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/raid1/www/Hosts/bankrupt/TCRLA_Public/190702.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, July 2, 2019, Vol. 20, No. 131 Headlines A N T I G U A A N D B A R B U D A LIAT: Negotiations for Sale of Airline Shares to Begin July 1 B O L I V I A BANCO DE CREDITO: Moody's Withdraws Ba2/B1 Deposit Ratings BANCO DE DESARROLLO: Moody's Withdraws Ba3 Issuer Rating BANCO DE LA NACION : Moody's Withdraws B2 Ratings BANCO FIE: Moody's Withdraws Ba3/B1 Deposit Ratings BANCO NACIONAL DE BOLIVIA: Moody's Withdraws B1 Deposit Rating BUPA INSURANCE: Moody's Withdraws Ba3 IFS Rating PATRIMONIALES Y FIANZAS: Moody's Withdraws B1 IFS Rating VIDA Y SALUD: Moody's Withdraws B1 IFS Rating for Own Reasons E C U A D O R ECUADOR: IMF Approves US$251.14 Million Disbursement J A M A I C A DIGICEL GROUP: Bonds Slip as Debt Puts Pressure on Company SEARS HOLDINGS: U.S. Trustee Ordered to Appoint Retirees Committee M E X I C O GRUPO KUO: S&P Affirms 'BB' Global Scale Issuer Credit Rating V E N E Z U E L A PETROLEOS DE VENEZUELA: Reshuffles Oil Operations Amid Sanctions - - - - - ===================================== A N T I G U A A N D B A R B U D A ===================================== LIAT: Negotiations for Sale of Airline Shares to Begin July 1 ------------------------------------------------------------- Antigua Observer reports that the Government Antigua and Barbuda is crossing its fingers and hoping for a reasonable outcome as a team from the twin island will head to Barbados to commence negotiations surrounding the sale of LIAT Ltd., formerly known as Leeward Islands Air Transport or LIAT, shares. The local team responsible for spearheading negotiations with the Barbadian government will depart the island for the first round of talks, according to Antigua Observer. The Chief of Staff in the Office of the Prime Minister, Lionel "Max" Hurst, made the disclosure during the post-Cabinet press briefing, the report notes. "We will want to point to that the Antigua and Barbuda team responsible for negotiating with the Barbados team on the sale of certain shares owned by Barbados in the LIAT airline that that team will set off for a meeting in Bridgetown on July 1," he said, the report relays. The news from the Cabinet of Antigua and Barbuda came days after Barbados' Attorney General Dale Marshall announced that the negotiations had not begun, the report says. The report notes that Marshall said he was hopeful he would be able to meet with authorities from Antigua and Barbuda before the start of next month's 40th Regular Meeting of the Conference of Heads of Government to be held in St. Lucia. The local government has agreed to take over the liabilities incurred by Barbados in the LIAT re-fleeting exercise, and to keep LIAT flying rather than participate in any collapsing of the airline, the report says. In exchange for that responsibility, Antigua and Barbuda would acquire partial ownership of the shares which Barbados currently owns, the report relays. Following the purchase, Antigua will become the major shareholder in the regional carrier, the report adds. About LIAT LIAT Ltd., formerly known as Leeward Islands Air Transport or LIAT, is an airline headquartered on the grounds of V. C. Bird International Airport in Antigua. It operates high-frequency inter-island scheduled services serving 15 destinations in the Caribbean. The airline's main base is VC Bird International Airport, Antigua and Barbuda, with bases at Grantley Adams International Airport, Barbados and Piarco International Airport, Trinidad and Tobago. The airline is owned by seven Caribbean governments, with three being the major shareholders: Barbados, Antigua & Barbuda and St. Vincent and the Grenadines along with Dominica(94.7 %); other Caribbean governments, private shareholders and employees (5.3%). In the last few years, LIAT has been challenged with financial difficulties, often needing additional funding as the airline dealt with the high cost of operations. In November 2016, the Barbados government defended LIAT's operations, even as opposition legislators called for a cessation of the business. In early 2015, LIAT offered early retirement packages to employees in efforts to downsize. In 2014, LIAT knew it had to deal with unprofitable routes to make operations viable. In the third quarter of 2013, the airline's top management was shaken, with news Chief Executive Officer Captain Ian Brunton's sudden resignation. LIAT's current chief executive officer is Julie Reifer-Jones, chairman is Jean Holder, and chief financial officer is Rojer Inglis. Dr. Ralph Gonsalves, prime minister of St. Vincent & the Grenadines, serves as chairman of LIAT shareholders. ============= B O L I V I A ============= BANCO DE CREDITO: Moody's Withdraws Ba2/B1 Deposit Ratings ---------------------------------------------------------- Moody's Latin America Agente de Calificacion de Riesgo announced that it has withdrawn all of its ratings for Banco de Credito de Bolivia S.A. for business reasons. The following ratings of Banco de Credito de Bolivia S.A. were withdrawn: - Long-term local currency deposit rating, previously rated Ba2 with stable outlook - Short-term local currency deposit rating, previously rated Not Prime - Long-term foreign currency deposit rating, previously rated B1 with stable outlook - Short-term foreign currency deposit rating, previously rated Not Prime - Bolivian national scale long-term local currency deposit rating, previously rated Aaa.bo with stable outlook - Bolivian national scale short-term local currency deposit rating, previously rated BO-1 - Bolivian national scale long-term foreign currency deposit rating, previously rated Aa3.bo with stable outlook - Bolivian national scale short-term foreign currency deposit rating, previously rated BO-1 - Foreign currency senior unsecured debt rating, previously rated Ba2 with stable outlook - Bolivian national scale foreign currency senior unsecured debt rating, previously rated Aaa.bo with stable outlook - Baseline credit assessment, previously rated ba3 - Adjusted baseline credit assessment, previously rated ba2 - Long-term counterparty risk assessment, previously rated Ba1(cr) - Short-term counterparty risk assessment, previously rated Not Prime(cr) Outlook, changed to rating withdrawn from stable RATINGS RATIONALE Moody's has decided to withdraw the ratingss for its own business reasons. BANCO DE DESARROLLO: Moody's Withdraws Ba3 Issuer Rating -------------------------------------------------------- Moody's Latin America Agente de Calificacion de Riesgo announced that it has withdrawn all of its ratings for Banco de Desarrollo Productivo S.A.M. for business reasons. The following ratings of Banco de Desarrollo Productivo S.A.M. were withdrawn: - Long-term local currency deposit rating, previously rated Ba3 with stable outlook - Short-term local currency deposit rating, previously rated Not Prime - Long-term foreign currency deposit rating, previously rated B1 with stable outlook - Short-term foreign currency deposit rating, previously rated Not Prime - Bolivian national scale long-term local currency deposit rating, previously rated Aaa.bo with stable outlook - Bolivian national scale short-term local currency deposit rating, previously rated BO-1 - Bolivian national scale long-term foreign currency deposit rating, previously rated Aa3.bo with stable outlook - Bolivian national scale short-term foreign currency deposit rating, previously rated BO-1 - Local currency issuer rating, previously rated Ba3 with stable outlook - Short term local currency issuer rating, previously rated Not Prime - Bolivian national scale local currency issuer rating, previously rated Aaa.bo with stable outlook - Bolivian national scale short term local currency issuer rating, previously rated BO-1 - Baseline credit assessment, previously rated b2 - Adjusted baseline credit assessment, previously rated b2 - Long-term counterparty risk assessment, previously rated Ba3(cr) - Short-term counterparty risk assessment, previously rated Not Prime(cr) Outlook, changed to rating withdrawn from stable RATINGS RATIONALE Moody's has decided to withdraw the ratingss for its own business reasons. BANCO DE LA NACION : Moody's Withdraws B2 Ratings ------------------------------------------------- Moody's Latin America Agente de Calificacion de Riesgo announced that it has withdrawn all of its ratings for Banco de la Nacion Argentina S.A. (Bolivia) for business reasons. The following ratings of Banco de la Nacion Argentina S.A. (Bolivia) were withdrawn: - Long-term local currency deposit rating, previously rated B2 with stable outlook - Short-term local currency deposit rating, previously rated Not Prime - Long-term foreign currency deposit rating, previously rated B2 with stable outlook - Short-term foreign currency deposit rating, previously rated Not Prime - Bolivian national scale long-term local currency deposit rating, previously rated A3.bo with stable outlook - Bolivian national scale short-term local currency deposit rating, previously rated BO-2 - Bolivian national scale long-term foreign currency deposit rating, previously rated A3.bo with stable outlook - Bolivian national scale short-term foreign currency deposit rating, previously rated BO-2 - Long-term counterparty risk assessment, previously rated B1(cr) - Short-term counterparty risk assessment, previously rated Not Prime(cr) Outlook, changed to rating withdrawn from stable RATINGS RATIONALE Moody's has decided to withdraw the ratingss for its own business reasons. BANCO FIE: Moody's Withdraws Ba3/B1 Deposit Ratings --------------------------------------------------- Moody's Latin America Agente de Calificacion de Riesgo announced that it has withdrawn all of its ratings for Banco FIE S.A. for business reasons. The following ratings of Banco FIE S.A. were withdrawn: - Long-term local currency deposit rating, previously rated Ba3 with stable outlook - Short-term local currency deposit rating, previously rated Not Prime - Long-term foreign currency deposit rating, previously rated B1 with stable outlook - Short-term foreign currency deposit rating, previously rated Not Prime - Bolivian national scale long-term local currency deposit rating, previously rated Aa2.bo with stable outlook - Bolivian national scale short-term local currency deposit rating, previously rated BO-1 - Bolivian national scale long-term foreign currency deposit rating, previously rated Aa3.bo with stable outlook - Bolivian national scale short-term foreign currency deposit rating, previously rated BO-1 - Local currency senior unsecured debt rating, previously rated Ba3 with stable outlook - Bolivian national scale local currency senior unsecured debt rating, previously rated Aa2.bo with stable outlook - Local currency senior unsecured MTN rating, previously rated (P)Ba3 - Bolivian national scale local currency senior unsecured MTN rating, previously rated Aa2.bo - Baseline credit assessment, previously rated b1 - Adjusted baseline credit assessment, previously rated b1 - Long-term counterparty risk assessment, previously rated Ba3(cr) - Short-term counterparty risk assessment, previously rated Not Prime(cr) Outlook, changed to rating withdrawn from stable RATINGS RATIONALE Moody's has decided to withdraw the ratingss for its own business reasons. BANCO NACIONAL DE BOLIVIA: Moody's Withdraws B1 Deposit Rating -------------------------------------------------------------- Moody's Latin America Agente de Calificacion de Riesgo announced that it has withdrawn all of its ratings for Banco Nacional de Bolivia S.A. for business reasons. The following ratings of Banco Nacional de Bolivia S.A. were withdrawn: - Long-term local currency deposit rating, previously rated Ba3 with stable outlook - Short-term local currency deposit rating, previously rated Not Prime - Long-term foreign currency deposit rating, previously rated B1 with stable outlook - Short-term foreign currency deposit rating, previously rated Not Prime - Bolivian national scale long-term local currency deposit rating, previously rated Aaa.bo with stable outlook - Bolivian national scale short-term local currency deposit rating, previously rated BO-1 - Bolivian national scale long-term foreign currency deposit rating, previously rated Aa3.bo with stable outlook - Bolivian national scale short-term foreign currency deposit rating, previously rated BO-1 - Baseline credit assessment, previously rated ba3 - Adjusted baseline credit assessment, previously rated ba3 - Long-term counterparty risk assessment, previously rated Ba2(cr) - Short-term counterparty risk assessment, previously rated Not Prime(cr) Outlook, changed to rating withdrawn from stable RATINGS RATIONALE Moody's has decided to withdraw the ratingss for its own business reasons. BUPA INSURANCE: Moody's Withdraws Ba3 IFS Rating ------------------------------------------------ Moody's Latin America Agente de Calificacion de Riesgo, S.A. withdrawn the Ba3 global local currency and Aaa.bo Bolivian national scale insurance financial strength ratings of Bupa Insurance (Bolivia) S.A.. At the time of the withdrawal, the outlook of the organization was stable. Moody's has decided to withdraw the ratings for its own business reasons. PATRIMONIALES Y FIANZAS: Moody's Withdraws B1 IFS Rating -------------------------------------------------------- Moody's Latin America Agente de Calificacion de Riesgo, S.A. withdrawn the B1 global local currency and Aa3.bo Bolivian national scale insurance financial strength ratings of Nacional Seguros Patrimoniales y Fianzas S.A.. At the time of the withdrawal, the outlook of the organization was stable. Moody's has decided to withdraw the ratings for its own business reasons. VIDA Y SALUD: Moody's Withdraws B1 IFS Rating for Own Reasons ------------------------------------------------------------- Moody's Latin America Agente de Calificacion de Riesgo, S.A. withdrawn the B1 global local currency and Aa3.bo Bolivian national scale insurance financial strength ratings of Nacional Seguros Vida y Salud S.A.. At the time of the withdrawal, the outlook of the organization was stable. RATINGS RATIONALE Moody's has decided to withdraw the ratings for its own business reasons. ============= E C U A D O R ============= ECUADOR: IMF Approves US$251.14 Million Disbursement ---------------------------------------------------- The Executive Board of the International Monetary Fund (IMF) completed the first review of Ecuador's performance under its economic program supported by the Extended Arrangement under the Extended Fund Facility (EFF) for Ecuador. The completion of the review allows the authorities to draw the equivalent of SDR 180.65 million (about US$251.14 million). The 36-month EFF with a total access of SDR 3.035 billion (about US$4.2 billion), equivalent of 435 percent of Ecuador's quota in the IMF, was approved by the IMF's Executive Board on March 11, 2019 (see Press Release 19/72). Following the Executive Board discussion, Mr. Tao Zhang, Deputy Managing Director and Chair, summarized the Board's findings: "The authorities' reform program supported by the Fund arrangement is yielding results. The underlying fiscal position is improving, international reserves are rising, and borrowing costs are declining. Notwithstanding downside risks, including spillovers from neighboring countries, the strengthening of the fiscal position and structural reforms should help boost growth and create jobs. "The Ecuadorian government has demonstrated its resolve to restore fiscal discipline by rationalizing public spending. The planned tax reform will be instrumental in raising revenues and making the tax system more efficient, simple and equitable. These reforms will help put public debt on a sustainable path and strengthen Ecuador's external competitiveness. "Fiscal sustainability should be underpinned by reforms in public financial and debt management, and improvements in fiscal transparency. The authorities are taking steps towards strengthening budget formulation and execution, reducing discretion, strengthening oversight and controls, introducing robust fiscal rules, and improving public debt management. "Fortifying the financial system is paramount to preserving financial stability, improving crisis preparedness, and boosting the efficiency of financial intermediation. The institutional reform of the central bank will be key in supporting the dollarization regime and boosting international reserves. "Labor market reforms are essential in supporting job creation as well as boosting competitiveness and growth. Measures to facilitate hiring, reduce rigidities and informality, and increase female labor force participation are needed. Efforts to increase transparency and governance will also help safeguard public resources and promote a business environment supportive of growth and job creation. "Protecting the poor and the most vulnerable remains a key priority. The authorities are taking steps to upgrade the social registry and expand the coverage of social assistance. The Ecuadorian government stands ready to step up efforts to ensure that the vulnerable remain protected." ============= J A M A I C A ============= DIGICEL GROUP: Bonds Slip as Debt Puts Pressure on Company ---------------------------------------------------------- RJR News reports that the price of Digicel bonds has slipped as it emerged that the burden of its US$6.7 billion debt pile is increasing, ramping up pressure on the company. The Irish Times newspaper quoted a source as saying the group has told bondholders that its quarterly earnings fell 9 per cent to US$210 million for the three months to the end of March, according to RJR News. RJR News, citing a Bloomberg report, relays that the company blamed the slide in its earnings on higher customer acquisition costs, accounting changes on bad debts, and the treatment of capital expenditure, . Digicel had cash on hand of US$279 million. The company is said to be guiding mid single-digit growth in its earnings for the full year to the end of next March, with a debt level of seven times its earnings. Digicel previously set a debt ratio target of 6.7 times earnings for the end of March 2019, the report relays. Certain Digicel bonds were trading lower on the markets on June 28, after news emerged of its earnings slide, the report relays. A more than one billion euro tranche of loan notes due for repayment in 2024 fell in price by more than 1.3 per cent, and were trading more than 10.5 per cent below their level of last July, the report discloses. Digicel disclosed in January that close to 98 per cent of the holders of US$2 billion of bonds due for repayment next year had agreed to delay repayment until 2022, as it grapples with its debt burden, the report relays. It raised US$600 million in another bond sale in March, the report adds. As reported in the Troubled Company Reporter on Jan. 21, 2019, Moody's Investors Service appended the "limited default" designation to the probability of default rating of Digicel Group Limited, following the completion of its exchange offer, which Moody's considers as a distressed exchange under its definition of default, and upgraded Digicel's PDR to Caa1-PD/LD from Caa3-PD. At the same time, Moody's upgraded the rating of the new 2022 notes issued at Digicel Group One Limited to Caa1 from Caa2, assigned a Caa3 rating to the new 2022 notes at Digicel Group Two Limited and downgraded the rating of the new 2024 notes at DGL2 to Caa3 from Caa2. Moody's affirmed Digicel's Caa1 corporate family rating, as well as the ratings of its other debt instrument. The outlook on all ratings remains stable. The LD designation was to be removed within three business days. SEARS HOLDINGS: U.S. Trustee Ordered to Appoint Retirees Committee ------------------------------------------------------------------ Judge Robert Drain of the U.S. Bankruptcy Court for the Southern District of New York ordered the U.S. Trustee for Region 2 to appoint a committee to represent retired workers in the Chapter 11 cases of Sears, Roebuck and Co. and its affiliates. The bankruptcy judge also ordered that the committee to be appointed should have a budget not to exceed $250,000. The committee, however, "may seek increases for cause" upon application to the court, according to the order. About Sears Holdings Sears Holdings Corporation (NASDAQ: SHLD) -- http://www.searsholdings.com/-- began as a mail ordering catalog company in 1887 and became the world's largest retailer in the 1960s. At its peak, Sears was present in almost every big mall across the U.S., and sold everything from toys and auto parts to mail-order homes. Sears claims to be is a market leader in the appliance, tool, lawn and garden, fitness equipment, and automotive repair and maintenance retail sectors. Sears and Kmart merged to form Sears Holdings in 2005 when they had 3,500 US stores between them. Kmart emerged in 2005 from its own bankruptcy. Unable to keep up with online stores and other brick-and-mortar retailers, a long series of store closings has left it with 687 retail stores in 49 states, Guam, Puerto Rico, and the U.S. Virgin Islands as of mid-October 2018. The Company employs 68,000 individuals, of whom 32,000 are full-time employees. As of Aug. 4, 2018, Sears Holdings had $6.93 billion in total assets, $11.33 billion in total liabilities and a total deficit of $4.40 billion. Unable to cover a $134 million debt payment due Oct. 15, 2018, Sears Holdings Corporation and 49 subsidiaries sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 18-23538) on Oct. 15, 2018. The Hon. Robert D. Drain is the case judge. Weil, Gotshal & Manges LLP is serving as legal counsel and M-III Partners is serving as restructuring advisor. Aebersold, managing director, and Levi Quaintance, vice president of Lazard Freres & Co. LLC, serve as investment banker to Holdings. DLA Piper LLP is the real estate advisor. Prime Clerk is the claims and noticing agent. The U.S. Trustee for Region 2 appointed nine creditors, including the Pension Benefit Guaranty Corp., and landlord Simon Property Group, L.P., to serve on an official committee of unsecured creditors. Akin Gump Strauss Hauer & Feld LLP is counsel to the creditors' committee. FTI Consulting is financial advisor to the creditors' committee. Houlihan Lokey Capital, Inc., is providing investment banking services to the committee. =========== M E X I C O =========== GRUPO KUO: S&P Affirms 'BB' Global Scale Issuer Credit Rating ------------------------------------------------------------- S&P Global Ratings affirmed its 'BB' global scale and 'mxA' national scale issuer credit ratings on Grupo KUO. At the same time, S&P affirmed its 'BB' global scale issue-level rating with a '3' recovery rating. The stable outlook reflects S&P's expectation that Grupo KUO will continue to generate steady EBITDA during the next 12 months as it benefits from its expansion projects, leading to debt to EBITDA of about 3.0x and funds from operations (FFO) cash interest expense above 4.0x. Grupo KUO continues to make growth investments in line with its five-year plan that began in 2016, which intends to enhance production capacity in its pork meat and transmission segments. As of this June, Grupo KUO has reached the peak of its investment cycle. S&P believes that these investments will benefit its pork meat segment by doubling its production capacity with its new facilities in Mexico during the second half of the year. The company also invested in a dual-clutch transmission (DCT) plant, which will reach full operations at the beginning of 2020. ================= V E N E Z U E L A ================= PETROLEOS DE VENEZUELA: Reshuffles Oil Operations Amid Sanctions ---------------------------------------------------------------- Venezuelan state oil firm Petroleos de Venezuela, S.A. (PDVSA) is revamping one of its major processing operations geared to supplying U.S. buyers to produce instead a crude grade favoured by Asian refiners, according to internal documents seen by Reuters. Sweeping U.S. sanctions on the government of President Nicolas Maduro since January have effectively halted its oil sales to U.S. refiners, historically among the largest receivers of Venezuelan crude, Marianna Parraga at Reuters reports. The Trump administration imposed the sanctions to starve Maduro's government of oil revenue and force him from office, the report relays. Its Petropiar joint venture, which once made up to 210,000 barrels per day of exportable "synthetic" crude out of tar-like oil from its Orinoco Belt, will be converted next month to blend heavy and light oils, according to internal PDVSA documents detailing the strategy, the report notes. The joint venture, between PDVSA and U.S.-based Chevron Corp, plans to make a heavy crude grade called Merey by blending extra-heavy oil with lighter grades, the report discloses. The move comes after domestic inventories of Venezuela's synthetic crude jumped after U.S. refiners halted purchases, the report says. Asian refineries are better equipped to handle blended crudes compared to the synthetic type produced by the Venezuelan upgraders, said Rystad Energy analyst Paola Rodriguez-Masiu, the report relays. "Asia has a low hydrocracking capacity compared with the United States," she said, referring to the processing of synthetic crudes, the report notes. PDVSA's plan faces significant logistical challenges, most notably producing enough domestic light oil to blend -- given that U.S. sanctions have sharply limited imports, the report discloses. Merey will account for 822,000 bpd of PDVSA's roughly 900,000 bpd of planned July crude exports, the documents show, compared with about 500,000 bpd earlier this year, the report says. The shift could take advantage of a heavy crude supply crunch. Declining exports of similar grades from other Latin American producers have boosted Asia's appetite for Venezuelan crudes including Merey, and helped lift their pricing, traders said, the report notes. PDVSA's main customers in Asia are China National Petroleum Corp (CNPC) and its subsidiaries; India's Reliance Industries and Nayara Energy, and Thailand's Tipco Asphalt, according to long-term supply contracts, the report adds. As reported in Troubled Company Reporter-Latin America on June 3, 2019, Moody's Investors Service has withdrawn all the ratings of Petroleos de Venezuela, S.A. including the senior unsecured and senior secured ratings due to insufficient information. At the time of withdrawal, the ratings were C and the outlook was stable. ********* 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 * * *