six months," the report notes.

The two plants have been closed since 2009.

UC Rusal controls 65 per cent of Jamaica's alumina production
capacity and operates three of the island's four alumina
refineries.

                             *     *     *

As reported in the Troubled Company Reporter-Latin America on
March 31, 2014, RJR News said that UC Rusal reported a massive
increase in net losses in the year to December 31.  This was due
mainly to a large impairment cost and one-off restructuring
charges combined with lower production and a fall in aluminum
prices, according to RJR News.

The report noted that the company reported a net loss of US$3.2
billion.  It suffered a US$528 million loss in 2012.


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


GRUPO FERTINAL: S&P Affirms 'CCC+' CCR; Outlook Negative
--------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'CCC+' global
scale corporate credit rating on Grupo Fertinal S.A. de C.V.
(Fertinal).  The outlook remains negative.

The rating on Fertinal is based on S&P's expectation that the
company's financial performance would improve modestly from very
weak levels as a result of expected favorable DAP and MAP prices,
which are the main drivers for the company.

"As a result of more favorable prices, the company's EBITDA was
about $5 million during the first quarter of 2014, compared with a
loss of about $400,000 during the same period a year-earlier,"
said Standard & Poor's credit analyst Fabiola Ortiz.  S&P expects
that the company will improve its EBITDA generation as a result of
expected recovery of DAP and MAP prices during the second half of
the year.  Moreover, during last quarter of 2014, the company will
substitute the use of fuel oil for natural gas in its operating
process, which could lead to a further reduction in its operating
costs.


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


PUERTO RICO ELECTRIC: S&P Lowers Rating on Revenue Bonds to 'B-'
----------------------------------------------------------------
Standard & Poor's Ratings Services has lowered its rating on
Puerto Rico Electric Power Authority's (PREPA) power revenue bonds
four notches to 'B-' from 'BB'.  The rating remains on CreditWatch
with negative implications, where S&P originally placed it
June 18, 2014.

"The downgrade reflects our view of PREPA's inability to
successfully negotiate renewal of a liquidity facility it used to
purchase oil," said Standard & Poor's credit analyst Judith Waite.

S&P believes this increases the risk that the authority will
attempt to restructure long-term debt, as a law passed in June
allows.  The negotiating deadline for the revolving credit that
matured in January has been extended to July 31.  If the facility
is not renewed, PREPA will have to repay the $146 million
outstanding.  If a second revolving credit facility, which matures
Aug. 14, 2014, is similarly not renewed, the authority will have
to repay the $525 million outstanding.  Normally, it repays the
lines with revenue associated with fuel costs recovered from
customers.  Because PREPA does not have surplus liquidity to repay
the amounts, the utility might consider using an option under the
new law, which "allows public corporations, among other things, to
adjust their debts in the interest of all creditors affected
thereby; provides procedures for the orderly enforcement and, if
necessary, the restructuring of debt in a manner consistent with
the Commonwealth Constitution and the U.S. Constitution; and
maximizes returns to all stakeholders by providing them going
concern value based on each obligor's capacity to pay."

PREPA has $8.6 billion of power revenue bonds outstanding.  A
pledge of the electric system's net revenues secures the bonds.

S&P lowered the rating and placed it on CreditWatch negative in
response to PREPA's representation that the Government Development
Bank would not provide interim liquidity if the authority does not
renew its two liquidity facilities.  S&P lowered the rating again
when the legislation passed.

The CreditWatch placement is pending the outcome of PREPA's
negotiations with the banks.  S&P expects to resolve the
CreditWatch within the next three months.


PUERTO RICO: Fitch Lowers Rating on $13.4BB GO Bonds to 'BB-'
-------------------------------------------------------------
Fitch Ratings has downgraded the ratings of various Commonwealth
of Puerto Rico bonds as follows:

   -- $13.4 billion Commonwealth of Puerto Rico GO bonds to 'BB-'
      from 'BB';

   -- $6.7 billion Puerto Rico Sales Tax Financing Corporation
      (COFINA) senior lien sales tax revenue bonds to 'BB-' from
      'AA-';

   -- $8.5 billion COFINA first subordinate lien sales tax revenue
      bonds to 'BB-' from 'A+';

   -- $2.9 billion Employees Retirement System of the Commonwealth
      of Puerto Rico (ERS) pension funding bonds to 'BB-' from
      'BB';

   -- $3.4 billion Puerto Rico Aqueduct and Sewer Authority
      (PRASA) revenue bonds, series A, B, 2012A and 2012B (senior
      lien) to 'B+' from 'BB+';

   -- $658 million PRASA Commonwealth guaranty revenue bonds to
      'BB-' from 'BB';

   -- $1.4 billion Puerto Rico Public Building Authority
      government facilities revenue bonds guaranteed by the
      Commonwealth to 'BB-' from 'BB'.

The 'B+' rating on PRASA's senior lien revenue bonds is on
Negative Watch in light of near-term liquidity requirements
dependent on third-party extension of credit or market access.

All other ratings carry a Negative Rating Outlook.  The Rating
Outlook indicates the direction a rating is likely to move over a
one to two-year period.  A Rating Watch indicates that there is a
heightened probability of a rating change and the likely direction
of such change.

The rating actions follow passage of the Puerto Rico Public
Corporation Debt Enforcement and Recovery Act, which establishes a
restructuring regime for public corporations that may become
insolvent.  The Act contemplates two procedures for addressing
debt obligations.  While they are intended to restore solvency
over the long-term, both procedures entail debt restructuring that
would trigger suspension of debt payments and preclude the timely
payment of principal and interest during the pendency of the
proceedings.

Fitch downgraded the rating on $8.7 billion of Puerto Rico
Electric Power Authority (PREPA) power revenue bonds to 'CC' on
June 26 based on the agency's belief that a debt restructuring or
default by the Authority is probable in light of the Act, and
given the near-term liquidity demands brought on by maturing bank
lines of credit and the required repayment of outstanding loans
due in July and August 2014.

Fitch does not rate any other Commonwealth appropriation- or
special tax-secured debt.

SECURITY

COMMONWEALTH GO & GUARANTEED: GO bonds are secured by the good
faith, credit and taxing power of the Commonwealth of Puerto Rico.
Strong legal provisions for GO debt include a constitutional first
claim on Commonwealth revenues, including transportation-related
and rum excise tax revenues that are dedicated to specific
authorities and other bonds.  Bonds of the Puerto Rico Public
Building Authority and PRASA that are guaranteed by the
Commonwealth are backed by the Commonwealth's commitment to draw
from any funds available in the treasury.  The good faith and
credit of the Commonwealth is pledged to any such deficiency
payments, resulting in a rating that is the same as the
Commonwealth's GO bonds.

COFINA: COFINA bonds have a security interest in and are payable
from the Commonwealth's sales and use tax.  COFINA is an
independent governmental instrumentality of the Commonwealth and
affiliate of the Government Development Bank for Puerto Rico (GDB)
established by specific legislation.

PRASA: PRASA bonds are secured by a gross lien of all authority
revenues related to PRASA's combined water and sewer system, as
defined in the amended master agreement of trust (MAT), senior to
all other debt or expenses of PRASA.  Under the provisions of the
restructuring act, the gross lien will not be enforceable and is
converted effectively to a net lien similar to that under Chapter
9 of the Federal Bankruptcy Code that applies to special revenue
bonds.

EMPLOYEES RETIREMENT SYSTEM: The ERS bonds are a limited, non-
recourse obligation of the pension system, payable from and
secured by a pledge of statutorily required employer contributions
to the system.

KEY RATING DRIVERS

COMMONWEALTH GO & GUARANTEED: The Commonwealth has repeatedly
demonstrated its focus on bolstering the fundamentals of its
general credit, including through continued progress in closing
the general fund budget deficit and limiting exposure to public
corporation shortfalls.  However, the one-notch rating downgrade
reflects marginal deterioration in credit fundamentals despite
these efforts, with continued economic weakness, revenue
underperformance, and challenges to fiscal stabilization efforts,
including reform of the teachers' pension system.  Although
passage of the Public Corporation Debt Enforcement and Recovery
Act does not have a direct negative effect on the GO credit, Fitch
will closely monitor how passage of the Act affects future market
access and commitment to bondholders.  Fitch continues to believe
that the ultimate success of efforts to put the Commonwealth's
finances on a sustainable path will be driven by the performance
of the economy.  Maintenance of the Negative Outlook reflects both
the continued weakness of economic performance and the significant
implementation risks to achieving budget balance.

COFINA: Fitch is lowering its rating on the COFINA bonds to the
level of the Commonwealth's general credit.  Pursuant to Fitch
criteria, the amount of credit given to a special tax security is
tempered by the risk that the state, faced with extreme financial
stress, could exercise its sovereign powers to the detriment of
bondholders.  Although COFINA bonds are specifically excluded in
the Public Corporation Debt Enforcement and Recovery Act, the
passage of the Act has substantially increased Fitch's assessment
of the risk that the Commonwealth may take steps to the detriment
of COFINA bondholders if the Commonwealth considered that a fiscal
emergency and its need to provide essential services required
legislative action limiting revenues available to COFINA.  Such an
action would clearly be subject to challenge by bondholders on
grounds of unconstitutional impairment of contract similar to the
action currently being pursued by bondholders challenging the Act.
While bondholders could ultimately prevail on such claims, a
default in payment would precede any such outcome.  Fitch's
ratings reflect the probability of default and do not consider the
possible ultimate recovery on a successful impairments claim.  As
such, in Fitch's opinion, following the change in law a rating
distinction between the GO and COFINA credits is no longer
warranted.  Fitch does not place COFINA debt below the
Commonwealth's GO as the agency believes that if circumstances
warranted a shift in COFINA revenues to fund the general
government, the GO bonds would be equally likely to default.
Similarly, there is no longer a rating distinction between the
senior and subordinate COFINA liens, as the legal security of each
would warrant a higher rating in the absence of Commonwealth risk
factors.

PRASA: The downgrade to 'B+' from 'BB+' reflects the downgrade of
the Commonwealth's GO rating as well as the implementation of the
Act and resulting weakened legal protections of public corporation
bondholders (including PRASA bondholders).  Further, the downgrade
on PRASA's rating reflects the central government's ability to
directly or indirectly exert influence that could have adverse
implications to PRASA's operations, pointing to a rating that
Fitch currently believes can be no higher than that of the
Commonwealth GO.  Fitch notes that a one-notch distinction below
the Commonwealth GO as well as Negative Watch is warranted despite
PRASA's currently sound operating position, due to the market
challenges PRASA may face over the coming months as it seeks to
refinance certain bank lines of credit (LOC) and procure funds for
its largely regulatory-driven capital improvement program (CIP).

EMPLOYEES RETIREMENT SYSTEM: The ERS bonds continue to be rated on
par with the Commonwealth's GO rating, reflecting the strong legal
obligation for employers to make contributions to the system, the
long history of timely payment of pension contributions to the
system, satisfactory coverage of debt service requirements by
pledged revenues, and the general credit quality of the
Commonwealth of Puerto Rico, the largest contributor.  Puerto Rico
Supreme Court decisions provide protection against the
Commonwealth legislature lowering the statutory contribution rate,
and required employer contributions to the system have increased
in recent years.  Given that GO bondholders have a claim on
Commonwealth revenues senior to contributions due to the pension
systems, the rating on the ERS bonds can be no higher than the
Commonwealth GO rating.  Like COFINA, the ERS was specifically
excluded in the Debt Enforcement and Recovery Act.

RATING SENSITIVITIES

COMMONWEALTH GO & GUARANTEED: Maintenance of the current rating
will require stabilization in economic performance and emergence
from the long recessionary period.  In addition, failure to show
continued progress toward structural balance would pressure the
rating.  Finally, consistent external market access, including for
intra-year general fund cashflow borrowing, is important to the
stability of the rating.

COFINA: Going forward, the rating on the COFINA bonds will be
sensitive to changes in the Commonwealth's GO rating, to which it
is now linked.  The rating continues to be sensitive to the
performance of the pledged sales tax, although for the foreseeable
future the GO rating is expected to be the limiting factor.

PRASA: Difficulty or perceived inability to refinance PRASA's
outstanding bank LOCs and access funds for its CIP in the coming
months would put negative pressure on PRASA's rating.  Also, the
rating on PRASA's revenue bonds likely will be influenced by
movement of the Commonwealth GO rating for the foreseeable future.
Finally, deterioration in financial results that threaten PRASA's
ability to achieve at least break-even results would likely result
in downward pressure on the rating.

EMPLOYEES RETIREMENT SYSTEM: The rating on the ERS bonds is
sensitive to changes in the Commonwealth's GO rating, to which it
is linked due to the dominant Commonwealth role in making the
employer contributions that secure the bonds.  The rating is also
sensitive to the maintenance of adequate debt service coverage
from such contributions.

CREDIT PROFILE

COMMONWEALTH GO & GUARANTEED

The 'BB-' rating on Puerto Rico's GO and GO-guaranteed debt
reflects demonstrated weakness in the Puerto Rican economy, very
high liabilities including outstanding debt and unfunded pensions,
still challenged financial operations, and limited financial
flexibility.

The Commonwealth's economy has been in recession since 2006.
Although some recent information suggests nascent stabilization,
albeit at weak levels, results are mixed.  Nonfarm employment has
been essentially flat in 2014 after declines in 2013.  The
unemployment rate of 13.8% for May 2014 compares favorably to a
peak of 16.9% in May 2010, but incorporates continued drops in the
labor force that have once again accelerated year-over-year in
recent months.  The rate of decline in GDB's monthly economic
activity index has slowed notably this year; however, monthly
year-over-year declines persist (down 1.1% in May).  Fitch sees
the economy as a primary driver of future rating direction for the
GO credit.

Following a long history of large budget deficits and a reliance
on borrowing to fund operations, the general fund gap has been
reduced considerably.  Most recently, the enacted fiscal 2015
budget reportedly continues strong efforts to bring general fund
spending in line with revenues.  Fitch believes achieving and
maintaining balance will remain challenging, but the commitment of
management to this goal appears strong.  On the downside, the
Commonwealth has had to grapple with significant underperformance
in corporate tax revenues in fiscal 2014.  The Commonwealth's
above-average reliance on corporate taxes remains a concern, given
the potential volatility and concentration inherent in these
revenue streams, and management is reportedly considering a
substantial revision to the revenue system.

Puerto Rico's bonded debt levels and unfunded pension liabilities
are very high relative to U.S. states, with a large amount of
outstanding debt issued for deficit financing purposes.  Pension
funding will remain exceptionally low even with the significant
pension reform effort undertaken by the current administration,
and the April 2014 Puerto Rico Supreme Court decision finding
recent reforms of the teachers' retirement system unconstitutional
presented the administration with yet another challenge.  The
Commonwealth has stated in the past that without reform the
teachers retirement system would confront an annual cash flow
deficit beginning in fiscal 2020.

Puerto Rico's capital markets access deteriorated steeply in 2013
and the Commonwealth has become increasingly reliant on markets
other than traditional municipal investors for external financing.
The successful sale of $3.5 billion in GO bonds in March 2014
provided some critical breathing room, but needs remain, including
for general fund cashflow borrowing.  Reliable external market
access is important to long-term stability, and how passage of the
Act affects market access will be a significant rating factor for
Fitch.

COFINA

Bonds issued by COFINA are secured by the Commonwealth's island-
wide sales and use tax, which became effective on Nov. 15, 2006.
The tax was instituted as part of Puerto Rico's 2006 tax and
fiscal reform, with COFINA created to refinance appropriation debt
of the Commonwealth and thereby free up general fund resources.
The Commonwealth expanded leveraging of the revenue stream in 2009
as part of a fiscal and economic package designed to stimulate
Puerto Rico's economy and address recurring budget deficits.

Annual debt service coverage by pledged revenues is considerable;
based on fiscal 2013 revenues, debt service for the year was
covered 5.2x for the senior lien and 1.9x for the first
subordinate lien.  However, the final maturity of the bonds is
very long and the program's rising debt service profile requires
some growth in revenues to achieve coverage of later maturities,
particularly for the first subordinate lien bonds.  Fiscal 2013
revenues would be sufficient to fund debt service without growth
through 2056 (senior lien) and 2030 (first subordinate lien).
These figures do not include the additional 0.5% recently added to
the pledged sales tax to boost coverage or the above-trend growth
in fiscal 2014 due to base expansion.

Sales tax collections have proven resilient, increasing since the
lowest point in the recession even as the economy has remained
weak.  Collections fell in only one year during the recession, by
4.5% in fiscal 2009.  Total sales tax revenue is up 6.5% year-
over-year through May 2014.  This is below original expectations
for the year, reflecting underperformance of the sales tax changes
included in the budget to increase revenues, but still solid
growth given continued economic sluggishness.

Strong legal opinions that have been provided with COFINA
offerings state that neither the Commonwealth general fund nor
Commonwealth GO bondholders have a claim on pledged sales tax
revenues until COFINA debt service is fully funded each year.
Strong non-impairment language provides some additional assurances
to bondholders.  Nevertheless, as noted above, in light of the
Commonwealth's willingness to change law to the detriment of
bondholders with passage of the Public Corporation Debt
Enforcement and Recovery Act, Fitch no longer believes that the
structure provides sufficient confidence in superior prospects for
full and timely payment to warrant a rating above the
Commonwealth's GO rating.

PRASA

PRASA faces potential near-term challenges to takeout expiring LOC
from Puerto Rican banks and raise significant funds for annual
capital expenditures in light of market concerns relating to the
Act and PREPA's deteriorating credit .  PRASA currently has drawn
$200 million on its bank LOCs and is expected to make draws up to
the maximum $350 million prior to expiration of the LOCs in March
2015.  The LOCs are solely for interim capital financing and PRASA
expects to seek capital market access prior to expiration of the
LOCs to fix out the LOCs with long-term debt.  Simultaneously,
PRASA also hopes to raise sufficient monies to fund its remaining
fiscal 2015 - 2016 capital needs and possibly fiscal 2017 capital
demands as well.  Effecting the long-term takeout of the LOCs and
generating capital funding resources for some period of time will
be critical to removal of the Negative Watch.

PRASA currently is operationally sound after relying on the
commonwealth and GDB to address shortfalls in cash flows for the
last several years.  PRASA's turnaround was the result of an
average 67% rate hike enacted for fiscal 2014.  For unaudited
fiscal 2014, PRASA generated $1.05 billion in revenues (1% under
budget) while spending $691 million towards operations (1% under
budget) and incurring debt service costs $28 million under budget.
Based on these results and excluding the $86 million in expected
rate stabilization fund (RSF) transfers, total debt service
coverage (DSC) for the year on a net revenue basis was 1.31x
compared to a budgeted 1.19x; if expected RSF transfers are
deducted from revenues available for debt service then total DSC
was 1.0x for the year.

PRASA has updated its projections through fiscal 2018 and these
continue to point to self-sufficient operations, generally
favorable operating performance and no additional rate hikes.
PRASA's assumptions currently appear reasonable but operating
results could be negatively influenced from changes in PRASA's
operating environment.

For forecasting purposes, PRASA has assumed that the current
preferential electricity rate remains in place but that a planned
reduction in the rate in fiscal 2017 does not occur.  Based on
this change in assumption alone, PRASA plans to divert all surplus
revenues for fiscals 2014 - 2015 to its RSF and use these funds to
offset the higher than expected energy costs beginning in fiscal
2017 in order to maintain 1.0x DSC and forestall additional rate
hikes.  In PRASA's prior forecast a portion of surplus revenues
were to be utilized for pay-go capital purposes, so this change
will result in higher borrowing levels than previously
anticipated, albeit only modestly.  If PREPA rescinds the
preferential rates altogether, the forecast could come under
further pressure.  Officials have indicated that PRASA would pass-
through such costs immediately, but this would place added
pressure on PRASA's already burdened rate base.

PRASA's projections prudently do not include $37 million in
expenditure cuts mandated by Law 66, which should add some cushion
to financial results in the coming years.  PRASA has included the
corresponding reduced revenues from the commonwealth related to
the law's requirement that PRASA provide fiscal emergency
contributions to the commonwealth by not charging for services.
Fitch notes that even with the expenditure reduction offset, the
commonwealth's actions to unilaterally demand assistance from
PRASA exposes PRASA to future potential fiscal and operational
challenges and limits PRASA's credit fundamentals from previous
expectations.

EMPLOYEES RETIREMENT SYSTEM

The ERS pension funding bonds are payable from and secured by a
pledge of statutorily required employer contributions to the
system.  Employer contributions are made by the Commonwealth,
associated public corporations, and municipalities.  There are 215
contributing employers to the system, but the central government
represents about half of total contributions to the system and
there are strong interrelationships between other contributors and
the central government.  No retirement system assets or
Commonwealth backstop is available to the bonds and bondholders
have no claim on employee contributions.

There is a strong legal obligation for employers to make
contributions to the retirement system , a long history of timely
payment, and legal protections against the legislature making
changes to the system that would reduce the system's funded
status.  Although subject to appropriation, the contributions are
appropriated annually along with appropriations for employee
compensation and have a legal payment priority after only public
debt.  Contributions are made along with payroll as part of an
employer's payroll cycle (15 days or monthly), with about 50% of
total contributions made through the Commonwealth's Department of
Treasury payroll system.

The obligation to pay is a percentage of payroll calculation
rather than a fixed dollar amount and, as such, revenues are
driven by trends in payroll and the required contribution rate.
Required employer contributions to the system have increased in
recent years, and the Commonwealth is implementing contribution
rate increases to address funding deficiencies in the system.  By
the end of the 10-year ramp-up period, pension contributions will
have increased from 9.275% of covered payroll, the statutorily
required employer contribution rate in place from 1990 to 2011, to
20.525%, all of which is pledged to bondholders.

The debt structure is somewhat weak with a very long final
maturity (50 years) and rising debt service profile.  However,
pledged revenues provide satisfactory annual coverage of debt
service requirements and the required contribution increases will
support coverage going forward.  In fiscal 2013, the statutory
employer contribution of $425 million provided 2.5x coverage of
annual debt service and 0.99x coverage of MADS ($429 million in FY
2028).

The rating on the ERS bonds is the same as that assigned to the
Commonwealth's GO bonds, as the Commonwealth is the largest
employer contributor and contributions have a strong legal
priority.  However, given that GO bondholders have a claim on
Commonwealth revenues senior to contributions due to the pension
systems, the rating on the ERS bonds can be no higher than the
Commonwealth GO rating.


===============
S T.  L U C I A
===============


* ST. LUCIA: PM Agonises Over Ways to Cut Fiscal Deficit
--------------------------------------------------------
Caribbean360.com reports that St. Lucia government said it is
important to reach a consensus with the public sector unions on
ways of dealing with the current EC$76 million (One EC Dollar =
US$0.37 cents) fiscal deficit.

Prime Minister Dr. Kenny Anthony said an agreement will be the
best signal that can be sent to the financial markets, according
to Caribbean360.com.

The report notes that Dr. Anthony, who is also Finance Minister,
had proposed a five per cent cut in the salaries of public
servants as a way of helping to deal with the crisis, but this has
been rejected by the unions.

Just recently he wrote to the unions expressing the government's
willingness to activate a government negotiating team (GNT), but
said he is still awaiting a response, the report relates.

"There are times I really wish I can explain to the people how
difficult and how hard it is for me ideologically and otherwise,"
the report quoted Dr. Anthony as saying.  "I go to bed sometimes
and remember that I was a former president of the St Lucia
Teachers Union (SLTU) and fought for increased wages for teachers
in my time, and here I am at the crossroads dealing with a very
difficult situation."

However, Dr. Anthony noted that in all major decisions,
politicians have to make a judgment as to whether what they are
doing is the right thing, the report relates.

"I have agonized over it and I know in my heart it's the right
thing," the Prime Minister said, the report notes.

Dr. Anthony, the report discloses, observed that he may go down in
the history of the SLTU as the leader who may have betrayed the
leadership of the union that he once led, nevertheless he said it
was a price he was willing to pay for his country.

At the same time, Dr. Anthony said there is value in reaching a
consensus, the report relays.

"There is benefit to be gained if we can agree to move forward,"
Dr. Anthony said, but added that while he is seeking to persuade
the unions to make sacrifices, if the effort fails he will have to
exercise "the burden of leadership" that was entrusted to him, the
report relays.

Meanwhile, the report notes, the Trade Union Federation (TUF) is
preparing to break its silence on the ongoing impasse.

A union spokesman confirmed that the TUF, which does not include
the powerful Civil Service Association (CSA), plan to hand
government a list of its own proposals, the report says.

This would represent a response to a letter from Dr. Anthony in
which he listed two agenda items he wants the discussions to be
centered on, salaries and conditions of work and expenditure
reduction and wage adjustment, the report notes.

However, the report relays, the unions remain displeased with Dr.
Anthony's insistence that the latter be separate items on the
agenda, claiming that the discussion on salaries would involve
wage adjustments hence the separation of the two is unnecessary.

All public sector unions have already rejected government's five
per cent wage cut and a three-year wage freeze, which government
said would help raise EC$18 million, the report adds.


================================
T R I N I D A D  &  T O B A G O
================================


CARIBBEAN AIRLINES: Faces TT$100 Million Loss
---------------------------------------------
Trinidad and Tobago Newsday reports that Caribbean Airlines
Limited is facing another loss.

However, Finance Minister Larry Howai is hopeful the loss could be
narrowed down to less than TT$100 million, according to Trinidad
and Tobago Newsday.

Mr. Howai noted the new chief executive officer, Canadian Michael
DiLollo, has shown competence in his role and there was also new
management in place, the report relates.  Minister Howai also
noted there was new management coming as well, the report notes.

"So my next move would be to try and strengthen the board some
more and hopefully we could make a full turnaround in due course,"
the report quoted Mr. Howai as saying.

Mr. Howai noted the airline industry is not the easiest and many
airlines have gone bankrupt at some point, the report adds.

Caribbean Airlines Limited -- http://www.caribbean-airlines.com/
-- provides passenger airline services in the Caribbean, South
America, and North America.  The company also offers freighter
services for perishables, fish and seafood, live animals, human
remains, and dangerous goods.  In addition, it operates a duty
free store in Trinidad.  Caribbean Airlines Limited was founded in
2006 and is based in Piarco, Trinidad and Tobago.

As reported in the Troubled Company Reporter-Latin America on May
20, 2013, Caribbean360.com said Trinidad and Tobago Finance
Minister Larry Howai said Caribbean Airlines Limited recorded
losses estimated at US$70 million in 2012.  In 2011, CAL had
recorded losses of US43.7 million.


                            ***********


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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