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/raid1/www/Hosts/bankrupt/TCRLA_Public/190409.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, April 9, 2019, Vol. 20, No. 71 Headlines A R G E N T I N A SALTA: S&P Affirms B Foreign/Local Currency Ratings, Outlook Stable B R A Z I L BRAZIL: Former President Continues Fight Behind Bars M E X I C O MAXCOM TELECOMUNICACIONES: S&P Hikes ICR to CCC on Debt Repurchase MEXICO: President Denies Friction With United States MEXICO: Teachers Demand Full Repeal of Education Reform P A N A M A BANCO LA HIPOTECARIA: Fitch Affirms 'BB+' LT IDR, Outlook Stable BICSA: Fitch Hikes LT Issuer Default Rating to BB-, Outlook Stable P U E R T O R I C O STONEMOR PARTNERS: Needs Additional Time to File its Form 10-K T R I N I D A D A N D T O B A G O CARIBBEAN AIRLINES: Launches WiPay in Guyana CARIBBEAN AIRLINES: To Launch Kingston-Barbados Flights on April 15 V E N E Z U E L A PETROLEOS DE VENEZUELA: Braces For Low Output From Crude Upgraders VENEZUELA: Bondholders Get Warning Inside Manhattan Law Office VENEZUELA: To Cut Electricity 18 Hours Per Week VENEZUELA: US to Sanction Vessels, Companies That Move Crude X X X X X X X X LATIN AMERICA: IDB Highlights Strengths of Region Amidst Challenges - - - - - ================= A R G E N T I N A ================= SALTA: S&P Affirms B Foreign/Local Currency Ratings, Outlook Stable ------------------------------------------------------------------- S&P Global Ratings, on April 5, 2019, affirmed its 'B' foreign and local currency ratings on the province of Salta. The outlook remains stable. S&P also affirmed the 'B' issue-level ratings on the province's secured and unsecured notes. OUTLOOK The stable outlook on Salta reflects S&P's expectation of balanced fiscal accounts over 2019-2021, with average operating surpluses of 6% of operating revenue and minor deficits after capex. The outlook also reflects its expectation that Salta's debt will stay low, while structural limitations stemming from its narrow budgetary flexibility and low GDP per capita will remain. Downside scenario S&P said, "We could downgrade Salta over the next 12-18 months if its fiscal results worsen, reflecting management's inability to rein in spending and leading to a significant erosion of liquidity and higher debt levels. Given our opinion that we cannot rate Argentinean local and regional governments (LRGs) above the rating on the sovereign because they operate under a very volatile and underfunded institutional framework, a downgrade of Argentina would result in a downgrade of Salta." Upside scenario S&P said, "Given that we don't believe that Argentine LRGs meet the conditions for us to rate them above the sovereign, we could only upgrade the province of Salta if we take a similar action on Argentina within the next 12 months. An upgrade would also have to be backed by continuity in policies and improved financial management practices, while fiscal results and liquidity remain robust." RATIONALE The 'B' ratings and 'b' stand-alone credit profile (SACP) reflect the province's individual credit profile and the very volatile and underfunded institutional framework under which it operates. S&P said, "We expect Salta to post only minor deficits after capex, given its recent record of robust performance stemming from tariff adjustments and spending containment efforts last year. These measures have already led to a significant recovery in fiscal results, and, in our opinion, reflect the administration's commitment to fiscal sustainability. We believe debt levels will remain low at around 30% of operating revenue, which we consider a rating strength." On the other hand, Salta's low GDP per capita, resulting in a weak revenue base and high infrastructure needs, together with a rigid spending structure and uncertain access to external liquidity, limit the rating. Adjustment measures in 2018 strengthened Salta's finances, reflecting improving financial management and commitment to fiscal sustainability Governor Juan Manuel Urtubey from the Peronist party reshuffled his cabinet, replacing the chief of staff and five ministers following a disappointing midterm election in October 2017. Fiscal consolidation has been at the forefront of the cabinet's focus, in particular, reducing the fiscal deficit and avoid resorting to financing in the market. The administration took a series of revenue and cost control measures at the end of 2017 that resulted in strong fiscal results in 2018. S&P said, "Cost control monitoring improved, even amid volatile economic conditions, and we believe there have been enhancements in the level of sophistication of the province's cash flow management. We expect continuity in the administration's policies until the end of Governor Urtubey's term in December 2019. However, we believe the level of institutionalization of adequate financial practices is low, which results in uncertainty about policy continuity after this year's election." S&P continues to view the institutional framework for Argentine LRGs as very volatile and underfunded. However, S&P believes that there's a positive trend in the predictability of the outcome of potential reforms and the pace of their implementation amid an increasing dialogue between LRGs and the national government to address various fiscal and economic challenges that we expect to remain in the next few years. On the economic front, Salta's low per capita GDP is a key rating constraint. According to our estimates, it was $2,704 last year, which was only around one-third of the estimated national GDP for the same year ($8,628), and was lower than those of other provinces such as Cordoba ($5,150) and Neuquén ($10,654). Salta's economy represents only about 1% of the national GDP and is relatively diversified. Although mining currently represents only around 5% of the local GDP, it may grow due to lithium resources in the province. There are currently over 50 lithium-related mining projects in development and foreign companies have made investments in these projects, although we expect production won't begin for two to three years. Fiscal results to remain balanced, with fewer financing needs gradually leading to a lower debt burden Tariff adjustments and spending containment efforts in 2018 resulted in the province's operating surplus of 9.1% of operating revenues and a 6.7% surplus after capex, which was a significant improvement from the 2015-2017 average deficits of 3.4% and 7.9%, respectively. S&P said, "Our base case assumes policy continuity, resulting in operating surpluses around 6% of operating revenue and minor deficits after capital accounts during 2019-2021. Adjustment measures last year included changes in gross receipt tax rates and measures to rein in spending such as reducing the number of ministries, a retirement program and hiring freeze to reduce the number of public employees, and creating a spending control office, among other initiatives. We believe Salta's fiscal performance could be volatile because of potential shifts in political priorities and inflation dynamics over the next two to three years." Salta faces structural budgetary constraints, given that it generates only around 28% of its total revenue and receives the remainder from the national government. Moreover, its operating structure is very rigid because provincial payroll and interest payments account for around 65% of Salta's operating expenditures. S&P also believes that Salta's infrastructure needs are significant and it's highly unlikely that the province could reduce capex levels from our estimates of 8%-9% of total expenditures over the next three years, highlighting its weak financial flexibility. Salta's more robust fiscal results strengthened liquidity levels in 2018, and S&P estimates the available free cash currently covers slightly over 90% of projected debt service payments for the next 12 months. Its liquidity practices have also improved, with daily monitoring of cash positions and optimization of available liquidity though investments in low-risk assets, while it safeguards savings in U.S. dollars for foreign currency debt service payments. However, higher-than-expected spending could lead to liquidity erosion and a volatile coverage ratio. S&P said, "At the same time, our liquidity assessment is limited by our view that the province's overall access to external liquidity is uncertain because of Argentina's weak banking system, which our Banking Industry Country Risk Assessment (BICRA) scores in group '8'. We also view access as uncertain because of the Fiscal Responsibility Law's restrictions on provincial debt issuances. The law doesn't allow subnational governments to use such debt for operating expenditures and requires the national government's authorization for issuances. "We expect the province will have only minor deficits after capex, which should result in debt levels around 30% and interest payments of about 3% of operating revenue in 2019-2020. We expect Salta's borrowing this year to be composed of mainly pre-arranged financing with Inter-American Development Bank (IADB) and funding from the National Social Security Agency fund FGS-ANSES. In addition, we believe the province could potentially attempt to issue a small amount in the market for specific infrastructure projects." As of December 2018, 69% of Salta's debt was dollar-denominated, highlighting potential currency risks. Although this percentage is lower than that of other provinces such as Cordoba, steeper-than-expected depreciation of the local currency could exacerbate this risk. As of this March, Salta's outstanding structured notes totaled $65.3 million. On March 16, 2012, Salta issued $185 million in the capital markets for long-term infrastructure investments. The oil and royalties that the province receives from various oil and gas producers (the dedicated concessionaires), which secure the notes, represent 12% of the oil and gas production value of these dedicated concessionaires. S&P rates these notes the same as Salta's other direct, general, unconditional, and unsubordinated obligations, given that S&P believes their creditworthiness is directly linked to that of the province. S&P believes Salta's overall exposure to contingent liabilities is very low. Guarantees to municipalities and government-related entities (GREs) are included in the province's debt stock. Salta's two largest public companies are the transportation enterprise, SAETA, and the water and sanitation company, CoSAySA. The province has historically supported both companies through subsidies, but more recently has planned to lower transfers by increasing the tariffs of its GREs. RATINGS LIST Ratings Affirmed Salta (Province of) Issuer Credit Rating B/Stable/-- Senior Secured B Senior Unsecured B =========== B R A Z I L =========== BRAZIL: Former President Continues Fight Behind Bars ---------------------------------------------------- EFE News reports that it has been a year since former Brazilin president Luiz Inacio Lula da Silva entered a Federal Police facility in the southern Brazilian city of Curitiba to begin serving a prison sentence for corruption, but a confidant says the former leader remains unwilling to trade "his dignity for freedom." The 73-year-old cancer survivor who governed Brazil for eight years has seen the courts keep him off the ballot in last year's presidential election, according to EFE News. Then came a second conviction for corruption that stretched Lula's sentence to 25 years, even as his attorneys continue to challenge the initial guilty verdict, the report relays. Family and friends tell EFE that Lula remains resolute and hopeful that he will be able to prove his innocence to honor his family. They say the former union leader is mentally sharp and has dropped some weight, the report discloses. The various cases against Lula, who denies any wrongdoing, are based largely on plea-bargained testimony from people already convicted of corruption offenses, the report adds. =========== M E X I C O =========== MAXCOM TELECOMUNICACIONES: S&P Hikes ICR to CCC on Debt Repurchase ------------------------------------------------------------------ S&P Global Ratings raised the issuer credit rating on Maxcom Telecomunicaciones S.A.B. de C.V. to 'CCC' from 'SD' (selective default). At the same time, S&P raised its issue-level ratings on the remaining outstanding amount of the company's senior secured step-up notes to 'CCC' from 'D'. S&P's recovery rating on the notes is unchanged at '4'. S&P said, "The negative outlook reflects the fact that we could lower our ratings to 'CCC-' if the company isn't able to refinance its notes before December 2019. "The rating action reflects that we've reassessed the issuer credit rating after Maxcom repurchased $8 million of its outstanding senior secured step-up notes due June 2020, reaching a repurchase of 41.2% of the total issued amount as of April 2019. The company purchased below par at $59.75 per every $100.00 fair value, and then cancelled these repurchased notes. Maxcom was able to repurchase these notes with cash in hand. We expect the company's credit metrics to remain weak, with debt to EBITDA remaining close to 7.0x this year, because in our view, the repurchase doesn't represent an improvement in leverage metrics or in the pressure on the maturity schedule. "The rating reflects Maxcom's weak credit metrics, low EBITDA margins, and uncertainty about the sustainability of its business model because the company has struggled to grow in the past few years. Therefore, we believe that Maxcom is likely to default without an unforeseen positive development or to consider an additional distressed exchange offer or redemption in the next 12 months. "The negative outlook reflects the high likelihood that Maxcom will experience a default event in the next 12 months to address the long-term sustainability of its capital structure. Additionally, we could lower the rating if the company continues repurchasing notes below par, which we could view as a distressed exchange according to our criteria." MEXICO: President Denies Friction With United States ---------------------------------------------------- EFE News reports that Mexico's Andres Manuel Lopez Obrador denied that his government is at odds with the administration of US President Donald Trump, who is threatening to levy tariffs on Mexican imports if the Aztec nation doesn't do more to stop the flow of drugs and undocumented migrants. "Our relationship is good, we do not have a confrontation with the United States government, there is financial stability and that is what the data shows," Lopez Obrador told a press conference in the western city of Guadalajara, according to EFE News. He urged both domestic and foreign investors to rest easy, given that relations with Washington are "very good" and that the US-Mexico-Canada Agreement (USMCA) on trade "will be ratified," the report relays The USMCA is intended to replace the 1994 North American Free Trade Agreement (NAFTA), long denounced by Trump. "There is no problem in the economic or in the financial realms. On the contrary, we have a strong currency. The peso is strengthening as it has rarely done before and consumer confidence is stronger than ever," Lopez Obrador said, adding that tax collections are roughly 8 billion pesos (US$417 million) higher than expected, the report notes. Lopez Obrador's reassurances about the state of ties with Washington came hours after Trump threatened to punish Mexico economically if Mexican authorities stopped deporting undocumented Central American migrants, the report says. "Mexico, for the first time in decades, is meaningfully apprehending illegals at THEIR Southern Border, before the long march up to the US This is great and the way it should be. The big flow will stop," Trump said in the first of a series of tweets, the report says. Net immigration of Mexicans to the US fell to zero several years ago, the report notes. Today's northbound migrants come overwhelmingly from the Central American nations of Guatemala, El Salvador and Honduras, the report says. There are no indications that the Mexican government has changed its immigration policy, the report discloses. "However, if for any reason Mexico stops apprehending and bringing the illegals back to where they came from, the US will be forced to Tariff at 25 percent all cars made in Mexico and shipped over the Border to us. If that doesn't work, which it will, I will close the Border," Trump wrote, the report relays. "This will supersede USMCA. Likewise I am looking at an economic penalty for the 500 Billion Dollars in illegal DRUGS that are shipped and smuggled through Mexico and across our Southern Border. Over 100,00 Americans die each year, sooo many families destroyed!," he concluded, the report says. Despite the bluster, the president's Twitter outburst marked a softening of the position he was taking as recently, when he repeated his threat to close the US border with Mexico immediately, the report adds. MEXICO: Teachers Demand Full Repeal of Education Reform ------------------------------------------------------- EFE News reports that some 2,000 teachers marched in Mexico City on April 5 to once again show the Mexican government their dissatisfaction with what they see as a reluctance to completely undo the 2013 overhaul of education. It was the latest in a series of protests organized by the militant CNTE teachers union, which said that President Andres Manuel Lopez Obrador's plan to replace the program enacted by predecessor Enrique Pena Nieto six years ago does not go far enough, according to EFE News. Making their way from the Zocalo, Mexico City's giant main square, to San Lazaro, the seat of the lower house of Congress, the teachers waved banners and flags and chanted slogans, the report relays. "Let them understand that we are not going to back down in our quest for the total abrogation (of the 2013 reform), not pretense," Pedro Gomez, spokesman of Section 7 of the CNTE, told the media, the report notes. "We are going to set out a mobilization in the short, medium and long term for the total abrogation of the reform," the union's national press secretary, Wilbert Santiago said, the report says. He added that if members of the lower house meet again to debate on this issue without first speaking to the CNTE, union members wouldn't hesitate to resume the blockade of the entrances to the chamber they carried out last month, the report relays. Lopez Obrador pledged during his 2018 presidential campaign that he would roll back, a promise that teachers have etched in their minds, the report discloses. On March 27, the relevant committees of the lower house approved the current administration's initiative by a cumulative vote of 48-3 with 9 abstentions, the report notes. Lopez Obrador's bill eliminates the element of the 2013 reform that most angered teachers: rules that made hiring, continued employment and promotions contingent on performance in compulsory evaluations, the report says. Even so, the CNTE accuses the government of offering only cosmetic changes to the Pena Nieto program, the report discloses. "If they are not going to reverse this so-called educational reform, there will surely be a strike by education workers," union member Pedro Gomez told EFE at protest. Israel Lopez, also present at the march, told EFE that his concern is that, although the "punitive evaluation" has been eliminated, the process for hiring new teachers remains the same. "The lawmakers of the Institutional Revolutionary Party (PRI, the former president's party) have acknowledged that 80 percent or 88 percent of what was done with Pena Nieto is preserved," he said, the report adds. =========== P A N A M A =========== BANCO LA HIPOTECARIA: Fitch Affirms 'BB+' LT IDR, Outlook Stable ---------------------------------------------------------------- Fitch Ratings has affirmed Banco La Hipotecaria's Long-Term Issuer Default Rating (IDR) at 'BB+' with a Stable Outlook. In addition, Fitch has upgraded the bank's Viability Rating (VR) to 'bb-' from 'b+'. KEY RATING DRIVERS IDRS, NATIONAL RATINGS AND SENIOR DEBT Banco La Hipotecaria's IDRs, National Ratings and senior debt reflect the probability of support from its ultimate shareholder, Grupo ASSA, S.A., if required. Grupo ASSA is a regional financial conglomerate that mainly operates in the insurance and banking services, while maintaining some non-controlling interest in other industries with a presence in Panama, Nicaragua, Costa Rica, El Salvador, Honduras, Guatemala and Colombia. Grupo ASSA currently has a 'BBB-' IDR with a Stable Outlook, which reflects its ability to support Banco La Hipotecaria. In Fitch's opinion, Grupo Assa's propensity to support Banco La Hipotecaria if needed reflects the bank's significant strategic importance to the group's operations. Banco La Hipotecaria shares strong synergies with its main shareholder given its role in complementary market segments for many of its subsidiaries. This allows cross sales among products and services such as the signing of insurance policies that accompany the mortgage credit. Fitch believes there is material reputational risk for Grupo ASSA in the event of a default by one of its subsidiaries, since this could have a significant impact on its business and financial profile. In addition, Banco La Hipotecaria counts on guarantees of its funding instruments from Grupo ASSA, which further demonstrates the group's commitment to its subsidiaries' performance. However, Banco La Hipotecaria has significant independence from its ultimate shareholder, and there is a relatively low level of integration in terms of management and the bank's strategic decisions. Nonetheless, Grupo ASSA does have a presence at the bank and actively participates in its committees and Board of Directors. VR The VR's upgrade reflects Fitch's improved assessment of Banco La Hipotecaria's funding and liquidity structure, which fits well with its business model, while further increasing its funding alternatives, such as the recent international issuance of covered bonds in the United States. In addition, Fitch also takes into account the bank's reasonably ample revenue diversification, and income and earnings stability, which have been further tested amidst the challenging operating environment conditions experienced since 2018. Banco La Hipotecaria specializes in the underwriting, administration and securitization of mortgage loans. Its VR is highly influenced by its niche approach, which solely focuses on the mortgage market limiting the bank's franchise. This puts Banco La Hipotecaria at a disadvantage compared to other banks in Panama with higher diversification and larger market shares. In spite of its small size, the bank's business model proves to be efficient enough to compete against larger commercial banks and display adequate financial ratios that compare favourably with the rest of the banking system. The bank's main income stream stems mainly from the origination of mortgage loans but it also generates recurring income from its net fees and commissions, having one of the best revenue diversification amongst peers. For December 2018, the bank's profitability metrics were pressured due to an increase in international interest rates that affected its funding costs, affecting its net interest margin as well as higher loan loss allowances costs as a result of adapting to IFRS accounting standards, operating profits over risk-weighted assets were 1.34%. Additionally, aligned with the rest of the banking system, Banco La Hipotecaria's asset quality suffered a slight deterioration that raised its non-performing loans ratio to 1.26% from 0.95%, although it should be noted it still compares favourably against the system's average and most of its peers. Banco La Hipotecaria's funding structure is adequate and well diversified. The bank's funding is balanced between deposits, debt issuances and credit lines. Funding has been ample enough to sustain the company's growth rate and expansions. The predictability of its debt obligations maturities allows the bank to mitigate any refinancing risk through a precise schedule of its payment obligations. DEBT RATINGS The ratings for the marketable securities are aligned with the issuer's short-term ratings. The tranches for the unsecured negotiable notes have the same long-term rating as the issuer. This is due to the absence of any subordination of these securities and specific guarantees. The ratings for both the tranches with guarantees from Grupo ASSA as well as the negotiable notes guaranteed with mortgage loans will be a notch above the bank's long-term rating. Particularly, the negotiable notes with the mortgage loan guarantees benefit from an extended warranty. SUPPORT RATING The bank's Support Rating is based on Fitch's view of Grupo ASSA's ability and propensity to provide support to Banco La Hipotecaria if required. According to Fitch's criteria, Banco La Hipotecaria's 'BB+' IDR results in a support rating of '3'. RATING SENSITIVITIES IDRS, NATIONAL RATINGS AND SENIOR DEBT Changes in Banco La Hipotecaria's IDRs would reflect modifications in its shareholder's risk profile or changes in the assessment of its ability, or willingness, to provide support to its subsidiary. VR Banco La Hipotecaria's VR could increase given a significant improvement its competitive position and expansion of its market share. Conversely, its VR could be negatively affected by a noticeable reduction of its profitability metrics as well as deterioration of its funding stability or capitalization metrics. Fitch has taken the following rating actions on Banco La Hipotecaria: Fitch has upgraded the following rating: -- Viability Rating to 'bb-' from 'b+'. Fitch has affirmed the following ratings: -- Long-Term IDR at 'BB+', Outlook Stable; -- Short-Term IDR at 'B'; -- Support Rating at '3'; -- National Long-Term Rating at 'AA-(pan)', Outlook Stable; -- National Short-Term Rating at 'F1+(pan)'; -- Senior Unsecured Debt National Long-Term Rating at 'AA-(pan)'; -- Senior Secured Debt National Long-Term Rating at 'AA(pan)'; -- Senior Unsecured and Secured Debt National Short-Term Rating 'F1+(pan)'. BICSA: Fitch Hikes LT Issuer Default Rating to BB-, Outlook Stable ------------------------------------------------------------------ Fitch Ratings has upgraded Banco Internacional de Costa Rica's (BICSA) Long-Term Issuer Default Rating (IDR) to 'BB-' from 'B+', Viability Rating (VR) to 'bb-' from 'b+,' and National Ratings in Panama to 'A-(pan)' from 'BBB+(pan)'. The Rating Outlooks for the Long-Term Ratings are Stable. In addition, Fitch has affirmed BICSA's Short-Term IDR and National Short-Term Rating at 'B' and 'F2(pan)', respectively, and senior unsecured debt issuances in El Salvador at 'AAA(slv)' with a Stable Outlook. The rating upgrades are driven by the improved VR, which in turn reflects Fitch's revised assessment on BICSA's stable access to diversified wholesale funding, consistent presence in the local debt market and adequate term structure that minimizes gaps. These factors somewhat offsetting the risk associated with BICSA's highly concentrated deposit base and mitigate Fitch's previous concerns regarding liquidity stress. BISCA's overall credit profile is now commensurate to its 'bb-' Viability Rating. BICSA's IDR is one notch above the IDRs of its shareholders, Banco de Costa Rica (BCR, B+/Negative) and Banco Nacional de Costa Rica (BNCR, B+/Negative). In Fitch's opinion, the bank is relatively independent from its shareholders and has a contained contagion risk in the event of further deterioration of the Costa Rican market. Contagion risk is limited by BICSA's loan book diversification and moderate exposure to the Costa Rican market and sovereign debt (38% of its earning assets) and its limited reliance on funding from its parents to conduct normal operations. KEY RATING DRIVERS IDRs, VR AND NATIONAL RATINGS AND SENIOR DEBT IN PANAMA BICSA's IDRs and national ratings are driven by its VR. BICSA's VR reflects, with high importance, its company profile and business model. In Fitch's view, the bank's business model has a wider geographic diversification than similarly rated peers, although its funding structure is more reliant than peers' on non-deposit funding. Liquidity, measured as liquid assets to short-term funding, has been stable at around 19% over the past three years. BICSA's VR also reflects, with moderate importance, the large proportion of international operations that result in riskier operating environment compared to Panamanian peers'. Fitch estimates BICSA's operating environment at 'bb-', based on based on a weighted average of the scores of over 14 countries in which the bank does business. According to criteria, Fitch bases its assessment of the operating environment of a country on two core metrics: GDP per capita and the World Bank's Ease of Doing Business ranking. BICSA's funding profile shows an even distribution between customer deposits and wholesale funding from international commercial banks. The bank's customer deposits have shown positive growth rates, and its wholesale funding is more diversified than peers'. In Fitch's view, deposits concentration remains high and can be more prone to changes in market conditions. As of December 2018, the 20 largest deposits accounted for 50% of total deposits funding. BICSA's recovering profitability and full earnings retention underpins a Fitch Core Capital ratio of 13.4% as of December 2018. Current capital levels are expected to maintain a moderate decreasing trend and reach a level close to 12% as the bank continues to grow its loan portfolio; Fitch forecasts that they will remain consistent with the current rating level if the bank reaches its target growth rates. BICSA's asset quality continues to improve as the bank contains credit risk and maintains underwriting standards. As of December 2018, loan loss reserves coverage for non-performing loans has strengthened while delinquency rates have returned to a level below 1%. The loan book concentration by individual creditor has decreased to a moderate 22% and geographic diversification has widened. SUPPORT RATINGS BICSA's Support Rating reflects Fitch's opinion of the entity's shareholders', BCR and BNCR, and their ability and propensity to assist BICSA, should the need arise. The Support Rating of '4' reflects a limited probability of support from its shareholders, given the shareholders' capacity as demonstrated by the IDR. NATIONAL SENIOR DEBT RATINGS IN EL SALVADOR The national rating of BICSA's senior unsecured debt issuances in El Salvador, rated 'AAA(slv)', reflect the relative strength of the Panamanian bank compared with other issuers in El Salvador. BICSA's IDR is three notches above El Salvador's 'B-' Sovereign Rating. RATING SENSITIVITIES IDRs, NATIONAL RATINGS AND SENIOR DEBT IN PANAMA BICSA's IDR and national scale upside potential is limited. An upgrade could be triggered by asset growth and diversification towards less risky operating environments. In turn, a downgrade of the Bank's VR could be triggered by a material deterioration of the bank's financial profile that reduces its capital position to a level that is consistently below 12%; however, a downgrade of BICSA's IDR and national ratings would be limited by its shareholder's IDRs as in this scenario the ratings would return to be driven by support. SUPPORT RATINGS The Support Rating is sensitive to changes in BCR's and BNCR's capacity or propensity to provide timely support to the bank. NATIONAL SENIOR DEBT RATINGS IN EL SALVADOR The Rating Outlook is Stable. The National ratings could be downgraded in response to a material reduction in BICSA's IDR. The rating actions are as follows: Banco Internacional de Costa Rica International ratings -- Foreign Currency Long-term IDR upgraded to 'BB-' from 'B+'; Stable Outlook; -- Foreign Currency Short-term IDR affirmed at 'B'; -- Viability Rating upgraded to 'bb-' from 'b+'; -- Support Rating affirmed at '4'. National ratings -- Long-term National rating upgraded to 'A-(pan)' from 'BBB+(pan)'; Stable Outlook; -- Short-term National rating affirmed at 'F2(pan)'; -- Senior Unsecured National Long-term Ratings upgraded to 'A-(pan)' from 'BBB+(pan)'; -- Commercial Paper affirmed at 'F2(pan)'; -- Senior Unsecured National Long-term Ratings affirmed at 'AAA(slv)'; Outlook Stable. ===================== P U E R T O R I C O ===================== STONEMOR PARTNERS: Needs Additional Time to File its Form 10-K -------------------------------------------------------------- StoneMor Partners L.P. has filed a Notification of Late Filing on Form 12b-25 with respect to its Annual Report on Form 10-K for its fiscal year ended Dec. 31, 2018. StoneMor Partners was unable to file its Annual Report by the prescribed filing deadline (March 18, 2019) without unreasonable effort or expense due to additional time needed for the Partnership to compile and analyze certain information and documentation and complete preparation of its financial statements in order to permit the Partnership's independent registered public accounting firm to complete its audit of the financial statements to be included in the Form 10-K and complete its audit of the Partnership's internal controls over financial reporting as of Dec. 31, 2018. While there can be no assurances, the Partnership is working to file its Annual Report on Form 10-K on or before the fifteenth calendar day extension provided by Rule 12b-25. About StoneMor Partners StoneMor Partners L.P., headquartered in Trevose, Pennsylvania -- http://www.stonemor.com/-- is an owner and operator of cemeteries and funeral homes in the United States, with 322 cemeteries and 90 funeral homes in 27 states and Puerto Rico. StoneMor's cemetery products and services, which are sold on both a pre-need (before death) and at-need (at death) basis, include: burial lots, lawn and mausoleum crypts, burial vaults, caskets, memorials, and all services which provide for the installation of this merchandise. Stonemor reported a net loss of $75.15 million for the year ended Dec. 31, 2017, compared to a net loss of $30.48 million for the year ended Dec. 31, 2016. As of Sept. 30, 2018. StoneMor had $1.72 billion in total assets, $1.71 billion in total liabilities, and $13.46 million in total partners' capital. * * * As reported by the TCR on Feb. 13, 2019, Moody's Investors Service downgraded StoneMor Partners L.P.'s Corporate Family rating to Caa2 from Caa1 and Probability of Default rating to Caa3-PD from Caa1-PD. The Caa2 CFR reflects Moody's concern that if pre-need cemetery selling and liquidity pressures do not abate while the senior secured credit facility is being refinanced, a distressed exchange or other default event could become more likely. In February 2019, S&P affirmed its 'CCC+' issuer credit rating on StoneMor Partners LP. In April 2018, S&P Global Ratings affirmed its 'CCC+' corporate credit rating on StoneMor Partners L.P. The rating affirmation reflects S&P's view that StoneMor's capital structure is unsustainable and reflects S&P's expectation that the company will produce cash flow deficits in 2019. ===================================== T R I N I D A D A N D T O B A G O ===================================== CARIBBEAN AIRLINES: Launches WiPay in Guyana -------------------------------------------- Juhel Browne of CCNTV6 reports that Trinidad & Tobago based online payment company WiPay has partnered with state-owned Caribbean Airlines to offer a new way for passengers in Guyana to pay for flights with or without a credit card. Caribbean Airlines Limited - http://www.caribbean-airlines.com/- provides passenger airline services in the Caribbean, South America, and North America. The company also offers freighter services for perishables, fish and seafood, live animals, human remains, and dangerous goods. In addition, it operates a duty free store in Trinidad. Caribbean Airlines Limited was founded in 2006 and is based in Piarco, Trinidad and Tobago. As reported in the Troubled Company Reporter-Latin America on November 2, 2015, RJR News said that Michael DiLollo, Chief Executive Officer of Caribbean Airlines Limited has quit after just 17 months on the job. The 48-year-old Canadian national, citing personal reasons, resigned with immediate effect. His resignation was accepted by the airline's board of directors. Mr. DiLollo was appointed Caribbean Airlines CEO in May 2014, following the sudden resignation of Robert Corbie in September 2013. In early February 2015, Larry Howai, then Finance Minister, told Parliament that unaudited accounts for 2014 showed the airline made a loss of US$60 million, inclusive of its Air Jamaica operations, and the airline planned to break even by 2017. Mr. Howai told the Parliament that a five-year strategic plan had been completed and was in the process of being approved for implementation. In an interview with the Trinidad & Tobago Guardian in early November 2015, Mr. DiLollo said CAL did not need a bailout just yet. Mr. DiLollo said the airline had benefited from extremely patient shareholders for years and he believed the airline was strategically positioned to break even in three years. CARIBBEAN AIRLINES: To Launch Kingston-Barbados Flights on April 15 ------------------------------------------------------------------- Caribjournal.com reports that Caribbean Airlines Limited is adding a new nonstop route between Jamaica and Barbados, the company said. The new route, subject to government approval, will run between Kingston, Jamaica and Barbados, with flights twice weekly on Mondays and Fridays, according to Caribjournal.com. "The launch of this twice-weekly nonstop service is in direct response to feedback from our valued customers," said Garvin Medera, chief executive officer of Caribbean Airlines, the report notes. "The airline business is about providing a service that our customers want and this flight is a welcome addition to our network to serve their needs," the report relays. Last year, Barbados had more than 9,000 arrivals from Jamaica, a 2.2 percent increase over the previous week, the report discloses. "This demonstrates this market's potential for growth, and with a strong marketing program and Barbados' well-packed annual calendar of events, we have high hopes for significant business from the island," said William "Billy" Griffith, CEO of Barbados Tourism Marketing, the report says. The service is slated to launch April 15. Caribbean Airlines Limited - http://www.caribbean-airlines.com/- provides passenger airline services in the Caribbean, South America, and North America. The company also offers freighter services for perishables, fish and seafood, live animals, human remains, and dangerous goods. In addition, it operates a duty free store in Trinidad. Caribbean Airlines Limited was founded in 2006 and is based in Piarco, Trinidad and Tobago. As reported in the Troubled Company Reporter-Latin America on November 2, 2015, RJR News said that Michael DiLollo, Chief Executive Officer of Caribbean Airlines Limited has quit after just 17 months on the job. The 48-year-old Canadian national, citing personal reasons, resigned with immediate effect. His resignation was accepted by the airline's board of directors. Mr. DiLollo was appointed Caribbean Airlines CEO in May 2014, following the sudden resignation of Robert Corbie in September 2013. In early February 2015, Larry Howai, then Finance Minister, told Parliament that unaudited accounts for 2014 showed the airline made a loss of US$60 million, inclusive of its Air Jamaica operations, and the airline planned to break even by 2017. Mr. Howai told the Parliament that a five-year strategic plan had been completed and was in the process of being approved for implementation. In an interview with the Trinidad & Tobago Guardian in early November 2015, Mr. DiLollo said CAL did not need a bailout just yet. Mr. DiLollo said the airline had benefited from extremely patient shareholders for years and he believed the airline was strategically positioned to break even in three years. ================= V E N E Z U E L A ================= PETROLEOS DE VENEZUELA: Braces For Low Output From Crude Upgraders ------------------------------------------------------------------ Mircely Guanipa and Deisy Buitrago at Reuters report that Venezuelan state-owned oil company Petroleos de Venezuela S.A. (PDVSA) expects its crucial crude oil upgraders to operate well below capacity this month, according to industry sources and documents seen by Reuters, as U.S. sanctions and energy blackouts hit the OPEC nation's oil industry. Venezuela depends on the upgraders, which are mostly operated by joint ventures with foreign companies, to convert the extra-heavy crude oil produced in the Orinoco Belt into exportable grades usable in overseas refineries, according to Reuters. Together, they have a capacity of some 700,000 barrels per day. Prolonged power outages have been adding to problems blending and exporting crude, as PDVSA's main oil port, Jose, in northeastern Venezuela remained paralyzed, the report notes. The Petropiar and Petromonagas upgraders, part-owned by U.S. oil major Chevron and Russian giant Rosneft respectively, have not fully restarted since a March 7 blackout, the report relays. Petrocedeno, part-owned by France's Total and Norway's Equinor, stopped working after a second blackout on March 25, as did PDVSA's fully-owned Petrosanfelix, the report discloses. "The upgraders are still halted," oil workers' union leader Jose Bodas said, the report says. According to an internal PDVSA document seen by Reuters, Petropiar and Petrocedeno are "in the process of restarting." Petromonagas is expected to undergo "cleaning and repair" this month after maintenance workers found two of its furnaces were obstructed by waste products, while a maintenance process at Petrosanfelix was halted, according to the document, the report relays. "The upgraders are not expected to increase processing," an internal PDVSA document detailing planning for the month of April reads, the report adds. As reported in the Troubled Company Reporter-Latin America on Aug. 24, 2018, S&P Global Ratings affirmed its 'SD' global scale issuer credit rating and 'D' issue-level ratings on Petroleos de Venezuela S.A. (PDVSA). VENEZUELA: Bondholders Get Warning Inside Manhattan Law Office -------------------------------------------------------------- Ben Bartenstein at Bloomberg News reports that a prominent Venezuelan economist who has been mentioned as a potential future finance minister for the South American nation delivered a harsh warning to a group of money managers and strategists gathered at a Manhattan law firm. Miguel Angel Santos, a lecturer at Harvard University, said at a panel discussion that the next government in Caracas will need to restructure roughly $157 billion of overseas debt "aggressively" and focus on a humanitarian aid package and boosting imports to relieve shortages, according to Bloomberg News. "We're putting up a strategy to isolate and protect the assets of Venezuela and warranty that the new money coming in the country to finance the reconstruction doesn't go to pay the legacy creditors," he said at an event organized by the Venezuelan American Association at the offices of Pillsbury Winthrop Shaw Pittman, Bloomberg News discloses. Mr. Santos is a member of a think tank of sorts at Harvard focusing on Venezuela, led by Ricardo Hausmann, that's been advising opposition leader Juan Guaido, who the U.S. has recognized as the country's rightful leader. His message -- which was broadly in line with past comments from Hausmann -- was directed to a crowd that included representatives from Goldman Sachs Asset Management, JPMorgan Chase & Co., Aurelius Capital Management, Gramercy Funds Management and MacroSynergy Partners, Bloomberg News relays. Bloomberg News relays that Mr. Santos said Venezuela will probably need $60 billion to $70 billion from the International Monetary Fund as well as foreign grants. A morning-after plan for Venezuela if President Nicolas Maduro's regime is eventually ousted, which he and Hausmann have contributed to, highlights the need to open up the nation's oil industry to private investment and to boost imports to $34 billion within the first year under a new president from less than $10 billion in 2018, Bloomberg News notes. In an optimistic scenario, Santos said that within five years, Venezuela could produce 2.2 million barrels per day and boost per-capita income back to 1965 levels, Bloomberg News discloses. "We'll make the country jump from 1947, which is where we are now, 18 years into 1965 within five years," Santos said, Bloomberg News relays. "That's a lot to say, but that also means that a lot of the damage that's been done is permanent," he added. One other potential source of funding, which Santos isn't counting on, is the billions of dollars the U.S. has said Maduro's government looted from the Venezuelan people, Bloomberg News notes. Santos said it's possible Guaido would partner with a risk consultancy firm to try to claw back the missing cash, Bloomberg News relays. While Santos spoke about a future Venezuelan government, his co-panelists at Pillsbury cast doubt upon how quickly a regime change would occur, Bloomberg News notes. Cynthia Arnson, who directs the Latin American program at the Woodrow Wilson International Center for Scholars in Washington, said the idea of a quick political transition is wishful thinking, Bloomberg News says. The Trump administration is more likely to pursue quiet diplomacy rather than secondary sanctions short term, according to Russ Dallen, managing partner at Caracas Capital, Bloomberg News notes. When a debt restructuring eventually happens, Santos said Venezuela's long list of creditors, including bondholders, Russian state oil giant Rosneft, the Chinese and ConocoPhillips could get treated differently, Bloomberg News discloses. China may accept a haircut in net present value, according to the Harvard lecturer, Bloomberg News relays. "I haven't heard debt repudiation," Santos said. "Do we want to keep on selling oil to China? We do. Do we want to keep on importing goods from China? I'm sure we will. Do we want cheap loans below market rates from the Chinese Development Bank? We want it," he 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'. VENEZUELA: To Cut Electricity 18 Hours Per Week ----------------------------------------------- EFE News reports that the Nicolas Maduro government released its schedule for electricity rationing for Venezuela, with the exception of Caracas and three other states, according to which the general public will be without electric power for at least 18 hours per week. The Electric Energy Ministry and the state-run Corpoelec electricity company designed a schedule dividing 20 of the country's 23 states into five sectors with different rationing schemes with the idea of implementing daily three-hour blackouts six days per week, according to EFE News. According to this plan, on one day per week, each sector will have electricity for the full 24 hours, the report relays. The rationing measure specifically excludes the state of Vargas near Caracas where Venezuela's main airport is located, along with the southern state of Amazonas and the northeastern state of Delta Amacuro, border regions far from the capital, the report says. Maduro announced the launching of the rationing plan slated to last for 30 days but as of April 5, the details of the schedule had not been made public, the report notes. The programmed power outages are the government's response to the electricity crisis that has beset the country since March 7, when a series of massive blackouts paralyzed Venezuela for at least 11 days, the report relays. The power failures have persisted this, particularly in the west, where whole communities have been without electricity for more than 100 hours, the report says. Maduro's leftist government has blamed the United States and Venezuelan opposition for "sabotaging" the power grid claiming that "electromagnetic" attacks and a "long-range" sniper attack have been staged on the main hydroelectric plant and elsewhere, the report relays. After the blackouts, the government announced the modernization, intervention in and restructuring of the electric system, which has been managed by the military since 2013, with an eye toward "confronting these attacks" in the future, the report notes. The Venezuelan opposition, on the other hand, blames the government for the system's failures, pointing to ineptitude and poor management of the electric sector's resources as the real causes of the outages, the report says. In 2010, the government for the first time decreed a state of emergency in the electric sector and imposed the first electricity rationing, from which it exempted Caracas, which lasted for four months and included cutting power to each citizen for 24 hours per week, the report relays. Since then, blackouts have been becoming more frequent, especially in regions like the western state of Zulia, where over the last decade several rationing plans, not to mention unannounced cuts in service, have been implemented, the report adds. 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'. VENEZUELA: US to Sanction Vessels, Companies That Move Crude ------------------------------------------------------------ S&P Global Patts reports that the US will sanction 34 vessels owned or operated by Petroleos de Venezuela S.A. (PDVSA) and two companies that move Venezuelan crude to Cuba, Vice President Mike Pence said. The sanctions target two companies, Ballito Bay Shipping and ProPer In Management, which delivered Venezuelan oil to Cuba in February and March on the crude tanker Despina Andrianna, according to S&P Global Patts. The US also sanctioned 34 vessels that PDVSA has an interest in, the report notes. The sanctions are the latest punitive actions by the Trump administration, as it aims to remove Venezuelan President Nicolas Maduro from power, the report relays. The US recognizes opposition leader Juan Guaido as Venezuela's legitimate leader, the report discloses. The US Department of the "Treasury is taking action against vessels and entities transporting oil, providing a lifeline to keep the illegitimate Maduro regime afloat," Treasury Secretary Steven Mnuchin said in a statement, the report says. "Cuba continues to profit from, and prop up, the illegitimate Maduro regime through oil-for-repression schemes as they attempt to keep Maduro in power," the report notes. US sanctions unveiled in January have created a de facto ban on US imports of Venezuelan crude and a prohibition on US dollar transactions with PDVSA will be imposed on April 28, the report relays. No Venezuelan oil was imported by the US two weeks ago, the third week in a row of zero imports from the South American nation, the US Energy Information Administration reported last week, the report relays. The Trump administration is considering secondary sanctions on purchases of Venezuelan crude, but has also been warning governments of other nations, companies and oil traders that transactions with PDVSA could run afoul of US sanctions, the report notes. "There is selling, there is re-selling, there are oil traders involved in this and we have pretty decent information about this so we try to follow up and say 'don't do that,'" Elliott Abrams, the US State Department's special representative for Venezuela, said last week, the report says. "We're seeing efforts and we're trying to shut them off," the report discloses. Venezuela oil output averaged 740,000 b/d in March, the lowest monthly rate in 16 years, according to an S&P Global Platts survey released, the report says. If secondary sanctions are imposed, Venezuela's oil output could fall to 500,000 b/d by the final quarter of 2019, according to S&P Global Platts Analytics, the report adds. 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'. =============== X X X X X X X X =============== LATIN AMERICA: IDB Highlights Strengths of Region Amidst Challenges ------------------------------------------------------------------- The economy of Central America and the Dominican Republic has continued to grow over the past year, although at significantly different rates depending on the country. For 2018, growth is estimated at 3.8 percent, a level similar to that of 2017, thanks to a robust economic performance by the region's main trading partner, the United States. Central America saw several indicators improve, such as inflation, the current account balance and international reserves. But it has also been confronted with major challenges. One must point out a drop in international prices for major export goods such as sugar and coffee, the onset of a cycle of monetary rises (increases in interest rates?) in the United States, and lower corporate revenues in that country. At the same time, uncertainty remained over a possible escalation in protectionist US trade policy, which could slow the global economy, and tougher immigration policy in the US. Internally in the region, fiscal policy tightened and major weather and socio-political events took place in several countries. Furthermore, direct financial investment varied from country to country depending on their economic structures. These are some of the conclusions of a recent macro-economic report by the Inter-American Development Bank, entitled "The Economic Landscape in Central America and the Dominican Republic: External Challenges and Internal Strengths," which seeks to contribute to analysis of the economic challenges facing the region and stir debate on the policies it might undertake to address them more effectively. With growth in Central America forecast at 4.2% for 2019, the report recommends that policymakers consolidate the macroeconomic stability they have achieved so far, with emphasis on their fiscal position, and boost competitiveness through improvements in their regulatory and institutional systems. Taken together, such steps have proven to be the best guarantee against external risks and would help make the region more competitive and a more attractive lure for investors. "The countries of the region can take steps to be more resilient in a context of major challenges, both internal and external," said Veronica Zavala, manager of the IDB's department for the countries of Central America, Haiti, Mexico, Panama and the Dominican Republic. She added that this is "particularly relevant at a time when financial investment is focused especially on countries' economic fundamentals." The IDB Group's Work in Central America and the Dominican Republic Despite the stronger growth, the region still suffers from rates of poverty and inequality that are among the highest in Latin America and the Caribbean: nearly 20 million people still live in poverty and the income of the richest 10 percent of the population is 10 times greater than that of the poorest 10 percent. Therefore, the work of the IDB Group in Central America has been quite intense, approving nearly $3 billion in 2018 to develop new projects in Central America and the Dominican Republic. This is reflected in the 2018 Activities Report , which summarizes the work of the IDB Group last year in Belize, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, Panama and the Dominican Republic. Specifically, 21 new loans for the public sector were approved to the tune of $2.476 and 97 donations were provided for technical assistance, totaling $50 million. Added to this were 15 operations worth a total of $417 million by IDB Invest, the bank's private sector arm, and $12 million from 12 projects by IDB Lab, the IDB Group's innovation lab. ********* 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 * * *