/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/190121.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 Monday, January 21, 2019, Vol. 20, No. 14 Headlines B A R B A D O S * BARBADOS: Must Prepare for Possibility of Severe Dengue Outbreak B R A Z I L AVIANCA BRASIL: Regulator Moves to Ground 20% of Airline's Fleet BANCO PINE: S&P Withdraws 'B-/B' Issuer Credit Ratings USJ ACUCAR: S&P Cuts Global Scale ICR to 'CCC-' C O S T A R I C A BANCO DAVIVIENDA: Fitch Cuts Foreign Currency LT IDR to 'BB-' INSTITUTO COSTARRICENSE: Fitch Cuts LT Foreign Currency IDR to B+ D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: Business Sector to Embark on Dialogue M E X I C O * MEXICO: Must Halt Ecological Overexploitation by Tourism P A N A M A PROMERICA FINANCIAL: Fitch Cuts IDR to B+, Alters Outlook to Neg. P U E R T O R I C O AUTO MASTER EXPRESS: Feb. 9 Plan Confirmation Hearing Set GYMBOREE GROUP: Files Chapter 11 Petition to Facilitate Wind-Down X X X X X X X X X * BOND PRICING: For the Week January 14 to January 18, 2019 - - - - - =============== B A R B A D O S =============== * BARBADOS: Must Prepare for Possibility of Severe Dengue Outbreak ------------------------------------------------------------------ Jamaica Observer reports that the Caribbean Public Health Agency (CARPHA) has called on health officials across the region to prepare for the possibility of a severe outbreak of the mosquito borne Dengue fever. In a statement, CARPHA said the last major regional outbreak of Dengue occurred in 2009, according to Jamaica Observer. "Since then, the region has experienced two large outbreaks of mosquito-borne diseases, Chikungunya in 2014 and Zika in 2016, which are unlikely to reoccur soon," according to the report. The regional agency also said that "Disease modelling predicts that another regional outbreak of Dengue may occur in the near future," adding that last year, Latin America showed an increase in the number of Dengue cases, the report notes. The report relays that CARPHA has also pointed to the recent outbreak of Dengue in Jamaica, saying that it has elevated the level of concern in other Caribbean islands. "The Caribbean Public Health Agency is therefore advising countries to implement enhanced measures to reduce mosquito breeding and prevent the spread of disease," the report quoted CARPHA as saying. Dengue is a flu-like illness that affects infants, young children and adults. Symptoms typically begin four to ten days after infection, and include a high fever, headache, vomiting, muscle and joint pains, and a characteristic skin rash. This illness can evolve to severe dengue, characterized by potentially deadly complications, such as internal haemorrhaging, intense and continuous abdominal pain or tenderness and persistent vomiting, the report notes. In some cases, Dengue may be severe and cause death, the report says. Dengue and other mosquito-borne diseases threaten health, tourism, social and economic development, and a collaborative effort is required to reduce the spread of disease, the report relays. Dengue remains a global health problem and like Zika and Chikungunya, there is no specific treatment for the disease, the report says. The Aedes aegypti mosquito vector, which spreads Dengue, is present in all Caribbean territories, the report notes. The measures used for controlling the spread of Dengue are the same as those for Zika and Chikungunya as these diseases are also transmitted by the Aedes aegypti mosquito, the report relays. With the arrival of the rainy season within a few months, mosquito control and awareness activities need to be intensified, the report says. Caribbean ministries of health are advised to -- Increase health promotion messages to prevent mosquitos biting and breeding; combine efforts with communities to eliminate mosquito breeding sites; intensify vector surveillance and control and disseminate appropriate clinical care and treatment guidelines, the report notes. The agency says that the most effective way to avoid becoming ill from viruses spread by mosquitoes is to prevent mosquito bites, the report adds. =========== B R A Z I L =========== AVIANCA BRASIL: Regulator Moves to Ground 20% of Airline's Fleet ---------------------------------------------------------------- Marcelo Rochabrun at Reuters reports that Brazil's aviation regulator said it was going to ground 10 planes operated by Avianca Brasil, 20 percent of its fleet, prompting the carrier to go to court seeking to prevent the decision being enforced. The regulator, known as ANAC, said it was acting at the request of one of various lessors involved in a festering legal dispute with Avianca Brasil, which filed for bankruptcy last month after falling behind with lease payments, according to Reuters. In response, Avianca Brasil, the country's fourth largest airline, filed an emergency motion asking a judge to issue an injunction against the regulator, the report notes. The motion is still pending. The decision came as a surprise because Avianca Brasil reached an agreement in court with the aircrafts' owner and other lessors which granted the carrier 15 more days to operate the planes, the report relays. The report discloses that no planes had been grounded and it could take up to five business days to take them out of service, the regulator said. Avianca Brasil has argued that grounding the planes would affect thousands of people, the report relays. Avianca Brasil said in a statement that the announcement by ANAC was "in disagreement with the judicial decision" in a Sao Paulo bankruptcy court, the report notes. The request to ground the planes was submitted by GECAS, a General Electric subsidiary that leases aircraft, two days after its Brazilian lawyers agreed to let the planes fly for 15 more days, according to a letter obtained by Reuters. "Given recent events, GECAS has found it necessary to take steps to protect our interests," company spokesman James Lutton said in an email. "We have terminated leases on these aircraft and are currently working with Brazilian authorities and the airline to ensure a satisfactory return of the aircraft," he added. In the letter, the regulator said the agreement signed between Avianca Brasil and GECAS only applied to actions filed in a court. But since ANAC is not a judicial body, it was not bound by that court decision, the report notes. Avianca Brasil filed for bankruptcy in December, after falling behind on lease payments on many of its planes, setting off a legal battle in Brazil and the United States over whether it could still operate the aircraft, the report recalls. The airline has so far said it has managed to keep its operations running as normal, the report says. Avianca Brasil is separate from the better known Avianca Holdings, which is based in Colombia. Although they share a corporate parent. BANCO PINE: S&P Withdraws 'B-/B' Issuer Credit Ratings ------------------------------------------------------ S&P Global Ratings withdrew its global scale 'B-/B' and national scale 'brBBB-' issuer credit ratings on Banco Pine S.A. At the time of the withdrawal, the outlook on both rating scales was negative. At the time of the withdrawal, the ratings on the bank reflected its somewhat concentrated business profile and its struggle to stabilize its operating revenues. S&P said, "The ratings also incorporated our expectation that the bank's weak internal capital generation would continue preventing its capitalization from strengthening, leading to a forecast risk-adjusted capital (RAC) ratio of about 4.3% for the next two years. Moreover, the ratings took into account our view that asset risk remains high, and further losses may still pressure the bank's capital position. Our assessment also incorporated the bank's high reliance on local distributors for funding. However, we believe that Banco Pine's liquidity position provides adequate cushion to cope with its short-term obligations." USJ ACUCAR: S&P Cuts Global Scale ICR to 'CCC-' ----------------------------------------------- S&P Global Ratings lowered its global scale issuer credit rating to 'CCC-' from 'CCC' and its unsecured issue-level rating to 'C' from 'CC' on the Brazil-based sugarcane processor, USJ Acucar e Alcool S/A. The downgrade reflects the heightened risks of an adverse liquidity event for USJ in the next few months, in terms of ability or willingness to accomplish timely payments for its obligations, especially considering the sizeable coupon of its 2021 bond due next May and the amortization of the outstanding amount of its 2019 bond due next November. The depreciation of the Brazilian real during 2018 also took a toll on the company's cash generation, because almost 90% of its debt is in dollars. USJ has to service the coupon for its bonds, totaling $13 million, next May and November and meet its $29 million 2019 bond amortization in November Although the company has been able to rollover most short-term bank debt as it comes due, S&P's base- case scenario assumes that USJ won't generate enough funds to pay down its obligations in full and on timely basis. This increases the risks of a default or debt renegotiation, absent favorable external factors such as substantial asset sales or a capital injection. If a debt renegotiation occurs, changing terms and conditions of the payments, given USJ's current unsustainable capital structure, S&P would likely consider it as tantamount to a default. =================== C O S T A R I C A =================== BANCO DAVIVIENDA: Fitch Cuts Foreign Currency LT IDR to 'BB-' ------------------------------------------------------------- Fitch Ratings has taken various rating actions on six Costa Rican and two Panamanian Financial Institutions following the downgrade of Costa Rica's sovereign rating to 'B+' from 'BB' and the downgrade of the country ceiling to 'BB-' from 'BB+'. The foreign and local currency long-term Issuer Default Ratings of Banco de Costa Rica (BCR) and Banco Nacional de Costa Rica mirror the action on the sovereign ratings. These banks' IDRs are aligned with the sovereign, reflecting the explicit guarantee and complete ownership by the Costa Rican government. Fitch has downgraded the foreign currency long-term IDRs of Banco BAC San Jose, S.A. (BAC San Jose) and Banco Davivienda (Costa Rica), S.A. (Davivienda CR) to 'BB-' from 'BB+' as they are constrained by the Costa Rican country ceiling. In turn, the downgrade of the banks' Local Currency IDRs to 'BB' is consistent with a maximum uplift of two notches above the sovereign rating. The downgrade of the VRs of BAC San Jose, Davivienda CR, BCR and BNCR, as well as Banco Popular y de Desarrollo Comunal's (BPDC) IDRs and VR maintains these ratings at the same level as the sovereign rating, reflecting the high influence of the sovereign and the local operating environment over the financial sector and the credit profiles of these banks. As stated in Fitch's rating criteria, banks are rarely rated above the sovereign. Fitch also downgraded the Support Ratings (SRs) and revised the Support Rating Floors (SRFs) of some of these institutions. These banks have been removed from Rating Watch Negative and assigned Negative Outlooks in line with the sovereign Outlook. Fitch downgraded Banco Internacional de Costa Rica, S.A.'s (BICSA) foreign currency long-term IDR to be in line with those of its parents, BCR and BNCR. However, Fitch removed BICSA's Rating Watch Negative and assigned a Stable Outlook, unlike its parents. This indicates that a potential downgrade of BCR's and BNCR's IDRs will not impact BICSA's IDR, which is now based on its VR and was affirmed. Fitch affirmed Inversiones CrediQ Business's (ICQB) IDR with a Stable Outlook, given the entity's regional footprint and growing franchise that drives into relatively diversified operations. ICQB is present in four Central American countries: Costa Rica, El Salvador, Honduras and Nicaragua. The Costa Rican entity represents slightly above 45% of the group's total assets, the Salvadoran entity around 30%, and the Honduran subsidiary nearly 20%. Fitch upgraded the national scale ratings of Financiera G&T Continental Costa Rica, S.A. (Fin G&TC CR). The national ratings of the rest of the Costa Rican financial institutions were unaffected, reflecting changes in the relative strengths and weaknesses of each institution. Fitch downgraded the national ratings for BICSA and BPDC's debt issuances in Panama, reflecting Fitch's view that these have a relatively weaker credit worthiness compared with other issuers rated 'A-(pan)' or higher in Panama. In turn, Fitch affirmed BICSA's issuance rating in El Salvador at 'AAA(slv)' with a Stable Outlook to reflect the bank's relative strength compared to other issuers in El Salvador. At its current rating level, BICSA is above El Salvador's country ceiling of 'B'. KEY RATING DRIVERS State-Owned Banks BCR's and BNCR's IDRs are aligned with the sovereign, reflecting the explicit guarantee and complete ownership by the Costa Rican government. According to the law, the state-owned banks have the guarantee and full collaboration of the state. Fitch also believes both banks have high systemic importance and relevant and long- lasting policy roles. BNCR's senior unsecured debt ratings are aligned with the bank's IDR. BNCR's VR reflects with high importance the operating environment and the bank's risk appetite, which has been reflected in its financial performance. The VR also considers BNCR's leading franchise, reasonable asset quality, modest profitability, appropriate capitalization levels and solid funding and liquidity profile. BCR's VR reflects with high importance the operating environment and the bank's risk appetite. BCR's VR also reflects its stable funding, supported by the explicit sovereign guarantee, and the bank's ability to sustain its operation and effectively maintain stable core financial metrics through the board of directors' transition period. BCR's and BNCR's support ratings of '4' maps to a support based IDR at 'B+' and is consistent with the sovereign rating. The SRF is aligned with Costa Rica's sovereign rating. Banco Popular y de Desarrollo Comunal BPDC's IDRs and national ratings are driven by its VR. The ratings are high influenced by the operating environment and by the bank's company profile, given its public nature and the benefits granted by its inception law. BPDC's ratings also reflect its higher risk appetite relative to peers, sound loss absorption capacity, and adequate asset quality. The bank's SR of '4' and SRF of 'B' reflect the limited probability of support from the Costa Rican government despite the nature of the bank and its systemic importance. The national ratings of senior unsecured debt in Panama reflect the relative strength of this Costa Rican bank compared with other issuers in Panama. Foreign-Owned Commercial Banks BAC San Jose and Davivienda CR's IDRs are rated above the sovereign rating based on the potential support they could receive from their respective shareholders, Banco de Bogota and Banco Davivienda, both rated 'BBB'/Stable. In Fitch's view, their parents' commitment to their subsidiaries are sufficient to allow them to be rated above the sovereign rating. BAC San Jose's VR is highly influenced by the operating environment. Its VR reflects its relatively solid company profile, consistent performance and risk appetite. The bank benefits from above average profitability, good asset quality, as well as stable capitalization and deposit base. Davivienda CR's VR is highly influenced by the operating environment. The bank's VR also considers its moderate franchise, its reasonable risk appetite, good asset quality, modest profitability, moderate capitalization levels and appropriate funding structure. The banks' SRs of '3' reflect their parents' moderate probability to provide support and are mostly influenced by Costa Rica's country ceiling. Banco Internacional de Costa Rica BICSA's IDRs and national ratings are driven by its VR. BICSA's VR reflects, with high importance, its company profile. In Fitch's opinion, BICSA's small market share and its focus in corporate and commercial clients results in concentrations in both sides of its balance sheet. Fitch also considers BICSA's business model and its competitive position, which has a wider geographic diversification. BICSA's VR also takes into account the bank's strengthened capital position, recovering profitability and contained asset quality deterioration. BICSA's Support Rating reflects Fitch's opinion on its shareholders', BCR and BNCR, ability and propensity to provide assistance to BICSA, should the need arise. The Support Rating of '4' maps to BICSA's IDR of 'B+' and reflects a limited probability of support from its shareholders. Inversiones CrediQ Bussines ICQB's IDRs are highly influenced by the entity's company profile, which reflects its concentrated and proven business model focused in vehicle financing and its growing franchise through the region. However, the entity continues to have a relatively small scale of operations in Central America compared with higher-rated regional financial groups. The ratings also consider as a relevant factor ICQB's credit quality, which remains reasonable for the rating level, but with a slight deteriorating trend within a challenging operating environment. Additionally, Fitch takes into account the group's consistent profitability and capital levels exhibited in the recent years and its relatively diversified funding sources mainly reliant on wholesale sources from several financial institutions. Financiera G&T Continental Costa Rica, S.A. Fin G&TC CR 's national scale ratings are based solely on the potential support it would receive from Banco G&T Continental Guatemala (G&TC Gt, 'BB'/Stable), if required. In Fitch's opinion, G&TC Gt' support is highly influenced by the reputational risk that could arise in case of default of its Costa Rican subsidiary. Also, it considers the relatively small size of the subsidiary relative to its parent size, its reduced role in the group and the potential for disposal. RATING SENSITIVITIES An additional downgrade of Costa Rica's sovereign rating or material deterioration of the local operating environment could trigger a downgrade of BAC San Jose's, Davivienda CR's, BCR's, BNCR's and BPDC's IDRs, SR and VRs, and a SRFs revision. BNCR's senior unsecured debt ratings will mirror the bank's IDR. BICSA's IDR and national scale ratings could be upgraded in response to an upgrade of its own VR, which in turn could arise from improvements in diversification on both sides of the bank's balance sheet and improvements in BICSA's funding structure in terms of stability and concentration. In turn, a downgrade of the Bank's VR could be triggered by material liquidity stress or significant asset quality deterioration. A downgrade of the Bank's IDR and national ratings could be possible only if both its own VR and its parents' IDRs are downgraded. ICQB's ratings could be downgraded in a scenario of material deterioration in asset quality metrics such as a sustained NPL ratios increase to above 5%, accompanied by a business volume reduction that could affect its financial performance and a debt to tangible equity ratio above 7x. Fin G&TC CR's national scale ratings are sensitive to a change in the capacity or propensity of its parent company to provide support. Fitch has taken the following rating actions: Banco BAC San Jose -- Foreign Currency Long-term IDR downgraded to 'BB-' from 'BB+'; Rating Watch Negative removed and Negative Outlook assigned; -- Foreign Currency Short-term IDR affirmed at 'B'; -- Local Currency Long-term IDR downgraded to 'BB' from 'BBB-'; Rating Watch Negative removed and Negative Outlook assigned; -- Local Currency Short-term IDR downgraded to 'B' from 'F3'; -- Support rating affirmed at '3'; -- Viability rating downgraded to 'b+' from 'bb'. Banco Davivienda (Costa Rica) -- Foreign Currency Long-term IDR downgraded to 'BB-' from 'BB+'; Rating Watch Negative removed and Negative Outlook assigned; -- Foreign Currency Short-term IDR affirmed at 'B'; -- Local Currency Long-term IDR downgraded to 'BB' from 'BBB-'; Rating Watch Negative removed and Negative Outlook assigned; -- Local Currency short-term IDR downgraded to 'B' from 'F3'; -- Support rating affirmed at '3'; -- Viability rating downgraded to 'b+' from 'bb-'. Banco de Costa Rica -- Foreign and Local Currency Long-term IDRs downgraded to 'B+' from 'BB', Rating Watch Negative removed and Negative Outlook assigned; -- Foreign and Local Currency Short-term IDR affirmed at 'B'; -- Viability Rating downgraded to 'b+' from 'bb-'; -- Support Rating downgraded to '4' from '3'; -- Support Rating Floor revised to 'B+' from 'BB'. Banco Internacional de Costa Rica International ratings -- Foreign Currency Long-term IDR downgraded to 'B+' from 'BB', Rating Watch Negative removed and Stable Outlook assigned; -- Foreign Currency Short-term IDR affirmed at 'B'; -- Viability Rating affirmed at 'b+'; -- Support Rating downgraded to '4' from '3'. National ratings -- Long-term National rating downgraded to 'BBB+(pan)' from 'A+(pan)'; Rating Watch Negative removed and Stable Outlook assigned; -- Short-term National rating downgraded to 'F2(pan)' from 'F1(pan)'; -- Senior Unsecured National Long-term Ratings downgraded to 'BBB+(pan)' from 'A+(pan)' -- Commercial Paper downgraded to 'F2(pan)' from 'F1(pan)'; -- Senior Unsecured National Long-term Ratings affirmed at 'AAA(slv)'; Outlook Stable. Banco Nacional de Costa Rica -- Foreign and Local Currency Long-term IDRs downgraded to 'B+' from 'BB', Rating Watch Negative removed and Negative Outlook assigned; -- Foreign and Local Currency Short-term IDR affirmed at 'B'; -- Long-term senior unsecured bonds downgraded to 'B+' from 'BB'; -- Viability Rating downgraded to 'b+' from 'bb'; -- Support Rating downgraded to '4' from '3'; -- Support Rating Floor revised to 'B+' from 'BB'. Banco Popular y de Desarrollo Comunal -- Foreign and local Currency Long-term IDRs downgraded to 'B+' from 'BB', Rating Watch Negative removed and Negative Outlook assigned; -- Foreign and local Currency Short-term IDR affirmed at 'B'; -- Viability Rating downgraded to 'b+' from 'bb'; -- Support Rating downgraded to '4' from '3'; -- Support Rating Floor revised to 'B' from 'BB-'; -- Senior Unsecured National Long-Term Ratings downgraded to 'BBB+(pan)' from 'A+(pan)'. -- Senior Unsecured National Short-Term Ratings downgraded to 'F2(pan)' from 'F1(pan)'. Financiera G&T Continental Costa Rica -- Long-term National rating upgraded to 'AA-(cri)' from 'A+(cri)'; Outlook Stable; -- Short-term National rating upgraded to 'F1+(cri)' from 'F1(cri)'; -- Senior Unsecured National Long-Term Ratings upgraded to 'AA- (cri)' from 'A+(cri)'. -- Senior Unsecured National Short-Term Ratings upgraded to 'F1+(cri)' from 'F1(cri)'. Inversiones CrediQ Business -- Long-term IDR affirmed at 'B'; Outlook Stable; -- Short-term IDR affirmed at 'B'. INSTITUTO COSTARRICENSE: Fitch Cuts LT Foreign Currency IDR to B+ ----------------------------------------------------------------- Fitch Ratings has downgraded the ratings on the following corporate issuers as a result of Fitch's recent downgrade of Costa Rica's sovereign rating to 'B+' from 'BB': -- Instituto Costarricense de Electricidad y Subsidiarias -- Investment Energy Resources Limited KEY RATING DRIVERS The downgrade of Costa Rica's sovereign rating reflects persistently wide fiscal deficits, high near-term financing needs due to a steep amortization schedule and budget financing constraints. The new administration successfully passed a fiscal reform in late December to address fiscal imbalances. Despite this, Fitch expects limited near-term yield from the reform and a rapidly climbing interest bill, will keep the country's fiscal deficit higher than peers and the debt burden on a relatively steep upward trajectory. The sovereign's ability to meet its high financing needs remains uncertain pending congressional approval for external borrowing and amid high domestic financing rates. These financing uncertainties pose risks to macroeconomic stability. The Negative Outlook for the country reflects downside risks related to ongoing uncertainty surrounding government financing amidst high interest rates and shorter debt maturities, notwithstanding the implementation of the fiscal reform legislation and repayment of a short-term liquidity facility from the central bank. Instituto Costarricense de Electricidad y Subsidiarias (ICE) ICE exhibits a strong linkage to the sovereign, given its strategic importance to Costa Rica and the potentially significant negative socio-political and financial implications of any financial distress at the level of the company. The ratings are supported by government ownership and the implicit and explicit expectation of government support. Additionally, the ratings incorporate the company's diversified asset portfolio, moderate capital expenditure program, and its strong market share position in the telecommunications business. Investment Energy Resources Limited (IERL) The downgrade of Costa Rica's rating combined with Fitch's earlier downgrade of Nicaragua (B-/Outlook Negative) has weakened IERL's overall operating environment, resulting in a downgrade to 'B+'. The company's geographic diversification and generally favorable cash flow predictability partially mitigate its exposure to macroeconomic uncertainty for its generation companies, supporting a Stable Outlook. The expected rating on the proposed USD550 million bond has been downgraded to 'B+'/'RR4' and then withdrawn, as the transaction has not been executed. RATING SENSITIVITIES Instituto Costarricense de Electricidad Although unlikely in the near term, a positive rating action could occur as a result of stronger than expected outcomes from the fiscal reform that contribute to a significant reduction of the fiscal deficit or the emergence of external funding resources that alleviate the high sovereign financing constraints. Developments that could lead to a negative rating action include: a sovereign downgrade, weakening of legal, operational and/or strategic ties with the government; or regulatory intervention that negatively affects the company. Investment Energy Resources Limited Continued expansion of its geographic footprint that increases IERL's operations in moderate- to low-risk operating environments would be considered credit positive, provided that this expansion does not result in a material deterioration of financial metrics. Negative rating sensitivities include: deterioration of the sovereign ratings and/or applicable country ceiling combined with a significant lag in payments; sustained disruptions in generation capacity due to either technical or climatological issues, particularly in conjunction with continued aggressive cash management policies; and significant delays in realizing IERL's near-term deleveraging trajectory. FULL LIST OF RATING ACTIONS Fitch has taken the following rating actions: Instituto Costarricense de Electricidad y Subsidiarias - Long-Term Foreign Currency IDR downgraded to 'B+' from 'BB'; Outlook Negative; - Long-Term Local-Currency IDR downgraded to 'B+' from 'BB'; Outlook Negative; - Senior unsecured debt downgraded to 'B+'/'RR4' from 'BB'. The ratings have been removed from Rating Watch Negative. Investment Energy Resources Limited - Long-Term Foreign Currency IDR downgraded to 'B+' from 'BB-'; Outlook Stable; - Long-Term Local-Currency IDR downgraded to 'B+' from 'BB-'; Outlook Stable; - Senior unsecured debt downgraded to 'B+'/'RR4(EXP)' from 'BB- (EXP)' and withdrawn. =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: Business Sector to Embark on Dialogue --------------------------------------------------------- Dominican Today reports that the Dominican Republic business sector is willing to embark on a three-way dialogue when the National Salary Committee convene the parties to review the salary this year, but National Council (Conep) vice president Cesar Dargam notes that this cannot displace the "imperative need" to amend a 27-year-old Labor Code. "As you know there is a National Wages Committee that meets every two years, this committee should meet this year and we are in the best disposition to go to that committee and discuss what these conditions would be," he said, according to Dominican Today. He said the current Labor Code belongs to a "different world" from the one we are living in of "robots, automation and new ways of working," the report relays. He said the salary should be readjusted this year to improve the conditions of employees. "No one wants to have a partner in a company that does not feel comfortable, that does not have security, because at the end of the day that has a negative impact on productivity," he said, notes the report. Mr. Dargam spoke in response to union leader Gabriel del R°o, who said that labor aims to achieve a minimum wage of RD$20,000 and better conditions for workers, 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. =========== M E X I C O =========== * MEXICO: Must Halt Ecological Overexploitation by Tourism ---------------------------------------------------------- EFE News reports that Tourism in Mexico must promote taking care of biodiversity with measures such as mitigating the environmental footprint to try and halt the ecological overexploitation being suffered by some of the country's tourist destinations. The director of the Tourism Faculty at Anahuac University, Francisco Madrid Flores, told EFE that the destinations have to understand that climate change, desertification, traffic congestion, air quality and the massive generation of waste are factors that need to be taken into account in tourism planning. "We're at an opportune moment for asking that tourist destinations be sustainable. The official policy that must be pushed by the new federal administration has to go down that road," he said, EFE News notes. "Given that there are destinations that have already gone beyond the human impact and have a very pressing situation, it's necessary to adopt a clearer vision in tourism and environmental policies to achieve synergies to benefit both," he added. The tourism industry is responsible for almost 8 percent of Mexico's GDP and creates some 10 million direct and indirect jobs, according to EFE News. According to Madrid Flores, the destinations that best exemplify ecological overexploitation are the paradise ports of Cancun, Acapulso and Los Cabos, places where the massive inflow of travelers has brought social problems, economic inequality and the loss of biodiversity, the report relays. Recently, Mexico City's tourism secretary, Carlos Mackinlay said that there are places in the capital that are oversaturated in terms of hotels and the lack of space makes it very difficult to create new infrastructure, the report notes. To that, he added that -- if new tourism alternatives are not created -- the capital's downward trajectory will be very rapid, the report discloses. According to Mexico's Tourism Promotion Council, sustainability incorporated into tourism promotion is a trend that has come to stay and Mexico is lagging somewhat in that regard, the report notes. In addition, the entity also feels that this has to be pushed in keeping with a vision that balances social and environmental responsibility with the profitability of investments, the report says. Meanwhile, the World Tourism Organization warns in its guidelines that local action must be taken to achieve responsible and sustainable tourism that can simultaneously maintain competitiveness and proper management of the tourist destinations, the report relays. According to this organization, in 1950 there were 25 million international tourists, a figure that over the past 70 years has skyrocketed to an estimated 1.52 billion travelers per year by 2020, the report notes. Miguel Angel Munoz Luna, the president of the Hotel Association in San Cristobal de las Casas, a city in the southeastern state of Chiapas, told EFE that tourism has to understand that sustainability is a part of doing business. According to the Nielsen marketing research firm, 66 percent of consumers worldwide would pay more to go to tourist spots if they are sustainable, the report adds. =========== P A N A M A =========== PROMERICA FINANCIAL: Fitch Cuts IDR to B+, Alters Outlook to Neg. ----------------------------------------------------------------- Fitch Ratings has downgraded Promerica Financial Corporation Long- Term Issuer Default Rating to 'B+' from 'BB-'. The Rating Outlook is revised to Negative from Stable. PFC's Long-Term IDR downgrade reflects the combined effect of Fitch's recent downgrade of Costa Rica sovereign ratings to 'B+' from 'BB'; Outlook Negative. Costa Rica's downgrade is the is the third PFC location to face a negative rating action since November 2018, following the revision of Ecuador's Rating Outlook to Negative from Stable on Jan. 10, 2019 (see "Fitch Revises Ecuador's Outlook to Negative; Affirms at 'B-'") and the downgrade of Nicaragua's sovereign rating to 'B-' from 'B'/ Negative Outlook (see "Fitch Downgrades Nicaragua to 'B-'; Outlook Negative" published Nov. 27, 2018). The Negative Outlook of the group's IDR reflects the Negative Outlook of the sovereigns as these signal challenges for the financial performance of PFC's operations in those countries. Moreover, a downgrade of one or more of these sovereign ratings could drive a downgrade of PFC's ratings. KEY RATING DRIVERS IDRs and VR PRC's ratings reflect the group's consolidated risk profile. The IDR is also heavily influenced by the group's significant geographic diversification, which balances the risks associated with the weaker operating environments of its main subsidiaries and its comparatively higher risk appetite relative to peers' underpinned by its organic and inorganic growth strategy. PFC's main financial profile weaknesses include its tight capital position and the significant double leverage. The VR also considers the individual strength of its operations and the diversification of profits and dividend payments. Fitch's Assessment of PFC's Operating Environment reflects the group's broad geographic diversification, which includes a large proportion of assets in countries with relatively higher risk. PFC consolidates the group's operations in nine locations. In Fitch's view, the group's profitability may be negatively impacted by the further deterioration of the operating environment in Ecuador, Nicaragua or Costa Rica. After Fitch's sovereign rating action on Costa Rica and Ecuador, 62% of the group's unconsolidated profits attributable to the controlling shareholders as of September 2018 were coming from location with negative outlooks. In spite of the challenging operating environment, the Ecuadorian operation profitability metrics have improved as a result of higher interest income driven by loan growth. As of June 2018, operating profit to risk-weighted assets reached 2% (June 2017:1.2% In Turn, as of September 2018, Banpro Nicaragua saw a 19% decrease in profitability and its operating profit to risk- weighted assets decreased to 3%. The Costa Rican subsidiary profits increased by 16% as of December 2018, driven by sustained loan growth. PFC's Fitch Core Capital ratio of 8.63% as of June 2018 compares unfavourably to peers as a result of higher growth through acquisitions. Double leverage at the holding company is also significant at 126% as of September 2018. Fitch also analyses the group's capital metrics relative to other investment companies per its Non-Bank Financial Institutions Rating Criteria. The core leverage metric for investment companies under these criteria is the gross debt/tangible equity ratio. As of September 2018, this core metric was 0.34x. SUPPORT RATING AND SUPPORT RATING FLOOR PFC Support Rating (SR) and Support Rating Floor (SRF) reflect Fitch's view that external support for the bank, though possible, cannot be relied upon. SENIOR SECURED DEBT The rating of the notes is aligned to PFC's Long-Term IDR. Despite being senior secured and unsubordinated obligations, in Fitch's view, the shares pledged would not have a significant impact on recovery rates. Based on the agency's assessment of the default risk/recovery prospects, the issuance has average recovery prospects. Fitch believes the pledged shares are not traded and have not been rated by Fitch in its opinion on recovery prospects. RATING SENSITIVITIES The Negative rating Outlook on the bank holding's Long-Term IDR is sensitive to further deterioration of Fitch's estimation of the group's operating environment. Further downgrades in these locations accompanied by a material deterioration in the subsidiaries financial performance may trigger a rating downgrade. The Rating Outlook is Negative, therefore a rating upgrade is unlikely. The Rating Outlook could return to Stable if Fitch assessment of the operating environment improves, driven either by the revision of the Sovereign Outlooks to Stable or by a material improvement of the operating environment outside of these locations. SUPPORT RATING AND SUPPORT RATING FLOOR As Panama is a dollarized country with no lender of last resort, a change in PFC's SR or SRF is unlikely. SENIOR SECURED DEBT Senior secured debt rating would mirror any change to PFC's IDRs. Fitch has downgraded the following ratings: Promerica Financial Corporation: -- Long-Term IDR to 'B+' from 'BB-'; Outlook revised to Negative from Stable; -- Viability Rating to 'b+' from 'bb-'; -- Senior Secured Debt to 'B+'/'RR4' from 'BB-'. Fitch has affirmed the following ratings: -- Short-Term IDR at 'B'; -- Support Rating at '5'; -- Support rating floor at 'NF'. ====================== P U E R T O R I C O ====================== AUTO MASTER EXPRESS: Feb. 9 Plan Confirmation Hearing Set --------------------------------------------------------- Bankruptcy Judge Enrique S. Lamoutte conditionally approved Auto Master Express, Inc.'s disclosure statement dated Dec. 26, 2018. Acceptances or rejections of the Plan may be filed in writing by the holders of all claims on/or before 10 days prior to the date of the hearing on confirmation of the Plan. Any objection to the final approval of the Disclosure Statement and/or the confirmation of the Plan must be filed on/or before 10 days prior to the date of the hearing on confirmation of the Plan. A hearing for the consideration of the final approval of the Disclosure Statement and the confirmation of the Plan and of such objections as may be made to either will be held on Feb. 5, 2019, at 10:00 AM at the U.S. Bankruptcy Court, U.S. Post Office and Courthouse Building, 300 Recinto Sur, Courtroom No. 2, Second Floor, San Juan, Puerto Rico. About Auto Master Express Auto Master Express Inc. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D.P.R. Case No. 18-01464) on March 19, 2018. At the time of the filing, the Debtor estimated assets of less than $500,000 and liabilities of less than $1 million. The Debtor engaged Lcdo. Carlos Alberto Ruiz, CSP, as its legal counsel. GYMBOREE GROUP: Files Chapter 11 Petition to Facilitate Wind-Down ----------------------------------------------------------------- Gymboree Group, Inc., on Jan. 16, 2019, disclosed that the Company and its U.S. subsidiaries have voluntarily filed for relief under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the Eastern District of Virginia. In addition, the Company's Canadian subsidiary, Gymboree, Inc., intends to seek protection in proceedings pursuant to the Bankruptcy and Insolvency Act of Canada ("BIA") in the Ontario Superior Court of Justice (Commercial List). Gymboree Group intends to use these proceedings to facilitate an orderly wind-down of all of its Gymboree [(R)] and Crazy 8 [(R)] store locations and operations, while continuing to pursue a going-concern sale of its Janie and Jack [(R)] business and a sale of the intellectual property and online platform for Gymboree [(R)]. The Company has entered into an asset purchase agreement with Special Situations Investing Group, Inc. ("SSIG"), an affiliate of Goldman Sachs & Co. LLC, pursuant to which SSIG will serve as the stalking-horse bidder in a court-supervised sale process for Janie and Jack [(R)]. Gymboree Group expects to conduct an auction pursuant to Section 363 of the U.S. Bankruptcy Code no later than February 25, 2019, pursuant to bid procedures to be approved by the Court. Pursuant to the asset purchase agreement, SSIG has agreed to acquire the Janie and Jack [(R)] business and the intellectual property and online platform for Gymboree [(R)]. The asset purchase agreement sets the floor for the auction, which is designed to achieve the highest or otherwise best offer, subject to approval by the Bankruptcy Court. Shaz Kahng, appointed in November 2018 as Gymboree Group CEO, said, "The Company has worked diligently in recent months to explore options for Gymboree Group and its brands, and we are saddened and highly disappointed that we must move ahead with a wind-down of the Gymboree and Crazy 8 businesses. At the same time, we are focused on using this process to preserve the Janie and Jack business -- a strong brand that is poised to grow -- by pursuing a sale of the business as a going concern. As we move ahead, we are working to minimize the impact on our employees, customers, vendors and other stakeholders." Ms. Kahng continued, "We have tremendous appreciation for the hard work of our dedicated employees and their commitment to Gymboree Group and our customers. We are also incredibly grateful for the many years of support by our vendors. And, finally, we thank the customers of the Gymboree, Janie and Jack and Crazy 8 brands for their loyalty -- our teams have been proud to serve you since Gymboree was first started as a provider of mom-and-baby classes in 1976." Gymboree [(R)], Janie and Jack [(R)] and Crazy 8 [(R)] stores and online platforms are currently open and continuing to serve customers. The Company will provide an update on plans for its Janie and Jack [(R)] stores as the court-supervised sale process progresses. Gymboree Group will provide more details about the plans for its Gymboree [(R)] and Crazy 8 [(R)] going out of business sales in the near term. Gymboree Group has received a commitment for a debtor in possession financing, which consists of $30 million in new money loans to be provided by SSIG and Goldman Sachs Specialty Lending Holdings, Inc. and a "roll up" of all of Gymboree's obligations under the prepetition Term Loan Credit Agreement in an amount not less than $89 million. If approved by the court, the financing package is expected to support the Company's operations during these proceedings. Gymboree Group has filed a number of customary motions with the U.S. Bankruptcy Court seeking authorization to support its operations during the process, including authority to continue payment of employee wages and maintain healthcare benefits and certain other relief customary in these circumstances. The Company has sought authorization from the Court to continue to honor customer gift cards for 30 days. Gymboree Group has discontinued its GymBucks and Gymboree Rewards programs effective immediately. Additional information regarding Gymboree Group's Chapter 11 filing is available at http://www.GymboreeGroupRestructuring.com/ Court filings and information about the claims process are available at https://cases.primeclerk.com/gym or by calling the Company's claims agent, Prime Clerk, at (929) 272-0801 (or toll- free at (844) 399-4163 for international calls), or by sending an email to gyminfo@primeclerk.com. Additional information regarding the Canadian proceedings of Gymboree, Inc. under the BIA will be available on the website of KPMG Inc., as Proposal Trustee: home.kpmg/ca/gymboree, or by calling (416) 777-3520 or (833) 467-5379, or by sending an email to gymboree@kpmg.ca Gymboree Play & Music [(R)], a separate entity, is not included in the court proceedings. About Gymboree Group Gymboree Group, Inc., is a portfolio of children's brands operating specialty retail stores with high-quality clothing and accessories for children. The Company currently operates 380 Gymboree [(R)] stores in the United States and Canada. Gymboree Group's family of brands includes Gymboree [(R)], Janie and Jack [(R)] and Crazy 8 [(R)], with hundreds of retail stores across the United States, Canada and Puerto Rico as well as online stores at http://www.gymboree.com/,http://www.janieandjack.com/and http://www.crazy8.com/ Gymboree Group, Inc., on Jan. 16, 2019, disclosed that the Company and its U.S. subsidiaries have voluntarily filed for relief under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the Eastern District of Virginia. Milbank, Tweed, Hadley & McCloy LLP is serving as the Company's legal counsel, Berkeley Research Group is serving as its restructuring advisor, and Stifel, Nicolaus & Co., Inc. and Miller Buckfire & Co., LLC are serving as its financial advisor. Norton Rose Fulbright Canada LLP is counsel to Gymboree Canada. KPMG Inc. is acting as Proposal Trustee and is represented by Osler, Hoskin & Harcourt LLP. ================= X X X X X X X X X ================= * BOND PRICING: For the Week January 14 to January 18, 2019 ----------------------------------------------------------- Issuer Name Cpn Price Maturity Country Curr ----------- --- ----- -------- ------- --- Agua y Saneamientos 6.625 71.982 2/1/2023 AR USD Banco Macro SA 17.5 50 5/8/2022 AR ARS Cia Latinoamericana 9.5 60.447 7/20/2023 AR USD CSN Islands XII Corp 7 69.44 BR USD Odebrecht Finance Ltd 7.5 39.15 KY USD YPF SA 16.5 50.96 5/9/2022 AR ARS Odebrecht Finance Ltd 4.37 35.715 4/25/2025 KY USD Odebrecht Finance Ltd 7.12 37.293 6/26/2042 KY USD China Huiyuan 6.5 75.1 8/16/2020 CN USD Odebrecht Finance 5.125 45.754 6/26/2022 KY USD Noble Holding 6.2 74.46 8/1/2040 KY USD Noble Holding 5.25 70.444 3/15/2042 KY USD Odebrecht Finance 7 58.985 4/21/2020 KY USD Noble Holding 6.05 73.508 3/1/2041 KY USD Odebrecht Finance 5.25 36.2 6/27/2029 KY USD Rio Energy SA 6.875 71.551 2/1/2025 AR USD BCP Finance Co 1.751 74.397 KY EUR Provincia del Chubut 4 10/21/2019 AR USD YPF SA 16.5 50.96 5/9/2022 AR ARS Argentina 7.125 76 6/28/2117 AR USD Automotores Gildemeister 6.75 62.759 1/15/2023 CL USD Odebrecht Finance 6 37.193 4/5/2023 KY USD Banco do Brasil 6.25 76.375 KY USD Cia Latinoamericana 9.5 60.621 7/20/2023 AR USD Polarcus Ltd 5.6 70 7/1/2022 AE USD Argentina 6.875 74.985 1/11/2048 AR USD Provincia del Chubut 7.75 72.304 7/26/2026 AR USD Banco Macro SA 17.5 50 5/8/2022 AR ARS CSN Islands XII Corp 7 74.375 BR USD Provincia de Rio Negro 7.75 70.153 12/7/2025 AR USD Provincia de Entre Rios 8.75 71.083 2/8/2025 AR USD Argentina 4.33 70 12/31/2033 AR JPY Provincia de Entre Rios 8.75 72.333 2/8/2025 AR USD Odebrecht Finance Ltd 4.375 35.242 4/25/2025 KY USD Ironshore Pharma 13 69.621 2/28/2024 KY USD Automotores Gildemeister 8.25 60.583 5/24/2021 CL USD Odebrecht Finance Ltd 7.125 38.674 6/26/2042 KY USD Odebrecht Finance Ltd 5.25 36.187 6/27/2029 KY USD Province of Santa Fe 6.9 74.177 11/1/2027 AR USD Provincia del Chubut 7.75 71.654 7/26/2026 AR USD Argentina 6.25 72.711 11/9/2047 AR EUR Cia Energetica 6.1827 1.105 1/15/2022 BR BRL Odebrecht Finance 7.5 43.5 KY USD Argentina 0.45 31.75 12/31/2038 AR JPY SACI Falabella 2 7/15/2020 CL CLP Province of Jujuy 8.625 72.788 9/20/2022 AR USD Province of Santa Fe 6.9 73.44 11/1/2027 AR USD Ironshore Pharma 13 69.621 2/28/2024 KY USD Tanner Servicios 3.8 52.42 4/1/2021 CL CLP AES Tiete Energia SA 6.78 1.06 4/15/2024 BR BRL Odebrecht Finance Ltd 6 37.19 4/5/2023 KY USD Provincia de Rio Negro 7.75 70.15 12/7/2025 AR USD Odebrecht Finance 7 59.466 4/21/2020 KY USD Odebrecht Finance Ltd 5.12 47.298 6/26/2022 KY USD Provincia de Cordoba 7.12 74.286 8/1/2027 AR USD Argentina 7.125 75.752 6/28/2117 AR USD Automotores Gildemeister 8.25 60.583 5/24/2021 CL USD Enlasa Generacion 3.558 11/15/2023 CL CLP Metrogas SA/Chile 645 8/1/2024 CL CLP Automotores Gildemeister 6.75 62.759 1/15/2023 CL USD Provincia del Chaco 9.375 72.315 8/18/2024 AR USD Fospar S/A 6.53 1.034 5/15/2026 BR BRL Sociedad Concesionaria 2.9547 6/30/2021 CL CLP Esval SA 3.453 3/15/2028 CL CLP Caja de Compensacion 7.75 35.23 3/27/2024 CL CLP Sociedad Austral 318.478 9/20/2019 CL CLP Provincia de Neuquen 7.5 74.753 4/27/2025 AR USD Caja de Compensacion 5.2 9/15/2018 CL CLP Empresa de Transporte 4.341 7/15/2020 CL CLP Corp Universidad 5.968 11/10/2021 CL CLP Provincia de Cordoba 7.125 74.802 8/1/2027 AR USD Provincia del Chaco 9.375 72.585 8/18/2024 AR USD Argentine Republic 7.125 75.322 6/28/2117 AR USD Sylph Ltd 2.367 61.194 9/25/2036 KY USD Banco Security SA 311 7/1/2019 CL CLP Sylph Ltd 2.657 73.081 3/25/2036 KY USD *********** 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 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. . * * * End of Transmission * * *