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/raid1/www/Hosts/bankrupt/TCRLA_Public/171227.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, December 27, 2017, Vol. 18, No. 256 Headlines B R A Z I L CEMIG DISTRIBUICAO: Moody's Rates BRL1.575BB Sr. Debentures B3 GOL LINHAS: Moody's Hikes Corporate Family Rating to B2 MARFRIG GLOBAL: Moody's Revises Outlook to Stable & Affirms B2 CFR SUZANO PAPEL: Fitch Hikes Long-Term IDR From BB+; Outlook Stable D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: 'Secretive' Electric Pact Splits Big Business DOMINICAN REPUBLIC: Law Lets Gov't. Sell up to US$1.5BB in Assets M E X I C O MINERA MEDIA: Signs Waiver on Liquidity Covenant With Lenders P U E R T O R I C O CHASE MONARCH: Hires Hector J. Figueroa as Bankruptcy Counsel GOTITAPAK INC: Taps Carlos Pena Garcia as Accountant T R I N I D A D & T O B A G O SAGICOR FINANCIAL: Slams IMF Report * TRINIDAD & TOBAGO: Finding a Job, Hard These Days in the Country V E N E Z U E L A PROVINCIAL DE REASEGUROS: Fitch Withdraws C IFS Rating X X X X X X X X X * Record US$306BB Insurance Losses in 2017 After Disasters - - - - - =========== B R A Z I L =========== CEMIG DISTRIBUICAO: Moody's Rates BRL1.575BB Sr. Debentures B3 -------------------------------------------------------------- Moody's America Latina assigned B3/B2.br (Global Scale and Brazil National Scale, respectively) ratings to Cemig Distribuicao S.A. (Cemig D, B3/B2.br stable)'s new issuance of BRL1,575 million senior secured debentures due June 2022. The debentures are guaranteed by Cemig D's parent company, Companhia Energetica de Minas Gerais (Cemig, Corporate Family Rating or 'CFR' of B3/B2.br stable). The proceeds of the issuance will be used to partially pay down Cemig D's 4th issuance of debentures due 2018, in total outstanding amount of BRL1,793 million as of Sept. 2017. RATINGS RATIONALE CEMIG-D's B3/B2.br issuer and senior unsecured ratings reflect the overall consolidated credit profile of the corporate family under Cemig, given the guarantees provided by the holding company as well as cross-default clauses embedded in the various debt instruments across the corporate family. The senior secured ratings of B3/B2 reflect the limited credit uplift of the receivables assigned in favor of debenture holders, composed of future flow receivables related to electricity bills paid by its clients which flow through certain bank accounts. The issuer committed to a monthly minimum amount of BRL400 million. Pursuant to the terms of the indenture, in case monthly flows are below the minimum amount the issuer is to provide additional guarantees to fulfill the amounts. Failure to do so can lead to early amortization of the debentures. The debentures carry an interest rate of 146.5% of the DI rate, payable on a monthly basis as of January 2018. The principal amortization schedule is set for 36 monthly amortizations, starting in June 2019. The debentures can be prepaid at any point in time, although prepayment premium flat fees are set between 1.0% and 0.5% depending on prepayment dates. The indenture establishes that in the event Cemig is successful in selling any of its assets, as per the publicly announced divestment program, that 20.4% of any amounts left following the payment of the BRL593 million due in Nov. 2018 related to the Light S.A. put option, be used to prepay the debentures, in part or in full. The indenture also establishes limitations on dividend distributions above minimum requirements as established in company by-laws. The documents further establish the requirement to obtain an overall capital increase of BRL2.2 billion by Dec. 2018. Financial covenants have been set for both Cemig D and Cemig, as guarantor. For Cemig D, covenants are set at Net Debt to Ebitda of 7.5x until June 2018, scaling down to 4.5x in Dec. 2018, 3.8x in Dec. 2019, and further down until reaching 3.30x in Dec. 2021. For Cemig, as guarantor, the covenants are set at Net Debt / Ebitda levels of 4.5x until June 2018, 4.25x for Dec. 2018, 3.5x in Dec. 2019, and further down until reaching 2.5x in Dec. 2021. An additional liquidity covenant is set at a ratio of 0.6x for current assets over current liabilities. Cemig's credit profile reflects its market position and economic relevance as one of the largest integrated energy utility companies in Brazil and 5.5 GW of generation installed capacity. Overall leverage metrics as measured by Debt / Ebitda and CFO pre W/C to Debt, stood at 3.9x and 21.5% as of Sept. 2017 (as per Moody's standard adjustments). The B3/B2.br CFR assigned to Cemig reflects the application of Moody's joint default analysis (JDA) framework for government related issuers (GRI). The state of Minas Gerais is the shareholder with majority control. Moody's GRI rating methodology considers the following four input factors (i) a moderate-level probability of extraordinary support from the state should Cemig face financial distress, (ii) Moody's estimates of a high level of dependence between the company and the state, (iii) Moody's rating of the State of Minas Gerais (B1, negative) as well as (iv) Cemig's intrinsic credit profile as captured in the Moody's Baseline Credit Assessment (BCA) of caa1. In December 2017, the company concluded several measures which addressed the corporate family's immediate liquidity/refinancing needs on debts due in December 2017 and early 2018. Over the past three months, the companyhas been able to (i) close on a USD1.0 billion Eurobond issuance, (ii) reach an agreement with its key creditor banks to refinancing approximately BRL3.9 billion of debts, (iii) honor a substantial portion of the put option obligations related to Light S.A. (B1/Baa1.br positive) with the remaining portion rescheduled for late 2018 and (iv) raised a total BRL1.2 billion amount in capital increase as of Dec. 13, 2017 of a total amount that can reach up to BRL1.3 billion. Through the combination of these events, the company has raised sufficient funds to refinance its immediate financial obligations. The next relevant maturities are the BRL593 million outstanding amount on the Light put option in November 2018, and an amount of BRL842 million due by Cemig GT on December 2018. WHAT COULD CHANGE THE RATINGS UP/DOWN The ratings can be downgraded should the company not be successful in securing funds to pay down or refinance the relevant financial obligations in total amount of almost BRL1.5 billion due by Dec. 2018. Positive rating pressure can result from the company successfully paying down or refinancing the abovementioned obligations combined with establishing and adhering to a liquidity and liability management strategy that is consistent with higher rating levels. Headquartered in Belo Horizonte in the state of Minas Gerais, Cemig is a leading Brazilian integrated utility operating in the sectors of electricity distribution, generation and transmission with 5,500 MW in installed capacity and approximately 8,200km of transmission lines across the country. The company also owns controlling equity participation in the electricity utility Light S.A and the transmission company Transmissora Alianca de Energia Eletrica (Ba2/Aa1.br stable). Cemig is controlled by the state of Minas Gerais which owns 50.69% of Cemig's voting capital. As of Sept. 2017, Cemig generated last twelve month net revenues and EBITDA of BRL18.8 billion and BRL4.1 billion respectively, as per Moody's standard adjustments. The principal methodology used in this rating was Regulated Electric and Gas Utilities published in June 2017. GOL LINHAS: Moody's Hikes Corporate Family Rating to B2 ------------------------------------------------------- Moody's Investors Service upgraded the ratings of Gol Linhas Aereas Inteligentes S.A.'s debt, including the corporate family rating ("CFR") to B2 from Caa3 and Gol Finance's perpetual notes guaranteed by Gol to B3 from C. The rating outlook was changed to stable. Moody's also affirmed the foreign currency rating assigned to Gol LuxCo S.A.'s ("Gol LuxCo") term loan guaranteed by Delta Air Lines, Inc. ("Delta") at Baa3; outlook stable. Upgrades: Issuer: Gol Linhas Aereas Inteligentes S.A. -- Corporate Family Rating, Upgraded to B2 from Caa3 Issuer: Gol Finance -- USD200 Million Guaranteed Senior Unsecured Perpetual Notes, Upgraded to B3 from C Affirmation: Issuer: Gol LuxCo S.A. -- USD300 Million Guaranteed Senior Unsecured Term Loan due 2020, Affirmed at Baa3 Outlook Actions: Issuer: Gol Linhas Aereas Inteligentes S.A. -- Outlook, Changed to Stable Issuer: Gol Finance -- Outlook, Changed to Stable Issuer: Gol LuxCo S.A. -- Outlook, Remains at Stable RATINGS RATIONALE The ratings upgrade is a result of Gol's improvements in operating performance and financial flexibility that have culminated in the successful issuance of USD500 million 7.0% senior unsecured notes due 2025 (unrated). More specifically, Gol has posted a marked recovery in its operating margins and leverage measured by total adjusted debt to Ebitda that have reached 11.8% and 4.6 times, respectively, in the last twelve months ("LTM") ended September 2017. Operating improvements are a consequence of capacity reduction, cost cutting, and stronger demand for air travel in Brazil stemming from a gradual strengthening in the Brazilian economy, which Moody's believe will continue during 2018. Part of the proceeds from the recent notes offering were used in a tender offer that repurchased around USD185 million from the company's USD276 million 8.875% notes due 2022. Moody's expect the company to keep around USD150 million from the proceeds to reinforce its liquidity position while the balance should be used in the tender offer of the of the unsecured notes due 2020 and in the of the 2018, 2021 and 2028 secured notes, extending its debt maturity, releasing assets, while decreasing interest expenses . Gol's B2 ratings reflect the company's leadership position in the Brazilian domestic market supported by its strong brand name and low-cost structure based on a modern and efficient operating fleet of 116 Boeing 737 aircrafts, along with an experienced management team. Nonetheless, Gol's ratings incorporate its exposure to foreign currency, fuel price volatility, tough competitive environment, and dependence on the Brazilian economy because of its low geographic diversification compared to other rated airlines. The B3 rating on the unsecured notes stand one notch lower than Gol's B2 corporate family rating (CFR) in order to reflect the effective subordination of those unsecured creditors to the company's other existing secured debt. Gol's consolidated debt pro-forma for the new bond issuance will be composed of finance leases collateralized by aircraft, representing about 40% of its total debt and the other 60% will be comprised by the proposed unsecured bonds and other unsecured debt. As such, unsecured notes will rank below all the company's existing and future secured claims. The affirmation of Gol LuxCo's USD300 million senior unsecured term loan at Baa3 reflects Delta guaranty for this term loan. Moody's views this guarantee as an effective guaranty of payment of lenders in the entirety of its original promise when due, and not just a guarantee of collection after an event of default. As such, the rating on the term loan is at the same level as Delta's senior unsecured rating of Baa3 and the outlook is stable. The stable outlook on Gol and Gol Finance reflects Moody's belief that the company will be able sustain the improvements in operating margins and cash flow generation liquidity and leverage that were more evident in the last four quarters. The company significantly reduced capacity in the last couple of years ahead of its domestic market peers in pursuit of higher yields and streamlined its costs to help mitigate earnings pressure from softer economy and weaker demand. These actions and the incremental passenger growth stemming from an slowly improving local economy have led to meaningful improvement of credit metrics. Positive ratings pressure requires leverage approaching 4.0x, internal cash generation measured by RCF/Debt to above 12.5% along with an interest coverage measured by (FFO+Interest)/Interest above 4.0x, while improving its unrestricted cash position to further mitigate the effects of a prolonged local currency devaluation. Downward pressure on Gol's ratings or the outlook will occur if credit metrics were to deteriorate over without expectation of recovery. Quantitatively, negative ratings pressure increases if adjusted gross Debt to EBITDA increases above 6.0x or Ebit margin erodes to below 8% for a prolonged period, or should the company' financial flexibility deteriorate could also lead to a negative rating action for Gol. An upgrade or downgrade in the term-loan rating depends on changes in Delta's creditworthiness. The methodologies used in these ratings were Global Passenger Airlines published in May 2012, and Rating Transactions Based on the Credit Substitution Approach: Letter of Credit-backed, Insured and Guaranteed Debts published in May 2017. Based in Sao Paulo and founded in 2001, Gol is the largest low- cost carrier in Latin America, offering almost 700 daily passenger flights to connect Brazil's major cities and various destinations in South America and the Caribbean, along with cargo and charter flight services. Additionally, Gol has a 53% stake in Smiles, a loyalty program company with almost 13 million participants that allows members to accumulate miles and redeem tickets in more than 800 destinations around the world and also offer non-ticket reward products and services. In the last twelve months ended September 2017, Gol reported consolidated net revenues of BRL10.3 billion (~USD3.2 billion) and lease adjusted EBITDA of BRL2.4 billion. Gol LuxCo and Gol Finance are wholly-owned subsidiaries of Gol Linhas Aereas Inteligentes S.A. ("Gol," B2 stable). MARFRIG GLOBAL: Moody's Revises Outlook to Stable & Affirms B2 CFR ------------------------------------------------------------------ Moody's Investors Service affirmed Marfrig Global Foods S.A.'s B2 ratings, including its corporate family ratings (CFR) and the senior unsecured ratings of Marfrig Holdings (Europe) B.V. At the same time Moody's changed the company's outlook to stable from positive. The following ratings have been affirmed: Issuer: Marfrig Global Foods S.A. - Corporate Family Rating: B2 (global scale); Issuer: Marfrig Holdings (Europe) B.V. and guaranteed by Marfrig: - USD215 million 8.375% senior unsecured guaranteed notes due 2018: B2 (foreign currency); - USD660 million 6.875% senior unsecured guaranteed notes due 2019: B2 (foreign currency); - USD27 million 11.250% senior unsecured guaranteed notes due 2021: B2 (foreign currency); - USD1000 million 8.000% senior unsecured guaranteed notes due 2023: B2 (foreign currency); The outlook of all ratings is Stable RATINGS RATIONALE The change in outlook to stable from positive reflects Marfrig's high leverage and Moody's perception that the deleveraging process will take longer than initially anticipated. The deterioration in credit metrics during 2017 resulted mostly from a decline in cash generation due to (i) lower volumes in the 1H17, including disruptions influenced by the Weak Flesh trigged in the second week of March, despite Marfrig not being involved, the investigation adversely affected animal protein companies in Brazil due to temporary bans and negative impact in consumer confidence and (ii) a less favorable exchange rate for the translation of its exports. Moreover, the higher working capital needs following its decision to ramp-up capacity to 300,000 heads per month with the activation of 5 additional plants for slaughtering implied additional pressure to cash flow generation during the year. Although Moody's anticipate a recovery in operations during 2018, mainly as a consequence of the increase in volumes and higher meat prices, Moody's don't expect Marfrig's metrics to recover as fast. Accordingly, Moody's estimate Debt/EBITDA will remain above 6x over the following 12 months. Moody's had changed the company's outlook to positive on January 2017, following the conversion of BRL2.1 in convertible debentures into equity. Back then, Moody's expected that with debt reduction and a stronger EBITDA adjusted gross leverage would approach 5.0x by end of 2017. Marfrig's B2 ratings are supported by its diversified portfolio of animal proteins, as well as a diverse geographic footprint and distribution capabilities. The company's diversity in terms of raw material sourcing reduces risks related to weather and animal diseases, while its product portfolio and food service business help to mitigate some of the volatility inherent in commodity cycles and supply-demand conditions for each specific protein. In addition, the company has maintained a clear focus on organic growth, presents a good liquidity profile, and has been working to deleverage via higher EBITDA generation and disposal of assets. It the last 4 years Marfrig has (i) maintained a consistent strategy of organic growth, (ii) shown a remarkable improvement in liquidity profile, (iii) increased participation of the more stable US poultry business in sales, and redemption of debentures held mainly by BNDESPAR, which implies BRL300 million less in interest to be serviced in 2018 as compared to 2017. On the other hand, the ratings are constrained by a high gross leverage, low interest coverage and a considerable exposure to the commodity related business which is highly volatile. Going into 2018 a positive cattle cycle will provide enough animals for slaughter to mitigate cost pressures from higher slaughtering demand. Exports and domestic meat sales present a positive trend in terms of volumes and pricing, and FX should be more stable, allowing the company to ramp-up EBITDA generation. Marfrig's adjusted leverage, measured by gross debt to EBITDA remains high, at 7.5x. Going forward, Moody's estimate that gradual improvements in operating performance will translate into overall better metrics, considering (i) a continued strong EBITDA generation from Keystone Foods, both in the US and Asia operations, especially given the advance of sales in Asia and international low feed costs, and (ii) EBITDA margin recovery for the beef segment (Brazil, Uruguay and Chile operations), with increased capacity for slaughter and an improved consumer scenario in Brazil and increase in export volumes. Liability management and the conversion of BRL 2.1 billion in debentures in 2017, will yield an improvement in interest coverage by 2018. A possible IPO of Keystone Foods could lead to faster deleveraging depending on the use of proceeds by Marfrig. As of September 30, 2017, Marfrig's total cash balance of BRL 4.5 billion was sufficient to cover reported short term debt by 2.6x. Additionally, the company currently holds, through its subsidiary Keystone, approximately USD300 million (BRL 990 million) in revolving credit facilities available. The stable outlook reflects Moody's view that Marfrig will be able to gradually reduce gross leverage while sustaining a good liquidity profile. FACTORS THAT COULD LEAD TO AN UPGRADE The ratings could be upgraded if Marfrig maintains a consistent and predictable execution of its financial policy with the ability to improve operating margins from current levels, maintain a good liquidity profile and reduce its indebtedness. In addition, it would require CFO/Net Debt approaching 15% and a Total Debt/EBITDA below 4.5x. FACTORS THAT COULD LEAD TO A DOWNGRADE Marfrig's ratings could be downgraded in case of a deterioration in its liquidity position or if a consistent and predictable financial policy execution is not observed going forward. Quantitatively, downward pressure on Marfrig's B2 rating or outlook is likely if Total Debt/EBITDA does not approach 6.0x over the next 12 to 18 months, EBITA to gross interest expense falls below 1.0x or if Retained Cash Flow to Net Debt is below 10%. All credit metrics are according to Moodys standard adjustments and definitions. Marfrig, headquartered in Sao Paulo, Brazil, is one of the largest protein players globally, with consolidated revenues of BRL 18.6 billion (approximately USD5.6 billion) in the last twelve months period ended in September 30, 2017. The company has significant scale and is diversified in terms of sales, raw materials and product portfolio, with operations in Brazil, US, Uruguay, Chile and Asia-Pacific and presence in the beef, poultry and food service segments. The company has two main business segments - Keystone and Beef, each representing approximately 47% and 53%, respectively, of Marfrig's total revenues. Approximately 77% of Marfrig's sales and EBITDA are tied to foreign currencies, with food service, which produces less volatile cash flows than the in- natura exports business, representing 56% of total EBITDA. Keystone Foods, headquartered in the US, is a food service supplier with operations in the US and Asia, with Mc Donald's accounting for 55% of its revenues. Beef divison is the second largest beef producer in Brazil and one of top 5 players worldwide. The principal methodology used in these ratings was Global Protein and Agriculture Industry published in June 2017. SUZANO PAPEL: Fitch Hikes Long-Term IDR From BB+; Outlook Stable ---------------------------------------------------------------- Fitch Ratings has upgraded Suzano Papel e Celulose S.A.'s Long- Term Foreign and Local Currency Issuer Default Ratings (IDR) to 'BBB-' from 'BB+'. Fitch has also upgraded Suzano's National scale Long-Term rating to 'AAA(bra)' from 'AA+(bra)'. The Rating Outlook is Stable. The upgrade to investment grade reflects Suzano's strong FCF which supported an important leverage reduction, to 2.5x in the LTM ended September 2017. Stronger operating cash flow and lower investments contributed to the company's debt reduction efforts and gross and net debt fell by BRL2.4 billion and BRL3.8 billion, respectively, between December 2015 and September 2017. The upgrade also incorporates Fitch's expectation that net leverage would climb again if Suzano decides to proceed with investing in a new pulp mill, but should not exceed 3.5x during the construction period. Pulp prices should remain elevated up to 2020 due to strong demand from China and a dearth of new projects, which would provide a favorable backdrop for partially funding the project with internal cash flow. Suzano's ratings also incorporate the company's strong business position as a low-cost producer of market pulp and its position as the leading producer of printing and writing paper, and paperboard in Brazil. Because of its strong market business position in pulp and production costs in the lowest quartile, Suzano is able to generate strong cash flow during cyclical pricing downswings while maintaining production volumes above 90% of nominal capacity. Suzano is rated above the 'BB+' Country Ceiling for Brazil. This is in line with Fitch 'Rating Non-Financial Corporates Above the Country Ceiling Rating Criteria' and takes into account the company's strong hard-currency external debt service ratio, which is supported by significant operating cash flows from exports and hard currency cash and marketable securities. KEY RATING DRIVERS Leverage to Remain Low: Fitch projects net leverage will fall below 2x during 2018. Better pulp prices should contribute to a continued deleveraging. The company's net debt/EBITDA ratio was reduced to 2.5x at Sept. 30, 2017, as per Fitch's calculations, from 3.1x in 2016 and an average of 5.1x between 2012 and 2014. In Fitch's opinion, Suzano's financial strategy approved by the board in May 2017 demonstrates the company's commitment to preserve low leverage and continue to manage its capital structure conservatively. The rating upgrade considers the possibility of a potential new investment cycle in a pulp mill and incorporates the expectation that net leverage will remain below 3.5x even with higher investments. Strong Cash Flow Generation: Fitch projects that Suzano will generate about BRL5.8 billion of adjusted EBITDA in 2018 and BRL6 billion in 2019. Fitch's base case scenario incorporates better pulp prices, total investments around BRL3.6 billion during 2018 and 2019, a downward cost trend, and some efficiency gains from adjacent business projects. Suzano generated BRL4 billion of adjusted EBITDA and BRL3.3 billion of cash flow from operations (CFFO) in the LTM ended Sept. 30, 2017. This compares with BRL3.7 billion of adjusted EBITDA and BRL3.1 billion of CFFO during 2016, and BRL4.5 billion and BRL2.6 billion, respectively, in 2015. FCF was BRL461 million in the LTM, after dividends of BRL371 million and investments of BRL2.4 billion, including BRL789 million from acquisition of land and forest. Solid Business Position: Suzano is the leading producer of printing and writing paper in Brazil, as well as paperboard, with 1.3 million tons of annual production capacity. Suzano supplies about 58% of printing and writing paper demand and about 37% of paperboard in Brazil. The company's strong market shares in uncoated printing and writing paper and paperboard allow it to be a price leader in Brazil. With 3.6 million tons of market pulp capacity, Suzano is the fourth largest producer of market pulp in the world, behind Fibria, Arauco and CMPC. Suzano's competitive advantage is viewed as sustainable due to its modern pulp mills, high-yielding forestry plantations, low average distance from the forests to the mill and its efficient logistics. During the LTM, the company's cash cost of production was USD184 per ton, which placed it firmly in the lowest quartile of the cost curve. In comparison, producers in the third quartile have production costs in the range of USD350-USD450 per ton, while those in the fourth quartile can be more than USD500. Forestry Assets Key to Credit Profile: A key credit consideration that supports Suzano's investment-grade credit profile is its significant forestry holdings, which ensure a competitive production cost structure. As of Sept. 30, 2017, the accounting value of the biological assets on its forest plantations was BRL4.3 billion. The company owns about 1.2 million hectares of forest assets in Brazil, on which it has developed 579,000 hectares of eucalyptus plantations. The nearly ideal conditions for growing trees in Brazil make these plantations extremely efficient by global standards and give the company a sustainable advantage in terms of the costs of fiber and transportation between forest and mill. Cyclicality of Pulp Prices: The market pulp industry is very cyclical; prices move sharply in response to changes in demand or supply. Suzano's sales volumes are less volatile than prices, as sales are carried out under long-term supply agreements. Market fundaments for pulp producers have turned favorable, as strong demand from China has helped the market absorb new capacity from Asia Pulp and Paper and Fibria seamlessly. Prices from 2018 through 2020 should be healthy do to the lack of new projects, which should help issuers build cash positions for new projects or reduce debt accumulated during recent pulp mill projects. China will continue to play a key role in supporting prices, and demand should be driven by a growing economy and the closing of pulp mills that relied upon non-wood fibers. DERIVATION SUMMARY Suzano is the leading producer of printing and writing paper in Brazil, as well as paperboard, and is the fourth-largest global producer of market pulp, after Fibria Celulose S.A. (BBB-/Stable), Celulosa Arauco y Constitucion S.A. (BBB/Negative) and Empresas CMPC S.A. (BBB/Stable). The company's business is exposed to the cyclicality of pulp prices. As at other Latin American pulp producers, Suzano's cash production costs are among the lowest in the world for hardwood pulp, ensuring its long-term competitiveness. Suzano and Fibria are rated lower than Chilean peers due to less diversified regional and business profile. Suzano and Fibria have industrial facilities only in Brazil, while Arauco and CMPC are more diversified with operations in the wood products segments and tissue, respectively. Suzano's ratings incorporate the important leverage reduction since 2015, which positions the company with the lower leverage among the Latin America pulp players. Liquidity is historically strong for pulp producers. Suzano's operating margins are similar to Fibria's and higher than the Chilean companies that operate in lower-margin business segments such as tissue, packaging and boards. Suzano is rated one notch above Brazil's Country Ceiling of 'BB+'. Suzano's Foreign Currency IDR is not constrained by Brazil's Country Ceiling, as the company exports about 70% of its sales and holds hard currency cash and marketable securities, which easily covers hard currency interest expense by more than 1.0x. The strong ratio supports notching up to 3 notches above Brazil's Country Ceiling and its weakening could result in a revision in Fitch approach. Suzano's Foreign Currency IDR is constrained by the company's Local Currency IDR, which is a reflection of the company's underlying credit quality. KEY ASSUMPTIONS Fitch's key assumptions within the rating case for Suzano include: -- Pulp sales volume of 3.7 million tons in 2018 and 2019; -- Paper sales volume of 1.2 million tons in 2018 and 2019; -- Average hardwood net pulp price between USD675 and USD700 per ton; -- FX rate of 3.3 BRL/USD. RATING SENSITIVITIES Future Developments That May, Individually or Collectively, Lead to Positive Rating Action - Positive rating actions are not expected. Future Developments That May, Individually or Collectively, Lead to Negative Rating Action - An expectation that net leverage will remain above 3.0x during 2018, not considering relevant investments; - If Suzano decides to invest in a new pulp project, net leverage should remain below 3.5x to prevent a negative rating action, with an expectation of quick deleveraging after the startup of the project; - Sharp deterioration of market conditions with significant reduction in pulp prices; - A debt-financed acquisition. LIQUIDITY Strong Liquidity: Suzano has historically maintained a strong cash position. As of Sept. 30, 2017, the company had BRL3.8 billion of cash and marketable securities and total debt was BRL13.8 billion. Liquidity covered short-term debt obligations by a multiple of 2x. Suzano has manageable debt maturities of BRL2.5 billion up to the end of 2018 and BRL2.1 billion in 2019. In September 2017, Suzano completed the reopening of its 2026 and 2047 senior unsecured notes, in the total amount of USD400 million, and will use proceeds to extend its debt maturity profile. Suzano does not have a standby facility. The company enjoys strong access to both the debt and equity markets. FULL LIST OF RATING ACTIONS Fitch has upgraded the following ratings: Suzano Papel e Celulose S.A. --Long-Term Foreign Currency IDR to 'BBB-', from 'BB+'; --Long-Term Local Currency IDR to 'BBB-', from 'BB+'; --Long-term National scale rating to 'AAA(bra)', from 'AA+(bra)'. The Outlook is Stable. Suzano Trading Ltd. --USD650 million senior notes due Jan. 23, 2021 to 'BBB-' from 'BB+' (guaranteed by Suzano Papel e Celulose S.A.). Suzano Austria GmbH USD700 million senior notes due in 2026 to 'BBB-' from 'BB+' (guaranteed by Suzano Papel e Celulose S.A.). USD500 million senior notes due in 2047 to 'BBB-' from 'BB+' (guaranteed by Suzano Papel e Celulose S.A.). =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: 'Secretive' Electric Pact Splits Big Business ----------------------------------------------------------------- Dominican Today reports that National Business Council (CONEP) Vice President Circe Almanzar said she's surprised by the Industries Association's (AEIH) refusal to sign the Electricity Pact. She said the industrialists "never took proposals and that what's reflected in the final document is the position of business," according to Dominican Today. "We, of the Pact's Coordination Committee, established an internal work mechanism, where all positions of the entire business sector that we externalized in the talks, any debate or any divergence was analyzed internally within the CONEP, or there are no industrial positions, separated from the financial sector or the generating sector because we discuss everything internally," she said, the report notes. The business leader said that in the discussions of the Pact, all actors present had the right to object to any point and the issues approved were based on practically unanimity, because any actor that objected to a proposal, it was rejected as a consensus, the report relays. The report discloses that Mr. Almanzar said there's no reason for an actor, who did not want to participate and did not submit any concrete proposal, come to object or to say that he doesn't agree when they had all the possibility. "It strikes us, it surprises us, that decisions are questioned when there was no alternative proposal, there is no better decision to be made, than the one you have and if you never took any internal proposal, you have no moral or justification to object," Mr. Almanzar said, in response to AEIH president Antonio Tavera's critique of the Pact he affirms was reached in a "secretive" manner, the report notes. As reported in the Troubled Company Reporter-Latin America on Nov. 20, 2017, Fitch Ratings has affirmed Dominican Republic's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'BB-' with a Stable Outlook. DOMINICAN REPUBLIC: Law Lets Gov't. Sell up to US$1.5BB in Assets ---------------------------------------------------------------- Dominican Today reports that with the recently approved Financing Law 2018, Congress authorized the Executive Branch to sell the capital shares or stake in State-owned companies or projects up to an amount not higher than 5% of the public debt of the Non- Financial Public Sector (SPNF). That means that the operation or the transactions, because there could be several should not exceed US$1.5 billion, according to Dominican Today. That sets as reference the value of the SPNF debt of US$29.1 billion as of last October, the report notes. When Budget (Digepres) director Luis Reyes, went to the Chamber of Deputies Finance Commission on Nov. 30, he said there was no ulterior motive in that proposal: it's about partially dispensing of shares in the Punta Catalina power plant when its construction ends, the report relays. "Once operational, it's desirable for the Government to be able to do that operation and restore the investment that has been made in it," Mr. Reyes said. However, the law that allows the Executive to issue public debt in 2018 doesn't expressly state that what is to be sold is Punta Catalina, and leaves the door open to operations involving any state enterprise, including initiatives in the project phase, the report relays. "The Executive Power is authorized to carry out operations for the sale of shares and / or capital shares of companies owned by the Dominican State or projects, for up to the maximum amount of 5% of the debt of the non-financial public sector, for the purpose of limiting any new increase in public debt, promote operational sufficiency and increase sectoral productivity," says article 10 of the law, the report notes. While acknowledging that the legal text does not specify the operations that may involve, the economist Jose Rijo highlights that the only project available to the government for an amount of such magnitude is Punta Catalina, the report says. He said a sale of the Energy Distribution Companies (EDE) or of the State's stake in EGE Haina would have been embodied in the Electricity Pact, and they are not in the final document, the report relays. On the other hand, the management of the Punta Catalina power plant is not tied to the pact because it was not included, the report notes. Another large company that is partially in the hands of the State is the refinery Refidomsa, but government sources quoted by diariolibre.com have indicated that currently there is no interest to sell off the 51% stake it owns. The rest of the package is in the hands of the Venezuelan government, through PDVSA, the report says. Approved Before president Danilo Medina signed it into law, legislators Faride Raful and Francisco Paulino issued a dissenting report precisely because of Article 10's ambiguity, the report discloses. "The National Congress cannot continue granting general powers and authorizations to the Executive to act as it does," the report said, Dominican Today adds. As reported in the Troubled Company Reporter-Latin America on Nov. 20, 2017, Fitch Ratings has affirmed Dominican Republic's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'BB-' with a Stable Outlook. =========== M E X I C O =========== MINERA MEDIA: Signs Waiver on Liquidity Covenant With Lenders -------------------------------------------------------------- Torex Gold Resources Inc. disclosed that its wholly owned subsidiary, Minera Media Luna, S.A. de C.V. (MML), has received a waiver signed by BNP Paribas, as Administrative Agent, on behalf of the Lenders to lower the liquidity covenant threshold in the credit agreement of July 21, 2017, from $50 million to $30 million until January 31, 2018, with the proviso that the remaining $25 million available under the credit agreement, and not yet drawn, is counted toward meeting the liquidity covenant threshold but it may not be drawn by MML. In addition, the Company provided an update on the current situation at the ELG site. Fred Stanford, President & CEO of Torex stated: "A frequently asked question we have received is whether we would breach the liquidity covenants of our Credit Facility. This no cost waiver to temporarily reduce the liquidity covenant is helpful in that it extends the time before liquidity becomes a covenant breach risk. The high quality of support that the Lenders have provided is appreciated and has been consistent throughout their relationship with Torex." He added, "This month we also received VAT returns of US$13 million, which has helped to reduce liquidity risks." Meantime, the illegal blockade by Los Mineros Union started on November 3, 2017, continues. On December 19, 2017, a group of workers, community members, and government representatives attempted to cross the blockade to enter the ELG mine site. Los Mineros prevented them from entering and were belligerent throughout the encounter. The majority of the blockaders did not appear to be employees or local community members. Government officials now have a direct experience of the Los Mineros projection of violence and intimidation that employees and community members have been subjected to. Community members have now responded by blockading the blockaders. The risk of violent confrontation continues to escalate and we urge the authorities to restore law and order and diffuse the tensions, so that employees of the Company, contractors, and suppliers, can go back to work and provide for their families. State government officials have proposed a negotiation between the Company and employees that are aligned with Los Mineros. Previous discussions with the leader of Los Mineros, and the head of their affiliated union, UNIFOR, were unproductive because their suggested solutions were illegal. The Company is prepared to fully engage in the State facilitated negotiation, and will consider all legal suggestions that could lead to a lifting of the blockade and a sustainable business moving forward. Unfortunately, the Company is not optimistic legal solutions will be offered, but believes it is worth engaging and trying to find a productive path forward. Torex is an emerging intermediate gold producer based in Canada, engaged in the exploration, development and operation of its 100% owned Morelos Gold Property, an area of 29,000 hectares in the highly prospective Guerrero Gold Belt located 180 kilometers southwest of Mexico City. Within this property, Torex has the El Lim¢n Guajes Mine, which announced commercial production in March of 2016, the Sub-Sill Project, currently under development, and the Media Luna Project, an early stage development project for which the Company issued a preliminary economic assessment (PEA) in 2015. The property remains 75% unexplored. ====================== P U E R T O R I C O ====================== CHASE MONARCH: Hires Hector J. Figueroa as Bankruptcy Counsel ------------------------------------------------------------- Chase Monarch International, Inc., seeks authority from the U.S. Bankruptcy Court for the District of Puerto Rico to employ Hector J. Figueroa Vincenty, Esquire, as attorney to the Debtor. Chase Monarch requires Hector J. Figueroa to: a. advise the Debtor with respect to its duties, powers and responsibilities in the bankruptcy case, under the laws of U.S. and Puerto Rico in which the Debtor in possession conducts the operations, does business or is involved in litigation; b. advise the Debtor in connection with the determination of whether reorganization is feasible and, help the Debtor in the orderly liquidation of its assets; c. assist the Debtor in the following negotiations with creditors: (1) arrange the orderly liquidation of assets; and (2) propose a viable Plan of Reorganization; d. prepare on behalf of the Debtor the necessary complaints, answers, orders, reports, memoranda of law and any other papers or documents, including a Disclosure Statement and a Plan of Reorganization; e. perform the required legal services needed by the Debtor to proceed or in connection with the operation of and involvement of its business; and f. perform the professional services as necessary for the benefit of the Debtor and of the estate. Hector J. Figueroa will be paid at the hourly rates of $200. The firm will be paid a retainer in the amount of $5,000. It will also be reimbursed for reasonable out-of-pocket expenses incurred. Hector J. Figueroa, Esq., assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtor and its estates. Hector J. Figueroa can be reached at: Hector J. Figueroa Vincenty, Esq. 310 San Francisco Street, Suite 32 San Juan, PR 00901 Tel: (787) 378-1154 E-mail: quiebras@elbufetedelpueblo.com About Chase Monarch International, Inc. Chase Monarch International, Inc., filed a Chapter 11 bankruptcy petition (Bankr. D.P.R. Case No. 16-06841) on November 14, 2017, disclosing under $1 million in both assets and liabilities. The Debtor is represented by Hector Juan Figueroa Vincenty, Esq. GOTITAPAK INC: Taps Carlos Pena Garcia as Accountant ---------------------------------------------------- Gotitapak, Inc. seeks approval from the U.S. Bankruptcy Court for the District of Puerto Rico to hire Carlos Pena Garcia as its accountant. Mr. Garcia will assist the Debtor in the preparation of its monthly operating reports, tax returns, reports and analysis needed in the preparation of a Chapter 11 plan of reorganization. Mr. Garcia will charge an hourly fee of $70 and will be paid a retainer in the sum of $3,500. In a court filing, Mr. Garcia disclosed that he is a "disinterested person" as defined in section 101(14) of the Bankruptcy Code. Mr. Garcia maintains an office at: Carlos X. Pena Garcia P.O. Box 9076 Caguas, PR 00726 Tel: 787-453-7632 Email: cpena@cpapena.com About Gotitapak Inc. Gotitapak, Inc., a privately held company based in Caguas, Puerto Rico, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. P.R. Case No. 17-06821) on November 12, 2017. Marie C. Ramirez Alvarez signed the petition. At the time of the filing, the Debtor disclosed that it had estimated assets and liabilities of less than $100,000. Judge Enrique S. Lamoutte Inclan presides over the case. ================================ T R I N I D A D & T O B A G O ================================ SAGICOR FINANCIAL: Slams IMF Report ----------------------------------- Trinidad Express reports that regional insurance giant Sagicor Financial Corporation (SFC) rejected as "grossly inaccurate and indeed recklessly careless" comments attributed to a draft International Monetary Fund (IMF) report, which suggested the insurance company was being inadequately regulated and made comparisons between Sagicor and CLICO, the T&T-headquartered company that collapsed in January 2009. Online newspaper, Barbados Today, published an article, based on a draft IMF report, which stated that as a result of its size and regional penetration, Sagicor poses "systemic risks" for Barbados and the Caribbean, according to Trinidad Express. * TRINIDAD & TOBAGO: Finding a Job, Hard These Days in the Country ------------------------------------------------------------------ Trinidad Express reports that for some people, keeping the job they already have is proving to be just as difficult given the present economic climate. San Fernando Business Association president Daphne Bartlett believes she has found a way to get people more marketable, and avoid the risk of losing their job, according to Trinidad Express. She summed up her plan in one simple word -- diversification, the report notes. "I know it is an over-used word, but we have to look into the areas of manufacturing and export," Mr. Bartlett said. ================= V E N E Z U E L A ================= PROVINCIAL DE REASEGUROS: Fitch Withdraws C IFS Rating ------------------------------------------------------ Fitch Ratings has withdrawn Provincial de Reaseguros, C.A.'s (Pro Re) Insurer Financial Strength (IFS) rating of 'C' for commercial reasons. RATING SENSITIVITIES Rating sensitivities are no longer relevant given withdrawal. ================= X X X X X X X X X ================= * Record US$306BB Insurance Losses in 2017 After Disasters ---------------------------------------------------------- RJR News reports that estimates from insurance firm Swiss Re said disasters in 2017 caused losses of US$306 billion. The figure represents a 63 per cent jump from last year, and is well above the average of the last decade, according to RJR News. Local insurers in Jamaica said rates in this country will also be increased as a result, the report relays. The report discloses that the Americas was hardest hit, with hurricanes in the Caribbean and southern US, earthquakes in Mexico and wildfires in California. Despite the rise in the financial cost of disasters, there was no significant increase in the loss of lives, the report notes. Swiss Re said more than 11,000 people died or went missing in disaster events in 2017, which is similar to 2016's figure, the report adds. *********** Monday's edition of the TCR-LA delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR-LA editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR-LA constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR-LA editor holds some position in the issuers' public debt and equity securities about which we report. Tuesday's edition of the TCR-LA features a list of companies with insolvent balance sheets obtained by our editors based on the latest balance sheets publicly available a day prior to publication. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. 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. . * * * End of Transmission * * *