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                     L A T I N   A M E R I C A

           Tuesday, October 3, 2017, Vol. 18, No. 196



ARGENTINA: Economy to Grow by 3% in 2017, Moody's Says


SEGUROS ILLIMANI: Moody's Lowers Global LC IFS Rating to Caa3
SEGUROS PROVIDA: Moody's Lowers Global LC IFS Rating to Caa2


ARAUCARIA SANEAMENTO: Moody's Ups BRL95.5MM Sr. Debt Rating to Ba3
RIO DE JANEIRO: Fitch Affirms BB Long-Term IDR; Outlook Negative

D O M I N I C A N   R E P U B L I C

DOMINICAN REPUBLIC: Corruption Hobbles Competitiveness


JAMAICA MERCHANT: Fitch Affirms 'BB+' Notes Rating


NICARAGUA: To Strengthen Electricity Sector With $65MM IDB Loan


PERU: Iquitos Turns to Tourism to Revive its Fortunes

P U E R T O    R I C O

PUERTO RICO: Debt Hearings Postponed, Moved to New York
TOYS "R" US: May Maintain Customer Programs, Court Says


BANCO BANDES: Moody's Cuts Long-Term Deposit Ratings to Caa1


CARIBBEAN: Correspondent Banking Relationships Limited, IMF Says

                            - - - - -


ARGENTINA: Economy to Grow by 3% in 2017, Moody's Says
Moody's Investors Service released its latest annual report on
Argentina (B3 positive), highlighting the primary drivers behind
the sovereign's positive outlook.

Moody's expects the Argentine economy to grow by 3% in 2017 and by
3.5% in 2018. Public and private investment should bolster growth,
and government initiatives expected to be introduced after the
October mid-term elections will help reduce the fiscal deficit by
at least 1% of GDP in 2018.

"While Argentina's economic growth has been volatile, it is also
larger and wealthier than peers," says Gabriel Torres, a Moody's
senior credit officer and lead author of the report.

Faster growth should support a reduction in the fiscal deficit,
which will top 6% of GDP this year. The government's debt-to-GDP
ratio will rise to 53% this year and 56% next. About half of
Argentina's government debt is held by other public sector
entities, reducing rollover risk. But the proportion of debt held
by the private sector is rising, increasing the country's fiscal
vulnerability. Other credit weaknesses include high inflation and
a high share of foreign-currency debt, which exposes the
government balance sheet to exchange rate risk.

This annual update follows Moody's lifting Argentina's B3 rating
to positive from stable in March. That change reflected the rating
agency's view that the economy will start to report positive
growth, in part after new policies that reduce the deficit take

The credit analysis further elaborates on Argentina's credit
profile in terms of economic strength, institutional strength,
fiscal strength and susceptibility to event risk, which are the
four main analytic factors in Moody's Sovereign Bond Rating


SEGUROS ILLIMANI: Moody's Lowers Global LC IFS Rating to Caa3
Moody's Latin America Agente de Calificacion de Riesgo (MLA) has
downgraded Seguros Illimani S.A.'s global local-currency (GLC)
insurance financial strength (IFS) rating to Caa3 from Caa2, and
downgraded the company's Bolivian national scale (NS) IFS rating
to from The ratings now carry a stable outlook.
This rating action concludes the review process initiated on 30
June 2017.


The rating agency said that the downgrade on Seguros Illimani's
ratings is based on the adverse business and financial
consequences for Seguros Illimani of a recent Resolution
(#550/2017) issued by the Bolivian insurance regulator (APS, for
its Spanish acronym), which resulted in a USD1.4 million negative
adjustment on the company's shareholders' equity due to a net loss
reserve and balances with reinsurers accounting deficiency. After
this adjustment, Seguros Illimani's shareholders' equity dropped
38% as of June 2017 when compared to 2016 year end. Additionally,
Seguros Illimani's market position has been deteriorating sharply,
holding a market share of only 0.2% of the Bolivian P&C insurance
industry as of June 2017, based on gross premiums written. The
company's very low business volume has hurt the company's
profitability, which was also affected by lower investment
returns. Moody's went on to say that this sharp deterioration of
the company's business and financial profiles could potentially
affect its viability. Moody's also considers that APS' resolution
implies weaknesses about the company's reserving and corporate
governance practices, which also weigh on the insurers' ratings
and credit profile.

Among the factors that could result in a further downgrade for
Seguros Illimani, Moody's mentioned the company's failure to
comply with minimum regulatory solvency margins and/or reserves'
coverage, a regulatory intervention of the company, an impairment
in the company's reported capitalization metrics, or a disclosure
of further accounting deficiencies. Seguros Illimani's ratings
could be upgraded in the event of a sustainable recovery of its
market share and profitability, while maintaining adequate capital

Based in La Paz, Bolivia, Seguros Illimani reported a net losses
of BOB1.9 million, and gross premiums written of BOB2.4 million
for the six-month period ending at June 30, 2017. As of that date,
total assets were BOB55 million and shareholders' equity was BOB14

The principal methodology used in these ratings was Global
Property and Casualty Insurers published in May 2017.

SEGUROS PROVIDA: Moody's Lowers Global LC IFS Rating to Caa2
Moody's Latin America Agente de Calificacion de Riesgo (MLA) has
downgraded Seguros Provida S.A.'s global local-currency (GLC)
insurance financial strength (IFS) rating to Caa2 from Caa1, and
downgraded the insurers' Bolivian national scale (NS) IFS rating
to from The ratings now carry a stable outlook.


Moody's said that the downgrade of Seguros Provida's ratings
primarily reflects continued deterioration of the insurer's
economic capital position and profitability, and its significant
asset/liability mismatch. During the first six months of 2017 the
company reported net losses of USD3.6 million --in addition to the
USD5.1 million net losses in 2016-, which prompted shareholders'
equity to fall more than 60% in the last 18 months as of June
2017. This deterioration is mainly related to asset-liability
spread compression caused by the very low market interest rates in
Bolivia, combined with inflation-adjusted crediting rate
guarantees and currency mismatch on its pension liabilities.
Specifically, given the insurer's short asset duration in relation
to the long duration of its guaranteed liabilities, the rating
agency warned that the embedded losses driven by the low interest
rate environment and reinvestment risk suggest that the company's
economic capitalization, already very weak, remains vulnerable to
further erosion. Additionally, since March 2017 the company has
not complied with the minimum regulatory coverage of reserves with
admitted assets. This situation has prompted the Bolivian
insurance regulator (APS, for its Spanish acronym) to restrict
Seguros Provida from selling any of its financial assets without
regulatory approval. Moody's also noted concern with respect to
Seguros Provida's lack of significant ongoing business outside its
run-off annuity portfolio.

On the positive side, Moody's noted that since most of the
company's policy liabilities are long-duration and cannot be
surrendered by policyholders, the company has a low exposure to
liquidity risk.

Among the factors that could lead to a further downgrade of
Seguros Provida's ratings, Moody's indicated the following: 1)
continued impairment in the company's capitalization levels,
(i.e.: further decrease in its capital base, or continued failure
to comply with minimum regulatory capital and liquidity
requirements); 2) sustained weak profitability and further spread
compression; and 3) intervention of the company by the local
regulator, especially if it derives in a restructuring of its
policyholders' liabilities. Conversely; a significant and
sustainable restoration of its capital adequacy and profitability
(e.g. through renewed access to higher-yielding investments of
comparable or better credit quality) could lead to an upgrade of
the company's ratings.

Based in La Paz, Bolivia, Seguros Provida reported net losses of
BOB24.7 million, and gross premiums written of BOB2.2 million at
the six-month period ending at June 30, 2017. As of that date,
total assets were BOB519 million and shareholders' equity was
BOB55 million.


ARAUCARIA SANEAMENTO: Moody's Ups BRL95.5MM Sr. Debt Rating to Ba3
Moody's America Latina has upgraded the ratings on the BRL95.5
million senior secured amortizing debentures issued by Araucaria
Saneamento S.A. to Ba3 from B1 on the global scale and to
from on the national scale. The ratings outlook remains


The ratings upgrade reflects the reduced risks of the project
following the full completion of the construction and pre-
operating phase. The project has also built up an operating track
record since the full operations have started in October 2015,
with performance well in line with expectations. Araucaria will
remain responsible for the full operational availability of the
asset throughout the life of the project agreement with its unique
off-taker : the state-owned water utility company Companhia de
Saneamento Basico do Estado de Sao Paulo (Sabesp, rated
Ba2/, negative). However Moody's considers the scope for
significant cost or capital expenditures overruns will be
relatively limited going forward, taking comfort from the
extensive 12 months testing period in collaboration with Sabesp
which did not return any significant adjustments.

The stable outlook reflects Moody's expectations that going
forward the company will be able operate within the parameters of
the contract and generate sufficient cash flows to meet its debt
service requirements.

The ratings remain constrained by a very modest debt service
coverage ratio (as calculated by Moody's) of 1.0x as of 31
December 2016 and within a range of 1.1x to 1.2x as per Moody's
projections during the debt amortization period. While those
ratios are much lower than peers, they reflect the highly
leveraged capital structure of the project and speak to the very
stable and predictable nature of cash flows. The low debt service
coverage is somewhat mitigated by a four year debt-free period
between the debt maturity in March 2030 and the end of the
concession in April 2034, which would result in a projected debt
service coverage ratio of around 1.4x considering the full length
of the concession contract.

The Ba3/ ratings also capture relatively weak credit
protection relative to global projects, as illustrated by a debt
service reserve account of only 3 months and the absence of direct
restrictions on dividend payments.


An established track record of operating performance consistently
in line with budget such that Moody's debt service coverage ratio
exceeds 1.3x could lead to an upgrade of the ratings. The removal
of any contingent liability related to tail construction risk
could also exert positive pressure on the ratings.

A rating downgrade could result from (i) a material deviation in
operating performance from the project's expectations resulting
from costs and/or capital expenditures overrun such that Moody's
debt service coverage ratio falls below 1.0x, (ii) a breach of
covenants, and/or (iii) a downgrade of Sabesp, Araucaria's unique

The principal methodology used in these ratings was Generic
Project Finance Methodology published in December 2010.

Araucaria is a special purpose company owned by GS Inima Brasil
(51%), Cesbe S.A.-- Engenharia e Emprendimento (30% ), and
Construtora Elevacao Ltda (19%). In December 2009, Araucaria
participated and won the public auction conducted by Sabesp, a
water utility owned by the state of Sao Paulo (Ba2, negative), for
the construction and lease of the first wastewater treatment
facility in the city of Campos do Jordao, State of Sao Paulo,
Brazil. The project which is fully operational since October 2015
involves a 7.8km interceptor pipeline, a 10km collector pipeline
and three pumping stations which together enable the collection,
removal and treatment of sewage with a capacity of 230 liter per
seconds attending a city population of around 80,000 people on
average and of around 300,000 during the high season.

On December 27, 2010, SABESP and Araucaria signed a 20 year
concession contract setting out the rights and obligations of each
party in the project. At the termination of the contract in April
2034 the project assets will be transferred to SABESP at no cost.

Moody's National Scale Credit Ratings (NSRs) are intended as
relative measures of creditworthiness among debt issues and
issuers within a country, enabling market participants to better
differentiate relative risks. NSRs differ from Moody's global
scale credit ratings in that they are not globally comparable with
the full universe of Moody's rated entities, but only with NSRs
for other rated debt issues and issuers within the same country.
NSRs are designated by a ".nn" country modifier signifying the
relevant country, as in ".za" for South Africa. For further
information on Moody's approach to national scale credit ratings,
please refer to Moody's Credit rating Methodology published in May
2016 entitled "Mapping National Scale Ratings from Global Scale
Ratings". While NSRs have no inherent absolute meaning in terms of
default risk or expected loss, a historical probability of default
consistent with a given NSR can be inferred from the GSR to which
it maps back at that particular point in time. For information on
the historical default rates associated with different global
scale rating categories over different investment horizons.

RIO DE JANEIRO: Fitch Affirms BB Long-Term IDR; Outlook Negative
Fitch Ratings has affirmed the Brazilian City of Rio de Janeiro's
(CRio) Long-Term Foreign and Local Currency Issuer Default Ratings
(IDRs) at 'BB'. The Rating Outlook is Negative, reflecting the
Negative Outlook on the sovereign. Fitch has also affirmed the
city's National Rating at 'AA(bra)'/Stable Outlook.


The affirmation of City of Rio de Janeiro's ratings is underpinned
by CRio's capacity to generate operating margins close to 5%, in
Fitch's opinion. Fitch believes that the ratings assigned to the
Brazilian subnational cannot surpass those assigned to the
Federative Republic of Brazil. The ratings are strongly related to
those assigned to Brazil considering the fact that the most
relevant creditor is the federal government. For this reason,
CRio's Issuer Default Ratings (IDRs) have a Negative Outlook.

CRio's operating margins were negatively impacted in 2016 by
higher operating expenditures, especially in healthcare coupled
with sluggish revenue performance. As a response, the new
administration implemented several measures to curb expenditures
in early 2017. Fitch Ratings believes operating margins will
recover to levels close to 5% until 2019, compatible with peers.
The city posted a 0.1% margin in 2016.

The federal government, directly and indirectly, remains the
city's main creditor. Debt related to federal financial
institutions has been increasing at a fast pace, representing
46.4% of the city's current revenues in 2016. Regarding debt
sustainability, unless operating balances recover to historical
levels, direct debt service will consume a relevant portion of the
operating balance, thus exerting pressure over investments and
cash positions, in Fitch's opinion.

CRio has engaged in several credit operations to improve
transportation and logistics in Rio. The pace of new investments
should moderate in 2017 and 2018. Average capex for 'BB' rated
peer entities represented 5.5% of total expenditure, and reached
14.8% for CRio in 2016. Federal creditors are responsible for
virtually all new credit operations in 2016 and 2017.

Despite consuming around 28% of total annual personnel expenditure
in 2016, the pension system retains some assets and its actuarial
deficit of BRL3.2 billion corresponded to a low 13.5% of the
city's operating revenue. This is better when compared to other
large Brazilian states. Unlike states, however, Brazilian cities
do not have to support law enforcement and judiciary power.

Fitch considers CRio's liquidity adequate, with no short-term
concerns. Total debt service of BRL1.2 billion in 2017 is fully
covered by the city's outstanding cash position of BRL3.1 billion.
This liquidity position corresponds to 13.1% of the city's
operating revenue in 2016. The short-term obligations are mainly
composed of debt service and payments to suppliers.


Actions Linked to Sovereign: Any rating action affecting Brazil's
sovereign credit ratings will exert a direct influence over CRio's
ratings, provided the city maintains the current fiscal

Fiscal Performance and Debt: An operating margin consistently
lower than 2% coupled with a higher level of financial debt and
expressed by a direct debt/current balance higher than the
equivalent to 20 years will exert a negative pressure on CRio's


Fitch assumes a high level of sovereign support for the City of
Rio de Janeiro compared to the support granted to other Brazilian
local governments, even considering the weak institutional
framework. This is due to the city's economic relevance and the
fact that its most relevant creditor and guarantor is the federal

Fitch has affirmed the following ratings:

City of Rio de Janeiro:
-- Long-Term Foreign Currency IDR at 'BB'; Outlook Negative;
-- Short-Term Foreign Currency IDR at 'B';
-- Long-Term Local Currency IDR at 'BB'; Outlook Negative;
-- Short-Term Local Currency IDR at 'B';
-- Long-Term National at 'AA(bra)'; Outlook Stable;
-- Short-Term National rating at 'F1+(bra)'.

D O M I N I C A N   R E P U B L I C

DOMINICAN REPUBLIC: Corruption Hobbles Competitiveness
Dominican Today reports that the Dominican Republic fell 12 spots
in the Global Competitiveness Index 2017-2018, and was 104th among
the 137 nations analyzed by the World Economic Forum.

Corruption, inefficient government bureaucracy, tax rates, an
inadequately educated workforce, crimes and thefts are the five
most negative factors in doing business in the country, the report
said, according to Dominican Today.

The causes of the fall go beyond the general perceptions and focus
on the poor results in areas such as institutionality,
macroeconomic environment, labor market efficiency and financial
market development, which showed a downward trend, according to
the results published in the index, Dominican Today says.

The World Economic Forum evaluates each country based on 12
pillars that affect a company's ability to do business in that
country, the report notes.  The first, on institutions, is one of
the worst pillars evaluated with negative perceptions about the
public confidence in the politicians, corruption, a lack of
judicial independence, favoritism in official decisions, low
efficiency in government spending, the weight of regulations and
even the transparency of policies, among others, the report

As for the macroeconomic environment, the Global Competitiveness
Index 2017-2018 warns about a decline in the budget balance and in
the public debt, the report says.

Likewise, the labor market's capacity to be efficient declined
compared to last year, with problems such as low flexibility in
wage determination, redundancy of labor costs, low capacity to
retain and attract talent, the report notes.

The World Economic Forum also notes that the development of the
financial market shows setbacks in aspects such as the
availability of financial services and the soundness of banks, the
report notes.

In that regard, National Competitiveness Council executive
director, Rafael Paz, in statement said that a public-private
action plan is needed to reverse those results immediately, given
the effect of the situation on the country's business climate, the
report says.  "From the Dominican Government we have the
commitment to take the corresponding steps to achieve it," he

As reported in Troubled Company Reporter-Latin America on July 24,
2017, Moody's Investors Service has upgraded the Dominican
Republic's long term issuer and debt ratings to Ba3 from B1 and
changed the outlook to stable from positive, based on the
following key drivers:

(1)  The Dominican Republic's continued robust growth outlook
     compared to rating peers, coupled with a reduction in
     external risks as current account deficits have declined and
     international reserves have increased.

(2)  The reduction in fiscal deficits over the last four years and
     Moody's expectation that fiscal deficits will remain shy of
     3% of GDP, supported by fiscal restraint and reduced
     transfers to the electricity sector.


JAMAICA MERCHANT: Fitch Affirms 'BB+' Notes Rating
Fitch Ratings has affirmed the 'BB+' ratings assigned to the
series 2015-1 and 2016-1 notes issued by Jamaica Merchant
Voucher Receivables Limited. Fitch has also affirmed the
'BB' rating assigned to the series 2013-1 notes issued by
Jamaica Diversified Payment Rights Company. The Rating
Outlook is Stable.

Jamaica Merchant Voucher Receivables Limited is backed by
future flows due from Visa International Service Association
(Visa) and MasterCard International Incorporated
(MasterCard) related to international merchant vouchers
acquired by National Commercial Bank Jamaica Ltd. (NCBJ) in

Jamaica Diversified Payment Rights Co. is backed by existing
and future USD-denominated diversified payment rights (DPRs)
originated by NCBJ. DPRs are defined as electronic or other
messages utilized by financial institutions to instruct NCBJ
to make payment to a beneficiary. The majority of DPRs are
processed by designated depository banks (DDBs) that have
executed agreements obligating them to send payments to
accounts controlled by the transaction trustee.

Fitch's ratings address timely payment of interest and
principal on a quarterly basis.


Originator's Credit Quality: Fitch assigns NCBJ a Local
Currency (LC) Issuer Default Rating (IDR) of 'B'/Stable
Outlook and Viability Rating (VR) of 'b'. The bank's LC IDR
and VR reflect the high influence of the operating
environment given its substantial exposure to the sovereign
as well as its reach into all major sectors of the Jamaican

Going Concern Assessment (GCA): NCBJ's GCA score of 'GC1'
reflects the bank's position as a systemically top-tier bank
with around 33% of system deposits. The GCA score allows the
transactions to be rated up to six notches above NCBJ's LC
IDR, but other factors limit the notching differential.

Relatively High FF Debt: NCBJ's total outstanding future
flow debt of $516.7 million represents approximately 12.5%
of the bank's consolidated liabilities and 32.2% of non-
deposit funding. This relatively high level of future flow
debt limits the uplift of the future flow ratings.

Merchant Voucher Program's Strength: NCBJ's market-leading
credit card franchise supports a growing level of
international Visa and MasterCard merchant vouchers. Fitch's
debt service coverage ratio (DSCR), which considers monthly
program flows and maximum debt service, averaged 7.5x over
the last 12 months.

DPR Line's Moderate Strength: The DPR program contains a
large proportion of government-related flows and/or capital
flows, which Fitch considers more volatile than export-
related payments and remittances. Fitch's DSCR, which
considers monthly DDB flows (excluding 65% of flows from
certain entities) and maximum debt service, averaged 50.9x
during the last 12 months.

Partially-Mitigated Sovereign Risk: The transaction
structures mitigate certain sovereign risks by keeping cash
flows offshore until collection of periodic debt service,
allowing the future flow ratings to be above the sovereign
country ceiling.


The ratings are linked to the credit quality of NCBJ and the
ability of the securitized business lines to continue
operating, as reflected by the GCA score. Although the
future flow ratings are sensitive to changes in NCBJ's
ratings, a one-notch movement in the bank's ratings may not
lead to a similar rating action on the transaction ratings.
In addition, severe reductions in coverage levels or an
increase in the level of future flow debt relative to the
bank's balance sheet could result in rating downgrades.

Fitch has affirmed the following ratings:

Jamaica Merchant Voucher Receivables Limited
-- Series 2016-1 notes at 'BB+'; Outlook Stable.
-- Series 2015-1 notes at 'BB+'; Outlook Stable.

Jamaica Diversified Payment Rights Company
-- Series 2013-1 notes at 'BB'; Outlook Stable.


NICARAGUA: To Strengthen Electricity Sector With $65MM IDB Loan
The IDB has approved a $65 million loan to help Nicaragua
strengthen a framework that guarantees financial and operational
sustainability of its electricity sector.  The program will
support macroeconomic stability, ensure the sector's financial
soundness, improve transparency of its management results, and
promote a sustainable energy matrix.

The program is aligned with the Government's "Energy Sector Action
Plan," which consists of three strategic lines of work-universal
access to energy, energy efficiency, and energy matrix
diversification-and addresses the following challenges: (i)
electricity service cost vulnerability associated with the energy
matrix, (ii) high energy service costs due to system losses, (iii)
lack of a consolidated sector framework for private investment,
(iv) low regional market participation, and (v) the need to
improve the transparency of management results.

The program is the third in a series of programmatic loans on
which the Bank has worked with Nicaragua between 2013 and 2017,
setting the stage for strengthening the government's performance
in the energy sector, improving the safety, reliability and
quality of the supply of energy in the country, increasing
regional integration in the sector and promoting environmentally
sustainable development.

The activities planned beginning with approval of the first
operation in 2013 have been retained throughout the series of
loans, allowing for integrated solutions to challenges in the
sector through the approval of reforms and institutional measures,
among them the Energy Efficiency Law, reform of the Electricity
Industry Law to incorporate distributed generation, actions to
improve procedures for the contracting of energy, strengthening of
the wholesale market to attract private investment, and
modification of operational rules at the national level to mesh
with those in the regional electricity market.


PERU: Iquitos Turns to Tourism to Revive its Fortunes
Alvaro Mellizo at EFE News reports that Iquitos, the largest city
in the world that cannot be reached by road, is now turning to
tourism to regain the wealth it enjoyed at the beginning of the
20th century when the rubber industry made it one of the richest
places on earth.

Located in the heart of the Peruvian Amazon, five days from the
first road accessible by car, Iquitos today is a far cry from its
glory days between 1880 and 1914 when the production of rubber
generated immense fortunes from land previously lost in the
jungle, only to see that industry and the fortunes it created
disappear from one day to the next, according to EFE News.

In that era, thousands of migrants from around the world came to
Iquitos and transformed a tiny jungle village into a thriving
city, the report notes.

"When the rubber boom took off in the mid-1880s, the village
became a mini-metropolis based on the rubber economy. It was an
essential raw material for the automotive industry, and the rubber
shipped from Iquitos was sold to companies like Ford to make
tires," tourist guide Dick Rengifo told EFE.

The home of that industry, which savagely exploited Amazon Indians
for the collection and transport of rubber to the Iquitos docks on
the river, from where it was shipped directly to Europe and the
United States, the jungle city was soon replete with symbols of
status and economic power, whose phantoms can be seen there to
this day, the report says.

Photos of the period show elegant magnates strolling in Parisian
suits and hats under the blazing equatorial sun, or enjoying
cocktails and coffee at the Hotel Palace, an unusual building for
the jungle with its unmistakable traits of Catalan modernism, the
report notes.

"The rubber disappeared because of the abuse of the Indians, the
invention of synthetic rubber and the rise of Asian rubber
plantations, which made the collection of latex for rubber quicker
and easier. Starting in 1914 the elites left the city and by mid-
1915 it was again economically and geographically isolated," the
report quoted Mr. Rengifo as saying.

After several unsuccessful attempts to revive the city, tourism
seems to offer a sustainable solution, and now countless travelers
come here in search of adventure, wildlife and the mysticism of
the Amazon River, the report relays.

However, just as the rubber industry was known for its criminal
exploitation of Indian labor, Iquitos tourism also has its dark
side: the sexual exploitation of children, the report notes.

Despite the authorities' efforts, the city is one of the world's
leading sexual-tourism destinations, where poverty and social
passivity have led to the systematic abuse of hundreds of minors,
the report adds.

P U E R T O    R I C O

PUERTO RICO: Debt Hearings Postponed, Moved to New York
Alex Wolf, writing for Bankruptcy Law360, reports that U.S.
District Judge Laura Taylor Swain has pushed back impending debt
restructuring hearings and moved them from San Juan to her
courtroom in New York to accommodate the immediate crises on the
island caused by Hurricane Maria.

                      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, 2017.  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 on-board 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:


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
II LP (the QTCB Noteholder Group).


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
& 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.

TOYS "R" US: May Maintain Customer Programs, Court Says
Alex Wolf, writing for Bankruptcy Law360, reports that the Hon.
Keith L. Phillips of the U.S. Bankruptcy Court for the Eastern
District of Virginia has granted Toys R Us authorization to
maintain its customer programs, shortly after gaining access to
$2.2 billion in post-petition financing.

Law360 relates that Judge Phillips permitted the iconic toy
retailer to continue administering and maintaining popular
programs that the Debtor hopes will "attract and maintain positive
customer relationships."  The Debtor, according to the report, can
continue allowing clients to return or exchange purchased
merchandise, redeem gift cards, take advantage of sales promotions
and receive discounts or rewards if they are enrolled in certain

Court documents state that roughly $206 million in the Debtor's
issued gift cards and merchandise credit remain outstanding, while
another $22.5 million worth of valid rewards certificates have yet
to be redeemed.

                        About Toys "R" Us

Toys "R" Us, Inc., is an American toy and juvenile-products
retailer founded in 1948 and headquartered in Wayne, New Jersey,
in the New York City metropolitan area.

Merchandise is sold in 880 Toys "R" Us and Babies "R" Us stores in
the United States, Puerto Rico and Guam, and in more than 780
international stores and more than 245 licensed stores in 37
countries and jurisdictions.  Merchandise is also sold at
e-commerce sites including and

On July 21, 2005, a consortium of Bain Capital Partners LLC,
Kohlberg Kravis Roberts and Vornado Realty Trust invested $1.3
billion to complete a $6.6 billion leveraged buyout of the
company.  Toys "R" Us is now a privately owned entity but still
files with the Securities and Exchange Commission as required by
its debt agreements.

The Company's consolidated balance sheet showed $6.572 billion in
assets, $7.891 billion in liabilities, and a stockholders' deficit
of $1.319 billion as of April 29, 2017.

Toys "R" Us, Inc. and certain of its U.S. subsidiaries and its
Canadian subsidiary voluntarily filed for relief under Chapter 11
of the Bankruptcy Code (Bankr. E.D. Va. Lead Case No. Case No.
17-34665) on Sept. 19, 2017.  Judge Keith L. Phillips is the case

In addition, the Company's Canadian subsidiary voluntarily
commenced parallel proceedings under the Companies' Creditors
Arrangement Act ("CCAA") in Canada in the Ontario Superior Court
of Justice.

The Company's operations outside of the U.S. and Canada, including
its 255 licensed stores and joint venture partnership in Asia,
which are separate entities, are not part of the Chapter 11 filing
and CCAA proceedings.

Kirkland & Ellis LLP is serving as principal legal counsel to Toys
"R" Us, Alvarez & Marsal is serving as restructuring advisor and
Lazard is serving as financial advisor.  Prime Clerk LLC is the
claims and noticing agent.

Grant Thornton is the monitor appointed in the CCAA case.


BANCO BANDES: Moody's Cuts Long-Term Deposit Ratings to Caa1
Moody's Investors Service has downgraded Banco Bandes Uruguay
S.A.'s (Bandes Uruguay) long-term global local- and foreign-
currency deposit ratings to Caa1 from B3. Moody's also downgraded
the bank's long-term Uruguayan national scale local- and foreign-
currency deposit ratings to from and its baseline
credit assessment (BCA) and adjusted BCA to caa1 from b3. The Not
Prime short-term global local- and foreign-currency deposit
ratings were affirmed. The outlook remains negative.

The following ratings and assessments of Banco Bandes Uruguay S.A.
were downgraded:

Long-term global local-currency deposit rating: to Caa1, from B3,
negative outlook

Long-term global foreign-currency deposit rating: to Caa1, from
B3, negative outlook

Long-term Uruguayan national scale local-currency deposit rating:
to, from, negative outlook

Long-term Uruguayan national scale foreign-currency deposit
rating: to, from, negative outlook

Baseline credit assessment: to caa1, from b3

Adjusted baseline credit assessment: to caa1, from b3

Long-term counterparty risk assessment: to B3(cr), from B2(cr)

The following ratings and assessments of Banco Bandes Uruguay S.A.
were affirmed:

Short-term global local-currency deposit rating of Not Prime

Short-term global foreign-currency deposit rating of Not Prime

Short-term counterparty risk assessment of Not Prime(cr)


The downgrade reflects a sharp rise in delinquencies last year and
a resulting increase in credit costs that was funded largely with
an extraordinary increase in other non-interest income, which
Moody's believes to consist primarily of payments from the bank's
parent Banco Bandes S.A. (Bandes Venezuela, unrated), a Venezuelan
state-owned development bank. In addition, Bandes Uruguay
continues to depend on its parent for a portion of its total
funding (37% as of June 2017).

While this financial support has helped Bandes Uruguay withstand
its intrinsic challenges, at the same time the bank has become
more exposed to the political and economic adversity facing the
Venezuelan government.

Notwithstanding the substantial, if indirect, credit interlinkages
between Bandes Uruguay and its ultimate parent, and rising asset
risks, the bank's rating remains two notches above that of the
government of Venezuela because Uruguayan regulations should
restrict its ability to pay dividends to its parent in excess of
net income, and hence upstream its capital. Moreover, the bank's
domestic business and customers are largely independent of its
parent. It also has relatively good levels of capital, substantial
loan loss reserves, moderate volume of domestic funding to
complement funding from its parent, and ample liquidity.

The rise in credit costs was driven by a jump in Bandes Uruguay's
problem loans to 10.8% of total loans in June 2017, from 4.1% one
year prior. While most of the deterioration was due to a number of
large delinquencies in the second half of 2016, the non-performing
loan ratio continued to rise in the first half of 2017. The steep
increase highlights the risks associated with the bank's high
borrower concentrations. Moody's expects problem loans will remain
elevated in the next 12 to 18 months because Uruguayan banks must
keep past-due loans on balance for two years before writing them
off. The increase in credit costs was largely offset by a
corresponding rise in other non-interest income. In 2016, these
accounted for 25% of the bank's total revenues and, as a result,
the bank broke even in that year.

Although credit costs fell sharply in the first half of 2017, the
bank nevertheless reported a small net loss equal to 0.24% of
tangible assets. In addition to high credit costs, large operating
expenses are the main hindrance to Bandes Uruguay's earnings,
often resulting in cost-to-income ratios above 100%. Profits will
remain weak unless credit costs decline further and management is
able to cut expenses and redeploy a portion of the bank's low-
yielding liquid assets into higher-margin peso-denominated loans
to individuals and small- and mid-sized companies.

However, notwithstanding its weak profitability, the bank's
capital levels remain sound, with tangible common equity (TCE)
equal to 11% of risk-weighted assets (RWAs). Together with loan
loss reserves of more than 100% of problem loans, this helps
mitigate the bank's high asset risks. In addition, the bank's
strong liquidity position, with liquid assets equal to 47% of
tangible banking assets, helps to mitigate risks related to its
dependence on funding from its parent.

The national scale rating is the sole rating on Uruguay's
national rating scale corresponding to the bank's Caa1 global
scale rating.

The negative outlook on Bandes Uruguay's deposit ratings considers
the bank's credit interlinkages with the government of Venezuela
(Caa3, negative), the rating of which also carries a negative


Bandes Uruguay's ratings could face further downward pressure if
its dependence upon its parent increases further or if there is
evidence of reduced ability on the part of Bandes Venezuela to
provide funding to bank. The ratings could also face additional
downward pressure if asset quality and profitability deteriorate
any further, leading to an erosion of the bank's capitalization
and/or if its ability to raise funds locally.

While the ratings do not face upward pressure at this time, the
outlook could stabilize if and when the outlook on the Venezuelan
sovereign stabilizes.


The principal methodology used in these ratings was Banks
published in September 2017.

Moody's National Scale Credit Ratings (NSRs) are intended as
relative measures of creditworthiness among debt issues and
issuers within a country, enabling market participants to better
differentiate relative risks. NSRs differ from Moody's global
scale credit ratings in that they are not globally comparable with
the full universe of Moody's rated entities, but only with NSRs
for other rated debt issues and issuers within the same country.
NSRs are designated by a ".nn" country modifier signifying the
relevant country, as in ".za" for South Africa. For further
information on Moody's approach to national scale credit ratings,
please refer to Moody's Credit rating Methodology published in May
2016 entitled "Mapping National Scale Ratings from Global Scale
Ratings". While NSRs have no inherent absolute meaning in terms of
default risk or expected loss, a historical probability of default
consistent with a given NSR can be inferred from the GSR to which
it maps back at that particular point in time. For information on
the historical default rates associated with different global
scale rating categories over different investment horizons.

Banco Bandes Uruguay S.A. is headquartered in Montevideo, Uruguay,
with assets of UYU 9.73 billion and shareholders' equity of UYU
1.27 billion as of June 30, 2017.


CARIBBEAN: Correspondent Banking Relationships Limited, IMF Says
RJR News reports that the International Monetary Fund (IMF) says
the macroeconomic impact of banks across the Caribbean losing
Correspondent Banking Relationships (CBRs) has so far been

The IMF released a policy paper on how regional banks have been
coping since losing their connections with major foreign banks,
according to RJR News.

The IMF says the limited macroeconomic impact is due in part to
banks having multiple relationships or successfully replacing lost
Correspondent Banking Relationships, the report notes.

However, the Fund says the cost of services has increased
substantially, some services have been cut back, and some sectors
have experienced reduced access, the report relays.

It added that policy options to address multiple drivers,
including lower profitability and risk aversion by global banks,
require tailored actions by several stakeholders, the report

The report discloses that correspondent banking relationships
facilitate a number of payment systems, including international
trade, cross-border payments and receipt of remittances.

Some large international banks have started terminating or
severely limiting those relationships with regional banks
including Jamaica in an effort to reduce exposure to risks
associated with money-laundering and financing of terrorism, the
report relays.

This process is known as de-risking.

In its policy paper the IMF says further loss of Correspondent
Banking Relationships remains a significant risk to the region and
could have large economic costs, the report notes.

It says Caribbean countries are small open economies with
extensive links to the global economy, making them vulnerable to a
loss of Correspondent Banking Relationships, the report says.

According to the IMF, a disruption could adversely impact the
economy through several links, including: reduced international
trade, remittances and investment flows; higher costs of doing
business and direct negative impact to key sectors or activities,
the report says.

These include gaming, offshore financial sector and citizenship-by
investment programs, the report adds.


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

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

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Troubled Company Reporter-Latin America is a daily newsletter
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