TCRLA_Public/190115.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

           Tuesday, January 15, 2019, Vol. 20, No. 10



SEADRILL LTD: CFO to Step Down Following Financial Restructuring


BRAZIL: Bolsonaro Leaves Economy to Free-Market Crusader
GENERAL SHOPPING: Moody's Reviews Caa2 CFR for Downgrade
GENERAL SHOPPING: Fitch Puts CCC+ LT IDR on Rating Watch Neg.

C A Y M A N  I S L A N D S

OCEAN RIG: S&P Discontinues 'B-' Long-Term Issuer Credit Rating

D O M I N I C A N   R E P U B L I C

AUTOPISTAS DEL NORDESTE: Fitch Affirms 'BB-' Notes Rating
DOMINICAN REPUBLIC: Official Denies Ruffled Feathers in US-DR Ties


ECUADOR: Fitch Affirms B- LT IDRs, Alters Outlook to Neg.


DIGICEL GROUP: Secures 98% Bondholder Acceptance on Swap Deal


MEXICO: Security Bolstered Along Stretch of Pipeline Network


VENEZUELA: Canada Slams Maduro's 2nd Term as 'Illegitimate'

                            - - - - -


SEADRILL LTD: CFO to Step Down Following Financial Restructuring
Rama Venkat at Reuters reports that Norwegian offshore drilling
rig firm Seadrill Ltd. said on Jan. 10 that Chief Financial
Officer Mark Morris will step down following completion of the
company's financial restructuring.

According to Reuters, the company, controlled by Norwegian-born
billionaire John Fredriksen, said it has begun a formal search
process and that Mr. Morris will remain in the role until the end
of June to make the transition possible.

Seadrill said last July that it had successfully completed its
reorganisation, emerging from U.S. Chapter 11 bankruptcy, Reuters

The company, once the world's largest offshore driller by market
capitalisation, was forced to seek protection from creditors when
it was unable to repay debts amassed during boom years to buy new
rigs, Reuters notes.

                      About Seadrill Ltd.

Seadrill Limited is a deepwater drilling contractor providing
drilling services to the oil and gas industry.  It is
incorporated in Bermuda and managed from London.  Seadrill and
its affiliates own or lease 51 drilling rigs, which represents
more than 6% of the world fleet.

As of Sept. 12, 2017, Seadrill employed 3,760 highly-skilled
individuals across 22 countries and five continents to operate
their drilling rigs and perform various other corporate

As of June 30, 2017, Seadrill had $20.71 billion in total assets,
$10.77 billion in total liabilities and $9.94 billion in total

Seadrill reported a net loss of US$155 million on US$3.17 billion
of total operating revenues for the year ended Dec. 31, 2016,
following a net loss of US$635 million onUS$4.33 billion of total
operating revenues for the year ended in 2015.

After reaching terms of a reorganization plan that would
restructure $8 billion of funded debt, Seadrill Limited and 85
affiliated debtors each filed a voluntary petition for relief
under Chapter 11 of the United States Bankruptcy Code (Bankr.
S.D. Tex. Lead Case No. 17-60079) on Sept. 12, 2017.

Together with the chapter 11 proceedings, Seadrill, North
Atlantic Drilling Limited ("NADL") and Sevan Drilling Limited
("Sevan") commenced liquidation proceedings in Bermuda to appoint
joint provisional liquidators and facilitate recognition and
implementation of the transactions contemplated by the RSA and
Investment Agreement, and Simon Edel, Alan Bloom and Roy Bailey
of Ernst & Young are to act as the joint and several provisional

In the Chapter 11 cases, the Company has engaged Kirkland & Ellis
LLP as legal counsel, Houlihan Lokey, Inc. as financial advisor,
and Alvarez & Marsal as restructuring advisor.  Slaughter and May
has been engaged as corporate counsel, and Morgan Stanley served
as co-financial advisor during the negotiation of the
restructuring agreement.  Advokatfirmaet Thommessen AS is serving
as Norwegian counsel. Conyers Dill & Pearman is serving as
Bermuda counsel.  Prime Clerk serves as claims agent.

The United States Trustee for Region 7 formed an official
committee of unsecured creditors with seven members: (i)
Computershare Trust Company, N.A.; (ii) Daewoo Shipbuilding &
Marine Engineering Co., Ltd.; (iii) Deutsche Bank Trust Company
Americas; (iv) Louisiana Machinery Co., LLC; (v) Nordic Trustee
AS; (vi) Pentagon Freight Services, Inc.; and (vii) Samsung Heavy
Industries Co., Ltd.

Kramer Levin Naftalis & Frankel LLP is serving as lead counsel to
the Committee.  Cole Schotz P.C. is local and conflicts counsel
to the Committee.  Zuill & Co (in exclusive association with
Harney Westwood & Riegels) is serving as Bermuda counsel.  London
based Quinn Emanuel Urquhart & Sullivan, UK LLP, is serving as
English counsel.  Parella Weinberg Partners LLP is the investment
banker to the Committee.  FTI Consulting Inc. is the financial


BRAZIL: Bolsonaro Leaves Economy to Free-Market Crusader
EFE News reports that Brazilian President Jair Bolsonaro again
admitted his lack of expertise in some areas, including the
economy and finance, which he said will be the responsibility of
Economy Minister Paulo Guedes, an acolyte of free-market apostle
Milton Friedman (1912-2006).

"Admitting my ignorance in many areas is a sign of humility. I'm
certain I know a lot more about politics than Minister Guedes, but
he knows much more about the economy than I do," the president
said at a ceremony in which the new presidents of Brazil's three
principal public banks assumed their positions, according to EFE

"Minister Guedes was at liberty to choose his entire team," the
report quoted Mr. Bolsonaro as saying.

Taking their positions at the ceremony were the presidents of the
Caixa Economica Federal (CEF), Pedro Guimaraes; of the Banco do
Brasil, Rubem Novaes; and of the Brazilian Development Bank
(BNDES), Joaquim Levy, all in line with the free-market ideology
of Guedes, an economist trained at the University of Chicago, the
report relays.

Guedes was a professor in Chile during the 1973-1990 dictatorship
of Gen. Augusto Pinochet, who relied heavily on a group of Chilean
economists known as the "Chicago Boys," because they had trained
under Friedman at the University of Chicago, the report notes.

"If the economy does well, we'll have more jobs, the violence
index will drop and we'll have better days ahead," Mr. Bolsonaro
said, the report relays.

He added that his government will review the distribution of funds
for official publicity, so it will no longer favor one media
outlet over another, the report discloses.

"Having a free press is a rule of democracy" and the idea is to
distribute the advertising budget without favoring any particular
media outlet, so "they can all do good work," the report notes.

He also said the funds directed by the government to support non-
governmental organizations (NGOs) will be reviewed and audited,
the report relays.

"It may seem that this has little importance, but it does, and for
that reason NGO funding will undergo a strict control to make sure
public resources are put to good use," Mr. Bolsonaro said, the
report adds.

As reported in the Troubled Company Reporter-Latin America,
Egan-Jones Ratings Company, on October 8, 2018, withdrew its 'B+'
foreign currency and local currency senior unsecured ratings on
debt issued by the Federative Republic of Brazil.

GENERAL SHOPPING: Moody's Reviews Caa2 CFR for Downgrade
Moody's America Latina placed General Shopping e Outlets do Brasil
S.A.'s, ("GSB"), global scale, foreign currency corporate family
rating, currently at Caa2 (national scale, local currency
corporate family rating at, on review for downgrade. The
outlook was changed to rating under review from stable.

The following rating was placed on review for downgrade:

Issuer: General Shopping e Outlets do Brasil S.A.

Global scale, foreign currency corporate family rating at Caa2
(national scale, local currency corporate family rating at

Outlook Actions:

Issuer: General Shopping e Outlets do Brasil S.A.

Outlook, Changed to Rating Under Review from stable


On December 26, 2018, General Shopping e Outlet do Brasil
announced its intent to transfer the equity interests, direct or
indirectly held, in 11 of 16 of its shopping centers to a real
estate investment fund, and to distribute approximately R$829
million of unrealized profits in February 2019. The company
expects to distribute approximately R$207 million in cash and the
rest in shares in the real estate fund. For shareholders who opt
to not receive shares in the fund, they can choose to receive a
local perpetual bond.

Its review of GSB's ratings will focus on several factors,
including 1) company's significantly reduced portfolio and cash
flow generation to service the debt related to its 10% coupon, US$
164.2 million, senior unsecured perpetual bonds, currently rated
at Caa2; 2) any complexities related to its prospective capital
structure, including the 12% coupon, US$150 million, subordinated
perpetual bonds, currently rated at Ca; 3) its operational
strategy going-forward and 4) whether GSB will continue to operate
as an infinite life company.

Headquartered in Sao Paulo, Brazil, General Shopping e Outlets do
Brasil S.A. [BM&F Bovespa: GSHP3] is a real estate operating
company dedicated to the ownership, development and management of
shopping centers and outlet centers in Brazil. As of December 31,
2018, the total portfolio comprised of 16 properties, encompassing
approximately 451,000 square meters (m2) of gross leasable area
(GLA), of which the company owned share was approximately 53%.
Predominantly concentrated in the state of Sao Paulo, the
portfolio focuses on serving the Class B and C consumers.

The last rating action with respect to General Shopping e Outlets
do Brasil S.A. was on October 26, 2018, when Moody's downgraded
the company's corporate family rating to Caa2/ from
Caa1/ and revised the rating outlook to stable from

The principal methodology used in these ratings was REITs and
Other Commercial Real Estate Firms published in September 2018.

GENERAL SHOPPING: Fitch Puts CCC+ LT IDR on Rating Watch Neg.
Fitch Ratings has placed the ratings for General Shopping e
Outlets do Brasil S.A. on Rating Watch Negative. The action
follows GSB's recent announcement it intends to transfer the
equity interests, direct or indirectly held, in 11 of 16 of its
shopping centers to a real estate investment fund and to
distribute approximately R$829 million of unrealized profits in
February 2019. The rating action reflects Fitch's credit concern
of potential deterioration in GSB's capital structure and
liquidity if the proposed transaction is approved.


Negative Rating Watch: While the details of the proposed
transaction remain unclear, the overall impact is expected to be
negative from a liquidity, capital structure and cash flow
diversification perspective for GSB's bond holders, which has
resulted in Fitch's decision to place GSB's ratings on Rating
Watch Negative. GSB's had BRL 1.9 billion of total debt and BRL
460 million of cash as of Sept. 30, 2018. During the LTM ended in
September the company generated BRL 154 million of EBITDA. When
considering the 50% credit on the subordinated perpetual notes,
Fitch estimates GSB's net leverage at 6.9x as of Sept. 30, 2018.

Material Reduction in GLA: GSB is one of the largest shopping
center operators in Brazil's south-eastern and southern regions
with participation in 16 shopping centers. GSB's total gross
leasable area (GLA) was approximately 185,000 as of Dec. 31, 2018.
The 11 shopping centers that would be removed from the group with
this transaction represent approximately 67% of GSB's owned GLA;
this not only decreases the number of assets that support debt
service but it also increases the exposure of bondholder to a more
limited group of performing assets. The occupancy rate of GSB's 16
malls was 94% as of Sept 30, 2018 and the weighted average
remaining lease term was between four to six years.


GSB's 'CCC+' rating reflects the company's track record of
maintaining high financial leverage, negative FCF and weak
liquidity. The Rating Watch Negative factors in Fitch's view that
the execution of the proposed transaction could result in a
material deterioration in GSB's capacity to service its debt.
Fitch views GSB's capital structure as weaker than regional peers
such as BR Malls Participacoes S.A. (BB/Stable) and InRetail Real
Estate S.A. (BB+/Stable). GSB's 'CCC+' rating reflects weakness in
several rating considerations. In terms of net leverage, measured
as the net debt/EBITDA, BR Malls and InRetail Real Estate had
ratios of 2.7x and 3.0x, respectively, during 2017. In terms of
liquidity and capacity to consistently cover interest expenses
paid with recurrent cash flow generation, BR Malls and InRetail
Real Estate had coverage ratios of 2.5x and 2.8x, respectively,
during the period.


Fitch's key assumptions within its rating case for the issuer

  -- Average annual net revenue around BRL 187 million during 2018
- 2019;

  -- The company continues deferring interest payments on the
subordinated perpetual notes during 2018 - 2020;

  -- Cash interest coverage trend to levels around 1.5x during
2018 - 2019;

  -- GSB's free cash flow margin, after capex, is negative in the
low single during 2018 - 2019.


Fitch expects to resolve the Rating Watch Negative over the next
one to three months. Key items that will determine the future
ratings are the following: the successful completion of the
transaction under the proposed terms, liquidity relative to debt
service for GSB if the transaction is completed, cash flow
generating capacity of the remaining entity, the value of
unencumbered assets relative to the debt burden of GSB post


Fitch has placed the following ratings on Rating Watch Negative:

General Shopping e Outlets do Brasil S.A.

  -- Long-Term Foreign Currency IDR 'CCC+';

  -- Long-Term Local Currency IDR 'CCC+';

  -- National Scale rating 'CCC(bra)'.

General Shopping Finance Limited (GSF):

  -- USD250 million perpetual notes 'CCC+'/'(RR4)' .

General Shopping Investment Limited (GSI):

  -- USD150 million subordinated perpetual notes 'CCC-'/'RR6'.

  -- USD8.9 million of senior secured notes due 2026 'CCC+'/'RR4'.

C A Y M A N  I S L A N D S

OCEAN RIG: S&P Discontinues 'B-' Long-Term Issuer Credit Rating
S&P Global Ratings discontinued its 'B-' long-term issuer credit
rating on Cayman Islands-domiciled drilling company Ocean Rig UDW

S&P also discontinued its 'B' issue rating and '2' recovery rating
on Ocean RIG 2 INC.'s senior secured debt.

This follows the acquisition of the company by Transocean Ltd.
Ocean Rig is now a fully owned subsidiary of the Transocean group
and all debt at Ocean Rig has been repaid.

D O M I N I C A N   R E P U B L I C

AUTOPISTAS DEL NORDESTE: Fitch Affirms 'BB-' Notes Rating
Fitch Ratings has affirmed Autopistas del Nordeste Ltd's notes at
'BB-'. The Rating Outlook is Stable. The notes are due in 2026 and
have an outstanding balance of USD127.5 million.


The rating is supported by the minimum revenue guarantee (MRG)
paid by the Dominican Republic's government, which largely
mitigates the project's volume and price risks, as toll revenues
remain persistently insufficient to cover operational costs and
debt service. MRG payment days have increased and, despite the
project has enough liquidity to meet debt service in the short to
medium term, Fitch expects collection delays not to worsen in

The rating also reflects a flexible debt structure with principal
payments that can be deferred for two years if needed and robust
liquidity in the form of the typical reserve accounts and
additional resources retained by the stockholders within the
project to face its operational and financial obligations should
delays in receipt of the MRG continue or increase significantly.
Considering the MRG cash inflows, Fitch's rating case yields a
solid debt service coverage profile with minimum and average debt
service coverage ratio (DSCR) of 1.64x and 1.66x, respectively,
considered strong for the rating category according to applicable
criteria. AdN's rating is capped by the Dominican Republic's
sovereign rating.

Fitch believes the delays in the payment of the MRG are not signs
of the sovereign's incapacity or unwillingness to pay but rather a
strategic use of the financial flexibility offered by the
project's liquidity position and a reflection of the complex
administrative process needed to make budget appropriations. If
such a buffer was not available, Fitch believes the government
would try and reduce the payment cycle. The presence of
Multilateral Investment Guarantee Agency (MIGA) insurance may also
incentivize the government to treat the MRG as a senior

Adequate Governmental Support: The government of the Dominican
Republic pledged under the concession agreement in 2001 an MRG
that protects noteholders from the risk of insufficient traffic
over the life of the notes. The government has continued to honor
this pledge, and Fitch expects required payments to be made over
the life of the notes. The government also offers a SBLC required
under the concession agreement to provide additional support to
the transaction.

Financial Guarantee: The notes benefit from a partial political
risk guarantee provided by the MIGA, a member of the World Bank
Group. A failure by the government to honor the MRG would be
covered under this guarantee; however, disbursements can be
delayed, and internal liquidity is essential to the project's
capacity to service debt. Fitch believes the MIGA guarantee
provides additional incentives for the government to honor its
obligations under the concession.

Low Volume Touristic Asset [Revenue Risk - Volume: Weaker]: The
toll road connects Santo Domingo and the northern province of
Samana. It provides an efficient route but has competing free
alternatives. Moreover, despite robust gains in recent years,
actual traffic remains far below initial projections requiring
substantial payments via the MRG. This dependence on external
revenues is expected to continue in the near to intermediate term.

Regular Toll Increases [Revenue Risk - Price: Midrange]: The
operator of the road is able to increase tolls annually by
inflation under the concession agreement and has historically
completed annual rate adjustments without issue.

Predictable Operating Costs [Infrastructure Development & Renewal:
Midrange]: A fixed operation and maintenance (O&M) agreement with
an experienced toll road operator. The project benefits from
oversight from an independent engineer who provides quarterly
reports on the overall condition of the toll road along with
current and future maintenance needs. There is a 12 month major
maintenance reserve account.

Conservative Debt Structure [Debt Structure: Stronger]: The notes
are fully amortizing, fixed-rate obligations with typical project
finance covenants. Liquidity available within the structure
includes a six-month debt service reserve account, working capital
voluntarily contributed by the stockholders, among others.
Additional flexibility is also available as targeted principal
amortization on the notes is deferrable.

Financial Profile

The project's rating case ratios are strong for the rating
category with minimum and average DSCRs at 1.44x and 1.60x,
respectively. The rating is capped by the Dominican Republic's
sovereign rating.


Given AdN's revenue profile, the most comparable transactions are
P.A. Pacifico 3 and P.A. Costera, two Colombian toll road
transactions rated at 'BBB-', with revenues that are mostly
dependent on grants and traffic top up payments by the
concession's grantor. AdN's rating case credit metrics compare
well with those of the Colombian transactions, which present LLCRs
around 1.4x.


Future Developments That May, Individually or Collectively, Lead
to Negative Rating Action:

  -- A negative rating action on the Dominican Republic.

  -- Annual cash flows from operations, without considering MRG
payments, plus all available cash below 1.5x debt service in a
sustained basis.

  -- Absence of the SBLC coupled with heavier delays in the MRG

Future Developments That May, Individually or Collectively, Lead
to Positive Rating Action:

  -- A positive rating action on the Dominican Republic's
sovereign rating, to the extent that project fundamentals and
financial metrics support an improvement.


As of November 2018, traffic increased 11.8% compared to the same
period in 2017, while toll revenues increased 10.0%.

Although traffic continues well below the original forecast,
project liquidity remains strong in the form of a debt service
reserve account (USD15.0 million), operational reserves permitted
by the Indenture to be used for debt service if needed (USD16.2
million), and cash (USD1.7 million) as shareholders have decided
not to take out the totality of the dividends accrued. Although
the latter is not a contractual obligation, the company has
expressed the intention of its shareholders to keep a relevant
cash amount within the project to maintain healthy liquidity

The SBLC required under the concession agreement to cover any
deficiency in MRG has not been renewed since 2017 due to changes
in the government administration. The issuer expects it to be
renewed in early 2019 and Fitch will closely monitor it.

During 2018, the government continued having heavy delays in the
payment of the MRG. The only MRG revenues received were for the
months of June 2017 to February 2018 (nine months). The invoice
corresponding to March, April and May 2018 was partially paid in
January 2019 (USD4.6 million) and the remaining months of June to
November 2018 have not been received yet. Fitch will also closely
monitor collection days as to verify the term does not
significantly widen as this, in combination with the lack of the
SBLC to cover the government's obligations and an increasing
amortization schedule, could become problematic in the future.

The project started the resurfacing and improvement works
programmed for 2018, in line with the original asset maintenance
schedule. Works are performed with available funds from the
appropriate reserve accounts and are expected to conclude in 2019.

Fitch Cases

Fitch's base case assumed traffic growth at 4% for 2019, 3% for
2020-2021, and 2% for 2022-2024. The Dominican Republic's Consumer
Price Index (CPI) was assumed at 4% for 2019 onwards. The United
States' CPI was assumed at 2.3% for 2019, 2.4% for 2020 and 2% for
2021 onwards. O&M expenses were increased annually by inflation
plus 5%. DSCR including resources from MRG resulted at 1.66x
minimum and 1.67x average.

Fitch's rating case assumed traffic growth at 2% for 2019-2022 and
1% for 2023-2024. The Dominican Republic's and United States' CPIs
were assumed to be the same as in the base case. O&M expenses were
increased annually by inflation plus 10%. DSCR including resources
from MRG resulted at 1.64x minimum and 1.66x average.

Asset Description

The toll road, completed in 2009, extends 106 kilometers
(approximately 66 miles), connects Santo Domingo with the northern
province of Samana, and includes three toll plazas. In comparison
to alternative roads in the region, it considerably reduces the
travel distance between Santo Domingo and Samana. AdN is the
issuer, created under the laws of the Cayman Islands, and is an
exempted limited liability company.

DOMINICAN REPUBLIC: Official Denies Ruffled Feathers in US-DR Ties
Dominican Today reports that administrative minister, Jose Ramon
Peralta, affirmed that diplomatic relations between the Dominican
and US governments are currently in an excellent moment.

He said "a climate of fluid diplomatic relations and excellent
communication" is the current situation between the two countries,
ruled out any kind of differences, according to Dominican Today.
"We want to repeat that the diplomatic and commercial relations
between our country and the United States are at an excellent time
and everything is going perfectly well, so there is no need to
worry or harbor any fear of anything."

He stressed that the United States continues to be the main
trading partner, which "greatly contributes to the local economy
through investment, remittances and tourism," the report relays.

In a National Palace press conference, Mr. Peralta added that he
was unaware of conflicting positions on any issue, "and on the
contrary, diplomatic and consular relations are at their best,"
the report relays.

Miami based El Nuevo Herald reported Washington's alleged
discontent with Santo Domingo over that latter's failure to tow
the US line on the issues of Venezuela and the Chinese expansion
in the region, 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.


ECUADOR: Fitch Affirms B- LT IDRs, Alters Outlook to Neg.
Fitch Ratings has revised Ecuador's Outlook to Negative from
Stable and affirmed its Long-Term, Foreign- and Local-Currency
Issuer Default Ratings at 'B-'.


The Negative Outlook on Ecuador's rating reflects Ecuador's
relatively large fiscal financing needs for 2019-2020 and the
sovereign's uncertain access to funding sources in the context of
tighter global financing conditions. A faster fiscal consolidation
to reduce the funding gap is difficult and uncertain, especially
as it could bring additional challenges for Ecuador's economic and
political outlook. Ecuador's low level of international reserves
and resulting weak external liquidity are an additional

Fitch estimates Ecuador's 2019 financing needs at USD9 billion,
which include an estimated USD3.7 billion fiscal deficit, USD3.9
billion in amortizations and USD1.4 billion in anticipated sale of
oil and other obligations. The government has identified possible
sources of financing that are heavily reliant on oil-related
financing, China and international markets.

There is limited visibility on the timing and magnitude of funding
from China. Current market access for Ecuador is uncertain (yields
are currently above 9% in the secondary market). External
financing conditions have become tighter in the context of rising
U.S. interest rates and diminished central bank liquidity
globally. Although China granted a loan of USD900 million to
Ecuador in December 2018 (with a disbursement of half in
December), pledges for additional funding do not yet constitute
firm commitments in Fitch's view. The volatility of oil prices
also adds an additional risk to the government's financing plans.
Fitch expects Ecuador's financing needs to remain at roughly USD9
billion in 2020, including a Eurobond maturity of USD2.2 billion
in March 2020.

In addition to the fiscal financing difficulties, Ecuador faces
external liquidity pressures. Historically, Ecuador's
international reserve levels have been low and volatile, and
heavily reliant on sovereign external borrowing. While Ecuador is
a fully dollarized economy, and therefore technically
international reserves do not serve a traditional balance of
payments purpose, the Central Bank of Ecuador is the country's and
the government's payment agent, and as such needs a certain
threshold of operational reserves, which private sector analysts
estimate at around USD2 billion. International reserves ended 2018
at USD2.7 billion or just over one month of current account
payments and up slightly from US2.4 billion from year-end 2017.

Large fiscal deficits and increased reliance on expensive market
debt have led to rapidly rising debt and interest burdens, which
are eroding Ecuador's fiscal flexibility, especially in the
context of dollarization. Fitch projects Ecuador's debt/GDP ratio
will rise to nearly 55% of GDP by year-end 2019, up from just 35%
in 2015. Furthermore, the interest burden has risen sharply and
the government's interest/revenues will approach 10% in 2020,
nearly double the 2016 level. Although the government has reduced
the fiscal deficit significantly over the last three years to a
preliminary estimate of 3.1% of GDP in 2018, Fitch expects the
fiscal adjustment to stall over the next two years due in part to
increased spending pressures coming from court-mandated pension
payments beginning in 2019. As a result the debt/GDP ratio will
continue to rise.

Fitch also believes that there are significant implementation
risks to fiscal adjustment plans, given the sharp fall in the
popularity of President Lenin Moreno. A December 2018 poll
conducted by Cedatos showed his popularity fell to 34%, down from
over 68% in January 2018. For example, further fuel subsidy
reductions could prove politically difficult to implement. On the
revenue side, recent oil price volatility highlights risks to a
fall in prices for the government's budget (oil revenues represent
roughly 20% of the total for the non-financial public sector).

Ecuador's economic growth remains lackluster, and Fitch expects
growth to fall to just 0.6% in 2019 from 1.0% in 2018 due in part
to the fiscal retrenchment underway (especially on the public
sector capital expenditure side). Average five-year growth (2015-
2019) is expected at just 0.6%, underscoring the severe economic
constraints for the country as it tries to move away from the
public sector investment led growth model under the Correa


Fitch's proprietary SRM assigns Ecuador a score equivalent to a
rating of 'BB-' on the Long-Term, Foreign-Currency (LT FC) IDR

Fitch's sovereign rating committee adjusted the output from the
SRM to arrive at the final LT FC IDR by applying its QO, relative
to rated peers, as follows:

  - Macroeconomic: -1 notch, to reflect Ecuador's lower growth
prospects than rating peers and weaker macroeconomic policy
credibility given the large fiscal imbalances in the context of
official dollarization.

  - Fiscal: -2 notches, to reflect growing fiscal financing
constraints given the sovereign's large borrowing needs and
limited domestic financing options due to the shallowness of the
local market. Continued expected increases in the debt burden
undermine fiscal flexibility and debt sustainability while
materialization of contingent liabilities could also increase debt
burden in the future.

Fitch's SRM is the agency's proprietary multiple regression rating
model that employs 18 variables based on three-year centered
averages, including one year of forecasts, to produce a score
equivalent to a LT FC IDR. Fitch's QO is a forward-looking
qualitative framework designed to allow for adjustment to the SRM
output to assign the final rating, reflecting factors within the
agency's criteria that are not fully quantifiable and/or not fully
reflected in the SRM.


The main factors that could lead to a downgrade include:

  - Tighter financing constraints that undermine debt repayment

  - Economic weakness or instability that heightens public debt
sustainability concerns;

  - Political instability that undermines the government's
policymaking capacity and willingness to service debt.
The Rating Outlook is Negative. Consequently, Fitch does not
currently anticipate developments with a high likelihood of
leading to a positive rating change. However, the main factors
that could lead Fitch to stabilize the Outlook include:

  - Sustained easing of financial constraints and a
diversification of funding sources;

  - Further fiscal policy adjustments that narrow the budget
deficit, ease financial financing constraints and improve the
trajectory of government debt/GDP;

  - Improvements in the country's external liquidity position that
provide a more ample buffer to external shocks.


The growth, fiscal and external forecasts assume that oil
production remains at 530,000 barrels a day in 2019, similar to
year-end 2018 production. Fitch's latest projections expect
average Brent oil prices at USD65 per barrel in 2019 and USD62.5
per barrel in 2020.

The full list of rating actions is as follows:

Long-Term, Foreign-Currency IDR affirmed at 'B-'; Outlook to
Negative from Stable;

Long-Term, Local-Currency IDR affirmed at 'B-'; Outlook to
Negative from Stable;

Short-Term, Foreign-Currency IDR affirmed at 'B';

Short-Term, Local-Currency IDR affirmed at 'B';

Country Ceiling affirmed at 'B-';

Issue ratings on long-term senior unsecured foreign-currency bonds
affirmed at 'B-'.


DIGICEL GROUP: Secures 98% Bondholder Acceptance on Swap Deal
RJR News reports reports that Digicel Group is reporting that
nearly 98% of creditors holding US$3 billion of its bonds have
taken up an offer to postpone getting their money back.

Following four months of negotiations with bondholders in what
credit ratings agency Moody's described as a distressed exchange
offer, Digicel said as at December 19, 96 per cent of holders of
Digicel bonds due in October 2022 elected to swap their notes for
securities that will mature in 2022, according to RJR News.

Three days later, Digicel revealed that 95.4 per cent of the
owners of US$1 billion of Digicel bonds due in 2022 had been
persuaded to exchange their holdings for 2024 bonds, the report

In an update statement, Digicel said final take-up across both
offers had risen to 97.9 per cent by the time the offer expired on
January 9, the report notes.

Digicel is saddled with about US$6.7 billion of debt, the report

As reported in the Troubled Company Reporter-Latin America on
July 5, 2018, Moody's Investors Service changed to negative
from stable the outlook on the ratings of Digicel Group Limited
("Digicel", "DGL" or the "company") and Digicel Limited ("DL") and
assigned a negative outlook to Digicel International Finance
Limited ("DIFL"). At the same time, Moody's has affirmed DGL's B2
corporate family rating (CFR) and B2-PD probability of default
rating (PDR), as well as the B1 rating on the unsecured notes of
DL and the Ba2 rating on the secured bank credit facilities of


MEXICO: Security Bolstered Along Stretch of Pipeline Network
EFE News reports that Mexico's president said that security would
be tightened along a 1,600-kilometer (995-mile) stretch of state
oil company Petroleos Mexicanos' (Pemex's) pipeline network to
prevent fuel theft.

"We're going to bolster surveillance along 1,600 km of pipelines,
where the six main ducts for transporting fuels are located,"
Andres Manuel Lopez Obrador, known as AMLO, said in his morning
press conference, according to EFE News.

Previously, AMLO's administration adopted a change in Pemex's
method for distributing gasoline and diesel from refineries to
urban distribution centers, opting to transport the fuel via
tanker trucks instead of pipelines (a frequent target of fuel
thieves), the report recalls.  That modification has caused supply
problems in at least 10 states and in Mexico City and led to the
closure of service stations and panic purchases.

AMLO said that fuel shortages the day before in Mexico City
occurred because a pipeline serving the capital had been
"sabotaged" on two occasions, notes EFE.

"We have enough gasoline . . . so don't get desperate," the
president said, thanking service-station owners, citizens and the
media for their understanding, reports EFE.

Besides ordering the deployment of 4,000 security forces to
monitor pipelines, AMLO also said ordinary citizens have a crucial
role to play in preventing fuel theft, according to the report.

"The pipelines run through ejidos (lands farmed by cooperatives),
through small properties, and I'm calling on everyone to support
this effort, either by informing (the authorities)" or directly
participating in the vigilance efforts, the report quoted the
president as saying.

EFE relates that Stealing fuel from Pemex-owned pipelines and re-
selling it on the black market has become a major criminal
enterprise in Mexico.

Theft of fuel from pipelines by organized crime groups cost Mexico
some $3.4 billion last year, the government says, EFE notes.

During the press conference, AMLO also highlighted the fact that
Mexico imports 600,000 barrels per day of the 800,000 bpd of
gasoline it consumes, a situation he blamed on neo-liberal (free-
market) policies adopted in the Aztec nation in the late 1980s.

The leftist president, who took office in December, added that his
government plans to resolve this problem by investing in the
country's internal development, EFE relates.


VENEZUELA: Canada Slams Maduro's 2nd Term as 'Illegitimate'
Mike Blanchfield at The Canadian Press reports that inauguration
of Nicolas Maduro has solidified him as a dictator, Foreign
Affairs Minister Chrystia Freeland said in a scathing denunciation
of the Venezuelan president that aligned Canada with major allies.

Freeland characterized Maduro's recent election victory as
illegitimate as he was sworn in for a second term in Caracas.
Canada joined the United States and 17 Latin American governments
in rejecting the legitimacy of the new Maduro government,
according to The Canadian Press.

Venezuela's political and economic crisis has forced three million
people to flee their homes in search of food, health care and
other basic services since 2015, the report relays.  Canada has
provided $2.2 million in humanitarian assistance to Venezuela and
is a member of the Lima Group of countries that is trying to bring
international pressure to bear on the South American country, the
report notes.

"We call on (Maduro) to immediately cede power to the
democratically elected National Assembly until new elections are
held, which must include the participation of all political actors
and follow the release of all political prisoners in Venezuela,"
said Freeland, the report says.

Many other countries in Europe and Latin America snubbed Maduro's
inauguration ceremony, but the socialist presidents of Cuba and
Bolivia, Miguel Diaz-Canel and Evo Morales, showed up to support
him. Maduro used his inauguration speech to shoot back at Canada
and the U.S., the report discloses,

"Venezuela is the centre of a world war led by the North American
imperialists and its allies," he said, the report relays.

President Maduro vowed to fight his enemies in the spirit of
former president Hugo Chavez, and accused the U.S. of stoking the
unrest through the sanctions, the report relays.  President Maduro
was Venezuela's vice-president under Chavez, until Chavez's death
in 2013, the report notes.

Freeland and U.S. Secretary of State Mike Pompeo gave their full-
throated support to Juan Guaido, who assumed the presidency of the
country's only democratically elected institution, the National
Assembly, the report relays.

"The United States remains steadfast in its support of the
Venezuelan people and will continue to use the full weight of U.S.
economic and diplomatic power to press for the restoration of
Venezuelan democracy," the report quoted Mr. Pompeo as saying.

Rich in oil, Venezuela was once one of the Western Hemisphere's
economic success stories, but its crude production has declined by
two-thirds amid allegations of corruption and mismanagement in the
state-run oil company, PDVSA, the report relays.

A recent report, jointly authored by a Canadian and an American
think-tank, urged the U.S. to take the lead in confiscating and
repurposing US$3 billion in frozen Venezuelan assets to help the
country's neighbors and international agencies provide support to
refugees and migrants, the report notes.

The Centre for International Governance Innovation in Waterloo,
Ont. and the Washington-based Inter-American Dialogue estimated
that the ill-gotten proceeds of Venezuelan corruption total in the
tens of billions of dollars, noting that the U.S. Treasury
Department estimates that $2 billion has been stolen from PDVSA
alone, the report relays.

"While the frozen assets stolen from a country's treasury would
under normal circumstances be returned to that country, the
kleptocratic nature of the Venezuelan regime makes it impossible
to ensure that the funds would go to the benefit of the Venezuelan
public," the report said, The Canadian Press added.

As reported in the Troubled Company Reporter-Latin America,
S&P Global Ratings in May 2018 removed its long- and short-term
local currency sovereign credit ratings on Venezuela from
CreditWatch with negative implications and affirmed them at
'CCC-/C'. The outlook on the long-term local currency rating is
negative. At the same time, S&P affirmed its 'SD/D' long- and
short-term foreign currency sovereign credit ratings on Venezuela.
S&P's transfer and convertibility assessment remains at 'CC'.


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.
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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 2019.  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.

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