/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/171115.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Wednesday, November 15, 2017, Vol. 18, No. 227 Headlines B E R M U D A KOSMOS ENERGY: Fitch Revises Outlook to Positive; Affirms B IDR B R A Z I L GOL LINHAS: Fitch Raises Long-Term IDR to B; Outlook Stable OI SA: Focused On Creditors Meeting, Not On New Investors SA USINA CORURIPE: S&P Assigns 'BB-' CCR, Outlook Stable J A M A I C A JAMAICA: IMF Boss Christine Lagarde to Visit Next Week JAMAICA: Signs US$40 Million Loan Deal With IDB P U E R T O R I C O EVERTEC GROUP: Moody's Lowers CFR to B2; Outlook Stable PUERTO RICO: Seeks $94 Billion in Federal Aid After Hurricane V E N E Z U E L A CORPORACION ELECTRICA: S&P Cuts Debt Rating to D on Missed Payment CORPORACION ELECTRICA: Fitch Cuts Long-Term FC IDR to RD PETROLEOS DE VENEZUELA: Fitch Lowers LT FC IDR to RD on Default VENEZUELA: Begins Refinancing Its Foreign Debt - - - - - ============== B E R M U D A ============== KOSMOS ENERGY: Fitch Revises Outlook to Positive; Affirms B IDR --------------------------------------------------------------- Fitch Ratings has revised Kosmos Energy Ltd.'s (Kosmos) Outlook to Positive from Stable. The Issuer Default Rating has been affirmed at 'B'. Its senior secured notes have been affirmed at 'B' with a Recovery Rating of 'RR4'. The revision of the Outlook to Positive from Stable reflects greater asset diversification and higher oil and gas production following the start of the TEN field and acquisition of acreage in Equatorial Guinea. Fitch expects production of 40-45mboepd in 2017-2019 compared to 19mboepd in 2016. Kosmos has also successfully farmed out its assets in Mauritania and Senegal to BP (A/Stable). In addition to the purchase price consideration already received, Kosmos has gained a strong partner in developing the Tortue field, which contains an estimated 15tcf of gas. Fitch expects that over the next 12-18 months Kosmos will be able to introduce measures in the Jubilee field aimed at remediation of the turret-bearing problem in its floating production, storage and offloading platform (FPSO) and provide more information on the results of the exploratory works in Equatorial Guinea. Fitch also expect further information on the final investment decision for the Tortue field with the final estimate of exploratory and development spending. The positive resolution of these operating considerations will lead to a rating upgrade. Key rating constraints include Kosmos's small size, operations in low-rated countries and the risks inherent in its business model focused on oil exploratory activities. KEY RATING DRIVERS Equatorial Guinea Improves Asset Diversification: Kosmos announced recently that in partnership with Trident Energy, it has agreed to acquire an interest in three exploration licenses and offshore assets in Equatorial Guinea on a 50/50 basis for USD240 million. Fitch see the transaction as positive for both the operational and financial profile of Kosmos Energy. It increases the number of the company's producing assets and production by approximately 13.5 mbpd on a net pro forma 2017 basis as well as improving geographical diversification. Aiming to Stabilise Production: Underinvestment over the last few years led to a production decline from above 60 mbpd gross in 2015 to around 45 mbpd gross forecasted in 2017. One of the challenges for the partners will be to arrest the decline and stabilise production at around 45 mbpd gross over the rating horizon. As such Fitch forecast Kosmos's net entitlement to average around 11 mbpd over 2018-2020. Tortue Development On Track: BP plc (A/Stable) entered into a partnership with Kosmos Energy in December 2016, signing an agreement to acquire a working interest, including the operation of Kosmos's exploration blocks in Mauritania and Senegal. The key asset, the Tortue field, holds an estimated 15tcf of gas. The final investment decision on field development is expected in 2018. In addition to the USD220 million upfront payment Kosmos received from BP, the latter company will also fund a USD228 million exploratory budget on behalf of Kosmos and up to USD533 million of development expenses until first gas expected in 2021. We view the transaction as positive for Kosmos. Cooperation with a strong partner provides comfort for successful asset development. The final investment decision confirming the estimated exploratory and development spending will further strengthen the case for a rating upgrade. TEN Set for Production Growth: The International Tribunal of the Law of the Sea (ITLOS) issued a final decision in September 2017 in the maritime border dispute between Ghana and Cote d'Ivoire, which was favourable to Kosmos. Following the ruling, Kosmos and its partners plan to resume drilling by the end of the year in the previously contested area, which should help the FPSO reach its gross capacity of 80,000 barrels of oil per day (mbpd). Production in the TEN field started in August 2016, improving Kosmos's asset diversification. Further asset development will be positive for the credit profile. Jubilee Remediation Set for 2018: The production impact of the turret bearing issue on Kosmos's most important asset - the Jubilee field - has been less pronounced in 2017 as actions taken by the company and its partners have led to gross production regularly exceeding 100 mbpd in 1H17. The field operator forecasts that a facility shutdown of between seven to nine weeks will be required to fully resolve the technical issue, but this has now been postponed to 2018. The financial impact of the turret issue has so far been mitigated by a combination of loss of production income (LOPI) insurance and hull and machinery (H&M) insurance. Strong financial profile: Operational problems in the Jubilee field, lower oil prices and additional expenses related to start of production in the TEN field resulted in a 49% yoy drop in EBITDA 2016. Fitch expect a gradual increase in EBITDA generation in the medium term on the back of growing production in 2017-2019 from TEN, Jubilee and the addition of Equatorial Guinea assets. Fitch include FCF from the acquired Equatorial Guinea asset in the FFO calculation. Fitch expect leverage metrics to be broadly commensurate with a rating upgrade in 2017-2020. Favourable resolution of operating considerations expected in the next 12-18 months will be positive for the credit profile. DERIVATION SUMMARY Kosmos compares favourably with Fitch-rated smaller E&P companies such as Unit Corporation (B+/Stable, Unit) and GeoPark Limited (B/Stable, GeoPark) in terms of production growth, reserve life, profitability and liquidity. Historically, Kosmos's single asset exposure was the main rating constraint. However, with the start of the TEN field in 3Q16 and the addition of the Equatorial Guinea assets in 2017, the company's asset diversification improved. KEY ASSUMPTIONS Fitch's key assumptions within Fitch rating case for the issuer include: - Brent crude price of USD52.5/bbl in 2017 and 2018, USD55/bbl in 2019 and USD57.5/bbl thereafter; - combined production from TEN and Jubilee exceeding 30 mbpd by 2019; - the Equatorial Guinea production assets accounted for under the equity method, with free cash flow up streamed as dividend to Kosmos; - successful completion of the turret remediation project, with incremental opex and capex largely covered by insurers; - no dividends. The recovery analysis assumes that Kosmos Energy Ltd. would be considered as a going-concern in bankruptcy and that the company would be reorganised rather than liquidated. Fitch have assumed a 10% administrative claim. Kosmos's going-concern EBITDAX is based on forecast 2017 EBITDAX and includes pro forma adjustments for the Equatorial Guinea asset acquisition. As the acquisition would be accounted under the equity method Fitch have assumed any FCF at the level of the JV will be paid out as dividends and added to EBITDAX. Fitch used a discount of 25% to reflect the risk of operational problems in the production assets. The Fitch-employed average distressed multiple for recovery analysis in the natural resources sector of 4.5x is used to calculate a post-reorganisation valuation. The reserve-based lending facility and the corporate revolver are assumed to be fully drawn upon default. The waterfall results in a 45% recovery corresponding to 'RR4' recovery for the senior unsecured notes RATING SENSITIVITIES Future Developments That May, Individually or Collectively, Lead to Positive Rating Action - FFO-adjusted net leverage below 3.5x on a sustained basis (the net leverage figure has been revised up from 2.5x to reflect Kosmos' improved operational profile) - Successful completion of the turret bearing remediation works on the Jubilee field - Final investment decision with clarity on the development costs for the Tortue field - Favorable results of early exploratory works on the Equatorial Guinea acreage acquired in 2017 Future Developments That May, Individually or Collectively, Lead to Negative Rating Action - FFO-adjusted net leverage above 4.5x - Operational issues within the fields operated or planned to be developed by Kosmos LIQUIDITY Strong Liquidity: At 30 September 2017 Kosmos's liquidity comprised USD164 million of cash and cash equivalents and USD1,100 million of undrawn credit facilities, including an unutilised balance of USD700 million under the USD1.3 billion reserve-based facility. The company has no maturities until 2019, with the exception of the currently unutilised USD400 million corporate revolver, which is due in November 2018. Fitch expect Kosmos to generate positive FCF over the next few years as a result of growing production, stable oil prices and declining capital intensity. =========== B R A Z I L =========== GOL LINHAS: Fitch Raises Long-Term IDR to B; Outlook Stable ----------------------------------------------------------- Fitch Ratings has upgraded GOL Linhas Aereas Inteligentes S.A.'s (GOL) Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDRs) to 'B' from 'CCC' and its National rating to 'BBB-(bra)' from 'CCC(bra)'. Fitch has also upgraded GOL's fully owned subsidiaries' secured notes to 'B+'/'RR3' from 'CCC+'/'RR3' and its fully owned subsidiaries' unsecured bond ratings to 'B'/'RR4' from 'CCC-'/'RR5'. The rating actions reflect Fitch's reassessment of GOL's credit risk incorporating the company's recent restructuring executed during 2017, which reduced the company's capacity and cost structure, lowered leverage and improved operational performance. The ratings actions also incorporate Fitch's expectations for GOL to benefit from the Brazilian airline industry's improving fundamentals in 2017-2018. A full list of rating actions follows at the end of this press release. KEY RATING DRIVERS Market Position and FX Risk Incorporated: The ratings reflect GOL's leading business position in the Brazilian airline domestic market, which is viewed as sustainable over the medium term, with a market share of around 35% as measured by revenues/passenger/kilometer in January through September 2017. As this is the company's key market, GOL's operational results are highly correlated to the Brazilian economy. Due to limited geographic diversification the company's FX exposure is high. GOL generates approximately 90% of its revenues in Brazilian reais, while around 60% of its total costs and 80% of its total debt are denominated in U.S. dollars. Macro Driving Moderate Traffic Improvement in 2017-2018: Brazil's better macroeconomic environment in 2017-2018 should be reflected in improved traffic levels, stable cost structure and lower interest expenses. Fitch forecasts Brazil's GDP growth to be positive 0.7% and 2.7% in 2017 and 2018, respectively. Fitch expects Brazil's domestic segment traffic (total transported passengers), to reach single-digit annual growth as demand fundamentals and corporate activity recover during 2017-2018. GOL's consolidated traffic is expected to reach average annual growth rates in the 3%-4% range during this period. Significant Expansion in Operational Margin: GOL reached an operational margin of 9.8% during the LTM September 2017 versus 7.1% and -1.9% in 2016 and 2015, respectively. Fitch expects GOL to sustain EBIT margin in the 9%-11% range during 2017-2018, driven by cost reduction, moderate higher yields and expectations of moderate demand recovery as the Brazilian macroeconomic environment improves. These factors could be partially offset by fuel cost increases, devaluation of the local currency versus the U.S. dollar, and/or increasing capacity from competitors. Fitch anticipates GOL will maintain reasonable capacity management resulting in increases in total capacity, measured as total available seat kilometres, of 1% and 3%, respectively, in 2017 and 2018,. Material Deleveraging, Adjusted Leverage Trending to 5x: GOL has materially reduced its financial adjusted gross leverage during 2016-2017. The company's total adjusted debt/EBITDAR was 5.4x during LTM September 2017 down from 6.2x and 12.7x in 2016 and 2015, respectively. GOL's LTM September 2017 EBITDAR was BRL2.3 billion. Total adjusted debt was BRL12.6 billion, composed of BRL5.9 billion in on-balance-sheet debt, including loans, financial leases and bonds, and BRL6.7 billion in off-balance- sheet obligations related to operating leases, with combined payments of approximately BRL0.9 billion during LTM September 2017. Fitch expects the company to reach gross adjusted leverage levels of around 5x during 2018-2019 driven primarily by a positive trend in revenues and margins. FCF Trend Key for Financial Flexibility: Fitch expects GOL to reach positive FCF during 2017 driven by better operational performance, lower capex, some tax benefit, and lower working capital needs. For 2018-2019, FCF is expected to be neutral to negative, as capex levels are anticipated to increase. Fitch views GOL as having the capacity to adjust its capex plan in an economic distress scenario as occurred in 2016-2017. GOL renegotiated 29 aircraft contracts in 2016, including payment deferrals, final sale, sale-leaseback and leasing returns. In addition, GOL postponed 11 new aircraft deliveries during 2016-2017 to 2026- 2027. During 2016, the company's FCF generation was negative BRL170 million, resulting in FCF margin, or LTM FCF/LTM revenue, of negative 1.7%, representing a material reduction when compared with negative 16.7% in 2015 (negative BRL1.6 billion). Recovery Ratings Incorporated: The 'RR3' Recovery Rating (RR) for the secured notes reflects above-average recovery prospects in an event of default. These notes are secured by collateral that has been valued at USD222.7 million, representing a principal coverage ratio of over 3 to 1. Fitch recovery analysis for the secured notes resulted in higher values but has been capped at 'RR3' considering that issues in some jurisdictions could affect the recovery prospects. The 'RR4' for the senior unsecured notes reflects average recovery prospects in an event of default. DERIVATION SUMMARY GOL's recent operational performance compares well to those of the other two main airlines in Latin America rated by Fitch, LATAM Airlines Group S.A. (B+/Stable) and Avianca Holdings S.A. (B/Negative). The ratings distinction among the three airlines reflects differences in their financial strategies, operational performance volatility and business diversification for each airline. GOL's volatility in its operational performance over the last five years and relatively low liquidity have been incorporated into the company's rating versus peers. On the positive side, the company has benefited during 2017 from Brazil's improving business environment as well as from a capacity reduction, both resulting in better operational performance and declining leverage during 2017. Among the three companies GOL is showing the highest operational margin thus far this year. In addition, the ratings incorporate expectation of further improvement in GOL's liquidity position, measured as readily available cash as a percentage of LTM revenues. KEY ASSUMPTIONS Fitch's key assumptions within Fitch rating case for the issuer include: -- 2017-2018 EBIT margin around 10%; -- Positive FCF in 2017 and neutral to negative (low single digits) in 2018; -- Gross adjusted financial leverage (total adjusted debt/EBITDAR) at around 5.5x during 2017-2018; -- 2017-2018 liquidity, measured as readily available cash over LTM net revenues, in the 10%-12% range; -- 2017-2018 coverage ratio, EBITDAR/(net interest expense + rents), around 1.6x. RATING SENSITIVITIES Future Developments That May, Individually or Collectively, Lead to Positive Rating Action -- Liquidity, measured as cash/LTM revenues, consistently around 15%; -- Gross adjusted leverage consistently below 5x; -- Moving toward neutral-to-positive FCF; -- Coverage ratio, measured as total EBITDAR/(net interest expense plus rents) consistently above 2x. Future Developments That May, Individually or Collectively, Lead to Negative Rating Action -- Adjusted gross leverage consistently above 6.5x; -- EBIT margin consistently below 6%; -- Liquidity, cash/ LTM revenues, consistently below 8%; -- Sustained negative FCF at levels resulting in FCF margin consistently below -5%. LIQUIDITY Liquidity Improving: GOL's liquidity is viewed as adequate and improving in 2017 as a result of positive FCF generation and some liability management during 2017-2018. GOL's 2017 FCF generation is estimated at around BRL285 million. GOL's readily available cash, measured as total cash plus marketable securities, was BRL900 million as of Sept. 30, 2017. The company has debt principal payments due of approximately BRL1 billion during 2018. Deteriorating economic or business conditions could put pressure on the company's liquidity; however, the company does have some liquidity buffers available in case of financial stress (e.g. credit access with local banks on a secured basis, residual value in aircraft equipment, available account receivables, and asset disposal). Fitch expects GOL to maintain of readily available cash of around BRL1.2 billion-BRL1.4 billion during 2017-2019. GOL's level of liquidity, measured as total cash and marketable securities over LTM revenues, is expected to be around 12% during the same years. FULL LIST OF RATING ACTIONS Gol Linhas Aereas Inteligentes S.A. (GOL): -- Long-Term Foreign- and Local-Currency IDRs upgraded to 'B' from 'CCC'; -- National Long-Term Rating upgraded to 'BBB-(bra)' from 'CCC(bra)'; -- USD200 million perpetual bonds upgraded to 'B'/'RR4' from 'CCC-'/'RR5'. VRG Linhas Aereas S.A. (VRG): -- Long-Term Foreign and Local-Currency IDRs upgraded to 'B' from 'CCC'; -- National Long-Term Rating upgraded to 'BBB-(bra)' from 'CCC(bra)'. GOL Finance, a company incorporated with limited liability in the Cayman Islands: -- USD300 million of senior unsecured notes due 2020 upgraded to 'B'/'RR4' from 'CCC-'/'RR5'. GOL LuxCo S.A.: -- USD200 million of senior unsecured notes due 2023 upgraded to 'B'/'RR4' from 'CCC-'/'RR5'; -- USD325 million of senior unsecured notes due 2022 upgraded to 'B'/RR4' from 'CCC-'/RR5'; -- USD14.1 million of senior secured notes due 2018 upgraded to 'B+'/'RR3' from 'CCC+'/RR3; -- USD41.3 million of senior secured notes due 2021 upgraded to 'B+'/'RR3' from 'CCC+'/'RR3'; -- USD18.1 million of senior secured notes due 2028 upgraded to 'B+/RR3' from 'CCC+'/'RR3'. The Rating Outlook for the corporate ratings is Stable. OI SA: Focused On Creditors Meeting, Not On New Investors --------------------------------------------------------- Gram Slattery and Brad Haynes at Reuters report that debt-laden Brazilian telecoms provider Oi SA could benefit from a third-party capital injection, but the company should focus on talks between creditors and shareholders before engaging new strategic investors, its chief executive said. In an interview regarding third-quarter results, CEO Marco Schroeder said he thought it was "extremely important" that a long-delayed creditors meeting be held on Dec. 7 even if creditors and shareholders had not reached an agreement, according to Reuters. In the results, Oi reported a net profit of BRL8 million ($2 million) in the third quarter, compared with a net loss of BRL1.214 billion a year earlier, as a stronger currency reduced the burden of its dollar-denominated debts, the report relays. Oi SA, Brazil's fourth largest carrier, filed for Latin America's largest ever bankruptcy protection process last year to restructure BRL65 billion in debt, the report recalls. Many firms without a significant stake in the carrier have proposed injecting capital into Oi in return for equity, with TPG Capital Management LP and state-run China Telecom Corp Ltd being the latest to do so, the report relays. "I think it's not a good moment to have this conversation," Mr. Schroeder said. "We have to overcome the matter of the recovery plan before really engaging more intensely with those groups," Mr. Schroeder added. The next deadline for the recovery plan is a vote at the Dec. 7 creditors assembly, the report relays. "I think it's extremely important to hold the creditors meeting on Dec. 7, even if it's not conclusive," he said. "People start to talk, they start to put their ideas forth," he added. If the meeting does take place, and creditors vote against the plan, Oi runs the risk of being liquidated, the report notes. Still, Mr. Schroeder said that possibility is "practically non- existent" as private bondholders would lose almost everything in that scenario, the report relays. Oi's third-quarter net profit, following a string of quarterly losses over the past two years, was helped heavily by currency effects, the report notes. Almost $9 billion of Oi's debt is dominated in U.S. dollars, which lost ground against the Brazilian real last quarter, the report relates. Oi SA also kept up a cost-cutting drive. Quarterly operating expenditures dropped 7.2 percent from the same period a year earlier to BRL4.321 billion, and operating expenses year-to-date have dropped BRL1.5 billion, the report discloses. Still, earnings before interest, depreciation, taxes, and amortization (EBITDA) fell 2.4 percent to BRL1.605 billion, underscoring the need fresh capital to keep Oi competitive, the report adds. About Oi SA Headquartered in Rio de Janeiro, and operating almost exclusively within Brazil, the Oi Group provides services like fixed-line data transmission and network usage for phones, internet, and cable, Wi-Fi hot-spots in public areas, and mobile phone and data services, and employs approximately 142,000 direct and indirect employees. As reported in the Troubled Company Reporter-Latin America on Nov. 9, 2017, Gram Slattery and Leonardo Goy at Reuters report that the head of Brazil's telecommunications watchdog, Anatel, demanded that debt-laden carrier Oi SA submit its latest restructuring proposal to the regulator before officially filing it with a bankruptcy court. Anatel head Juarez Quadros told reporters in Brasilia that the regulator, an Oi creditor due to billions of dollars in unpaid regulatory fines, would wait for the country's solicitor-general to give an opinion on the company's proposal before deciding whether or not to vote for it, according to Reuters. On June 20, 2016, pursuant to Brazilian Law No. 11.101/05 (the 'Brazilian Bankruptcy Law'), Oi S.A. and certain of its subsidiaries filed for recuperao judicial (judicial reorganization) in Brazil. On June 21, 2016, OI SA and its affiliates Telemar Norte Leste S.A. and Oi Brasil Holdings Cooperatief U.A. commenced Chapter 15 proceedings (Bankr. S.D.N.Y. Lead Case No. 16-11791). Ojas N. Shah, as foreign representative, signed the petitions. Coop and PTIF are also subject to proceedings in the Netherlands. The Chapter 15 cases are assigned to Judge Sean H. Lane. In the Chapter 15 cases, the Debtors are represented by John K. Cunningham, Esq., and Mark P. Franke, Esq., at White & Case LLP, in New York; and Jason N. Zakia, Esq., Richard S. Kebrdle, Esq., and Laura L. Femino, Esq., at White & Case LLP, in Miami, Florida. On July 22, 2016, the New York Court recognized the Brazilian Proceedings as foreign main proceedings with respect to the Chapter 15 Debtors, and granted certain additional related relief. SA USINA CORURIPE: S&P Assigns 'BB-' CCR, Outlook Stable -------------------------------------------------------- S&P Global Ratings assigned a 'BB-' global scale corporate credit rating on S.A. Usina Coruripe Acucar e Alcool (Coruripe). The outlook on this rating is stable. S&P also affirmed its 'brA+' long-term and 'brA-1' short-term national scale ratings on the company. The outlook on the long-term national scale rating remains stable. The ratings reflect Coruripe's sound operating performance, which allows the company to gradually increase its free cash flow generation. This, combined with a smoother debt amortization profile following the company's debt renegotiation in 2016, will enable the company to continue deleveraging, while enhancing its liquidity. The adequate profitability stem from Coruripe's very low idle capacity, above-average productivity and irrigation capacity, which mitigates climatic risks, especially in the northeast region of Brazil. Moreover, Coruripe is able to dilute fixed costs through its operations in clusters, and benefits from the access to the port in Alagoas and a railway terminal in the Iturama cluster. The company also benefits from more stable cash inflows from its energy cogeneration assets and its sizable storage capacity, which enables Coruripe to carry inventories to sell in the off-season period, when prices are usually higher. In addition, the company's hedging strategy has enabled it to benefit from still high sugar prices in fiscal 2018, which ends March 31, 2018, softening the impact of currently weaker prices. S&P said, "We project that the lower sugar prices for the fiscal 2019 will take a toll on Coruripe's revenue and EBITDA generation. However, the higher energy and ethanol prices, after the changes in Petrobras' fuel pricing policy and the increase in taxation on gasoline, will help cushion the drop in sugar prices. "We expect Coruripe to post stronger FOCF generation in fiscal 2018 and use most of it to continue paying more expensive debt as it comes due, mainly related to its renegotiated debt. As a result, the company's liquidity and capital structure could improve in the intermediate term." ============= J A M A I C A ============= JAMAICA: IMF Boss Christine Lagarde to Visit Next Week ------------------------------------------------------- RJR News reports that Christine Lagarde, Managing Director of the International Monetary Fund (IMF), is expected to meet with a number of local groups, including women leaders when she visits Jamaica. The managing director will be in Kingston for the Western Hemisphere Department's annual Caribbean Forum, which convenes leaders, finance ministers, central bank governors, and private sector executives, according to RJR News. This year's forum, which will be held at the University of the West Indies, Mona, is entitled: "Unleashing Growth and Strengthening Resilience in the Caribbean," the report notes. The managing director will also have a series of official meetings with Jamaican officials, including Prime Minister Andrew Holness, the report adds. As reported in the Troubled Company Reporter-Latin America, S&P Global Ratings affirmed on Sept. 25, 2017, its 'B' long- and short-term foreign and local currency sovereign credit ratings on Jamaica. The outlook on the long-term rating remains stable. At the same time, S&P Global Ratings affirmed its 'B+' transfer and convertibility assessment on the country. JAMAICA: Signs US$40 Million Loan Deal With IDB ------------------------------------------------ RJR News reports that the Inter-American Development Bank (IDB) and the Government of Jamaica signed a US$40 million loan agreement, to finance the Energy Management and Efficiency Program. The US$40 million financing program includes US$30 million for comprehensive energy efficiency retrofits in 30 government-owned buildings and the installation of LED lighting in another 50 structures, according to RJR News. The energy efficiency program will be undertaken in schools, hospitals and public agencies, and will help cut the government's electricity bill by US$7 million annually, the report notes. The Energy Management and Efficiency Program is an import component of the Jamaican Government's broader efforts to provide high-quality, affordable, environmentally friendly energy and reduce the country's dependence on high-cost imported oil, the report adds. As reported in the Troubled Company Reporter-Latin America, S&P Global Ratings affirmed on Sept. 25, 2017, its 'B' long- and short-term foreign and local currency sovereign credit ratings on Jamaica. The outlook on the long-term rating remains stable. At the same time, S&P Global Ratings affirmed its 'B+' transfer and convertibility assessment on the country. ====================== P U E R T O R I C O ====================== EVERTEC GROUP: Moody's Lowers CFR to B2; Outlook Stable ------------------------------------------------------- Moody's Investors Service downgraded EVERTEC Group, LLC's Corporate Family Rating ("CFR") and the ratings for its senior secured credit facilities to B2, from B1. As part of the rating action, Moody's downgraded Evertec's Probability of Default Rating to B3-PD, from B1-PD, and affirmed its SGL-3 liquidity rating. This rating action concludes the review of Evertec's ratings that was initiated on October 9, 2017. The ratings have a stable outlook. RATINGS RATIONALE The downgrade of the ratings reflects Moody's view that Evertec faces high business uncertainty in Puerto Rico, which accounted for about 80% of its revenues, that will likely extend beyond the recovery efforts following Hurricane Maria. The widespread damage caused by the hurricane has added new risks to an already fragile economy of the Commonwealth. Moody's expects Evertec's earnings to trough in the fourth quarter of 2017 and progressively improve as the utility, telecommunications and other essential services are restored in the island. Monetary aid and rebuilding activity should boost Puerto Rico's economic growth and drive higher payment transaction volumes for Evertec over the next 12 to 18 months. While Evertec's earnings should bounce back over this period, the negative economic impact from the Government of Puerto Rico's fiscal austerity plans and the acceleration in migration of population pose greater long-term risks. Evertec's plans to suspend common dividends until business conditions in the island normalize will support its liquidity. The B2 CFR reflects Evertec's limited operating scale, high revenue concentration in Puerto Rico and long-term challenges from the island's shrinking economy. These risks are mitigated by the critical role Evertec plays in the Puerto Rico economy as the dominant payments processor and a provider of the leading ATM and PIN debit network. Evertec's payment processing and merchant acquiring services benefit from a secular shift to electronic forms of payments and generate recurring, transaction processing revenues. Although Evertec's EBITDA margins have experienced gradual erosion in recent periods, its payment processing and merchant acquiring services have high operating leverage and drive its solid adjusted EBITDA margins (about 48% in twelve months before Hurricane Maria). The company's low working capital, taxes and capital expenditures support good free cash flow generation. Moody's expects Evertec's leverage could deteriorate and temporarily approach the mid 4x (Moody's adjusted) around mid- 2018, but a rebound in EBITDA and scheduled debt repayments should drive leverage to about 4x over the next 12 to 18 months. While Evertec's credit metrics should strengthen as the island's economy recovers from the disruption caused by the hurricane, Evertec's business risks will still remain elevated. The stable outlook reflects Moody's expectation that Evertec will maintain adequate liquidity and generate free cash flow (after dividends) in the high single digit percentages of total debt over the next 12 to 18 months. The SGL-3 liquidity rating reflects Evertec's adequate sources of liquidity relative to debt maturities in the next 12 months. Liquidity is supported by cash balances, free cash flow and partial availability under the revolving credit facility. The deterioration in earnings will reduce the available cushion under the net senior secured leverage covenant, especially with a step- down in 3Q 2018, but Moody's estimates that Evertec will still have adequate operating flexibility. The downgrade of the Probability of Default Rating reflects Evertec's elevated business risks, erosion in liquidity and expectations for reduced headroom under financial covenants over the next 12 months. Given Puerto Rico's weak economic outlook, a ratings upgrade is not expected in the next 12 to 18 months. Moody's could upgrade Evertec's ratings if (i) geographic diversification of profits increases meaningfully, (ii) it generates good earnings growth, and, (iii) total debt to EBITDA is below 4x and free cash flow exceeds 10% of total debt on a sustained basis. The ratings could be downgraded if operating challenges or aggressive financial policies cause Evertec's total debt to EBITDA to approach 5x (Moody's adjusted), liquidity deteriorates, or free cash flow is expected to fall below 5% of total debt. The following ratings were downgraded: Issuer: EVERTEC Group, LLC -- Corporate Family Rating, B2, from B1 -- Probability of Default Rating, B3-PD, from B1-PD -- Senior secured credit facilities, B2 (LGD3), from B1 (LGD 3) -- Outlook: Stable, from Rating Under Review Affirmation: -- Speculative Grade Liquidity Rating, SGL-3 The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. Evertec is an indirect subsidiary of EVERTEC, Inc., and provides transaction and payment processing, merchant acquiring and processing, and other banking information technology consulting services to banks and merchants in Puerto Rico, and 27 countries in Latin American, the Caribbean and Central America. PUERTO RICO: Seeks $94 Billion in Federal Aid After Hurricane ------------------------------------------------------------- Luis Alonso Lugo at the Associated Press reports that Puerto Rico's governor asked the federal government for $94.4 billion as the island struggles to recover from the damage inflicted by Hurricane Maria, with much of the U.S. territory without power and thousands still homeless. Ricardo Rosello also urged Congress to adopt a tax overhaul plan that addresses Puerto Rico's specific needs to avoid an exodus of the companies that currently generate 42 percent of the island's gross domestic product, according to Associated Press. The report notes that the governor said during a news conference that he will formally make his request to the White House and Congress, along with a report with a detailed assessment of damage. The governor is seeking $46 billion to restore housing through the Community Development Block Grant program, $30 billion within the Federal Emergency Management Agency to recover critical infrastructure and $17.9 billion in other federal grant programs for long-term recovery, the report relays. So far, Congress has approved nearly $5 billion in aid for Puerto Rico, where Hurricane Maria caused widespread damage on Sept. 20 and the worst blackout in U.S. history, the report discloses. The request from Puerto Rico surpasses the $61 billion that Texas is pursuing from the federal government for infrastructure improvements, the report relays. "This is a transformative moment in the history of Puerto Rico," Mr. Rosello wrote to President Donald Trump, the report notes. "We recognize that your leadership, along with that of leaders from both parties, will be essential to our recovery, and the future economic and fiscal health of the island," Mr. Rosello added. The report relays that Mr. Rosello announced that his team will create a portal that will allow the public to track the status of recovery and funds. That is part of an effort to placate concerns after the Puerto Rico Electric Power Authority selected Whitefish Energy Holdings to help rebuild the island's electrical system, even though it had just two employees when the hurricane struck, the report relays. The contract was canceled on Oct. 29 amid bipartisan criticism from members of Congress and a request by Mr. Rosello to void the deal, the report notes. On the tax front, Mr. Rosello asked Congress to exclude Puerto Rico from a proposed excise tax of 20 percent for merchandise manufactured abroad because products manufactured in Puerto Rico and imported into the U.S. should be treated as domestic products, the report relays. Republicans hope to finalize a tax overhaul by Christmas and send the legislation to Trump for his signature, the report discloses. "If the goal of the tax reform is to create American jobs, then Puerto Rico must be taken into consideration," the governor said, the report says. "If not, it would end up being worst than how it is today," the report adds. 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: 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. ================= V E N E Z U E L A ================= CORPORACION ELECTRICA: S&P Cuts Debt Rating to D on Missed Payment ------------------------------------------------------------------ S&P Global Ratings lowered its senior unsecured debt rating on Corporacion Electrica Nacional, S.A. (Corpoelec) to 'D' from 'CC'. At the same time, S&P lowered its long-term corporate credit ratings on the company to 'SD' from 'CC'. S&P's also removing the credit ratings from CreditWatch negative. The rating action reflects that the interest payment due on October 10, 2017 on Corpoelec's $650 million 8.5% notes due 2018 was not made within the 30-day grace period (which ended on Nov. 9, 2017). CORPORACION ELECTRICA: Fitch Cuts Long-Term FC IDR to RD -------------------------------------------------------- Fitch Ratings has downgraded Corporacion Electrica Nacional S.A.'s (CORPOELEC) Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) to 'RD' from 'C' and 'CC', respectively. Additionally, Fitch has also downgraded CORPOELEC's National Long- Term and Short-Term ratings to 'RD(ven)' from 'CCC(ven)' and 'C(ven)', respectively. The company's senior unsecured notes have been affirmed at 'C'/'RR4'. CORPOELEC's downgrade follows the end of the 30-day cure period, which expired on Nov. 9, 2017, after the company failed to make interest payments on its 2018 notes for USD26.6 million. Bondholders did not receive the funds for the interest payment after the expiration of the 30-day grace period, which in Fitch's opinion is a payment default and also constitutes an event of default under the note's indenture. The delay in payment was allegedly related to processing issues. KEY RATING DRIVERS Average Recovery: Fitch anticipates recovery levels for CORPOELEC's bondholders to be at the lowest end of the 31%-50% range that is consistent with a RR4 rating in the event of a debt restructuring. A debt restructuring process would likely be prolonged due to restrictive sanctions imposed by the U.S. government. Obstacles for an expedient restructuring include the inability for creditors to negotiate with key members of the government, a requirement from the U.S. government that a restructuring plan is approved by the opposition-led national assembly, and limitations for incurring new indebtedness in the U.S. capital markets. Poor Quality of Information: The company is expected to make available a first draft of the auditor notes of its 2016 consolidated financial statements sometime during the second half of 2017. Previously, the auditor (Deloitte) could not issue an opinion on the reasonability of 2015 statements, given the weaknesses observed in the administrative control environment and lack of accounting support with which to establish an opinion on key components of the company's financial statements. According to management, 2016 statements will carry a similarly qualified opinion, with a marginal improvement at best over 2015 statements in terms of the number of issues raised. DERIVATION SUMMARY CORPOELEC's LT Foreign and Local Currency IDRs are not well positioned relative to peers as a result of insufficient cost recovery, which is explained by a continuing tariff lag that impedes a sustainable CFFO performance, especially when compared with peers such as Comision Federal de Electricidad (CFE) and Instituto Costarricense de Electricidad ICE.. CORPOELEC depends on public-fund transfers from its parent to carry out its day-to-day operations, meet its financial obligations, and finance its capital expenditure. Specifically, the company's 2018 bond financial obligations are paid by the central government, through the Ministry of Finance's Public Credit Office, which transfers the funds directly to the paying agent (Citi Bank). KEY ASSUMPTIONS - Maintenance of the tariff lag further consolidates the sovereign linkage, as Fitch expects the company's dependence on current and capital transfers to continue. - The company continues to depend on transfers from the central government to meet its financial obligations. Fitch anticipates average recovery for CORPOELEC's bondholders of 31%-50%, likely closer to the lower end of the range. Fitch's recovery analysis yields a Recovery Rating commensurate with an average recovery of 50%, but the willingness of Venezuela's government to extend concessions to investors will likely move actual recovery closer to the lower end of the 31%-50% range. RATING SENSITIVITIES Future Developments That May, Individually or Collectively, Lead to Positive Rating Action -- A prolonged track record of timely debt service in line with the original maturity schedule for upcoming debt obligations could result in a positive rating action. Future Developments That May, Individually or Collectively, Lead to Negative Rating Action -- Commencement of bankruptcy filings, administration, receivership, liquidation or other formal winding-up procedure could result in a rating downgrade to 'D'. LIQUIDITY Liquidity is determined by timely access to government transfers that allow CORPOELEC to meet operating costs, finance its capex and meet its financial obligations. The company's liquidity is expected to be pressured over the next 12 months as a result of the sizable foreign-currency denominated payments of USD650 million due April 2018. FULL LIST OF RATING ACTIONS Fitch has taken the following rating actions: Corporacion Electrica Nacional S.A. -- Long-Term Foreign Currency IDR downgraded to 'RD' from 'C'; -- Long-Term Local Currency IDR downgraded to 'RD' from 'CC'; -- EDC's USD650 million senior unsecured bond issuance due 2018 affirmed at 'C/RR4'; -- National Long-Term Rating downgraded to 'RD(ven)' from 'CCC(ven)'; -- National Short-Term Rating downgraded to 'RD(ven)' from 'C(ven)'. PETROLEOS DE VENEZUELA: Fitch Lowers LT FC IDR to RD on Default --------------------------------------------------------------- Fitch Ratings has downgraded Petroleos de Venezuela S.A.'s (PDVSA) Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) to 'RD' from 'C' and 'CC', respectively. Fitch has also downgraded PDVSA's National scale rating to 'RD(ven)' from 'CCC(ven)' and affirmed all senior secured and unsecured debt issuances at 'C'/'RR4'. These rating actions reflect the payment default on the company's notes due Nov. 2, 2017 and Oct. 27, 2017 due to processing delays that resulted in bondholders receiving principal payments up to one week after the due date. KEY RATING DRIVERS Average Recovery Fitch expects the recovery level for PDVSA's bondholders to be at the low end of the anticipated 31%-50% recovery range that is consistent with an RR4 rating. The debt restructuring process, which the company intends to undergo, will likely be prolonged due to the restrictive sanctions imposed by the U.S. government. Obstacles for an expedient restructuring include the inability for creditors to negotiate with key members of the government, a requirement from the U.S. government that a restructuring plan is approved by the opposition-led national assembly, and limitations for incurring new indebtedness in the U.S. capital markets. Uncertain Liquidity Position PDVSA's decision to use the grace periods for interest payments, which expires on November 13, highlights its weak liquidity positon. During 2017, the company has made payments for more than USD9.0 billion of an estimated USD9.8 billion of interest and principal payments due during the year. These payments compare unfavorably versus its year-end 2016 cash position of USD8.3 billion. Limited Transparency The Venezuelan government displays limited transparency in the administration and use of government-managed funds, as well as in fiscal operations, which poses challenges to accurately assessing its fiscal state and the full financial strength of the sovereign. PDVSA displays similar characteristics, which reinforces the linkage of its ratings to the sovereign. DERIVATION SUMMARY PDVSA's current ratings of 'RD' reflect the company's delay in making principal payments on two sr. unsecured notes. Up to before the payment default, PDVSA's ratings were linked to the Venezuelan sovereign ratings, which was is in line with the linkage present for most National Oil and Gas companies (NOCs) in the region; including Pemex (BBB+ IDR), Ecopetrol (BBB IDR), Petrobras (BB IDR), PetroPeru (BBB+ IDR), Enap (A IDR). In most cases in the region, NOCs are of significant strategic importance for energy supply to the countries were they operate as is the case in Mexico, Colombia, Venezuela and Brazil. NOCs can also serve as a proxy for federal government funding as in Mexico and Venezuela and have strong legal ties to governments through their majority ownership, strong control and at times governmental budgetary approvals. KEY ASSUMPTIONS -- Fitch expects Brent oil prices to average USD52.5/b in 2017, USD55/b in 2018 and USD60/b in 2019. RATING SENSITIVITIES Future Developments That May, Individually or Collectively, Lead to Positive Rating Action -- If PDVSA is able to re-establish timely payments of its debt obligations in accordance with the original terms of the documents a positive rating action could occur Future Developments That May, Individually or Collectively, Lead to Negative Rating Action -- A commencement of a bankruptcy filings, administration, receivership, liquidation or other formal winding-up procedure could result in a rating downgrade to 'D'. LIQUIDITY PDVSA's liquidity position is expected to continue to weaken as a result of low oil prices and near-term debt service payments and transfers to the central government. As of December 2016, PDVSA reported cash of USD8 billion, which compared unfavorably with interest and principle payments of approximately USD9.8 billion due in 2017 and approximately USD5.0 billion in 2018. The company has made payments of approximately USD9.0 billion during 2017, although it delayed interest payments in more than one occasion to use the grace period provided under the indentures. The company's current liquidity position is uncertain given expenditures, transfers to the government, and interest and principal debt payments that might have driven down liquidity from the last reported amount. Under Fitch's base case scenario, which assumes WTI oil prices of USD50/bbl in 2017, PDVSA's liquidity position will continue to deteriorate. Venezuela's gross international reserves continued to decline and as of end of October they amounted to approximately USD10.2 billion. FULL LIST OF RATING ACTIONS Fitch has taken the following rating actions: Petroleos de Venezuela, S.A. -- Long-Term Foreign Currency IDR downgraded to 'RD' from 'C'; -- Long-Term Local Currency IDR downgraded to 'RD' from 'CC'; -- National Scale long-term rating downgraded to 'RD(ven)' from 'CCC(ven)'; -- Senior unsecured notes affirmed at 'C'/'RR4'; -- Senior secured notes due 2020 affirmed at 'C'/'RR4'. VENEZUELA: Begins Refinancing Its Foreign Debt ---------------------------------------------- Wion News reports that the Venezuelan government said on Nov. 13 that the country has successfully begun the process of refinancing its foreign debt during a meeting earlier in the day in Caracas with bondholders from various countries. "The government of the Bolivarian Republic of Venezuela wants to inform the world that today, at the Miraflores Government Palace, the process of refinancing Venezuela's foreign debt was started with resounding success, as a strategy to fully comply with our obligations," an official statement read, according to Wion News. Venezuelan government representatives met with creditors to try and renegotiate the debt, an initial meeting from which no agreements or concrete proposals emerged and at which the Nicolas Maduro administration informed its creditors of its limitations to pay, the report notes. "We rate this meeting, in which Venezuelan debt holders from Venezuela, the United States, Panama, the United Kingdom, Portugal, Colombia, Chile, Argentina, Japan and Germany participated, as highly positive and very auspicious," the statement continued, Wion News relays. Wion News notes that Venezuela accuses Washington of "attacking" its economy and denounces that the credit rating agencies, following the pattern of financial blockade undertaken by the Donald Trump administration, extol the reports that are devoid of any form of rigor and veracity, and intervene to hinder the country. Caracas added that it has "punctually" paid $73.35 billion for debt services in the last 36 months, and hoped that the Nov. 13 meeting will help reiterate its willingness to comply with its commitments, Wion News says. "The positive climate in which this refinancing process began indicates that we will move forward and continue to build the welfare state that the people of Venezuela deserve," the official note added, the report notes. According to the Venezuelan National Assembly's financial commission's estimates, Venezuela holds a total debt close to $150 billion, which results in an annual payments close to $10 billion, "not including what is paid to China and Russia" by various agreements, the report discloses. * * * As reported in the Troubled Company Reporter-Latin America, Robin Wigglesworth at The Financial Times related that Venezuela appeared to have made a crucial bond repayment in late October. The Latin American country and its state oil company PDVSA have failed to make several debt payments in recent weeks, the report noted. But the most important one was an $842 million instalment due Oct. 29 on a PDVSA bond maturing in 2020, which, unlike most of the other overdue debts, had no 'grace period' that allowed for 30 days to clean up any arrears without triggering a default, the report notes. On Nov. 3, 2017, S&P Global Ratings lowered its long-term foreign currency sovereign credit rating on the Bolivarian Republic of Venezuela to 'CC' from 'CCC-'. The long-term local currency sovereign credit rating remains unchanged at 'CCC-'. The 'C' short-term foreign and local currency sovereign credit ratings also remain unchanged. S&P placed all ratings on CreditWatch negative. *********** 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, 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. 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