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/raid1/www/Hosts/bankrupt/TCRLA_Public/181121.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Wednesday, November 21, 2018, Vol. 19, No. 231 Headlines B R A Z I L BANCO BS2: Fitch Affirms B+ LT LC & FC IDRs, Outlook Stable BANCO BMG: Fitch Affirms B+ LT IDRs; Alters Outlook to Stable BANCO PINE: Fitch Affirms B+ LT IDRs, Outlook Negative JBS SA: Owner Joesley Batista Arrested Again in Corruption Probe NORSKE SKOGINDUSTRIER: Chapter 15 Case Summary D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: Most Fuels Post Considerable Declines P E R U ANDINO INVESTMENT: Fitch Withdraws CCC IDR due to Lack of Data CAMPOSOL HOLDING: Fitch Ups LT IDRs to B+; Outlook Now Stable PERU: Lawmakers Slam Ex-President's Request for Asylum in Uruguay P U E R T O R I C O BAILEY'S EXPRESS: Plan Admin's $395K Middletown Property Sale OK'd GOV'T DEV'T BANK: Moody's Alters Outlook on C Sr. Notes to Stable PUERTO RICO: Labor Unions File Pension Lawsuit Against Country T R I N I D A D & T O B A G O PETROLEUM CO: No S$ For Some Temporary Workers - - - - - =========== B R A Z I L =========== BANCO BS2: Fitch Affirms B+ LT LC & FC IDRs, Outlook Stable ----------------------------------------------------------- Fitch Ratings has affirmed Banco BS2 S.A.'s (BS2) Long-Term (LT), Foreign- and Local-Currency Issuer Default Ratings (IDRs) at 'B+'. The Rating Outlook on the LT IDRs is Stable. BS2's IDRs are driven by its Viability Rating (VR) of 'b+', which has also been affirmed. Fitch also affirmed the bank's Long-Term National Rating at 'BBB(bra)' and revised its Outlook to Positive from Stable. KEY RATING DRIVERS - VR, IDRs, AND NATIONAL RATINGS The revision of BS2's LT National Rating Outlook to Positive from Stable reflects Fitch's expectations that the entity will be able to maintain its recurrent profitability and improve its asset quality following the change in its business model to one focused on digital banking , FX operations and SME lending from one concentrated in payroll deductible lending. The shift has been taking place since 2015 and has already been providing a relatively more diversified income base. The Positive Outlook also considers that capitalization will strengthen from a capital injection and internal capital generation. The entity has been able to progressively reposition its franchise, although it is still relatively small. BS2's VR, IDRs and National Ratings reflect the bank's developing franchise and niche business model as well as comfortable liquidity and asset quality. The ratings take into account the challenges inherent to the development and consolidation of its new business lines, as well as regulatory capital ratios slightly below those of its peers, which exposes its capital position to possible changes in asset quality. In the last two years, BS2 has invested in the development of its own digital platform. The strategy is to become a service-oriented digital business hub, providing third-party products to its customer base through partnerships. At the same time, the bank has continued to expand in other areas. Among them, the purchase of "precatorios" (judicial securities issued by Brazil's states), SME lending, foreign exchange and its acquiring operation. Fitch believes that the positive effects of the bank's new strategy will be observed in the medium term, as the newer business lines gain scale and representativeness in results, especially the digital banking arm, which has required large technology investments. Fitch acknowledges the good performance of BS2's core business areas, which, although recent, present good profitability and evolution. The agency also considers the bank's focus on revenue diversification through fee products, which has brought high revenues while requiring little capital, allowing for expansion of credit activities, to be positive. However, although the new areas have a positive impact, Fitch highlights the positive effect that the joint venture (JV) with Banco Ole Consignado had on profitability, accounting for 36% of the operating profit in 2017. The JV was created in 2014, through an operating agreement between BS2 and Banco Santander (Brazil) S.A. In 2015, BS2 transferred all its payroll operations to the new company, of which the bank had a share of 40% until 2017. The control was transferred to the group holding company at the end of that year. The operating profit/risk-weighted assets ratio stood at 2.6% as of 1H18, mainly reflecting the strong growth in service revenues and the low credit costs as a consequence of improved non- performing loan ratios. Meanwhile, BS2 has been leveraging its "precatorio" platform while it continues to explore new credit opportunities with its SME clients. These platforms have grown 17.3% and 33.4%, respectively, on the 12-month period ended June 2018. Asset quality has improved. Loans classified as 'D-H' ratings declined from 4.6% in June 2017 to a level close to 3% in the same month of 2018, while NPLs (Non-Performing Loans) represented a low percentage of 0.3% of the total portfolio (2.8% in 2017), which is better than the average of its peers. Fitch notes that the maintenance of rapid loan growth may post some risks. Despite having reduced compared with previous periods, the ten largest loan exposures still represented 2.2x the Core Equity Tier 1 (CET1) in June 2018, down from 3.2x in June 2017. BS2's capitalization indicators have remained adequate, even considering the strong growth of loan operations in recent years. In June 2018, the Tier 1 capital ratio rose to 11.8% from 9.1% 12 months earlier, while total regulatory capital reached 15.7% from 14.1%. Throughout 2018, shareholders injected, through the holding, BRL60 million to support the pace of growth of the bank's operations. Although the capital injections increased BS2's capital position, its capitalization levels are still below the average of other midsize banks. The bank's funding profile was focused on its institutional investors and brokerage agreements, which, in turn, distribute BS2's papers to its retail customers through its own platforms. Despite the greater diversification of investors, with granularity on the final end of the brokerage companies, BS2 still has concentrations in terms of investors. Its liquidity remained strong and well above its short-term needs -- cash totaled BRL716 million, covering 86% of its funding with maturities of less than one year in June 2018. SUPPORT RATING AND SUPPORT RATING FLOOR BS2's Support Rating of '5' and its Support Rating Floor of 'No Floor' were affirmed, reflecting the bank's low systemic importance. In Fitch's view, the bank is not likely to benefit from external support. RATING SENSITIVITIES NATIONAL RATINGS The continuing development and consolidation of the bank's new business fronts, in addition to maintaining the already good indicators of profitability and asset quality, may result in a positive rating action. On the other hand, Fitch may revise the Outlook on the National Rating to Stable if the bank's strategic objectives do not materialize as expected. Capital pressures could also drive a downgrade. Additionally, National Ratings could also be affected by changes in local relativities. IDRs AND VR Although unlikely in the short term, BS2's VR and IDRs could benefit from a sustained improvement in the operating profitability, from the diversification of its funding base and from the sustained improvement of its capitalization. An upgrade will also depend on the maturation of its business model and a very relevant improvement on its franchise, together with the ability to control the risk appetite and to post adequate asset- quality ratios and keep credit costs under control. SUPPORT RATING AND SUPPORT RATING FLOOR A potential upgrade of BS2's Support Rating and Support Rating Floor is unlikely in the foreseeable future, since this would only arise from a material gain in the bank's systemic importance. Fitch has affirmed the following ratings: -- Long-Term, Foreign- and Local-Currency IDRs at 'B+'; Outlook Stable; -- Short-Term, Foreign- and Local-Currency IDRs at 'B'; -- National Long-Term Rating at 'BBB(bra)'; Outlook revised to Positive from Stable; -- National Short-Term Rating at 'F3(bra)'; -- Viability Rating at 'b+'; -- Support Rating at '5'; -- Support Rating Floor at 'NF' (No Floor). BANCO BMG: Fitch Affirms B+ LT IDRs; Alters Outlook to Stable ------------------------------------------------------------- Fitch Ratings has affirmed Banco BMG S.A.'s Viability Rating at 'b+' and its Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) at 'B+'. At the same time, Fitch affirmed BMG's Long-Term National Rating at 'A-(bra)'. The Rating Outlook for the long-term ratings has been revised to Stable from Negative. KEY RATING DRIVERS IDRs, VR, NATIONAL RATINGS AND SENIOR DEBT The affirmation of BMG's ratings and the Rating Outlook revision to Stable from Negative reflect improvements in the bank's profitability, which presented a positive trend in 2017 posting positive results during the first nine months of 2018. The operating profit-to-risk-weighted assets ratio improved to 2.94% as of September 2018. Rating action also considers as high importance factor recent improvements in the bank's company profile driven by its sustained ability to continue to grow its franchise in the payroll-backed credit card segment, which now accounts for over 74% of the total portfolio with relatively lower credit risk as compared to the previous business model, and progressive diversification of revenues and business mix. Fitch also acknowledges the recent improvement in BMG's capitalization ratios. The Fitch Core Capital ratio (FCC) increased to 15.6% as of 3Q18 from 14.7% at year-end 2017. The regulatory indicator remained around 13% in 2018. The bank made the first filing in CVM for the IPO process, which should improve its capitalization indicators in the future. While BMG's asset quality indicators improved during 2018, the bank still shows elevated impaired loans, especially when compared to peers in the same rating category and considering the main product offered by the bank. As of Sept. 30, 2018, the over 90-day NPL ratio was at 6.7%, while the BACEN D-H loans represented 7.5% of the total loans. BMG has been operating with a more comfortable liquidity position, which was partially enhanced by the sale of its vehicle-finance business and the downsizing of its commercial credit portfolio. Using its excess liquidity, the bank continues to reduce the amount of its more expensive liabilities and to diversify its funding sources. The volume of deposits captured mainly by distributors/brokers is increasing, and the bank also intends to evolve in its own funding platform. Fitch also believes the bank has an adequate ALM. SUPPORT RATING AND SUPPORT RATING FLOOR BMG's Support Rating and Support Rating Floor are based on Fitch's belief that the bank is not considered a significant financial institution locally because of the size of its market share in deposits and credits. Thus, it is unlikely to receive external support from the Brazilian sovereign. SUBORDINATED DEBT BMG's subordinated debt is rated two notches below its VR to reflect its subordinated status. Recovery Rating was unchanged at 'RR6' for subordinated notes, according to the agency's rating criteria. RATING SENSITIVITIES IDRs, VR, NATIONAL RATINGS AND SENIOR DEBT Positive rating actions are not foreseen in the short term and could only occur from a consolidation of its business model, while BMG continues to present relevant and sustained improvements in its operating profitability. Also, BMG needs to reduce its impaired loan ratio (D-H) to below 5% of total loans, without deteriorating charge-offs and foreclosed assets, and to keep its FCC ratio above 15%. BMG's ratings could be downgraded from a sustained deterioration in its asset quality (non-performing loans over 90 days remaining above 8%) and weak performance (negative trend on operating profit-to-risk-weighted assets), and/or a deterioration in capitalization (FCC falling below 12%). SUBORDINATED DEBT Subordinated TIER II debt ratings would generally move together with the bank's IDR. However, Fitch's criteria factor in the compression issue where the VR is 'bb+' or lower provides some room for a narrower notching. Thus, the overall notching for BMG's subordinate notes is two degrees below the anchor rating, given that BMG's VR ('B+') is non-investment grade. SUPPORT RATING AND SUPPORT RATING FLOOR A potential upgrade of BMG's Support Rating and Support Rating Floor is unlikely in the foreseeable future, since this would arise only from a material gain in systemic importance. Fitch has affirmed the following ratings: Banco BMG S.A. -- Long-Term Foreign- and Local-Currency IDRs at 'B+'; Outlook revised to Stable from Negative; -- Short-Term Foreign- and Local-Currency IDRs at 'B'; -- Viability Rating at 'b+'; -- Support Rating at '5'; -- Support Rating Floor at 'No Floor'; -- National Long-Term Rating at 'A-(bra)'; Outlook revised to Stable from Negative; -- National Short-Term Rating at 'F2(bra)'; -- Subordinated notes due 2019 and 2020 Long-Term Foreign- Currency Rating at 'B-'/'RR6'. BANCO PINE: Fitch Affirms B+ LT IDRs, Outlook Negative ------------------------------------------------------ Fitch Ratings has affirmed Banco Pine S.A.'s (Pine) Viability Rating (VR) at 'b+' and its Long-Term, Foreign- and Local-Currency Issuer Default Ratings (IDRs) at 'B+'. At the same time, Fitch affirmed Pine's Long-Term National Rating at 'BBB+(bra)'. The Long-Term (LT) Rating Outlooks are Negative. KEY RATING DRIVERS IDRS, VR AND NATIONAL RATINGS The Negative Outlook on the LT IDR and the National Ratings reflects the challenges the bank is facing to strengthen its weak asset quality and operating profitability to be able to grow its internal capital generation and support future growth. The affirmation of Pine's VR, IDRs and National ratings mainly reflects Fitch's assessment of the bank's company profile, which considers a relatively small franchise with concentrated business model focused in the small corporate segment which could be more vulnerable to the operating environment. The affirmation also considers recent improvements in capital metrics and precautionary measures the entity has taken in its liquidity position and funding structure. Operating profitability, which is also a main driver of these ratings, remains negative but appears to be on a positive trend, driven in part by lower credit costs. The bank continues its efforts to reduce its credit concentration risks and to further diversify its sources of revenue and funding. During 2018, Pine has been working on expanding the growth of its relatively new business model, which is based on booking lower- ticket credits that are expected to generate higher spreads and thus improve revenue generation from a wider customer base. However, continued weak operating environment and uncertainties related to the economic reforms are likely to continue to limit credit demand. Fitch notes the bank's prudential liquidity position. As of Sept. 30, 2018, the bank reported a cash and cash equivalent balance of BRL2.4 billion (approximately 25% of total assets). Management advised that they will be using a portion of this excess liquidity to retire certain short-term debt and reduce interest expenses and other related costs, as well as to reduce the bank's leverage metrics. Pine's management of its asset quality remains challenging. Pine's impaired loan ratio (credits classified as 'D'-'H') still remains high at 24% as of Sept. 30, 2018, while net charge offs and foreclosed assets had increased. Non-performing loans over 90 days reached 4.5% at Sept. 30, 2018. Ratios were affected by the operating environment, the still high concentrations and the continued shrinkage of the gross loan portfolio as it fell nearly 26% from the level seen at YE17. Tighter underwriting standards and the smaller size of the new transactions provide some comfort on new originations. Pine reversed some provisions in 2018 from its loss recovery program. As of September 2018, the bank's Fitch Core Capital Ratio did show an increase to 13.7% from the 10.8% as of June 30, 2018, but this was, in part, due to the significant reduction of risk-weighted assets. The regulatory Tier I ratio was 13% at Sept. 30, 2018. SUPPORT RATING AND SUPPORT RATING FLOOR The bank's Support Rating and Support Rating Floor reflect Fitch's belief that the bank is not considered a significant financial institution locally because of the size of its market share in deposits and credits. Thus, it is unlikely to receive external support from the Brazilian sovereign. RATING SENSITIVITIES IDRS, VR AND NATIONAL RATINGS Fitch will review the rating prior to the annual review. Pine's ratings could be downgraded in case of further deterioration in its asset quality (non-preforming over 90 days remaining above 3%) and weak performance (such as continued negative operating profit- to-risk-weighted assets), and/or a deterioration in capitalization (FCC falling below 11%).. A revision of the Outlook to Stable is contingent on significant improvements in operating profitability and the impaired loan ratio, which largely depends on a more stable operating environment. Specifically from a sustained reduction of credit impairments and its over-90 non-performing loan ratio below 3% and a sustained FCC above 12%. SUPPORT RATING AND SUPPORT RATING FLOOR A potential upgrade of Pine's Support Rating and Support Rating Floor is unlikely in the foreseeable future, since this would arise only from a material gain in systemic importance. The rating actions are as follows: -- Long-Term, Foreign- and Local-Currency IDRs affirmed at 'B+'; Outlook Negative; -- Short-Term, Foreign- and Local-Currency IDRs affirmed at 'B'; -- Viability Rating affirmed at 'b+'; -- Support Rating affirmed at '5'; -- Support Rating Floor affirmed at 'No Floor'; -- National Long-Term Rating affirmed at 'BBB+(bra)'; Outlook Negative; -- National Short-Term Rating affirmed at 'F2(bra)'. JBS SA: Owner Joesley Batista Arrested Again in Corruption Probe ---------------------------------------------------------------- Julia Leite and Gerson Freitas Jr. at Bloomberg News report that Joesley Batista, the meat tycoon at the center of a scandal that almost toppled the Brazilian government last year, was detained by police amid a probe linked to the sprawling Carwash investigation. Police were serving 18 arrest warrants and another 56 search and seizures on an illegal campaign financing scheme and corruption of high-ranking members of the Agriculture Ministry between 2014 and 2015, according to a statement from Brazil's tax agency, Bloomberg News says. The probe is centered in Brazil's Minas Gerais state, but warrants are also being carried out in Sao Paulo, Rio de Janeiro, Paraiba and Mato Grosso states, according to Bloomberg News. Joesley Batista was released from jail in March, weeks after his older brother Wesley Batista, the former chief executive officer of JBS SA, Bloomberg News relays. The brothers, who control the meatpacking giant, had been in jail for about six months as they battled insider-trading accusations and, in Joesley's case, allegedly concealing information during plea bargain negotiations, Bloomberg News says. The brothers became the center of a scandal that rocked Brazil in 2017 after they reached an agreement with authorities to testify about a long-running scheme to bribe politicians including President Michel Temer, Bloomberg News notes. Prosecutors later asked for the plea deals signed by both brothers to be revoked, Bloomberg News discloses. Bloomberg News notes that Mr. Batista has cooperated with the judiciary and the order for his temporary arrest is "strange," his lawyer Andre Callegari said in a message sent by a press official for the family's holding company, J&F Investimentos. He added that Mr. Batista has testified and given several documents in the case, and said he will give "all the clarifications needed," Bloomberg News relays. The news of the brothers' plea deal and later arrest sent markets plunging, and caused JBS to temporarily abandon plans to sell shares in New York, Bloomberg News discloses. The company appointed their father, 84-year-old Jose Batista Sobrinho, as CEO. The meatpacker's shares and bonds eventually rebounded as it renegotiated its debt with banks and quickly sold assets, Bloomberg News says. Meat operations in the U.S., which account for more than two-thirds of JBS's revenues, have benefited from rising demand both at home and abroad, Bloomberg News adds. As reported in the Troubled Company Reporter-Latin America on Oct. 22, 2018, Fitch Ratings has assigned an expected rating of 'BB-' to a proposed benchmark USD-denominated senior unsecured notes issued by JBS Investments II GmbH, a wholly-owned subsidiary of JBS S.A. (JBS). These notes will be unconditionally guaranteed by JBS S.A. The notes will rank pari-passu with JBS's other unsecured obligations. The proceeds are expected to be used to refinance existing indebtedness including JBS's 2020 notes pursuant to a cash tender offer. NORSKE SKOGINDUSTRIER: Chapter 15 Case Summary ---------------------------------------------- Chapter 15 Debtor: The Bankruptcy Estate of Norske Skogindustrier ASA c/o Tom Hugo Ottesen 1752 Vika Osla 0122 Norway Business Description: Norske Skogindustrier is a Norwegian limited liability company that acted as the ultimate parent company for various paper production subsidiaries and holding companies. Up until Dec. 19, 2017, Norske Skogindustrier, through its subsidiaries, operated paper mills in Norway, Austria, France, Brazil, Australia and New Zealand. Foreign Proceeding in Which Appointment of the Foreign Representative Occurred: Case No. 17-198212KON-OBYF/1, Oslo County Court Chapter 15 Petition Date: November 16, 2018 Court: United States Bankruptcy Court Southern District of New York (Manhattan) Chapter 15 Case No.: 18-13571 Judge: Hon. Stuart M. Bernstein Foreign Representative: Tom Hugo Ottesen Haakon VIIs Street 10 Oslo Postal Address Kvale Advokatfirma, DA, P.O. Box 1752, Vika 0122 Oslo, Norway Foreign Representative's Counsel: Warren E. Gluck, Esq. Richard A. Bixter, Jr., Esq. Sheila (Qian) Shen, Esq. HOLLAND & KNIGHT LLP 31 West 52nd Street New York, NY 10019 Tel: 212-513-3200 Fax: 212-385-9010 E-mail: warren.gluck@hklaw.com richard.bixter@hkalw.com qian.shen@hklaw.com Total Assets as of Dec. 19, 2017: EUR 287 million Total Liabilities as of Dec. 19, 2017: EUR 924 million A full-text copy of the Chapter 15 Petition is available for free at: http://bankrupt.com/misc/nysb18-13571.pdf =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: Most Fuels Post Considerable Declines --------------------------------------------------------- Dominican Today reports that the Industry and Commerce Ministry posted the fuel prices for the week from November 17 to 23, when premium gasoline will cost RD$224.60, or RD$5.50 less and regular will cost RD$212.60, or RD$5.70 less per gallon. Regular diesel will cost RD$191.20, or RD$2.60 less; optimum diesel will cost RD$201.50, or RD$4.40 less and avtur will cost RD$148.60, or RD$5.60 lower per gallon, according to Dominican Today. Kerosene will cost RD$176.60, or RD$5.50 less, and the fuel oil will cost RD$125.25, or RD$4.10 less per gallon, the report notes. Propane will cost RD$111.60 per gallon, or RD$4.80 lower, while natural gas continues at RD$28.97 per cubic meter, the report says. The Central Bank's average posted exchange rate of RD$50.19 per dollar was used to calculate all fuel prices, the report adds. As reported in the Troubled Company Reporter-Latin America on Sept. 24, 2018, Fitch Ratings affirmed Dominican Republic's Long-Term, Foreign-Currency Issuer Default Rating (IDR) at 'BB-' with a Stable Outlook. ======= P E R U ======= ANDINO INVESTMENT: Fitch Withdraws CCC IDR due to Lack of Data -------------------------------------------------------------- Fitch Ratings has withdrawn the 'CCC' Long-Term, Local- and Foreign-Currency Issuer Default Ratings of Andino Investment Holding S.A.A. Fitch is withdrawing the ratings as Andino Investment Holding S.A.A. has chosen to stop participating in the rating process. Therefore, Fitch will no longer have sufficient information to maintain the ratings. Accordingly, Fitch will no longer provide ratings (or analytical coverage) for Andino Investment Holding S.A.A. CAMPOSOL HOLDING: Fitch Ups LT IDRs to B+; Outlook Now Stable ------------------------------------------------------------- Fitch Ratings has upgraded to 'B+' from 'B' the Long-Term Foreign- and Local-Currency Issuer Default Ratings of Camposol Holding Plc. and its wholly-owned subsidiary Camposol S.A. In addition, Fitch has upgraded Camposol S.A.'s senior secured notes to 'B+'/'RR4' from 'B'/'RR4'. Camposol's Recovery Rating is capped at 'RR4' due to the location of the group's operations; Fitch currently limits recovery ratings for corporates located in Peru to 'RR4'. This recovery rating reflects average recovery prospects. The upgrade reflects Camposol's strong operating performance and robust credit metrics. The rating upgrades also reflects Camposol's increased operational scale, more cash generative business profile due to a better mix of products and the expansion of the avocado, blueberry and shrimp businesses. The Rating Outlook is revised to Stable from Positive. KEY RATING DRIVERS Leading Position in Peru: Camposol is a vertically integrated producer in Peru of food products such as avocados, blueberries, tangerines, mangoes, grapes as well as shrimp. Avocados, blueberries, and seafood represented 50%, 39%, and 9%, respectively, of Camposol's total gross profit in 2017. The company controls the entire value chain: research and product development, growing fields and ponds, processing facilities, and sales and distribution channels. Camposol benefits from the worldwide trends toward the consumption of healthy and more convenient products. Leverage: The company's credit protection measures are strong for the 'B+' rating category. Fitch expects continued EBITDA growth due to higher volumes for blueberries. The seafood profitability is expected to be impacted by lower prices sold in 2018. As of Sept. 30, 2018, 64% of planted fields are in high-yield phase. Fitch expects gross leverage to be in the range of 1.5x-1.8x by the end of 2018, a slight increase from 1.4x during 2017 due to higher capex. LTM EBITDA was at USD129 million as of Sept. 30, 2018. The group reported strong results in 2017 with EBITDA growing to USD125 million from USD76 million due to the strong performance of the company's avocado and seafood segments. IPO and Shareholder Support: Camposol is contemplating an IPO in 2019 depending upon market conditions. Fitch views the IPO positively as it is intended to accelerate the company's expansion by using equity and allows the company to diversify its source of funding and improve liquidity. Fitch expects Camposol's main shareholder to continue to support the company financially if needed. Limited Diversification and Exposure to Price and Climatic Risks: Camposol is exposed to price fluctuation and external factors such as climatic events like the El Nino or La Nina weather phenomenon, which could impact yields and cause logistical issues, and/or the outbreak or proliferation of diseases. In the last five years, Camposol has faced several El Nino phenomena that have had a negative impact on shrimp and avocado yields. The company is investing in intensive shrimp ponds to reduce its exposure to some of these environmental issues in and outside Peru. The company's operations are mainly located in Peru. In 2018, the company invested in new plantation in Colombia (Avocado) and Uruguay (Tangerines) in an effort to lower production risk. Operating profit contribution from overseas operations will be limited in the short term as planted crops need time to reach maturity. DERIVATION SUMMARY Camposol's 'B+' rating reflects the company's medium-sized operational scale and geographic concentration of its production base, which is weaker than other commodity traders and processors such as Tereos Union de Cooperatives Agricoles a capital Variable (BB) or Bunge Ltd (BBB). Camposol displays a business profile that is unique in Fitch's commodity rated portfolio in light of its products sold (avocados, blueberries, shrimps and others); other peers are mainly in the sugar and ethanol segments. The company operates in a high business risk, commodity industry where performance is subject to external shocks such as climatic events, natural disasters and potential supply and demand imbalances creating yield and price volatility of its products. Fitch expects Camposol's debt/EBITDA ratio to be below 2x by FYE18, which is strong for the 'B+' rating category and compares favorably to other rated companies in the agricultural industry or Corporacion Azucarera del Peru S.A. (BB-) or Jalles Machado (BB-). These lower leverage levels are somewhat offset by the higher levels of industry risk and higher level of secured debt compared to its peers. Fitch expects the company to continue to grow rapidly and therefore generate negative FCF due to higher capex. No country ceiling or operating environment aspects impact the rating. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer -- EBITDA of about USD150 million; -- Capex of about USD127 million; -- Net debt/EBITDA of 1.5x in 2018. KEY RECOVERY RATING ASSUMPTIONS Fitch believes that a debt restructuring would likely occur under a stress economic conditions and external shocks such as climatic events or lack of access to certain exports markets. Therefore, Fitch has performed a going concern recovery analysis for Camposol that assumes that the company would be reorganized rather than liquidated. Key going-concern assumptions are: -- Camposol would have a going-concern EBITDA of about USD77 million. This figure is conservative at 40% below the company's EBITDA of USD129 million and takes into consideration factors such as climatic events, logistics issues, potential strikes or a shut- down of export markets; -- A distressed multiple of 5.5x due to the exposure to the agri-business sector; -- A distressed EV of USD383 million (post 10% for administrative claims); -- Total pro forma debt of about USD264 million. The recovery performed under this scenario resulted in a recovery level of 'RR1' consistent with securities historically recovering 91%-100% of current principal and related interest. Because of Fitch's soft cap for Peru, which is outlined in its criteria, Camposol's RR has been capped at 'RR4' reflecting average recovery prospects. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action -- Improved geographical diversification of the production base; -- IPO and reduced amount of secured debt; -- Net leverage below 2x on a sustained basis; -- Strong liquidity. Developments That May, Individually or Collectively, Lead to Negative Rating Action -- Net leverage above 3x on a sustained basis; -- EBITDA interest expense coverage below 2.0x; -- Non-refinancing of the bond by YE 2019. LIQUIDITY The company's liquidity is adequate due to its cash on hand and good access to local banks to finance working capital requirements. As of Sept. 30, 2018, cash and cash equivalent totaled USD29 million compared to USD75 million of short-term debt. The short-term debt is mainly composed of working capital lines with banks and the long-term debt by the senior secured debt (USD147.5 million due in 2021). FULL LIST OF RATING ACTIONS Fitch has upgraded the following ratings: Camposol Holding Plc -- Long-Term Foreign-Currency IDR to 'B+' from 'B'; -- Long-Term Local-Currency IDR to 'B+' from 'B'. Camposol S.A. -- Long-Term Foreign-Currency IDR to 'B+' from 'B'; -- Long-Term Local-Currency IDR to 'B+' from 'B'; -- Camposol S.A.'s senior secured notes due 2021 to 'B+'/'RR4' from 'B'/'RR4'. The Rating Outlook is revised to Stable from Positive. PERU: Lawmakers Slam Ex-President's Request for Asylum in Uruguay ----------------------------------------------------------------- EFE News reports that Peruvian lawmakers expressed outrage at a former president's request for political asylum in Uruguay. Ex-head of state Alan Garcia asked Uruguay for asylum hours after a Peruvian court granted a request from prosecutors to bar him from leaving the country for 18 months as authorities investigate a charge that he took bribes from Brazilian construction giant Odebrecht, according to EFE News. The report notes that Mr. Garcia is suspected of accepting money in exchange for helping Odebrecht win a lucrative public works contract during his 2006-2011 administration. "The recidivist Alan Garcia once again seeks asylum to evade corruption accusations," a lawmaker for the center-right Popular Action party, Yonhy Lescano, said, the report relays. "He didn't have the courage to face justice. Uruguay should not protect this individual if it doesn't want to cover up illegal actions. Utterly shameless," Lescano wrote on Twitter, the report says. The report discloses that he recalled that the former president was granted asylum in Colombia in 1992 after then-President Alberto Fujimori dissolved the opposition-controlled Congress in a "self-coup." Mr. Garcia, who in the early 1990s faced allegations of graft stemming from his turbulent 1985-1990 presidency, when the country was racked by hyper-inflation, came home in 2001 after the expiration of the statute of limitations for those charges and went on to win another term as head of state, the report relays. Indira Huilca, a lawmaker for the Broad Front coalition of leftist parties, said the leadership of Garcia's American Popular Revolutionary Alliance -- Peruvian Aprista Party (APRA) had recommended that he submit the asylum request, the report notes. She added that now it is clear why that party has made a big push to prevent actions by political parties from being investigated under organized crime laws, referring to a bill that APRA introduced late last month, the report relays. "So many accomplices trembling. National shame," the lawmaker wrote on Twitter, notes the report. Odebrecht reached a settlement in December 2016 with the United States' Justice Department in which the firm pleaded guilty to paying hundreds of millions of dollars in bribes to government officials around the world, the report relays. As part of the settlement, Odebrecht has been cooperating with prosecutors in the affected countries to bring corrupt officials to justice, the report says. Judge Juan Carlos Sanchez Balbuena ruled that documents handed over by Odebrecht provided "sufficient elements" to support the accusations against Mr. Garcia, the report notes. Odebrecht executive Carlos Nostre told Peruvian prosecutors that the company paid up to $24 million in bribes to secure the contract to build Lima Metro's Line 1 during Mr. Garcia's presidency, the report relates. Mr. Garcia, who has been living in Spain for a number of years, returned to Peru for questioning in the case, the report says. Three other former presidents, Alejandro Toledo, Ollanta Humala and Pedro Pablo Kuczynski, have also been caught up in the Odebrecht probe, along with main opposition leader and two-time presidential candidate Keiko Fujimori, says the report. Ms. Fujimori is the daughter of disgraced former head of state Alberto Fujimori, who is serving a 25-year sentence for human rights abuses and corruption, the report adds. ====================== P U E R T O R I C O ====================== BAILEY'S EXPRESS: Plan Admin's $395K Middletown Property Sale OK'd ------------------------------------------------------------------ Judge Ann M. Nivens of the U.S. Bankruptcy Court for the District of Connecticut authorized David Allen, the plan administrator appointed for Bailey's Express Inc.'s bankruptcy estate, to sell the commercial real property located at 11 Industrial Park Road, Middletown, Connecticut to Accurate Logistics, LLC, for $395,000. The sale Hearing was held on Nov. 7, 2018. The sale is free and clear of all encumbrances, claims, interests, and liens. All time periods set forth in the Sale Order will be calculated in accordance with Bankruptcy Rule 9006(a). Notwithstanding the provisions of Bankruptcy Rules 6004(h), 6006(d) or 7062 or any applicable provisions of the Local Bankruptcy Rules, the Sale Order will not be stayed after the entry hereof, but will be effective and enforceable immediately upon entry, and the 14-day stay provided in Bankruptcy Rules 6004(h) and 6006(d) is expressly waived and will not apply. The Court authorized the Plan Administrator to pay Trevor David Commercial Real Estate, LLC a commission totaling 3% equaling $11,850, and pay NAI James E. Hanson a commission totaling 3% equaling $11,850 upon closing of title to the Property. About Bailey's Express Headquartered in Middletown, Connecticut, Bailey's Express -- http://www.baileysxpress.com/-- is a Connecticut-based less than truckload carrier. It provides service across the nation and is dedicated in helping Connecticut, Massachusetts and Rhode Island companies market their products throughout the U.S. including Hawaii and Alaska. It has distribution points in Charlotte, Dallas, Denver, Easton, Fontana, Indianapolis, Jacksonville, Memphis, Neenah, Phoenix, Salt Lake City and Toledo. It also provides service to Mexico, Puerto Rico & Canada. Bailey's Express filed for Chapter 11 bankruptcy protection (Bankr. D. Conn. Case No. 17-31042) on July 13, 2017. In the petition signed by CFO David Allen, the Debtor estimated its assets and liabilities at between $1 million and $10 million. Judge Ann M. Nevins presides over the case. Elizabeth J. Austin, Esq., and Jessica Grossarth Kennedy, Esq., at Pullman & Comley, LLC, serve as the Debtor's bankruptcy counsel. No creditors' committee has been appointed in the case. On Jan. 12, 2018, the court confirmed the Debtor's Chapter 11 plan of liquidation. Pursuant to the plan, David Allen was deemed the plan administrator for the Debtor's estate. On Nov. 17, 2017, the Court appointed Trevor Davis Commercial Real Estate, LLC, as real estate broker. GOV'T DEV'T BANK: Moody's Alters Outlook on C Sr. Notes to Stable ----------------------------------------------------------------- Moody's Investors Service has revised the outlook of the Government Development Bank for Puerto Rico senior notes to stable from negative. Concurrently, Moody's has affirmed the C rating on the notes. RATINGS RATIONALE On November 6, 2018, the federal court overseeing Puerto Rico's restructuring approved the settlement entered with GDB creditors. The approval is the final act in a series of procedural requirements before the GDB Debt Recovery Authority can issue new securities to creditors in exchange for existing notes. Investors are receiving new securities with a face amount recovery of 55% and a higher interest rate. Creditors are expected to recover 41% of outstanding principal, based on Moody's estimated calculation using currently available information. This is slightly above the 0-35% recovery range for the C rating, but its rating assumes lower recovery because the pledged revenue stream is unlikely to provide for full payment on the new bonds. The new bonds will be repaid, in part, with loan repayments from local municipal governments in Puerto Rico. These municipalities may see reduced aid from the Commonwealth, and increased service delivery requirements, under the most recent version of the Federal Oversight and Management Board's Fiscal Plan for Puerto Rico. The C rating also reflects the ongoing credit distress associated with the central government, which suffers from very weak metrics across analytic categories. Moody's expects the rating to be withdrawn upon finalization of the settlement. RATING OUTLOOK The stable outlook reflects its view that recoveries under the terms of the settlement agreement are likely to remain in the recovery range for the C rating because the pledged revenue stream is unlikely to provide for full payment. FACTORS THAT COULD LEAD TO AN UPGRADE - Any federal court rulings or actions by the US government or the FOMB that materially improve bondholder recovery prospects versus currently anticipated levels. FACTORS THAT COULD LEAD TO A DOWNGRADE - Appellate rulings that result in bondholders receiving lower recoveries than anticipated. - Economic or revenue trends that will undermine the creditworthiness of new securities that bondholders would receive. LEGAL SECURITY The existing senior notes are general, unsecured, senior obligations of GDB, ranking on parity with all other general, unsecured and unsubordinated obligations of GDB for borrowed money. PROFILE The Government Development Bank, as issuer of the debt currently being restructured, served as the financial repository, fiscal agent and financial advisor of the central government and its agencies. The GDB extended loans to the commonwealth and its instrumentalities, functioning as a financial support for the entire government. GDB's operations were wound down beginning in 2017, with its successor agency, the Puerto Rico Fiscal Agency and Financial Advisory Authority stepping in as the new fiscal agent for the commonwealth, but not reprising the role of financial repository. METHODOLOGY The principal methodology used in these ratings was US States and Territories published in April 2018. PUERTO RICO: Labor Unions File Pension Lawsuit Against Country -------------------------------------------------------------- Karen Pierog at Reuters reports that Puerto Rico violated a law meant to safeguard the pensions of its public-sector workers who have been unable to invest the more than $300 million they contributed to a new retirement plan, according to a lawsuit filed against the U.S. commonwealth's government and others by two labor unions. The litigation, filed in U.S. District Court in San Juan, joins a long list of adversary cases in a form of bankruptcy Puerto Rico's federally created oversight board initiated in May 2017 to restructure the island's $120 billion of debt and pension obligations, according to Reuters. It is also the latest chapter in a fraught relationship between Puerto Rico and its government employees, particularly teachers, the report notes. In the latest lawsuit, the American Federation of Teachers and the American Federation of State, County & Municipal Employees point to Law 106, enacted in August 2017 to require wage deductions from workers participating in a new retirement plan to be placed into segregated employee-controlled, 401(k)-style accounts that they said have not been created, the report relays. The report says that the unions claim that while workers' contributions totaled $316 million as of July 31, employees have been unable to invest the money, missing out on "historically high stock market returns." "For all intents and purposes, the commonwealth is seizing employees' own funds and hiding them under a mattress -- in this case, upon information and belief, government bank accounts at Banco Popular earning virtually zero interest," the lawsuit claimed, the report discloses. The unions, which represent thousands of teachers and government workers in Puerto Rico, asked the court to find the defendants in violation of Law 106 and of their fiduciary duties and require the creation of accessible retirement accounts by yearend, the report relays. The lawsuit also seeks an undetermined amount of compensation for lost investment income, the report notes. Defendants in the lawsuit include Banco Popular, Puerto Rico's governor, chief financial officer, treasurer, fiscal and financial advisory authority, retirement board, as well as the oversight board, the report notes. The latter, an entity established by a federal law known as PROMESA, failed to force the commonwealth government's compliance with the law, according to the lawsuit, the report discloses. "We agree the government of Puerto Rico should set up the defined contribution accounts as soon as possible; however, we won't comment on the lawsuit at this time," Natalie Jaresko, the oversight board's executive director, said in a statement, the report adds. About Puerto Rico Puerto Rico is a self-governing commonwealth in association with the United States that's facing a massive bond debt of $70 billion, a 68% debt-to-GDP ratio and negative economic growth in nine of the last 10 years. The Commonwealth of Puerto Rico has sought bankruptcy protection, aiming to restructure its massive $74 billion debt-load and $49 billion in pension obligations. The debt restructuring petition was filed by Puerto Rico's financial oversight board in U.S. District Court in Puerto Rico (Case No. 17-01578) on May 3, 2017, and was made under Title III of 2016's U.S. Congressional rescue law known as the Puerto Rico Oversight, Management, and Economic Stability Act ('PROMESA'). The Financial Oversight and Management Board later commenced Title III cases for the Puerto Rico Sales Tax Financing Corporation (COFINA) on May 5, 2017, and the Employees Retirement System (ERS) and the Puerto Rico Highways and Transportation Authority (HTA) on May 21, 2017. On July 2, 2017, a Title III case was commenced for the Puerto Rico Electric Power Authority ("PREPA"). U.S. Chief Justice John Roberts has appointed U.S. District Judge Laura Taylor Swain to oversee the Title III cases. The Honorable Judith Dein, a United States Magistrate Judge for the District of Massachusetts, has been designated to preside over matters that may be referred to her by Judge Swain, including discovery disputes, and management of other pretrial proceedings. Joint administration of the Title III cases, under Lead Case No. 17-3283, was granted on June 29, 2017. The Oversight Board has hired as advisors, Proskauer Rose LLP and O'Neill & Borges LLC as legal counsel, McKinsey & Co. as strategic consultant, Citigroup Global Markets, as municipal investment banker, and Ernst & Young, as financial advisor. Martin J. Bienenstock, Esq., Scott K. Rutsky, Esq., and Philip M. Abelson, Esq., of Proskauer Rose; and Hermann D. Bauer, Esq., at O'Neill & Borges are on-board as attorneys. McKinsey & Co. is the Board's strategic consultant, Ernst & Young is the Board's financial advisor, and Citigroup Global Markets Inc. is the Board's municipal investment banker. Prime Clerk LLC is the claims and noticing agent. Prime Clerk maintains a case web site at https://cases.primeclerk.com/puertorico Epiq Bankruptcy Solutions LLC is the service agent for ERS, HTA, and PREPA. O'Melveny & Myers LLP is counsel to the Commonwealth's Puerto Rico Fiscal Agency and Financial Advisory Authority (AAFAF), the agency responsible for negotiations with bondholders. The Oversight Board named Professor Nancy B. Rapoport as fee examiner and to chair a committee to review professionals' fees. Bondholders' Attorneys Kramer Levin Naftalis & Frankel LLP and Toro, Colon, Mullet, Rivera & Sifre, P.S.C. and serve as counsel to the Mutual Fund Group, comprised of mutual funds managed by Oppenheimer Funds, Inc., and the First Puerto Rico Family of Funds, which collectively hold over $4.4 billion of GO Bonds, COFINA Bonds, and other bonds issued by Puerto Rico and other instrumentalities. White & Case LLP and Lopez Sanchez & Pirillo LLC represent the UBS Family of Funds and the Puerto Rico Family of Funds, which hold $613.3 million in COFINA bonds. Paul, Weiss, Rifkind, Wharton & Garrison LLP, Robbins, Russell, Englert, Orseck, Untereiner & Sauber LLP, and Jimenez, Graffam & Lausell are co-counsel to the ad hoc group of General Obligation Bondholders, comprised of Aurelius Capital Management, LP, Autonomy Capital (Jersey) LP, FCO Advisors LP, and Monarch Alternative Capital LP. Quinn Emanuel Urquhart & Sullivan, LLP and Reichard & Escalera are co-counsel to the ad hoc coalition of holders of senior bonds issued by COFINA, comprised of at least 30 institutional holders, including Canyon Capital Advisors LLC and Varde Investment Partners, L.P. Correa Acevedo & Abesada Law Offices, P.S.C., is counsel to Canyon Capital Advisors, LLC, River Canyon Fund Management, LLC, Davidson Kempner Capital Management LP, OZ Management, LP, and OZ Management II LP (the QTCB Noteholder Group). Committees The U.S. Trustee formed an official committee of retirees and an official committee of unsecured creditors of the Commonwealth. The Retiree Committee tapped Jenner & Block LLP and Bennazar, Garcia & Milian, C.S.P., as its attorneys. The Creditors Committee tapped Paul Hastings LLP and O'Neill & Gilmore LLC as counsel. =============================== T R I N I D A D & T O B A G O =============================== PETROLEUM CO: No S$ For Some Temporary Workers ---------------------------------------------- Leah Sorias at Trinidad Express reports that Petroleum Co. of Trinidad & Tobago (Petrotrin) workers are holding Finance Minister Colm Imbert to his word, disclosed in the 2019 budget, that all terminated permanent, temporary and casual employees of the state- owned oil company would be provided with attractive termination packages. But now a group of temporary Petrotrin employees are in a state of distress and say they feel betrayed after learning that they will exit the company -- not with a few thousand dollars like some of their colleagues, but without "one red cent," according to Trinidad Express. As reported in the Troubled Company Reporter-Latin America on Sept. 28, 2018, Moody's Investors Service placed Petroleum Co. of Trinidad & Tobago's B1 corporate family rating and senior unsecured debt ratings on review for downgrade. This rating action was based on the lack of clarity regarding Petrotrin's new business profile and strategy as well as increasing liquidity risk related to the approaching maturity of the 2019 bonds. *********** 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 2018. 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 * * *