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/raid1/www/Hosts/bankrupt/TCRLA_Public/190701.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, July 1, 2019, Vol. 20, No. 130 Headlines D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: ANJE Warns of Bribes on Constitutional Reform J A M A I C A CARIBBEAN CEMENT: Gets New General Manager T R I N I D A D A N D T O B A G O T&T ELECTRICITY COMMISSION: Owes National Gas US$700 Million TRINIDAD PETROLEUM: Raises Funds to Pay Debt Due on Aug. 25 V E N E Z U E L A VENEZUELA: Fitch Affirms Then Withdraws Ratings VENEZUELA: Government & Opposition to Restart Negotiations X X X X X X X X [*] BOND PRICING: For the Week June 24 to June 28, 2019 [*] Fitch: Growth Slump A Factor in LatAm Neg. Rating Pressures [*] Momentum In Latin American Credit Conditions Is Ebbing, S&P Say - - - - - =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: ANJE Warns of Bribes on Constitutional Reform ----------------------------------------------------------------- Dominican Today reports that National Young Entrepreneurs Association (ANJE) President Guillermo Julian warned that bribing congressmen to get votes for another constitutional reform would lacerate the institutionalism that the Dominican people have managed to build with many efforts and sacrifices. Julian was asked about the complaints from several people, including opposition PRM party presidential hopeful Luis Abinader that in Congress offers have already been made to legislators to vote to amend the law of laws, according to Dominican Today. Speaking on Telesistema Channel 11, Julian stressed that it's up to Congress to amend the Constitution and not business associations or society, the report notes. "As a society we must ask the congressmen for an ethical and necessary behavior to maintain the institutional levels in the country," the report quoted Mr. Julian as saying. About Dominican Republic The Dominican Republic is a Caribbean nation that shares the island of Hispaniola with Haiti to the west. Capital city Santo Domingo has Spanish landmarks like the Gothic Catedral Primada de America dating back 5 centuries in its Zona Colonial district. Fitch Ratings affirmed Dominican Republic's Long-Term, Foreign-Currency Issuer Default Rating (IDR) at 'BB-' with a Stable Outlook in September 2018. The Troubled Company Reporter-Latin America reported on April 4, 2019 that the Dominican Today related that Juan Del Rosario of the UASD Economic Faculty cited a current economic slowdown for the Dominican Republic and cautioned that if the trend continues, growth would reach only 4% by 2023. Mr. Del Rosario said that if that happens, "we'll face difficulties in meeting international commitments." ============= J A M A I C A ============= CARIBBEAN CEMENT: Gets New General Manager ------------------------------------------ RJR News reports that Caribbean Cement Company Limited will have a new general manager as of August 1. The tenure of Peter Donkersloot Ponce will end on July 31, according to RJR News. He will be replaced by Yago Castro, the current General Manager at Arawak Cement Company Limited in Barbados, the report notes. In a statement, Caribbean Cement Company said Mr. Donkersloot advised he would not be seeking an extension of his contract, the report adds. * * * Caribbean Cement Company Limited, together with its subsidiaries, manufactures and sells cement and clinker in Jamaica and other Caribbean countries. The company was incorporated in 1947 and is based in Kingston, Jamaica. As reported in the Troubled Company Reporter-Latin America on Oct. 30, 2017, RJR News said that Caribbean Cement Limited is reporting improved profits for the three months ending September. For the quarter, the company earned J$747.8 million compared with a loss of J$81 million for the corresponding period last year, according to RJR News. ===================================== T R I N I D A D A N D T O B A G O ===================================== T&T ELECTRICITY COMMISSION: Owes National Gas US$700 Million ------------------------------------------------------------ Trinidad Express reports that Trinidad and Tobago Prime Minister Dr. Keith Rowley disclosed that the Trinidad and Tobago Electricity Commission (T&TEC) owes the National Gas Company (NGC) some US$700 million (TT$4.75 billion). He was speaking at the signing of the term sheet agreement between Shell Trinidad and the NGC, according to Trinidad Express. The raw material for electricity, in T&T, is natural gas with T&TEC being tied into take or pay contracts for its supply of natural gas, the report adds. TRINIDAD PETROLEUM: Raises Funds to Pay Debt Due on Aug. 25 ----------------------------------------------------------- Trinidad Express reports that state-owned Trinidad Petroleum Holdings (TPH), the successor company to Petroleum Company of Trinidad and Tobago Limited ("Petrotrin"), secured the funds to meet the upcoming principal payment on its US$850 million notes due on August 25, marking the end of its debt-exchange arrangement in which it asked the bondholders of its foreign debt to accept notes maturing in 2026. In a previous notice, S&P Global Ratings said TPH raised the funds with a combination of US$570 million from the bond exchange and a US$603 million bank loan, according to Trinidad Express. About Petrotrin and TPHL Trinidad Petroleum Holdings Limited (TPHL) is a holding company 100% owned by the Government of Trinidad & Tobago and focused on oil and gas production. It is vested with the responsibility of managing T&T's oil and related assets. The holding company has four operating subsidiaries. TPHL is the successor company of Petroleum Company of Trinidad and Tobago Limited ("Petrotrin"). Petrotrin underwent a corporate reorganization that started in the last quarter of 2018. The T&T government insisted that the reorganization was necessary to improve the company's efficiency. As a result of the reorganization, Petrorin's refining business was shut down and new entities were created: three operating subsidiaries (Heritage Petroleum Company Limited, Paria Fuel Trading Company and Guaracara Refining Company Limited), and the new holding company, TPH, to which the international bonds were transferred from Petrotrin. As previously reported by The Troubled Company Reporter - Latin America, S&P Global Ratings expects the company to focus its investments on Heritage Petroleum, responsible for the exploration and production (E&P) business, which will be the main cash flow generator of the group. Given that the refinery was closed, TPH will remain responsible for the fuel supply of the island via Paria, which holds the sole license to import and distribute refined products in Trinidad and Tobago (T&T), S&P noted. Ratings agencies have issued ratings on TPHL. Moody's Investors Service assigned a Ba3 Corporate Family Rating (Not On Watch status) and a b2 Baseline Credit Assessment to Trinidad Petroleum Holdings Limited on April 16, 2019. S&P Global Ratings assigned its long-term 'BB' issuer credit rating to Trinidad Petroleum and placed it on Credit Watch with negative implications on January 2019. S&P, on June 26, 2019, affirmed its BB ratings on the company and removed the ratings from CreditWatch negative on lower liquidity risks. ================= V E N E Z U E L A ================= VENEZUELA: Fitch Affirms Then Withdraws Ratings ----------------------------------------------- Fitch Ratings has affirmed Venezuela's Long-Term Foreign-and Local Currency Issuer Default Ratings (IDR) and its Short-Term Foreign and Local Currency Ratings. It also affirmed the country ceiling at 'CC'. At the same time, Fitch has withdrawn Venezuela's ratings. Fitch is withdrawing its ratings on Venezuela due to the imposition of U.S. sanctions on the government of Venezuela. The ratings for Venezuela are: Current Rating Prior Rating -------------- ------------ Long Term Issuer Default Rating RD Affirmed RD Long Term Issuer Default Rating WD Withdrawn RD Short Term Issuer Default Rating C Affirmed C Short Term Issuer Default Rating WD Withdrawn C Local Currency Long Term Issuer Default Rating CC Affirmed CC Local Currency Long Term Issuer Default Rating WD Withdrawn CC Local Currency Short Term Issuer Default Rating C Affirmed C Local Currency Short Term Issuer Default Rating WD Withdrawn C Country Ceiling CC Affirmed CC Country Ceiling WD Withdrawn CC VENEZUELA: Government & Opposition to Restart Negotiations ---------------------------------------------------------- Mayela Armas and Dan Flynn at Reuters report that Venezuelan President Nicolas Maduro's government and opposition leader Juan Guaido's team will restart negotiations to try to resolve the country's crisis, three people familiar with the talks said. The three people told Reuters that both sides had not yet decided whether to hold the discussions in Oslo, where previous talks were held, or in Barbados. Two of the people said the talks would begin. Norway's government encouraged both sides to meet in Oslo in May, but they were unable to reach any agreement to resolve the economic and political crisis that has driven more than 4 million Venezuelans to flee abroad, according to Reuters. Few details have been released about the contents of the talks between representatives of Maduro and Guaido, who assumed a rival presidency in January and denounces Maduro as illegitimate for securing re-election last year in a vote widely viewed as fraudulent, the report notes. The report relays that Mr. Guaido said on Twitter that he had received backing from allies to "begin a new round of consultations with national and international leaders," without giving more details. About Venezuela Venezuela, officially the Bolivarian Republic of Venezuela, is a country on the northern coast of South America, consisting of a continental landmass and a large number of small islands and islets in the Caribbean sea. The capital is the city of Caracas. Hugo Chavez was president to Venezuela from 1999 to 2013. The Chavez presidency was plagued with challenges, which included a 2002 coup d'etat, a 2002 national strike and a 2004 recall referendum. Nicolas Maduro was elected president in 2013 after the death of Chavez. Maduro won a second term at the May 2018 Venezuela elections, but this result has been challenged by countries including Argentina, Chile, Colombia, Brazil, Canada, Germany, France and the United States who deemed it fraudulent and moved to recognize Juan Guaido as president. The presidencies of Chavez and Maduro have challenged Venezuela with a socioeconomic and political crisis. It is marked by hyperinflation, climbing hunger, poverty, disease, crime and death rates, social unrest, corruption and emigration from the country. Standard and Poor's long- and short-term foreign currency sovereign credit ratings for Venezuela stands at 'SD/D' (November 2017). S&P's local currency sovereign credit ratings are 'CCC-/C'. The May 2018 outlook on the long-term local currency sovereign credit rating is negative, reflecting S&P's view that the sovereign could miss a payment on its outstanding local currency debt obligations or advance a distressed debt exchange operation, equivalent to default. Moody's credit rating (long term foreign and domestic issuer ratings) for Venezuela was last set at C with stable outlook (March 2018). Fitch's long term issuer default rating for Venezuela was last set at RD (2017) and country ceiling was CC. Fitch, on June 27, 2019, affirmed then withdrew the ratings due to the imposition of U.S. sanctions on Venezuela. =============== X X X X X X X X =============== [*] BOND PRICING: For the Week June 24 to June 28, 2019 ------------------------------------------------------- Issuer Name Cpn Price Maturity Country Curr ----------- --- ----- -------- ------- --- Odebrecht Finance Ltd 6.0 16.4 4/5/2023 KY USD Cia Latinoamericana de 9.5 73.9 7/20/2023 AR USD MIE Holdings Corp 7.5 56.2 4/25/2019 HK USD China Huiyuan Juice Gr 6.5 46.6 8/16/2020 CN USD Noble Holding Internat 5.3 60.5 3/15/2042 KY USD Noble Holding Internat 6.2 62.2 8/1/2040 KY USD YPF SA 16.5 67.3 5/9/2022 AR ARS Banco Macro SA 17.5 65.2 5/8/2022 AR ARS Odebrecht Finance Ltd 7.0 17.0 4/21/2020 KY USD Yida China Holdings Lt 7.0 74.3 4/19/2020 CN USD KrisEnergy Ltd 4.0 40.4 6/9/2022 SG SGD Noble Holding Internat 6.1 62.0 3/1/2041 KY USD USJ Acucar e Alcool SA 9.9 74.0 11/9/2019 BR USD Avadel Finance Cayman 4.5 55.0 2/1/2023 US USD Argentine Republic Gov 6.9 75.2 1/11/2048 AR USD Polarcus Ltd 5.6 71.8 7/1/2022 AE USD Argentine Republic Gov 8.3 74.5 12/31/2033 AR USD MIE Holdings Corp 7.5 56.4 4/25/2019 HK USD Automotores Gildemeist 8.3 54.2 5/24/2021 CL USD YPF SA 16.5 67.3 5/9/2022 AR ARS Provincia del Chubut A 4.5 2208 3/30/2021 AR USD Argentine Republic Gov 4.3 70.0 12/31/2033 AR JPY Automotores Gildemeist 6.8 54.9 1/15/2023 CL USD Cia Latinoamericana de 9.5 74.3 7/20/2023 AR USD Enel Americas SA 5.8 32.7 6/15/2022 CL CLP Banco Macro SA 17.5 65.2 5/8/2022 AR ARS Provincia de Rio Negro 7.8 70.3 12/7/2025 AR USD Odebrecht Finance Ltd 6.0 16.4 4/5/2023 KY USD Province of Santa Fe 6.9 75.2 11/1/2027 AR USD Odebrecht Finance Ltd 7.0 16.5 4/21/2020 KY USD Province of Santa Fe 6.9 74.7 11/1/2027 AR USD Embotelladora Andina S 3.5 37.9 8/16/2020 CL CLP USJ Acucar e Alcool SA 9.9 74.0 11/9/2019 BR USD Argentine Republic Gov 8.3 72.9 12/31/2033 AR USD Empresa Provincial de 12.5 0.0 1/29/2020 AR USD Cia Energetica de Pern 6.2 1.1 1/15/2022 BR BRL Provincia de Buenos Ai 7.9 75.3 6/15/2027 AR USD AES Tiete Energia SA 6.8 1.2 4/15/2024 BR BRL Provincia de Rio Negro 7.8 70.4 12/7/2025 AR USD Argentine Republic Gov 0.5 27.6 12/31/2038 AR JPY Plaza SA 3.5 38.3 8/15/2020 CL CLP Banco Security SA 3.0 5.6 7/1/2019 CL CLP Argentina Bonar Bonds 5.8 75.2 4/18/2025 AR USD Corp Universidad de Co 5.9 64.2 11/10/2021 CL CLP City of Cordoba Argent 7.9 73.1 9/29/2024 AR USD Automotores Gildemeist 8.3 54.2 5/24/2021 CL USD Provincia de Cordoba 7.1 72.7 8/1/2027 AR USD Argentine Republic Gov 6.3 74.1 11/9/2047 AR EUR Provincia del Chaco Ar 4.0 0.0 12/4/2026 AR USD Fospar S/A 6.5 1.2 5/15/2026 BR BRL Empresa de Transporte 4.3 30.9 7/15/2020 CL CLP Argentina Bonar Bonds 7.6 74.4 4/18/2037 AR USD Automotores Gildemeist 6.8 54.9 1/15/2023 CL USD SACI Falabella 2.3 50.6 7/15/2020 CL CLP Sylph Ltd 2.4 65.1 9/25/2036 KY USD Banco Security SA 3.0 27.4 6/1/2021 CL CLP Empresa Electrica de l 2.5 63.8 5/15/2021 CL CLP Sociedad Austral de El 3.0 17.0 9/20/2019 CL CLP Provincia del Chaco Ar 9.4 74.8 8/18/2024 AR USD Argentine Republic Gov 7.1 75.7 6/28/2117 AR USD Provincia de Cordoba 7.1 74.7 8/1/2027 AR USD Metrogas SA/Chile 6.0 41.6 8/1/2024 CL CLP Esval SA 3.5 49.9 2/15/2026 CL CLP [*] Fitch: Growth Slump A Factor in LatAm Neg. Rating Pressures --------------------------------------------------------------- Negative sovereign rating pressures in Latin America/Caribbean have increased since the beginning of the year, with eight out of 20 sovereigns now on Negative Outlook, says Fitch Ratings. While the factors driving downgrades and negative outlook revisions differ in each case, weak and uneven growth, persistent fiscal challenges, increasing debt burdens (or greater risks posed by contingent liabilities in the case of Mexico), restricted market access for some, and political risk have been notable factors negatively affecting sovereign credits in 2019. Such factors will likely continue to weigh on the credit profiles in the second half of the year. Drivers of Downgrades/Negative Outlooks in Latin America/Caribbean Fiscal Weaker Growth, Increased/Rising Pressures, Tighter Weak Reform Debt Levels/Risk of Inadequate Financing Outlook Contingent Liabilities Reforms Conditions ------------- ---------------------- ---------- ---------- Argentina Argentina Argentina Argentina Ecuador Aruba Aruba Costa Rica Mexico Colombia Colombia Ecuador Nicaragua Costa Rica Costa Rica Nicaragua Uruguay Ecuador Guatemala Mexico Ecuador Uruguay Nicaragua Uruguay Weak growth in Latin America's largest economies is weighing on overall regional economic performance. Fitch recently lowered its 2019 growth forecasts for Brazil and Mexico to 1%, with regional growth (excluding Venezuela) expected to decelerate to 1.2%. The balance of risks to growth remains to the downside, with Latin America continuing to be particularly vulnerable to external risks including a faster-than-expected China slowdown, lower commodity prices and protracted trade wars. Economies in the region also continue to be weighed down by a decline in potential growth rates linked to reduced investment rates. The lagging supply-side reform agenda and disruption to key infrastructure projects linked to corruption scandals have contributed to productivity headwinds. Countries are making progress with fiscal consolidation, but it remains insufficient to reverse the upward trends in general government debt levels. The lack of primary balances consistent with debt stabilization and continued low growth means that debt is still increasing in 2019 in half the rated sovereigns in the region. Structural reform efforts in the largest economies remain slow, with uncertainty regarding the direction of microeconomic policies in Mexico and implementation challenges hampering the effort in Brazil. Argentina has made some progress under its IMF Standby Arrangement to stabilize the economy and meet fiscal targets, but the outcome of the election later this year could affect the reform outlook. Meeting future fiscal targets will also likely be challenging and require significant additional adjustment measures. Political risk remains a potential wild card for the region with the aforementioned looming election in Argentina. Uruguay and Bolivia are also set for elections in 4Q19, while fragmented congresses are weighing on timely and effective policy corrections and reforms. In Brazil, the scope of pension reform that may pass through Congress and other spending adjustments to meet the spending cap in the coming years will be key tests in 2019 for the government's ability to address the wide fiscal gap and growing debt. In Mexico, willingness to adhere to the fiscal rule over the medium term, support for Pemex and the energy policy will be important areas to watch for the sovereign's credit profile. [*] Momentum In Latin American Credit Conditions Is Ebbing, S&P Say ------------------------------------------------------------------- Optimism for credit conditions in Latin America is fading despite the Federal Reserve's (Fed's) more dovish tone and the possibility for lower interest rates in the U.S. later this year, according to S&P Global Ratings in a report published on June 27, 2019, titled "Credit Conditions Latin America: Optimism Fades Despite Fed's Pause." Political challenges have been materializing in Latin America's largest countries, and new administrations are facing waning domestic investor confidence as policy uncertainty prevails. Financing conditions, however, have improved compared with the first few months of the year, and highly rated corporations have taken advantage to issue debt with favorable terms. Overall, S&P expects volatility to continue, driven by trade tensions and domestic policy uncertainty; these conditions will weigh on economic growth expectations. Policy uncertainty in the region's largest countries is becoming more acute, undermining investor confidence and economic growth prospects. On the other hand, the Fed is now leaning towards a more accommodative monetary policy. S&P now expects the U.S. interest rates could fall 25 basis points (bps) in September. The latter is driven by weaker economic prospects in the U.S. as trade spats escalate and fiscal stimulus fizzles. Geopolitical tensions in the Middle East and likely slower global economic growth for the next year also weigh on investor decisions for Latin America. Risks are rising in Latin America, despite better financing conditions and potential for lower interest rates in the future. While global investors continue looking for higher yields in emerging markets, domestic players' optimism is faltering as policy uncertainty prevails. The lack of critical reforms in Brazil; the cancellation of major projects, the shift in energy policy, and the lack of long-term direction at the Andres Manuel Lopez Obrador administration; economic slump and the upcoming election in Argentina cloud the economic outlook for the region. Exacerbating the trend are trade fights and U.S. protectionist posture. On the bright side, despite the volatility, which S&P expects will continue, commodity prices continue to be supportive of countries in the region. S&P said, "We expect financing conditions in Latin America to remain supportive, particularly because the Fed has made it clear that rates will remain low. However, market liquidity can erode rapidly upon negative news, specifically related to trade or geopolitical tensions. On the positive side, we expect issuers to continue taking advantage of improving conditions to refinance their maturities and could even anticipate for those that come due in 2020 and 2021." Since S&P's last publication in the first quarter of this year, several external and domestic downside risks have materialized, prompting S&P to lower its GDP growth expectations for several Latin American economies. Externally, a further escalation in the trade conflict between the U.S. and China (and between the U.S. and Mexico) has increased risk aversion among investors and renewed pessimism towards global growth -- an unfavorable environment for investment in Latin America. The region's political landscape has become more challenging, especially in Argentina and Brazil, further worsening an already weak investment picture. Overall, rated issuers in Latin America are well positioned to weather weaker economic prospects. Nevertheless, downgrades of lower rated entities and tightening refinancing conditions are likely. In general, weaker conditions should lead to a higher negative bias in the region. S&P made these forecast on macroeconomic development: * Argentina: S&P now expects Argentina's economy to shrink 1.6% this year, compared with a 1.2% contraction previously. Higher-than-expected inflation in early 2019 encouraged tighter monetary policy, while the rising uncertainty over the October presidential election has dimmed an already weak investment picture. * Brazil: S&P lowered its 2019 growth forecast to 1% (from 2.2% a quarter ago), which implies a similar subpar expansion of the previous two years. Political volatility associated with the process of approving pension reform has held back investment more than we initially expected, and the recovery in household spending has flattened as labor market dynamics remain weak. S&P assumes a pension reform will be approved later this year, which underpins S&P's forecast for real GP growth of 2.2% in 2020. * Mexico: S&P also lowered its GDP forecast for Mexico to a 1.3% growth this year from 1.6% previously. The ongoing decline in oil production and a softening in the services sector are main factors behind the slowdown from a 2% growth pace in 2018. S&P assumes trade relation with the U.S. will remain broadly unchanged, although the recent threat of 5% tariffs on Mexican goods going to the U.S. increases the risk of investor uncertainty, especially as the U.S. presidential election approaches in 2020. * Chile, Colombia and Peru: S&P lowered its forecasts for Chile and Peru, two economies that have the high degree of direct exposure to the U.S.-China trade conflict through copper exports to China. In both countries, domestic demand has also softened, following a strong 2018. In Chile, S&P now expects growth of 2.6% this year (down from 3.3% previously), and 3.4% for Peru (from 4.0% previously). S&P has kept its growth expectation unchanged for Colombia, at 2.9% for 2019. ********* 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 * * *