/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/171116.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 Thursday, November 16, 2017, Vol. 18, No. 228 Headlines B R A Z I L BANCO BONSUCESSO: Moody's Withdraws B2 LT/ST Global Deposit Rating CIELO SA: Fitch Raises FC IDR From BB+; Outlook Negative ODEBRECHT OLEO: Chapter 15 Recognition Hearing Set for Dec. 12 ODEBRECHT SA: Peru's Kuczynski Denies Taking Bribe From Firm ODEBRECHT SA: Ecuador VP to Face Trial in Corruption Case C A Y M A N I S L A N D S OCEAN RIG: Highland Fights Bid to Block Marshall Islands Case D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: Chief's Focus on Haiti Water Woes Gets Praise E C U A D O R BANCO DE LA PRODUCCION: Fitch Affirms B IDR; Outlook Negative BANCO PICHINCHA: Fitch Affirms B Long-Term IDR; Outlook Negative M E X I C O CREDITO REAL: S&P Rates $230MM Subordinated Perpetual Notes 'B+' P U E R T O R I C O OLIVER C&I: Court Dismisses Lawsuit vs Carolina Developers, et al. T R I N I D A D & T O B A G O CARIBBEAN AIRLINES: To Review Viability of North American Routes V E N E Z U E L A VENEZUELA: Fitch Lowers Long-Term Foreign Currency IDR to 'RD' VENEZUELA: S&P Cuts FC Sovereign Credit Ratings to 'SD' - - - - - =========== B R A Z I L =========== BANCO BONSUCESSO: Moody's Withdraws B2 LT/ST Global Deposit Rating ------------------------------------------------------------------ Moody's Investors Service has withdrawn all ratings and assessments assigned to Banco Bonsucesso S.A. (Bonsucesso), including the long and short-term global local and foreign currency deposit ratings of B2 and Not Prime, as well as the long- term foreign currency subordinated debt rating of B3 and Bonsucesso's long and short term Brazilian national scale rating of Ba2.br and BR-4. Moody's has also withdrawn the bank's baseline credit assessment (BCA) of b2, as well as its adjusted BCA of b2, and its long and short -term counterparty risk assessments of B1(cr) and Not prime(cr). Before the withdrawal, the outlook on the long-term local and foreign currency deposit ratings, as well as the issuer outlook, was negative. The following ratings and assessments of Banco Bonsucesso S.A. were withdrawn: - Long and short-term global local currency deposit rating of B2, negative outlook and Not Prime - Long and short-term foreign currency deposit rating of B2, negative outlook and Not Prime - Long and short term Brazilian national scale deposit rating of Ba2.br and BR-4 - Subordinate debt rating of B3 - Baseline credit assessment of b2 - Adjusted baseline credit assessment of b2 - Long and short-term counterparty risk assessment of B1(cr) and Not Prime(cr) The issuer outlook of Banco Bonsucesso S.A. was negative at the time of withdrawal. RATINGS RATIONALE The last rating action on Banco Bonsucesso S.A. was on 30 October 2017, when Moody's affirmed the global scale ratings, downgraded the long term Brazilian national scale rating to Ba2.br from Ba1.br and changed the outlook on the long-term local and foreign currency deposit ratings, as well as the issuer outlook, to negative. Banco Bonsucesso is headquartered in Belo Horizonte and had total assets of BRL 2.3 billion (US$ 700.4 million) and equity of BRL 514.5 million (US$ 156.4 million) as of June 30, 2017. Moody's has decided to withdraw the ratings for its own business reasons. CIELO SA: Fitch Raises FC IDR From BB+; Outlook Negative -------------------------------------------------------- Fitch Ratings has upgraded the foreign currency Issuer Default Rating (FC IDR) for Cielo S.A. (Cielo) to 'BBB-' from 'BB+'. The Rating Outlook is Negative. Fitch has also upgraded the senior unsecured notes for Cielo's wholly owned subsidiary, Cielo USA Inc., to 'BBB-' from 'BB+'. At the same time, Fitch has affirmed Cielo's local currency (LC) IDR at 'BBB-/Outlook Negative' and the national scale rating at 'AAA(bra)/Outlook Stable'. A full list of rating actions follows at the end of this release. The Negative Outlook for the foreign and local currency IDRs reflects the Negative Outlook on Brazil's sovereign ratings, which has led to Negative Outlooks for the three banks that are key to its relationships and distribution network: Banco do Brasil, Banco Bradesco and Caixa. These banks also are the counterparty risk for a substantial portion of its Visa related transactions. Given the continued holding of substantial amount of hard currency cash and marketable securities by Cielo, Fitch has upgraded the company's FC IDR by one notch in accordance with its "Rating Above the Country Ceiling Criteria". Cielo's FC IDR is not constrained by Brazil's Country Ceiling Rating of 'BB+', as the company's offshore readily available cash easily covers hard currency interest expense by more than 1.0x. Following the upgrade, Cielo's FC IDR is now constrained by the company's LC IDR, which is a reflection of the company's underlying credit quality. If Cielo's offshore readily available cash-to-hard currency interest ratio falls below 1.0x, Cielo's FC IDR would be downgraded and limited to Brazil's 'BB+' country ceiling. Cielo's underlying credit fundamentals and investment-grade ratings reflect the company's solid capital structure and financial flexibility and its proven capacity to generate strong and resilient cash flow in its business in an environment of strong economic retraction. Cielo benefits from its leading position in the Brazilian card payment industry, which is supported by the growing and predictable revenue stream from a diversified base of affiliated merchants. The analysis also incorporates the low counterparty risks associated with the Brazilian banking system, as more than 95% of the volume of transactions is concentrated in banks rated 'BB' and above or that are guaranteed by Mastercard. The ratings also incorporate the support and the strength of Cielo's controlling shareholders, Banco Bradesco S.A. (Bradesco; National Scale 'AAA(bra)'/Outlook Stable; local and foreign currency IDR 'BB+'/Outlook Negative) and Banco do Brasil S.A. (Banco do Brasil; National Scale 'AA+(bra)'/Outlook Negative; local and foreign currency IDR 'BB'/Outlook Negative). Regulatory risk is considered manageable, and Fitch views any disruptive measures as unlikely in the short to medium term. KEY RATING DRIVERS Leading Position in the Brazilian Card Payment Industry: The Brazilian card payment industry's high barriers to entry support Cielo's strong market position, which is viewed as sustainable in the medium term, despite the highly competitive environment. Cielo is the leading company in Brazil's merchant acquiring and payment processing industry with an estimated market share of 53.3%. The industry is highly consolidated with the two largest players representing approximately 86% of the market. Cielo's competitive advantage relies in part on the relationship and distribution network of three important banks in the Brazilian banking system, Banco do Brasil, Bradesco and Caixa. Cielo's affiliation with these leading banks gives it access to their broad customer base to acquire merchant accounts and creates high barriers to entry. The penetration of credit and debit cards in Brazil is still low, which supports Cielo's long-term growth prospects. Low Risk of Credit Loss: Cielo has virtually no direct credit exposure to cardholders, as the card-issuing bank guarantees cardholders' payment, while the company's exposure to merchants is limited. The company is, however, exposed to card-issuing bank defaults on a payment settlement for Visa transactions. The licensing agreement with Mastercard mitigates this risk, as it guarantees the settlement of all transactions. The risk associated with Visa transactions is mitigated by the fact that more that more than 95% of the volume of transactions is concentrated in banks rated 'BB' and above. For some non-investment grade banks, Cielo's risk management policy requires the card-issuing bank to pledge collateral. Cash Flow Remains Robust: Cielo has demonstrated recurrent capacity to generate robust and resilient cash flow, even during scenarios of different economic cycles. It also benefits from increased revenues diversification, following the acquisition of Merchant e-Solutions, in U.S., and Cateno. Fitch projects adjusted EBITDA to remain relatively stable at BRL7.7 billion in 2018, and FFO above BRL5 billion. In the LTM ended Sept. 30, 2017, the company reported BRL7.8 billion of adjusted EBITDA, including financial income derived from the acquisition of receivables from merchants of BRL2.5 billion, FFO of BRL5 billion and CFFO of BRL5.6 billion. These results compare with BRL8.2 billion, BRL5.3 billion and BRL4.4 billion, respectively, in 2016. The reduction in net interchange fee and in revenues from POS equipment rental, combined with lower growth of the volume of credit transactions, pressured EBITDA generation. Cielo invested BRL442 million and distributed dividends of BRL2.1 billion in the LTM ended September 2017, resulting in strong FCF of BRL3.1 billion. For 2018, Fitch's base case projections considered investments around BRL500 million. Fitch expects high single digit growth in 2018 of credit and debit transactions in Brazil. Still weak macroeconomic conditions will continue to pressure business growth compared to high historical growth levels. However, some improvement in consumer spending and consumer confidence is expected compared with the turbulent year of 2017. Cielo processed BRL586 billion in credit and debit transactions in 2016 and BRL454 billion in the first nine months of 2017. The volume of credit and debit transactions increased by more than 20% per year from 2007 to 2012 and by an average of 16% in 2013 and 2014. Weak macroeconomic conditions resulted in slower growth since 2015, and the volume of credit and debit transactions increased by 5.9% in 2015, 7% in 2016 and 6.4% during the first nine months 2017. Strong Capital Structure: Cielo has strong credit metrics and leverage remains low. In the LTM ended September 2017, net debt to adjusted EBITDA, including financial income derived from the acquisition of receivables from merchants, was 0.8x, compared with an average of 1.2x between 2013 and 2016. Fitch's projections indicate net leverage close to 1x in the upcoming years. As of Sept. 30, 2017, Cielo had BRL11.1 billion of total debt, of which about 25% was denominated in foreign currency. DERIVATION SUMMARY Cielo is the leading company in Brazil's merchant acquiring and payment processing industry with an estimated market share of 53.3%. The second largest player is Redecard (controlled by Itau; not rated) with 33.2% market share and the third largest is GetNet (controlled by Santander; not rated) with 11.7%. Compared to small players, like Stone (not rated) and PagSeguro (not rated), the three leaders have a strong competitive advantage due to their controlling shareholders structure, as the affiliation with these leading banks gives them access to a broad customer base to acquire merchant accounts and creates high barriers to entry. As a characteristic of the industry in Brazil, Cielo has no direct credit exposure to cardholders, as the card-issuing bank guarantees cardholders' payment. Cielo's ratings incorporate the counterparty risks associated with the Brazilian banking system. Cielo has predictable revenue stream from a diversified base of affiliated merchants and has consistently reported strong cash flow generation. In general, players with lower scale of operations are more reliant on the financial income from the acquisition of receivables from merchants that could present more volatility. Cielo is also well positioned in terms of research and development in technology, reducing the risk of obsolete systems, while small players have higher technology risk. KEY ASSUMPTIONS Fitch's key assumptions within our rating case for the issuer include: -- Volume of credit and debit transactions to increase by 5.5% in 2017 and 7.5% in 2018; -- Lower revenues from point of sale (POS) rental due to higher competition and foreclosures of retail stores; -- Acquisition of receivables from merchants between 18% and 20% of total credit value of transactions; -- Dividends of 70% of net income. RATING SENSITIVITIES Future Developments That May, Individually or Collectively, Lead to Positive Rating Action -- Ratings upgrades are not likely. Stabilization of Brazil's sovereign ratings' Outlook could lead to a Stable Outlook for Cielo's FC and LC IDR. Future Developments That May, Individually or Collectively, Lead to Negative Rating Action -- An increase in the volume of credit and debit transactions with banks rated 'BB' and below without collateral being pledged by the card-issuing bank or not guaranteed by Mastercard; -- A weakening credit profile of the main banks that operate with Cielo; -- A significant loss due to fraud and charge-backs; -- Effects on the business caused by the competitive environment and significant changes in the regulatory risk; -- A negative rating action on Brazil's sovereign ratings that leads to negative rating actions on Banco do Brasil, Bradesco, Caixa and Itau could result in negative rating action for Cielo. LIQUIDITY Strong Liquidity: Cielo's liquidity position is strong and cash flow generation capacity comfortably covers debt maturities. As of Sept. 30, 2017, Cielo had cash and marketable securities of BRL5.2 billion and BRL2.7 billion of short-term debt. About 91% of total cash is invested in Brazil and 9% abroad. At the end of September 2017, the company had BRL2.8 billion of debt maturing up to the end of 2018, BRL82 million in 2019 and BRL2 billion in 2020. In April 2017, Cielo amortized BRL1.7 billion of debentures and concluded the issuance of Fundo de Investimento em Diretos Creditorios Cielo (FIDC Plus), in the amount of BRL5 billion, in July 2017, and the loan with Bank of Tokyo-Mitsubishi UFG Ltd., equivalent to BRL1 billion, in September 2017. Fitch expects Cielo to continue to use operating cash flow generation to reduce total debt in the next couple of years. FULL LIST OF RATING ACTIONS Fitch has taken the following rating actions: Cielo S.A. -- FC IDR upgraded to 'BBB-', from 'BB+', Outlook Negative; -- LC IDR affirmed at 'BBB-', Outlook Negative; -- Long Term National Scale affirmed at 'AAA(bra)', Outlook Stable; -- 4th Debentures, in the amount of BRL4.6 billion, due in 2018, affirmed at 'AAA(bra)'. Cielo USA Inc. -- Senior unsecured notes, in the amount of USD875 million, due in 2022, upgraded to 'BBB-', from 'BB+'. The notes are fully guaranteed by Cielo S.A.. ODEBRECHT OLEO: Chapter 15 Recognition Hearing Set for Dec. 12 -------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York scheduled a hearing for Dec. 12, 2017, at 10:00 a.m. (prevailing Eastern time), at Room 601, One Bowling Green, New York, New York, to consider approval of the petitions for recognition of the foreign proceeding commenced by Odebrecht Oleo E Gas S.A. et al. under Chapter 15 of the U.S. Bankruptcy Code. The Chapter 15 proceedings were filed by Rogerio Luis Murat Ibrahim, foreign representative of the Debtors. Objections, if any, are due no later than 4:00 p.m. (prevailing Eastern time) on Dec. 1. As reported by the Troubled Company Reporter on Nov. 10, 2017, the Debtors have sought Chapter 15 bankruptcy protection in the United States to seek U.S. court recognition of reorganization plans approved in extrajudicial reorganization proceedings in the Federal Republic of Brazil. On its most recent financial report, OOG disclosed an aggregate amount of indebtedness of R$14.3 billion on its balance sheet as of Dec. 31, 2016. The Debtors have issued: (1) US$1.500 billion of 6.35% Senior Secured Notes due 2021 under an indenture with Deutsche Bank Trust Company Americas as trustee; (2) US$1.690 billion of 6.75% Senior Secured Notes due 2022 under an indenture with Bank USA, National Association, as trustee, and (3) US$580 million of 6.625% Senior Secured Notes due 2022 under a supplemental indenture with U.S. Bank as trustee. Additionally, US$550 million of unsecured perpetual notes were issued by Odebrecht Oil & Gas Finance Limited ("OOFL") with OOG as guarantor and Wilmington Savings Fund Society (as successor to HSBC Bank USA, National Association) as the indenture trustee. Rogerio Luis Murat Ibrahim, CFO of OOG, explains that OOG's financial distress stems from general market conditions, the global crisis facing the oil and gas industry and variations in real exchange rates over the past years. Between 2010 and 2014, the price of oil varied between US$75 and US$110 per barrel, increasing the incentives for the construction and operation of drilling rigs throughout the world and, consequently, increasing the maintenance costs in U.S.-dollars terms for the Drilling Rigs. In response to its liquidity crisis, the OOG Group took steps to restructure its liabilities through negotiations with its main creditors, which include certain holders of the 2021 Notes and 2022 Notes (the "Ad Hoc Group"), along with their financial and legal advisors, Houlihan Lokey, Inc., and Cleary Gottlieb Steen & Hamilton LLP. About Odebrecht Oil & Gas Based in Rio De Janeiro, Brazil, Odebrecht Oleo e Gas S.A. is a part of the Odebrecht Group and was incorporated in Brazil in 2006 to house the Odebrecht Group's oil field services activities after several decades of operations under the conglomerate Odebrecht Oil & Gas renders services related to the charter and operation of drilling rigs, floating production storage and offloading units (the "FPSOs") and pipe-laying support vessels (the "PLSVs"), as well as maintenance activities in the oil and gas industry in Brazil. Petroleo Brasileiro S.A. ("Petrobras ") is the main client and business partner of the OOG Group. On May 23, 2017, OOG and its affiliates jointly filed petitions before the 4th Commercial Court of the State of Rio de Janeiro in the Federative Republic of Brazil for the commencement of extrajudicial reorganization cases. The Brazilian Court on Oct. 19, 2017, approved Debtors' reorganization plans. OOG and 10 affiliates filed Chapter 15 cases (Bankr. S.D.N.Y. Lead Case No. 17-13130) in Manhattan, in the United States on Nov. 3, 2017, to seek recognition of the Brazilian proceedings. Rogerio Luis Murat Ibrahim, CFO of OOG, signed the Chapter 15 petitions. Law firm E. Munhoz Advogados, led by founding partner Eduardo Secchi Munhoz, has been advising OOG in all legal aspects of its reorganization since February 2016. The Hon. James L. Garrity Jr. is the case judge in the U.S. case. Davis Polk & Wardwell LLP represents OOG in the U.S. cases. ODEBRECHT SA: Peru's Kuczynski Denies Taking Bribe From Firm ------------------------------------------------------------ Mitra Taj at Reuters reports that Peru's President Pedro Pablo Kuczynski denied receiving $20 million in bribes from Brazilian construction giant Odebrecht SA in exchange for help winning a contract in 2005, when he was prime minister. In a massive plea deal that it signed in the United States, Odebrecht SA said it distributed a total of $29 million in bribes to unnamed officials in Peru during the terms of three presidencies from 2005 to 2014, according to Reuters. Mr. Kuczynski, a 78-year-old former investment banker who was prime minister and finance minister in 2005, said Odebrecht SA employees must be brought to Peru to explain whom it bribed to secure public work contracts, the report notes. "It clearly needs to be investigated," Mr. Kuczynski told reporters. "I can guarantee that I didn't receive anything or do anything," the report relays. Earlier this month, Peru's attorney general's office reopened a preliminary graft inquiry into whether Mr. Kuczynski and former president Alejandro Toledo helped Odebrecht SA win infrastructure contracts by passing a law that declared highway projects of national interest, the report relays. "I signed off on a law that Congress passed. That's not a crime," said Mr. Kuczynski, who assumed the presidency five months ago, the report discloses. Odebrecht SA has an outsized presence in Peru, where its donation of a small version of Rio de Janeiro's famous Christ the Redeemer statue dots Lima's skyline, the report relays. In the past decade it has won public work contracts worth more than $10 billion, the report adds. About Odebrecht Construtora Norberto Odebrecht SA is a Latin American engineering and construction company fully owned by the Odebrecht Group, one of the 10 largest Brazilian private groups. Construtora Norberto is the world's largest builder of hydroelectric plants, of sanitary and storm sewers, water treatment and desalination plants, transmission lines and aqueducts. The Group's main businesses are heavy engineering and construction based in Rio de Janeiro, Brazil, and Braskem S.A., its chemicals/petrochemicals company, based in Sao Paulo, Brazil. As of May 5, 2009, the company continues to carry Standard and Poor's BB Issuer Credit ratings, and Fitch Rating's BB+ Issuer Default ratings and BB+ Senior Unsecured Debt ratings. * * * As reporter in the Troubled Company Reporter-Latin America on Dec. 2, 2016, The Wall Street Journal related that Marcelo Odebrecht, the jailed former head of Brazilian construction giant Odebrecht SA, agreed to sign a plea-bargain agreement in connection with Brazil's largest corruption probe ever, according to a person close to the negotiations. The move could roil the nation's political class yet again. The testimony of the former industrialist, which is part of the deal, has the potential to implicate numerous politicians who allegedly took kickbacks from contractors as part of a years-long graft ring centered on Brazil's state-run oil company, Petroleo Brasileiro SA, known as Petrobras, according to The Wall Street Journal. ODEBRECHT SA: Ecuador VP to Face Trial in Corruption Case --------------------------------------------------------- Associated Press reports that a court in Ecuador has paved the way for a criminal trial to begin against the nation's vice president in an alleged corruption plot involving Brazilian construction giant Odebrecht SA. A judge with the National Justice Court disclosed that Jorge Glas and 12 other defendants should be tried and could face up to 5 years in jail if convicted, according to Associated Press. Mr. Glas was jailed in early October after the Supreme Court ordered him detained while being investigated for allegedly taking bribes from Odebrecht SA, the report notes. Mr. Glas has denied ever receiving any money from Odebrecht and refuses to give up his post, the report relays. He is the latest high-ranking government official in Latin America to come under scrutiny for purportedly taking bribes or illegal campaign contributions as part of Odebrecht SA's rapid expansion in the region, the report adds. About Odebrecht Construtora Norberto Odebrecht SA is a Latin American engineering and construction company fully owned by the Odebrecht Group, one of the 10 largest Brazilian private groups. Construtora Norberto is the world's largest builder of hydroelectric plants, of sanitary and storm sewers, water treatment and desalination plants, transmission lines and aqueducts. The Group's main businesses are heavy engineering and construction based in Rio de Janeiro, Brazil, and Braskem S.A., its chemicals/petrochemicals company, based in Sao Paulo, Brazil. As of May 5, 2009, the company continues to carry Standard and Poor's BB Issuer Credit ratings, and Fitch Rating's BB+ Issuer Default ratings and BB+ Senior Unsecured Debt ratings. * * * As reporter in the Troubled Company Reporter-Latin America on Dec. 2, 2016, The Wall Street Journal related that Marcelo Odebrecht, the jailed former head of Brazilian construction giant Odebrecht SA, agreed to sign a plea-bargain agreement in connection with Brazil's largest corruption probe ever, according to a person close to the negotiations. The move could roil the nation's political class yet again. The testimony of the former industrialist, which is part of the deal, has the potential to implicate numerous politicians who allegedly took kickbacks from contractors as part of a years-long graft ring centered on Brazil's state-run oil company, Petroleo Brasileiro SA, known as Petrobras, according to The Wall Street Journal. ========================== C A Y M A N I S L A N D S ========================== OCEAN RIG: Highland Fights Bid to Block Marshall Islands Case ------------------------------------------------------------- Tiffany Kary at Bloomberg News reports that Highland Capital Management LP objects to a bid by the bankrupt offshore driller Ocean Rig to block it from continuing a legal fight in the Marshall Islands. Ocean Rig UDW Inc. and three subsidiaries already had restructuring approved in Cayman courts, Bloomberg notes. The company currently seeks an order in New York bankruptcy court blocking Highland from pursuing further litigation in Marshall Islands, Bloomberg discloses. According to Bloomberg, Highland says in court papers filed on Nov. 9 that it opposes the motion, arguing that if the New York court rules in favor of Ocean Rig, it will be favoring the law of Cayman Islands over law of Republic of the Marshall Islands. The case is CASE: 17-10736, In re Ocean Rig UDW Inc.; U.S. Bankruptcy Court. About Ocean Rig Nicosia, Cyprus-based Ocean Rig UDW Inc. (NASDAQ: ORIG) -- http://www.ocean-rig.com/-- is an international offshore drilling contractor providing oilfield services for offshore oil and gas exploration, development and production drilling, and specializing in the ultra-deepwater and harsh-environment segment of the offshore drilling industry. On March 24, 2017, Ocean Rig UDW Inc., et al., filed winding up petitions with the Cayman Court and issued summonses for the appointment of joint provisional liquidators for the purpose of the Restructuring. By orders of the Cayman Court dated March 27, 2017, Simon Appell and Eleanor Fisher were appointed as the JPLs and duly authorized foreign representatives, and the Cayman Provisional Liquidation Proceedings were commenced. Simon Appell and Eleanor Fisher of AlixPartners, LLP, in their capacities, as the joint provisional liquidators and authorized foreign representatives, filed for Chapter 15 protection for Ocean Rig and its affiliates (Bankr. S.D.N.Y. Lead Case No. 17- 10736) on March 27, 2017, to seek recognition of the Cayman proceedings. The JPLs' U.S. counsel are Evan C. Hollander, Esq., and Raniero D'Aversa Jr., Esq., at Orrick, Herrington & Sutcliffe LLP, in New York. * * * On Sept. 15, 2017, the Grand Court of the Cayman Islands sanctioned the schemes of arrangements of the Company and its subsidiaries, Drill Rigs Holdings Inc. ("DRH"), Drillships Financing Holding Inc. ("DFH"), and Drillships Ocean Ventures Inc., ("DOV," and together with UDW, DRH and DFH, the "Scheme Companies"). The terms of the restructuring have therefore been approved by the Cayman Court. =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: Chief's Focus on Haiti Water Woes Gets Praise ----------------------------------------------------------------- Dominican Today reports that the Dominican delegation headed by Environment minister, Francisco Dominguez was praised for stressing the need for the international community to support cross-border environmental initiatives, which can mitigate a water crisis catastrophe especially in Haiti. Mr. Dominguez attends the UN Conference on Climate Change, COP23, which continues in Bonn, Germany, where delegations from all over the world spur actions on Climate Change, according to Dominican Today. The report notes that Costa Rica Environment minister, Edgar Gutierrez praised Dominguez's statement that "our nation had to work twice as much, in the case of Haiti, because some of the rivers that supply drinking water to the sister country are born in Dominican territory." "This is a valuable example of brotherhood and solidarity," Mr. Gutierrez said at a multilateral meeting of delegates from Central America and the Caribbean, with Germany Federal Environment Ministry secretary, Johen Flasbarth, the report relays. The Costa Rican official called on the international community to pay special attention to the Haitian people, as stated by the Dominican position urging to adopt mechanisms to improve and secure sources of drinking water for cities such as Port-au- Prince, the report adds. As reported in Troubled Company Reporter-Latin America on July 24, 2017, Moody's Investors Service 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. ============= E C U A D O R ============= BANCO DE LA PRODUCCION: Fitch Affirms B IDR; Outlook Negative ------------------------------------------------------------- Fitch Ratings has affirmed Banco de la Produccion S.A. y Subsidiarias' (Produbanco; commercially known as Produbanco Grupo Promerica) Long-Term Issuer Default Rating (IDR) at 'B', Rating Outlook Negative, its Viability Rating (VR) at 'b', and its Short- Term IDR at 'B'. KEY RATING DRIVERS IDRS AND VR Produbanco's IDRs are driven by its intrinsic creditworthiness (as indicated by its VR). The bank's VR is highly influenced by the operating environment - notably by Ecuador's sovereign rating - as well as by the institution's risk controls. The bank's VR also considers, with moderate importance, the bank's good asset quality, ample liquidity, strong local franchise and stable business model, and adequate capital position. In Fitch's view, Produbanco's relative size and franchise in Ecuador increase its exposure to the challenging operating environment. The agency usually does not rate banks above the sovereign, especially in such a high level of sovereign credit risk. In Fitch's opinion, Ecuador's low economic growth prospects limit Produbanco's growth potential and profitability, and may pressure asset quality or their funding and liquidity profile. Produbanco's risk controls are adequate and, as a result, the institution was able to maintain good asset quality indicators. Its underwriting standards and collection practices are consistent and effective, as reflected by its low impaired loans ratio and strong liquidity profile. Fitch notes that asset growth often exceeded internal capital generation and may put additional pressure on Produbanco's Fitch Core Capital which is lower than its Ecuadorian peers'. The agency recognizes that the issuance of subordinated debt increases secondary capital and the bank's buffer above the regulatory minimum; however, Fitch's criteria does not include hybrid capital reported as equity as part of the Fitch Core Capital. Produbanco's asset quality is strong and outperforms its local and international peer's. Non-performing loans ratios are low, benefited by its seasoned corporate loan portfolio, reserves coverage is ample although below the average of its local peer and concentration in the largest creditors is moderate. In Fitch's opinion, consistent underwriting standards may sustain asset quality and maintain stable credit costs. In Fitch's view, Produbanco's liquidity is strong and compares favorably with similarly rated banks. The bank's ample base of liquid assets, which materially exceed the local regulator's requirements, reflects that the institution's prudent investment practices prioritized low risk exposure. Produbanco's operating profits to risk weighted assets increased to 1.21% as of June 2017 as a result of the loan portfolio growth and an increase in the bank's net interest margin driven by funding cost reductions. In Fitch's view, the improvements are sustainable over the medium term as its greater participation in consumer segments will increase the average interest income of the loan portfolio, while the largest share of consumer deposits will control funding costs. Fitch does not anticipate a material increase in credit costs, given the bank's consistent underwriting standards. SUPPORT RATING AND SUPPORT RATING FLOOR Produbanco's Support Rating (SR) of '5' and Support Rating Floor (SRF) of 'NF' indicate that Fitch believes external support cannot be relied upon, due to Ecuador's limited funding flexibility as well as the lack of a lender of last resort. RATING SENSITIVITIES IDRS AND VR The Negative Rating Outlook is aligned with the sovereign. Any negative rating action on the sovereign would lead to a similar action on Produbanco's IDRs and VRs. Asset growth that consistently exceeds internal capital generation and decreases the bank's Fitch Core Capital ratio to a level below 9%, or that increases delinquency ratios or credit costs, would also be negative for creditworthiness. Currently, there is no upside potential for Produbanco's IDRs and VR as Ecuador currently has a Negative Outlook and Fitch rarely rates banks above the sovereign. SUPPORT RATING AND SUPPORT RATING FLOOR Ecuador's propensity or ability to provide timely support to these banks is not likely to change given the sovereign's low sub- investment grade IDR. As such, the SR and SRF have no upgrade potential. Fitch has affirmed the following ratings: Banco de la Produccion S.A. y Subsidiarias -- Long-Term IDR at 'B'; Outlook Negative; -- Short-Term IDR at 'B'; -- Viability Rating at 'b'; -- Support Rating at '5'; -- Support Rating Floor at 'No Floor'. BANCO PICHINCHA: Fitch Affirms B Long-Term IDR; Outlook Negative ---------------------------------------------------------------- Fitch Ratings has affirmed Banco Pichincha C.A. y Subsidiarias' (Pichincha) Long-Term Issuer Default Rating (IDR) at 'B' with a Negative Outlook and its Viability Rating (VR) at 'b'. KEY RATING DRIVERS IDRS AND VR Ecuador's operating environment and Pichincha's risk appetite highly influence the bank's ratings. Fitch also considers Pichincha's profitability recovery, stable asset quality, improved capitalization and ample liquidity for its market of operation. The bank's ratings are highly influenced by the sovereign given the impact of the government's macroeconomic and regulatory policies on its performance. Ecuador's weak economic recovery will continue limiting Pichincha's potential growth, profitability and internal capital generation capacity. Pichincha's performance recovered at the first half of 2017 (1H17). The operating profit over risk weighted assets of 0.2% is still weak, and compares unfavorably to the Ecuadorian financial system's average as well as international peers (universal commercial banks rated in the 'b' category and below). However, it is noteworthy that the bank was able to reverse the operating losses reported in 2016. Fitch expects the performance of Pichincha and the other Ecuadorian banks to remain stable or improve at a moderate pace in 2018, as a result of modest economic expansion and increased private sector confidence. Pichincha's asset quality remained stable reflecting the slight economic recovery and lower impaired loans due to significant loan restructuring. Fitch expects loan quality to be stable over the near term. However, asset quality ratios will likely to remain slightly worse than the industry average, reflecting the bank's important exposure in retail lending. However, Fitch highlights that local regulatory definitions of impaired loans are stricter than those in other markets. A slowdown in asset growth propelled an improvement in Pichincha's capital indicators. FCC increased to 11.96% of risk weighted assets at end June 2017, from 9.77% at end June 2016. Conservative reserve coverage, a strong risk profile and an improvement in internal capital generation, also underpinned the bank's stronger capitalization. Fitch expects this capital ratio to remain sound, given the bank's recent performance and the shareholder's commitment to maintain a sound internal capital generation. Pichincha's funding structure benefits from a successful franchise and a wide distribution network. Both allow the bank to enjoy a well-diversified, stable and relatively low-cost funding base. Similar to domestic peers, liquidity is conservative and more robust than similarly rated international peers. SUPPORT RATING AND SUPPORT RATING FLOOR Despite having the largest deposit market share, Pichincha's Support Rating (SR) of '5' and Support Rating Floor (SRF) of 'NF', indicate that Fitch believes that sovereign external support cannot be relied upon due to Ecuador's limited funding flexibility as well as the lack of a lender of last resort. RATING SENSITIVITIES IDRS AND VR The Negative Rating Outlook is aligned with the sovereign. Any negative rating action on the sovereign would also lead to a similar action on Pichincha's IDRs and VR. A significant reduction in the bank's internal capital generation or an acceleration of growth that leads to a decrease in FCC metrics consistently below 9% along with a material decline in excess loan loss reserves could also result in negative rating actions. There is no upside potential as the Ecuador currently has a Negative Outlook and Fitch rarely rates banks above the sovereign. SUPPORT RATINGS Ecuador's propensity or ability to provide timely support to these banks is not likely to change given the sovereign's low sub- investment grade IDR. As such, the SR and SRF have no upgrade potential. Fitch has affirmed the following ratings: Pichincha -- Long-Term Foreign Currency IDR at 'B'; Outlook Negative; -- Short-Term Foreign Currency IDR at 'B'; -- Viability Rating at 'b'; -- Support at '5'; -- Support Floor at 'No Floor'. =========== M E X I C O =========== CREDITO REAL: S&P Rates $230MM Subordinated Perpetual Notes 'B+' ---------------------------------------------------------------- S&P Global Ratings assigned its 'B+' issue-level rating to Credito Real S.A.B. de C.V. SOFOM E.R.'s (global scale: BB+/Stable/--; national scale: mxA+/Stable/mxA-1) subordinated perpetual notes for up to $230 million. The lender will use the proceeds to refinance market debt, enhance capitalization, and for general corporate purposes. This is the first debt instrument with these kinds of characteristics that a Latin American non-bank financial institution is issuing. The rating on the company's notes is three notches below the issuer credit rating, reflecting the following factors: -- The notes' contractual subordination to other senior debt: one notching for subordination and an additional one for the company's rating of 'BB+' or below; and -- An additional notch for the notes' discretionary non-payment clause, which allows the instrument to defer coupon payments. S&P's also assigning intermediate equity content--an amount equivalent to up to 33% of adjusted capital equity--to Credito Real's hybrid instrument because of the following factors: -- This issuance can suspend coupons without causing a default; -- No material restriction on payment deferrals; -- The notes' perpetual status; -- Lack of incentives to redeem the notes during their residual life; and -- The step-up clause won't be activated until 2038. As a result, S&P revised upward its forecasted risk-adjusted capital (RAC) ratio on Credito Real to about 14.4% for the next 12-18 months from 12%. Nonetheless, S&P's capital and earnings assessment remains unchanged because the new RAC forecast still reflects the strong category. S&P's base-case scenario for 2017 and 2018 incorporates the following assumptions: -- Mexico's GDP growth of 2.2% in 2017 and 2.3% in 2018; -- Proceeds of the issuance mainly for refinancing market debt; -- Credito Real's gross receivables to grow 20% and 35%, in 2017 and 2018, respectively; -- Nonperforming assets of about 2.5% for both years, and we expect them to be fully covered by reserves; -- Credit losses to represent 4.0%-4.5% of Credito Real's gross receivables; -- A dividend policy to remain fairly stable, with a payout ratio at about 30% for 2018; -- No capital injections; and -- No acquisitions for the next 12 months. S&P said, "If the notes issuance occurs as proposed, we will maintain our current funding and liquidity assessments on Credito Real. In our opinion, the proposed notes issuance will improve the lender's debt maturity profile and decrease its refinancing risk amid currently volatile market conditions. Credito Real's market debt amortizations in 2018 and 2019 total MXN3.955 billion. The lender's stable funding ratio (SFR) was 80.2% as of Sept. 30, 2017, with a three-year average of 81%. After this issuance, we expect the SFR to be still below 90%. Credito Real's funding structure will remain concentrated in market debt--estimated at about 65% of total liabilities, including the subordinated perpetual notes and the expected debt prepayment. The company's remaining funding sources are commercial and development banking credit facilities. "We consider that Credito Real has sufficient liquidity and cash flow to cover its debt maturities in the next 12 months. We consider that the company's loans collections, available bank lines, and market debt placements are sufficient to fund the growth plans and pay down debt maturities. Under a stress scenario, the company will need to reduce sharply its loan originations to generate cash and repay its debt maturities. Under this scenario, we expect the lender to also benefit from the credit line from development banks." The ratings on Credito Real also reflect its sound market share in Mexico's non-bank payroll lending segment with steady growth in operating revenue. The lender has continued diversifying its business in terms of geography through its recent acquisitions. Despite slowing lending growth, Credito Real's track record of aggressive growth still constrains S&P's assessment of its risk position, although it has maintained stable asset quality despite recent acquisitions. The stand-alone credit profile is 'bb+'. RATINGS LIST Credito Real S.A.B. de C.V. SOFOM E.R. Issuer credit rating Global scale BB+/Stable/-- National scale mxA+/Stable/mxA-1 Rating Assigned Credito Real S.A.B. de C.V. SOFOM E.R. Subordinated perpetual notes B+ ====================== P U E R T O R I C O ====================== OLIVER C&I: Court Dismisses Lawsuit vs Carolina Developers, et al. ------------------------------------------------------------------ Judge Mildred Caban Flores of the U.S. Bankruptcy Court for the District of Puerto Rico dismissed the adversary proceeding captioned OLIVER C & I CORP. Plaintiff, v. CAROLINA DEVELOPERS ASSOCIATES S. EN C. POR A., S.E., ET ALS., Defendants, Adversary Case No. 17-00166 (MCF) (Bankr. D.P.R.) for lack of subject-matter jurisdiction. Even if the court has jurisdiction, it will abstain in deference to local law, Judge Caban Flores said. The proceeding involves a chapter 11 bankruptcy debtor and its general partners in more than a decade-long quarrel regarding the debtor's economic rights to yearly distributions from several partnerships. Subsequent to its bankruptcy filing, the debtor filed the present adversary proceeding to resolve the many disputes that were never addressed in any previous legal action. Its general partners moved to dismiss for lack of subject-matter jurisdiction. The Debtor intends to collect monies from third parties through the various causes of action raised in the complaint. Its argument that the bankruptcy court has core jurisdiction for turnover actions is not persuasive because complaints to recover property of the estate do not automatically grant jurisdiction. Furthermore, the court's "related to" jurisdiction is unsustained by the facts in this case because the resolution of the complaint does not serve any bankruptcy purpose. Even assuming the court did have jurisdiction on any of Debtor's causes of action, or that it be construed to have jurisdiction as urged by the Debtor, this court will enter an order of abstention. The Debtor's complaint raises the interpretation of civil-law partnership agreements, which involves issues of local law. Thus, this court concludes that abstention is warranted. The bankruptcy case is in re: OLIVER C & I CORP., CHAPTER 11, Debtor, Case No. 16-08311 (MCF) (Bankr. D.P.R.). A full-text copy of Judge Flores' Opinion and Order dated Nov. 1, 2017, is available at https://is.gd/oIIY0G from Leagle.com. OLIVER C & I CORP, Debtor, represented by CARMEN D. CONDE TORRES - - condecarmen@condelaw.com -- & LUISA S. VALLE CASTRO -- ls.valle@condelaw.com -- C CONDE & ASSOCIATES. About Oliver C & I Corp. Oliver C & I Corp., based in Guaynabo, Puerto Rico, is a profit corporation organized under the laws of Puerto Rico. It was incorporated on Dec. 17, 2003. The Debtor is wholly owned by Maria del Carmen Magraner Folch. The Debtor's main assets are participations in certain limited partnerships and the corporations which serve as general partners of the limited partnerships. The Debtor filed a Chapter 11 petition (Bankr. D.P.R. Case No. 16-08311) on Oct. 17, 2016. The petition was signed by Max Olivera, vice-president and treasurer. The case is assigned to Judge Mildred Caban Flores. In its petition, the Debtor indicated $29.94 million in total assets and $1.06 million in total liabilities. The Debtor is represented by Carmen D. Conde Torres, Esq., at C. Conde & Assoc. The Debtor employed Doris Barroso Vicens of RSM Puerto Rico as its accountant; and Aurora Oti-Yvonnet of Villafane & Oti, Certified Public Accountants, PSC, as its external auditor. ================================ T R I N I D A D & T O B A G O ================================ CARIBBEAN AIRLINES: To Review Viability of North American Routes ---------------------------------------------------------------- RJR News reports that Caribbean Airlines Limited has been told to immediately review the viability of some of its North American routes deemed to be unprofitable. The instruction has come from a Joint Select Committee of Parliament in Trinidad, according to RJR News. The Committee says the unprofitable routes have a decline in passenger loads and massive financial losses, the report notes. At a news conference, Chairman of the Joint Select Committee Independent Senator David Small said the problem demanded urgent attention, adding that Caribbean Airlines needed to employ strategies to prevent future financial leakages, the report relays. He, however, declined to identify the routes, saying he did not want to damage the company's image and also called for the airline to immediately cease all international recruitment of foreign pilots so as to ensure local pilots were instead hired, the report notes. The report relates that Mr. Small said there are hundreds of qualified pilots in Trinidad and Tobago unable to find jobs with CAL despite applying. He also urged CAL to recover the huge sums of money owed by Venezuela, the report relays. But when asked to disclose the figure Mr. Small said he preferred not to make this public as it may have negative repercussions, the report discloses. However, he described the Caracas route as one of the more profitable ones, the report relays. The report notes that Mr. Small said during three meetings of the Joint Select Committee it struggled to obtain pertinent information from CAL, as partial submission of information was given, adding that there seemed to be a challenge with the airline regarding the way it managed its operations. The Committee recommended that CAL immediately put a freeze on salary increases until its operation is sustainably profitable, the report adds. Caribbean Airlines Limited -- http://www.caribbean-airlines.com/ -- provides passenger airline services in the Caribbean, South America, and North America. The company also offers freighter services for perishables, fish and seafood, live animals, human remains, and dangerous goods. In addition, it operates a duty free store in Trinidad. Caribbean Airlines Limited was founded in 2006 and is based in Piarco, Trinidad and Tobago. As reported in the Troubled Company Reporter-Latin America on November 2, 2015, RJR News said that Michael DiLollo, Chief Executive Officer of Caribbean Airlines Limited has quit after just 17 months on the job. The 48-year-old Canadian national, citing personal reasons, resigned with immediate effect. His resignation was accepted by the airline's board of directors. Mr. DiLollo was appointed Caribbean Airlines CEO in May 2014, following the sudden resignation of Robert Corbie in September 2013. In early February 2015, Larry Howai, then Finance Minister, told Parliament that unaudited accounts for 2014 showed the airline made a loss of US$60 million, inclusive of its Air Jamaica operations, and the airline planned to break even by 2017. Mr. Howai told the Parliament that a five-year strategic plan had been completed and was in the process of being approved for implementation. In an interview with the Trinidad & Tobago Guardian in early November 2015, Mr. DiLollo said CAL did not need a bailout just yet. Mr. DiLollo said the airline had benefited from extremely patient shareholders for years and he believed the airline was strategically positioned to break even in three years. ================= V E N E Z U E L A ================= VENEZUELA: Fitch Lowers Long-Term Foreign Currency IDR to 'RD' -------------------------------------------------------------- Fitch Ratings has downgraded Venezuela's Long-Term Foreign Currency Issuer Default Rating (IDR) to 'RD' (Restricted Default) from 'C' and affirmed the Long-Term Local Currency IDR at 'CC'. The Long-Term IDRs do not have a Rating Outlook. Fitch has also affirmed the Short-Term Foreign and Local Currency IDRs at 'C' and the Country Ceiling at 'CC'. KEY RATING DRIVERS The downgrade of Venezuela's LTFC IDR to 'RD' from 'C' reflects the failure of bondholders to receive overdue interest payments on Venezuela's sovereign bonds maturing Oct. 13, 2019 and Oct. 13, 2024 by the end of the 30-day grace period that ended on Nov. 13, 2017. Fitch has downgraded the 2019 and 2024 bonds to 'D' and affirmed the 'C' ratings on Venezuela's other long-term senior unsecured foreign currency debt. All long-term senior unsecured foreign currency debt issue ratings are being withdrawn following the default. At the same time, Fitch has affirmed Venezuela's 'CC' Long-Term Local Currency IDR as the sovereign has not explicitly announced its intention to restructure local currency debt. The 'CC' rating reflects the continued deep macroeconomic imbalances in Venezuela and its very high levels of fiscal vulnerability. SOVEREIGN RATING MODEL (SRM) and QUALITATIVE OVERLAY (QO) In accordance with its published rating criteria, Fitch's sovereign rating committee decided not to adopt the score indicated by the SRM as the starting point for its analysis because overdue interest payments on the sovereign's debt were not received by bondholders within the relevant grace periods. Consequently, Fitch decided to downgrade the Long-Term Foreign Currency IDR to 'RD'. Fitch's SRM is the agency's proprietary multiple regression rating model that employs 18 variables based on three-year centred averages, including one year of forecasts, to produce a score equivalent to a LT FC IDR. Fitch's QO is a forward-looking qualitative framework designed to allow for adjustment to the SRM output to assign the final rating, reflecting factors within the criteria that are not fully quantifiable and/or not fully reflected in the SRM. RATING SENSITIVITIES Future developments that may, individually or collectively, lead to a positive rating action: If the sovereign is able to re-establish a track record of timely and predictable payment of its commercial debt obligations, thereby normalising its relationship with its creditors, a positive rating action could occur. Fitch has taken the following rating actions: -- Long-Term Foreign-Currency IDR downgraded to 'RD'; -- Long-Term Local-Currency IDR affirmed at 'CC'; -- Short-Term Foreign-Currency IDR affirmed at 'C'; -- Short-Term Local-Currency IDR affirmed at 'C'; -- Country Ceiling affirmed at 'CC'; -- Issue ratings on long-term senior unsecured foreign-currency bonds due Oct. 13, 2019 and Oct. 13, 2024 downgraded to 'D' and withdrawn; -- All other issue ratings on long-term senior unsecured foreign- currency bonds affirmed at 'C' and withdrawn. VENEZUELA: S&P Cuts FC Sovereign Credit Ratings to 'SD' ------------------------------------------------------- On Nov. 13, 2017, S&P Global Ratings lowered its long- and short- term foreign currency sovereign credit ratings on the Bolivarian Republic of Venezuela to 'SD/D' from 'CC/C'. The long- and short- term local currency sovereign credit ratings remain at 'CCC-/C' and are still on CreditWatch with negative implications. S&P said, "At the same time, we lowered our issue ratings on Venezuela's global bonds due 2019 and 2024 to 'D' from 'CC'. Our issue ratings on the remainder of Venezuela's foreign currency senior unsecured debt remain at 'CC'. Finally, we affirmed our transfer and convertibility assessment on the sovereign at 'CC'." CREDITWATCH S&P said, "Our CreditWatch negative reflects our opinion that there is a one-in-two chance that Venezuela could default again within the next three months. We could lower specific issue ratings to default ('D') if Venezuela doesn't make its overdue coupon payments before the stated grace period expires, or upon the execution of the announced debt restructuring. "If the sovereign cures its default on the overdue coupon payments and remains timely on other coupon payments before the restructuring debt operation is completed, we would raise our long-term foreign currency sovereign issuer credit and issue ratings to 'CC'. "If any potential restructuring operation is completed, we would lower all of our foreign currency ratings on Venezuela to default and subsequently raise them to the 'CCC' or 'B' category." RATIONALE On Nov. 12, 30 calendar days had passed since two coupon payments were due, and Venezuela had not paid the $200 million due to bondholders (or the bondholders had not received funds by that date). In accordance with S&P's criteria, "Methodology: Timeliness of Payments: Grace Periods, Guarantees, And Use of 'D' And 'SD' Ratings," it has lowered two issue ratings to 'D' (default), and it lowered the long-term foreign currency sovereign credit rating to 'SD' (selective default). The overdue coupons are for the following issues: -- US$2.496 billion 7.75% bonds due 10/13/2019 -- US$2.496 billion 8.25% bonds due 10/13/2024 -- Four additional coupon payments are overdue but within their grace period. -- Unpaid obligations total $420 million.S&P could lower its ratings on the following issues to 'D' if the government fails to pay within the stated grace period. -- US$1.6 billion 7.65% bonds due 04/25/2025 -- US$2 billion 9.00% bonds due 05/07/2023 -- US$3 billion 11.75% bonds due 10/21/2026 -- US$2 billion 9.25% bonds due 05/07/2028 Finally, on Nov. 2, Venezuelan President Nicolas Maduro announced a government commission to restructure the sovereign's and state- owned Petr¢leos de Venezuela S.A.'s (PDVSA) external debt obligations. The first meeting with bondholders was held on Nov. 13, 2017, in Caracas. S&P said, "We would very likely consider any Venezuelan restructuring to be a distressed debt exchange and equivalent to default given the highly constrained external liquidity (see "Rating Implications Of Exchange Offers And Similar Restructurings, Update"). In addition, in our opinion, U.S. sanctions on Venezuela and government members will most likely result in a long and difficult negotiation with bondholders." S&P said, "We believe the government is less likely to default on its local currency-denominated debt, and President Maduro made no mention of any intention to restructure this debt. Therefore, our long-term local currency rating on Venezuela remains 'CCC-'. "In accordance with our relevant policies and procedures, the Rating Committee was composed of analysts that are qualified to vote in the committee, with sufficient experience to convey the appropriate level of knowledge and understanding of the methodology applicable (see 'Related Criteria And Research')." At the onset of the committee, the chair confirmed that the information provided to the Rating Committee by the primary analyst had been distributed in a timely manner and was sufficient for Committee members to make an informed decision. After the primary analyst gave opening remarks and explained the recommendation, the Committee discussed key rating factors and critical issues in accordance with the relevant criteria. Qualitative and quantitative risk factors were considered and discussed, looking at track-record and forecasts. The committee agreed that all key rating factors were unchanged. The chair ensured every voting member was given the opportunity to articulate his/her opinion. The chair or designee reviewed the draft report to ensure consistency with the Committee decision. The views and the decision of the rating committee are summarized in the above rationale and outlook. The weighting of all rating factors is described in the methodology used in this rating action (see 'Related Criteria And Research'). RATINGS LIST Downgraded To From Venezuela (Bolivarian Republic of) Sovereign Credit Rating Foreign Currency SD/D CC/Watch Neg/C Senior Unsecured US$2.496 bil 7.75% bonds due 10/13/2019 D CC/Watch Neg US$2.496 bil 8.25% bonds due 10/13/2024 D CC/Watch Neg Ratings Unchanged Venezuela (Bolivarian Republic of) Sovereign Credit Rating Local Currency CCC-/Watch Neg/C Transfer & Convertibility Assessment CC Senior Unsecured CC/Watch Neg *********** 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. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Peter A. Chapman at 215-945-7000 or Joseph Cardillo at 856-381-8268. * * * End of Transmission * * *