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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 7, 2017, Vol. 18, No. 134
Headlines
B A R B A D O S
BARBADOS: Regulator Says No to Gov't Plan to Sell Oil Terminal
BARBADOS: Warned Not to Overregulate Homestay Sector
BARBADOS: Improving Public Finances Still a Challenge, IMF Says
J A M A I C A
JAMAICA: Holness Urges CARICOM to Fully Implement CSME
M E X I C O
RASSINI AUTOMOTRIZ: Ratings Unaffected by NAFTA Renegotiation
P A N A M A
AES PANAMA: S&P Affirms BB Corp. Credit Rating, Outlook is Stable
P U E R T O R I C O
PUERTO RICO: Assured Guaranty Responds to PREPA Bankruptcy Filing
T R I N I D A D & T O B A G O
PETROTRIN: All Trinidad Union Supports OWTU
TRINIDAD & TOBAGO: Fighting the Food Crisis
TRINIDAD & TOBAGO: Expenditure to Exceed Revenue, Says Moody's
V E N E Z U E L A
VENEZUELA: Default Risk is Rising
- - - - -
===============
B A R B A D O S
===============
BARBADOS: Regulator Says No to Gov't Plan to Sell Oil Terminal
--------------------------------------------------------------
Caribbean360.com reports that the proposed sale of the Barbados
National Terminal Co. Ltd (BNTCL) to regional petroleum giant Sol,
which was expected to pump desperately needed foreign exchange
into the economy, is now in serious doubt after the island's
regulator objected to the deal.
In a preliminary ruling dated June 14 and obtained by the Nation
newspaper, the Fair Trading Commission (FTC) said "it is of the
view that merger should not be permitted," according to
Caribbean360.com.
The report notes that the Sol group had made a bid to purchase the
state-owned oil terminal -- which manages the importation and
supply of gasoline, diesel and fuel oil -- for more than US$100
million, but it was stopped in its tracks by competitor RUBIS
which took to the law courts to challenge the sale. Rubis secured
an interim injunction barring the sale, which it argued would
create a monopoly, the report relays.
The company also filed an application in the High Court for
judicial review of a decision to approve the inclusion of a 15-
year moratorium clause in the Sale and Purchase Agreement between
a Sol Subsidiary and the Barbados National Oil Company Limited
(BNOCL), BNTCL's parent company, the report notes.
The FTC found that sections of the proposed sale bid would hurt
competition and were, in fact, unlawful, the report says. It made
particular mention of a controversial moratorium on construction
of new terminal facilities or new import deports, the report
relays.
The regulatory body described the moratorium as "inherently anti-
competitive" and restrictive, as well as contrary to the FTC Act
and the Fuel Adjustment Act, the report discloses.
The Commission also raised concern that the proposed BNTCL sale
would give Sol an unfair advantage, dampen the market, and
possibly result in increased costs for consumers, the report
notes.
The FTC had given the two disputing oil companies, Sol and Rubis,
until June 30 to respond to the initial ruling, the report
discloses. It is not clear whether they have responded, the
report relays.
In last month's Budget presentation, Finance Minister Chris
Sinckler said the cash-strapped Freundel Stuart administration was
banking on the BNTCL deal to go through as it seeks to erase a
$537.6 million shortfall, the report adds.
As reported in the Troubled Company Reporter-Latin America on
March 7, 2017, S&P Global Ratings lowered its long-term foreign
and local currency sovereign ratings on Barbados to 'CCC+' from
'B-'. The outlook is negative. S&P also lowered the short-term
ratings to 'C' from 'B.' At the same time, S&P lowered its
transfer and convertibility assessment for Barbados to 'CCC+' from
'B-'.
BARBADOS: Warned Not to Overregulate Homestay Sector
----------------------------------------------------
Caribbean360.com reports that an advocacy group for Barbadians who
offer their homes to visitors through the homeshare program Airbnb
is warning Government that overregulation of the sharing economy
would be counterproductive.
Speaking against the background of a recommendation by airline
consultant and former American Airline employee Tom Bacon that
regional governments should not fight tourism industry
"disruptors" such as Airbnb, Uber and TripAdvisor, the Barbados
Entrepreneurship and Tourism Association (BETA) has said that over
regulation would make it difficult for ordinary Barbadians to play
a part in the growth of the sector, according to Caribbean360.com.
With a rising number of visitors choosing homestay programs such
as Airbnb over hotels, the formal sector has been calling for
regulation and taxation of the short-term accommodation providers,
something Minister of Tourism Richard Sealy has warned against for
the time being, the report notes.
Chief Executive Officer of the Barbados Hotel and Tourism
Association Rudy Grant has also confirmed that new guidelines were
being drafted to include regulation of the short-term rental
programs, the report relays.
But, BETA President Neeraj Vensimal has warned that the world of
accommodation was changing, especially through the use of online
platforms such as Airbnb, and Government must "heed international
advice to become more relevant to modern tourism markets" if the
country were to remain a leader in the hospitality and tourism
sector, the report notes.
The report discloses that President Vensimal made reference to
Caribbean countries such as Aruba, Grenada, Jamaica and the United
States Virgin Islands which had signed partnership agreements with
Airbnb, to press his case for Barbados to "create an enabling
environment for the company from both a regulatory and taxation
standpoint in order for Trips to be launched here first".
Trip is an Airbnb initiative that allows local experts, including
chefs, to take tourists on excursions and tours, including food
tasking and surfing, the report says.
The BETA founder argued that Bridgetown should capitalize on every
advantage it had, including culture and heritage tourism, and
promote the safety of the destination in order to stay "a step
ahead of the competition," the report relays.
"Unique and authentic experiences can be offered to visitors by
partnering with Airbnb to highlight our culture to Airbnb's
approximately 200 million traveller base," he said, adding that
some local experiences could include breadfruit roasting, road
tennis, heritage tours and nature hikes, the report notes.
"When you think about it, a walking tour through one of the safest
cities in the Caribbean is waiting for visitors in the Bridgetown
we all know and love. Not every city can offer that opportunity.
Airbnb's cultural experiences and immersions product Trips offers
opportunities for all Barbadians to earn meaningful incomes and
foreign exchange for Barbados based on their hobbies and passion.
People who may not have the space to host in their homes can now
create an experience to host their passion," he explained, the
report relates.
Stating that the industry was "moving ahead with or without us",
Vensimal stressed "there will be winners and losers and it's
important that Barbados is a winner," the report adds.
As reported in the Troubled Company Reporter-Latin America on
March 7, 2017, S&P Global Ratings lowered its long-term foreign
and local currency sovereign ratings on Barbados to 'CCC+' from
'B-'. The outlook is negative. S&P also lowered the short-term
ratings to 'C' from 'B.' At the same time, S&P lowered its
transfer and convertibility assessment for Barbados to 'CCC+' from
'B-'.
BARBADOS: Improving Public Finances Still a Challenge, IMF Says
---------------------------------------------------------------
Trinidad Express reports that the International Monetary Fund
(IMF) said the Barbados economy continues to recover due to a
stronger tourism performance but warned that improving public
finances remains a critical challenge.
It said that economic growth in 2016 is estimated to have been 1.6
per cent and to have accelerated in the first quarter of 2017 to
two per cent, according to Trinidad Express.
The IMF, which said it is ready to assist the Freundel Stuart
government through continued policy dialogue and technical
assistance, ended a two-week mission here, the report notes.
The mission, which was led by Judith Gold said the stronger
economic performance has supported a reduction in the unemployment
rate to 9.7 per cent in 2016 from 11.3 per cent in 2015, the
report relays.
It said inflation started to pick up in the second half of 2016
after deflation in 2015, and on a point-to-point basis reached 3.2
per cent by end-December 2016 mainly due to higher food prices,
the report adds.
As reported in the Troubled Company Reporter-Latin America on
March 7, 2017, S&P Global Ratings lowered its long-term foreign
and local currency sovereign ratings on Barbados to 'CCC+' from
'B-'. The outlook is negative. S&P also lowered the short-term
ratings to 'C' from 'B.' At the same time, S&P lowered its
transfer and convertibility assessment for Barbados to 'CCC+' from
'B-'.
=============
J A M A I C A
=============
JAMAICA: Holness Urges CARICOM to Fully Implement CSME
------------------------------------------------------
RJR News reports that Jamaica Prime Minister Andrew Holness urged
his colleague Heads of Government of the Caribbean Community
(CARICOM) to fully implement the Caribbean Single Market and
Economy (CSME).
The prime minister was contributing to discussions on the CSME
during the first plenary session at the 38th CARICOM Summit in
Grand Anse Grenada, according to RJR News.
Prime Minister Holness said regional leaders have been speaking
about implementing a CSME for too long with little action, the
report notes.
Prime Minister Holness said there are only three countries that
can truly claim to have compliance in adopting the CSME, one of
which is Jamaica, the report adds.
As reported in the Troubled Company Reporter-Latin America on
Feb. 9, 2017, Fitch Ratings affirmed Jamaica's Long-Term Foreign
and Local Currency Issuer Default Ratings (IDRs) at 'B' with a
Stable Outlook. The issue ratings on Jamaica's senior unsecured
Foreign and Local Currency bonds are also affirmed at 'B'. The
Outlooks on the Long-Term IDRs are Stable. The Country Ceiling is
affirmed at 'B' and the Short-Term Foreign Currency and Local
Currency IDRs at 'B'.
===========
M E X I C O
===========
RASSINI AUTOMOTRIZ: Ratings Unaffected by NAFTA Renegotiation
-------------------------------------------------------------
Mexican auto-parts suppliers Rassini Automotriz (Ba2 stable) and
Nemak (Ba1 positive) would be relatively unaffected by a moderate
renegotiation of the North American Free Trade Agreement, says
Moody's Investors Service in a new report. However, a more drastic
revision of the trade agreement remains a risk for the two
companies.
Moody's base case is that the US administration will seek a
moderate renegotiation of NAFTA that focuses mainly on so-called
rules of origin thresholds, dispute-resolution mechanisms, and
arbitration clauses. Such an outcome would have little effect on
Mexico's auto-parts manufacturers.
"Even in the case of a more extreme scenario, such as a US
withdrawal from NAFTA that would result in trade tariffs, it is
unlikely that auto-parts production would shift away from the
country completely," said Alonso Sanchez Rosario a Vice President
at Moody's.
Mexico's proximity to the US, combined with high switching costs
and high costs of entry make it difficult for US carmakers to
replace their Mexican suppliers. The process of shifting suppliers
would be expensive and could take several years to complete.
Rassini is the world's largest producer of suspension components
for light commercial vehicles, including seven of the top 10
regional light vehicles for Ford and GM. The company is also the
largest fully integrated disc brake producer in the Americas.
Nemak, a leading supplier of cylinder heads and engine blocks, is
the sole supplier of around 85% of the products that it sells.
Nonetheless, a more wide-ranging revision of NAFTA would stress
credit metrics for Mexican auto parts suppliers.
In this case, vehicle prices in the US would rise, discouraging
sales of imported vehicles. US car manufacturers might also try
and protect sales volumes by switching to domestic production, or
demanding price discounts from their suppliers. Either move would
damage the revenues and profitability of the Mexican auto-parts
suppliers in the medium-long term.
===========
P A N A M A
===========
AES PANAMA: S&P Affirms BB Corp. Credit Rating, Outlook is Stable
-----------------------------------------------------------------
S&P Global Ratings affirmed its 'BB' corporate credit rating and
issue-level ratings on AES Panama S.R.L (AES Panama). The outlook
is stable.
S&P said, "The affirmation reflects our expectation that the
company's cash flow generation will slightly improve in the short
term, although its financial metrics will be still in line with
our aggressive financial risk profile, as seen in projected debt
to EBITDA around 4.0x and FFO to debt above 12% in the next two
years, compared to 4.6x and 12.4%, respectively, in the 12 months
ended March 31, 2017. In the past two years, we've seen the
company's metrics improve mainly due to favorable hydrology
conditions and lower exposure to high spot prices." After the
drought in 2013 and 2014, AES Panama adopted a more conservative
commercial strategy that included:
-- A lower level of contracted energy;
-- Working with a 5%-10% cushion for its firm capacity to
mitigate hydrology fluctuations; and
-- Adding 72 megawatts (MW) to its total capacity through a
diesel-powered barge to diversify its energy resources.
======================
P U E R T O R I C O
======================
PUERTO RICO: Assured Guaranty Responds to PREPA Bankruptcy Filing
-----------------------------------------------------------------
Assured Guaranty Ltd. (together with its subsidiaries, Assured
Guaranty) released the following comments regarding the approval
of the Puerto Rico Electric Power Authority's (PREPA) Title III
bankruptcy filing by the Financial Oversight and Management Board
for Puerto Rico:
Dominic Frederico, President and Chief Executive Officer of
Assured Guaranty said, "As we indicated, the Oversight Board has
once again chosen to disregard the rule of law and a fundamental
purpose of the Puerto Rico Oversight, Management and Economic
Stability Act (PROMESA) -- implementing consensual restructurings
that solve fiscal problems and allow Puerto Rico to regain access
to the capital markets. The Restructuring Support Agreement (RSA)
would have provided: significant liquidity and debt relief, lower
rates for ratepayers, funds for capital improvements and access to
lower cost of capital. By rejecting the RSA and approving a Title
III bankruptcy, the Oversight Board has shown that it has no
intention of seeking consensual resolutions and is instead
committed to reneging on as many of Puerto Rico's obligations to
stakeholders as possible. This will lead to years of expensive
and time-consuming litigation. We continue to believe the pre-
existing PREPA RSA, which was approved by two Puerto Rico
governors, the Puerto Rico Legislature, the Puerto Rico Energy
Commission and the PREPA Board, represents the best path forward
for PREPA, the Commonwealth and the residents of Puerto Rico. We
believe that it is in the best interests of all parties involved
that the Trump Administration and US Congress step in and restore
the rule of law to avoid years of litigation and many wasted
expenses for Puerto Rico."
About PREPA
The Puerto Rico Electric Power Authority (PREPA) --
http://www.prepa.com/-- is a public corporation and government
instrumentality of Puerto Rico. PREPA supplies substantially all
the electricity consumed in the Commonwealth and owns all
transmission and distribution facilities and most of the
generating facilities that constitute Puerto Rico's electric power
system. Founded in 1941, PREPA supplies electricity to 1.5
million consumers in Puerto Rico. PREPA is the largest public
utility in the U.S. based on number of clients and revenue.
About Puerto Rico
Puerto Rico is a self-governing commonwealth in association with
the United States that's facing a massive bond debt of $70
billion, a 68% debt-to-GDP ratio and negative economic growth in
nine of the last 10 years.
The Commonwealth of Puerto Rico has sought bankruptcy protection,
aiming to restructure its massive $74 billion debt-load and $49
billion in pension obligations.
The debt restructuring petition was filed by Puerto Rico's
financial oversight board in U.S. District Court in Puerto Rico
(Case No. 17-01578) on May 3, 2017, and was made under Title III
of 2016's U.S. Congressional rescue law known as the Puerto Rico
Oversight, Management, and Economic Stability Act ("PROMESA").
The Financial Oversight and Management Board later commenced Title
III cases for the Puerto Rico Sales Tax Financing Corporation
(COFINA) on May 5, 2017, and the Employees Retirement System (ERS)
and the Puerto Rico Highways and Transportation Authority (HTA) on
May 21. On July 2, 2017, a Title III case was commenced for the
Puerto Rico Electric Power Authority ("PREPA").
U.S. Chief Justice John Roberts has appointed U.S. District Judge
Laura Taylor Swain to oversee the Title III cases. The Honorable
Judith Dein, a United States Magistrate Judge for the District of
Massachusetts, has been designated to preside over matters that
may be referred to her by Judge Swain, including discovery
disputes, and management of other pretrial proceedings.
Joint administration of the Title III cases, under Lead Case No.
17-3283, was granted on June 29, 2017.
The Oversight Board has hired as advisors, Proskauer Rose LLP and
O'Neill & Borges LLC as legal counsel, McKinsey & Co. as strategic
consultant, Citigroup Global Markets as municipal investment
banker, and Ernst & Young, as financial advisor.
Martin J. Bienenstock, Esq., Scott K. Rutsky, Esq., and Philip M.
Abelson, Esq., of Proskauer Rose; and Hermann D. Bauer, Esq., at
O'Neill & Borges are onboard as attorneys.
McKinsey & Co. is the Board's strategic consultant, Ernst & Young
is the Board's financial advisor, and Citigroup Global Markets
Inc. is the Board's municipal investment banker.
Prime Clerk LLC is the claims and noticing agent. Prime Clerk
maintains a case web site at:
https://cases.primeclerk.com/puertorico
Epiq Bankruptcy Solutions LLC is the service agent for ERS, HTA,
and PREPA.
O'Melveny & Myers LLP is counsel to the Commonwealth's Puerto Rico
Fiscal Agency and Financial Advisory Authority (AAFAF), the agency
responsible for negotiations with bondholders.
The Oversight Board named Professor Nancy B. Rapoport as fee
examiner and to chair a committee to review professionals' fees.
Bondholders' Attorneys
Toro, Colon, Mullet, Rivera & Sifre, P.S.C. and Kramer Levin
Naftalis & Frankel LLP serve as counsel to the Mutual Fund Group,
comprised of mutual funds managed by Oppenheimer Funds, Inc.,
Franklin Advisers, Inc., and the First Puerto Rico Family of
Funds, which collectively hold over $3.5 billion in COFINA Bonds
and over $2.9 billion in other bonds issued by Puerto Rico and
other instrumentalities, including over $1.8 billion of Puerto
Rico general obligation bonds ("GO Bonds").
White & Case LLP and Lopez Sanchez & Pirillo LLC represent the UBS
Family of Funds and the Puerto Rico Family of Funds, which hold
$613.3 million in COFINA bonds.
Paul, Weiss, Rifkind, Wharton & Garrison LLP, Robbins, Russell,
Englert, Orseck, Untereiner & Sauber LLP, and Jimenez, Graffam &
Lausell are co-counsel to the ad hoc group of General Obligation
Bondholders, comprised of Aurelius Capital Management, LP,
Autonomy Capital (Jersey) LP, FCO Advisors LP, Franklin Mutual
Advisers LLC, Monarch Alternative Capital LP, Senator Investment
Group LP, and Stone Lion Capital Partners L.P.
Quinn Emanuel Urquhart & Sullivan, LLP and Reichard & Escalera are
co-counsel to the ad hoc coalition of holders of senior bonds
issued by COFINA, comprised of at least 30 institutional holders,
including Canyon Capital Advisors LLC and Varde Investment
Partners, L.P.
Correa Acevedo & Abesada Law Offices, P.S.C., is counsel to Canyon
Capital Advisors, LLC, River Canyon Fund Management, LLC, Davidson
Kempner Capital Management LP, OZ Management, LP, and OZ
Management II LP (the QTCB Noteholder Group).
Committees
The U.S. Trustee formed a nine-member Official Committee of
Retirees and a seven-member Official Committee of Unsecured
Creditors of the Commonwealth. The Retiree Committee tapped
Jenner & Block LLP and Bennazar, Garcia & Milian, C.S.P., as its
attorneys. The Creditors Committee tapped Paul Hastings LLP and
O'Neill & Gilmore LLC as counsel.
================================
T R I N I D A D & T O B A G O
================================
PETROTRIN: All Trinidad Union Supports OWTU
-------------------------------------------
Trinidad and Tobago Newsday reports that all Trinidad General
Workers Trade Union President General Nirvan Maharaj has voiced
his support for Oilfield Workers Trade Union (OWTU) leader Ancel
Roget in his fight to ensure Government "comes clean" on plans for
Petrotrin.
At a news conference, Mr. Roget claimed that the restructuring
committee set up by the Government to restructure Petrotrin was a
ruse and they were instead "surreptitiously" moving to sell off
the company's assets, the report notes. However Energy Minister
Franklin Khan, in a media conference last week said, "The Ministry
of Energy is not putting Petrotrin's acreage for bid, according to
Trinidad and Tobago Newsday. Petrotrin has its acreage. It has a
responsibility to develop its acreage and also has a
responsibility to its shareholder, the people of Trinidad and
Tobago to run a profitable enterprise," the report relays.
But, in a show of solidarity with its brother union, Maharaj
applauded the actions of the OWTU saying the nation's patrimony
"must be protected at all costs and not sold off to private
companies looking to make a quick profit at the expense and
detriment of our country," the report says.
"The problem with Petrotrin is not the Union or Workforce, it is
the Management of the Company and the proper implementation of
policies and systems to prevent wastage, corruption and ensure
proper maintenance of all facilities," Mr. Maharaj stated, the
report relays. He continued: "The selling off of the assets of
Petrotrin and the privatisation of the company will be a blow not
only to our national pride and our economic welfare, but we have
to ensure that certain key Public Utilities and Industries always
remain in the hands of the people of Trinidad and Tobago," the
report notes.
"In addition, full support must be given to Mr. Roget because we
must never again allow any group of workers in this country to
suffer the pain, misery and frustration, that the workers of
Caroni (1975) Ltd faced when the sugar workers were forcibly
retrenched and thousands lost their jobs and the steel workers
when ArcelorMittal Steel Company wound up, throwing hundreds on
the breadline," he stated, the report adds.
As reported in the Troubled Company Reporter-Latin America on
April 28, 2017, Moody's Investors Service downgraded Petroleum Co.
of Trinidad & Tobago corporate family rating and senior unsecured
debt ratings to B1 from Ba3. Simultaneously, Moody's lowered
Petrotrin's Baseline Credit Assessment ("BCA") to caa1 from b3.
The outlook on the ratings is stable. The rating actions are
linked to Moody's April 25, 2017 downgrade of the government of
Trinidad & Tobago bond ratings to Ba1 from Baa3, with a stable
outlook.
TRINIDAD & TOBAGO: Fighting the Food Crisis
-------------------------------------------
Trinidad Express reports that two issues that negatively impact
efforts by Trinidad and Tobago and its Caricom partners to produce
more local foods came into focus over the past two weeks.
The first was the widespread destruction of agricultural crops and
livestock that resulted from flooding that accompanied Tropical
Storm Bret, according to Trinidad Express.
And the second was a complaint by the chief executive officer of
the T&T Manufacturers Association Ramesh Ramdeen that the rigid
application of a particular trade rule inhibits the growth of
trade in food products among Caricom member states, the report
notes.
With respect to flooding, the excessive rainfall that Bret dumped
on Trinidad can be deemed an act of God against which man is
powerless, the report relays.
Some might argue that flooding is a business risk that
agriculturists take when they cultivate lands during the rainy
season, notes the report. Both these arguments have some validity.
As reported in the Troubled Company Reporter-Latin America on
April 28, 2017, Moody's Investors Service has downgraded Trinidad
and Tobago's issuer and senior unsecured debt ratings to Ba1 from
Baa3 and assigned a stable outlook.
TRINIDAD & TOBAGO: Expenditure to Exceed Revenue, Says Moody's
--------------------------------------------------------------
Trinidad Express reports that Trinidad and Tobago's Government
expenditure will exceed its revenue, Moody's Investors Service has
forecast.
"In May, Trinidad and Tobago's Ministry of Finance published the
mid-year budget review that showed the energy sector was providing
an unexpected boost to Government revenues. In spite of this, we
maintain our fiscal deficit estimate of 5.8 per cent of gross
domestic product (GDP) in 2017 fiscal year, above the Government's
target of 3.9 per cent of GDP, due to lower-than-expected asset
sales," a team of Moody's analysts led by Ariane Ortiz-Bollin said
in a June 30 issue comment, according to Trinidad Express.
Moody's downgraded T&T to junk in April this year.
"Central government operations resulted in a deficit of
approximately $5.40 billion for the first half of 2017, $1.55
billion more than the official forecast. The shortfall reflected
lower-than-expected tax collections and capital revenues from
asset sales, which were not fully compensated by the increase in
personal income tax revenues and revenues from the Supplementary
Petroleum Tax (SPT).
The Government is receiving SPT-related revenues for the first
time since the first quarter of 2016, as oil prices averaged
$50.45 during the first six months, triggering mandatory payments.
As reported in the Troubled Company Reporter-Latin America on
April 28, 2017, Moody's Investors Service has downgraded Trinidad
and Tobago's issuer and senior unsecured debt ratings to Ba1 from
Baa3 and assigned a stable outlook.
=================
V E N E Z U E L A
=================
VENEZUELA: Default Risk is Rising
---------------------------------
Nathan Crooks at Bloomberg News reports that bets on a Venezuelan
default are climbing as international reserves slump toward $10
billion amid anti-government protests and President Nicolas
Maduro's push to rewrite the constitution.
The implied probability of the country missing a payment over the
next 12 months rose to 56 percent in June, according to credit-
default swaps data compiled by Bloomberg. That's the highest
level since December, according to Bloomberg News. The odds of a
credit event over the next five years increased to 91 percent last
month, the report notes.
Bloomberg News says that President Maduro, who has faced three
months of violent protests that have left almost 80 dead, has
drastically cut imports of food and medicine in order to conserve
the cash needed to pay bondholders with declining oil prices and
production. That hasn't stopped a drop in reserves, which usually
provide investors with a certain degree of assurance that the
government will avoid default in the short-term, Bloomberg News
relays. Recent deals to provide the government with liquidity
have only resulted in minor spikes that have disappeared quickly,
Bloomberg News discloses.
The country faces payments on principal and interest of more than
$5 billion in the remainder of the year, although no large sums
are due before October, Bloomberg News notes.
Venezuela's opposition alliance is planning to hold an unofficial
plebiscite on July 16 to gauge support for a national unity
government, Bloomberg News says. Voters will be asked if they
support Maduro's plan to rewrite the constitution, what role the
armed forces should play in restoring order and whether they would
back a unity government, Bloomberg News relays. The referendum
will occur just weeks before a July 30 vote for delegates for the
constitutional convention that is opposed by two-thirds of voters
and that critics worry could shift the country further toward
Cuba-style authoritarianism, Bloomberg News adds.
Bloomberg News notes that Venezuela dashboard indicators are:
-- Trading in Venezuela's dollar bonds was more volatile in
June, with its benchmark $4 billion of notes due in 2027
falling 5.2 percent to 49.9 cents on the dollar; yields rose
to 21.6 percent
-- PDVSA's benchmark $3 billion of notes due in 2035 declined
6.7 percent to 45.69 cents on the dollar, with the yield
rising to 22 percent
-- PDVSA's oil export basket price decreased 10.9 percent to
$39.95 a barrel
-- Venezuela's international reserves trade near lowest level
since June 2002
-- The weakest official exchange rate, used mostly for imports
deemed non-essential, was devalued 24 percent to 2,636
bolivars per dollar on the government's Dicom auction system
-- On the black market, the U.S. dollar still costs almost
three times more than the Dicom rate, with no prospects of
recovery after Maduro raised the minimum wage by another 50
percent in a move that will likely stoke even faster money
printing and inflation.
As reported in the Troubled Company Reporter-Latin America on
July 4, 2017, Fitch Ratings Fitch Ratings has affirmed Venezuela's
Long-term Foreign and Local Currency Issuer Default Ratings (IDRs)
at 'CCC'. Fitch has also affirmed the sovereign's Short-term
Foreign and Local Currency IDRs at 'C' and the Country Ceiling at
'CCC'.
***********
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.
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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
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equity securities trade in public market are determined by more
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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, Ivy B.
Magdadaro, and Peter A. Chapman, Editors.
Copyright 2017. 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 Joseph Cardillo at
856-381-8268.
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