/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/190815.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 Thursday, August 15, 2019, Vol. 20, No. 163 Headlines A R G E N T I N A ARGENTINA: Once Again on the Cusp of a Full-Blown Crisis C H I L E LATAM AIRLINES: Posts US$63MM Loss, Dragged by Recession C O L O M B I A GILEX HOLDING: Moody's Reviews B2 Sr. Sec. Rating for Downgrade D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: Dam in the South Advances; So Does Controversy DOMINICAN REPUBLIC: Most Employers Ready to Pay 14% Salary Hike E C U A D O R BANCO GUAYAQUIL: Fitch Assigns B- LT IDR, Outlook Negative J A M A I C A JAMAICA: Allocates $15MM to Farmers Affected by Ongoing Drought UC RUSAL: Revenue Drops Due to Unfavorable Market Environment M E X I C O MEXICO: Inflation Eased in July to Lowest Since 2016 P U E R T O R I C O HOTEL CUPIDO: Seeks to Hire Carlos Quintana as Accountant MONTE IDILIO: Hires Carlos Quintana Santiago as Accountant V E N E Z U E L A VENEZUELA: Congress to Create Committee for Debt Renegotiation - - - - - ================= A R G E N T I N A ================= ARGENTINA: Once Again on the Cusp of a Full-Blown Crisis -------------------------------------------------------- Ryan Dube and Jeffrey T. Lewis at Bloomberg News reports that in the wake of President Mauricio Macri's stunning rout in primary elections, investors dumped its stocks, bonds and currency en masse, leaving much of Wall Street wondering whether the country was headed for yet another default. The upset, widely seen as a preview of October's presidential vote, threw the doors open to the very real possibility a more protectionist government will take power come December and unravel the hard-won gains that Macri made to regain the trust of the international markets, according to Bloomberg News. It deepened worries his populist opponent, Alberto Fernandez, and running mate, former president Cristina Fernandez de Kirchner, will try to renegotiate its debts as well as its agreements with the International Monetary Fund, Bloomberg News relates. The country has billions in foreign-currency debt due over the coming year, Bloomberg says. "The market is starting to price in default," said Edwin Gutierrez, the London-based head of emerging-market sovereign debt at Aberdeen Asset Management, Bloomberg News notes. "The market is unwilling to give Fernandez the benefit of the doubt." Bloomberg News says credit-default swaps showed that traders were pricing in a 75% chance that Argentina will suspend debt payments in the next five years. On Aug. 9, the likelihood was just 49%. Its dollar-denominated government bonds lost roughly 25% on average, pushing down prices to as low as 55 cents on the dollar, notes Bloomberg News. Yields on shorter-maturity notes soared past 35%. Bloomberg News relates that the peso tumbled as much as 25% to a record-low 60 per dollar Aug. 12 and the Merval stock index lost the most ever in intraday trading. Other markets were largely unaffected by the turmoil, with the Brazilian real and Mexican peso each weakening about 1%, Bloomberg News notes. Bloomberg News relays that expected to trail his opponent by just a few points, Macri was instead pummeled at the polls, with voters giving Fernandez a 15-point lead. The sudden shift in voter sentiment shocked foreign investors and Argentines alike, who have suffered through years of high inflation, economic malaise and political division, notes the report. Bloomberg News recounts that Argentina has a long history of fiscal crises and it was only in 2016, under Macri, that the country put its most recent sovereign default behind it. Argentines still remember the 15-year default saga and deep recessions following a record default in 2001, Bloomberg News notes. The government and its subsidiaries currently have $15.9 billion in debt payments denominated in dollars and euros due in 2019, according to data compiled by Bloomberg. There are another $18.6 billion in bond principal, loans and interest payments issued in pesos, Bloomberg News relays. Now, investors are fearing the worst. Fernandez was cabinet chief under former President Nestor Kirchner, while his vice presidential pick, Cristina Kirchner, led the republic for eight years before Macri came to power, Bloomberg News recalls. During her time in office, Argentina was marked by currency controls, data manipulation and protectionist policies on trade to protect national industry. And, of course, it was also punctuated by another default that made the country an international pariah for years, Bloomberg News says. "The hopes of Argentina becoming a sustainable, well-functioning economy have been shattered for now," said Patrick Wacker, fund manager for emerging-market fixed income at UOB Asset Management Ltd. in Singapore, notes Bloomberg News. "I do not see a silver lining in the results." The company expects to cut its exposure further on Argentine bonds once prices stabilize, he added. "It is going to be an extremely tough period for Argentinian assets," said Marcin Lipka, a senior analyst at brokerage Cinkciarz.pl in Zielona Gora, Poland, Bloomberg News relays. "Without moderation of the Fernandez duo and regarding increasing expectations of another fight with the IMF, I would not exclude that peso could hit 100 level to the dollar in the next 12-month period." Lipka, whose outlook on Latin America currencies has been among the most accurate since the second quarter of 2018, said a rate of 100 pesos per dollar wasn't his base case, but that he does expect extreme volatility in the coming weeks,. There's a risk the currency will be doubly hit amid liquidity issues, capital outflows and string inflation pressure, Bloomberg News discloses. Luiz Ribeiro, the lead money manager for Latin American equities at DWS Group in Sao Paulo, said he will probably cut his exposure to Argentina in half, Bloomberg News relates. His Latin American equity fund outperformed 92% of rivals in the past year after building up holdings in Argentina amid expectations of political continuity. "What we are pricing right now is radical change in economic policies," he said in an interview. Still he's staying overweight relative to the benchmark as "Alberto Fernandez could come up with more moderate speech, which I think is possible given the kind of turmoil we see in the market right now." It's also possible, though would be difficult, that Macri could come back as the Oct. 27 election approaches, he said, Bloomberg News notes. "If Fernandez comes out with some market friendly comments (especially on the IMF front) and/or a credible economics team, this would certainly help the sentiment," said Esther Law, senior portfolio manager for emerging-market debt at Amundi Asset Management in London, Bloomberg News relates. "There is a chance for this but it is difficult to predict the timing." In a press conference, Macri said he still has a shot to reverse the trend in October and that his economic team is working on measures to address voter concerns on the economy, Bloomberg News relays. He also said that the market and international community lack confidence in Fernandez and the opposition as evidenced by the selloff. While the market was hoping for Fernandez to give some words of encouragement to investors who are desperate to know his government plans, he made no apparent overtures during his victory speech, Bloomberg News relays. He told a local radio network that the securities regulator should look into information shared that prompted a rally ahead of the vote, Bloomberg News notes. He suggested that the market look to Macri for answers rather than to him and that the reaction shows how investors react when they feel they've been "ripped off," adds Bloomberg News. About Argentina Argentina is a country located mostly in the southern half of South America. It's capital is Buenos Aires. Mauricio Macri is the incumbent president of Argentina. Argentina has the third largest economy in Latin America. The country's economy is an upper middle-income economy for fiscal year 2019 according to the World Bank. Historically, however, its economic performance has been very uneven, with high economic growth alternating with severe recessions, income maldistribution and--in the recent decades--increasing poverty. As reported in the Troubled Company Reporter-Latin America on July 16, 2019, Moody's Investors Service changed the outlook for the Government of Argentina to negative from stable. Concurrently, Moody's has affirmed the B2 foreign-currency and local-currency long-term issuer and senior unsecured ratings. The senior unsecured ratings for shelf registrations were also affirmed at (P)B2. At the same time Argentina's short-term rating was affirmed at Not Prime (NP). The senior unsecured ratings for unrestructured debt were affirmed at Ca and the unrestructured senior unsecured shelf affirmed at (P)Ca. ========= C H I L E ========= LATAM AIRLINES: Posts US$63MM Loss, Dragged by Recession -------------------------------------------------------- The Business Times reports that Chile's LATAM Airlines Group, South America's largest airline, posted a narrower loss of US$63 million in the second quarter, boosted by growing revenue in Brazil but dragged down by a recession in Argentina. The loss was a significant reduction compared to the same period last year, when it posted a US$206 million loss, at the time dragged down by a weak currency in Brazil and a truck drivers strike, according to The Business Times. The report notes that the domestic air travel market in Brazil became more concentrated in the quarter after Avianca Brasil ceased operations in late May following a bankruptcy filing. This has left Brazil with just three major airlines competing for domestic flights, the report relays. LATAM, which ranks as the No. 2 airline in Brazil, was widely expected to benefit from Avianca Brasil's demise, the report discloses. Its revenue in Brazil grew almost 20 per cent to US$878 million between April and June, compared to a year earlier, the report says. Still, LATAM's results were negatively affected by a financial crisis in Argentina that keeps dragging on, the report relays. Revenues there almost halved to US$135 million in the quarter, compared to US$260 million a year ago, the report notes. LATAM and its regional rivals have also been affected by weak currencies in both Brazil and Argentina, which increase the cost for fuel and aircraft rental payments that are usually denominated in US dollars, the report adds. LATAM Airlines Group S.A. (LATAM Airlines) is a Chilean-based airline holding company formed by the business combination of LAN Airlines S.A. of Chile and TAM S.A. of Brazil in June 2012. LATAM Airlines is the largest airline group in South America with local presence for domestic passenger service in six countries (i.e. Brazil, Chile, Peru, Ecuador, Argentina, Colombia). The company also provides intra-regional and international passenger services and it also has a cargo operation that is carried out through the use of belly space on passenger flights and dedicated freighter service. In 2017, LATAM Airlines generated USD10.2 billion in net revenues and carried over 67 million passengers and 896 thousand tons. As reported in the Troubled Company Reporter-Latin America on Feb. 14, 2019, Fitch Ratings has assigned a final rating of 'B+'/'RR4' to LATAM Airlines Group S.A.'s USD600 million unsecured notes issued through its fully owned subsidiary LATAM Finance Limited. The assignment of the final ratings follows the receipt of documents confirming the information already received. The final ratings are the same as the expected rating assigned to the senior unsecured notes on Jan. 28, 2019. =============== C O L O M B I A =============== GILEX HOLDING: Moody's Reviews B2 Sr. Sec. Rating for Downgrade --------------------------------------------------------------- Moody's Investors Service placed on review for downgrade all long-term ratings of Gilex Holding S.a.r.l. (senior secured rating B2) as well as the long-term ratings and the ba3 standalone Baseline Credit Assessment (BCA) of its lead bank, Banco GNB Sudameris S.A. (Ba2 for deposits). In the same action, Moody's has placed on review for downgrade all long-term ratings of Banco Bilbao Vizcaya Argentaria Paraguay (Ba1 for deposits (domestic currency)) as well as its ba2 BCA. RATINGS RATIONALE The rating action follows the recent announcement that BBVA Spain has reached an agreement with Banco GNB Paraguay, subsidiary of Banco GNB Sudameris S.A., a unit of Gilex Holding S.a.r.l., to sell 100% of its capital in BBVA Paraguay, for about $270 million dollars in an all-cash transaction. The proposed acquisition will create the largest commercial bank in Paraguay with $2.6 billion in deposits and $3.3 billion in total assets. The final value of the agreement is subject to possible variations until the date of the deal closing, which will also depend on the approval of the relevant regulatory authorities. GNB SUDAMERIS Moody's placed GNB Sudameris' (GNB, deposits Ba2 stable, BCA ba3) ratings on review for downgrade because its proposed acquisition of BBVA Paraguay would expose the bank to weaker operating conditions in Paraguay, which would account for 36% of GNB Sudameris' loans upon closing, doubling its current 17% exposure. Moody's has commented that the bank's increased presence in Paraguay can lead to a change in GNB Sudameris' weighted Macro Profile to "Moderate" from "Moderate +". The review will assess the effect that a larger presence in a potentially more volatile market could have on GNB Sudameris' asset quality and earnings that could lead to downward pressures on its baseline credit assessment (BCA). In addition, the ratings review will assess the trend in the bank's capitalization ratio resulting from recent investments in real estate, in addition to dividend payments to its Holding company, GIlex, to service the holding company's debt. As of March 2019, GNB's Moody's tangible common equity had weakened to a relatively low 6.1% of risk-weighted assets, from 7.8% in December 2017. GILEX HOLDING As a holding company, Gilex depends on its primary operating subsidiary Banco GNB Sudameris' dividends to service its debt and repay principal. As such, Gilex's senior secured debt is structurally subordinated to the obligations of GNB, and therefore, any possible downgrade of GNB's ratings resulting from the ratings review could have an effect on Gilex's ratings. The review of Gilex ratings will also focus on the company's financial metrics, including double leverage, which is an indication of how heavily it relies on debt to finance its investments. According to the company, Gilex will use $80 million out of its $284 million cash position to partially finance the acquisition, which will leave the holding company with a cash buffer in excess of $200 million. In this scenario, double leverage, which is measured by investments in subsidiaries divided by shareholders' equity, will increase to around 115%. Gilex's rating will be less pressured in such a scenario, because the assigned rating already incorporates the expectation of a double leverage in excess of 115% but below 140%. The remainder of the funds needed to close the transaction will be financed by a $40 million cash position of GNB Paraguay and a $150 million capital injection from the group's owner. However, in an alternative scenario in which Gilex were to use the $284 million cash on hand, except for $25 million minimum liquidity requirement, to finance the acquisition, its double leverage could potentially rise to as high as 144% from 109% as of March 2019. Moody's considers double leverage in excess of 115% to be high and previously indicated the rating would face downward pressure if it substantially rose above 140%. This leads to a rating two notches below GNB's baseline credit assessment (BCA) of ba3, one notch wider than Moody's typical notching for financial holding companies. BBVA PARAGUAY Moody's placed BBVA Paraguay's Ba1 deposit rating (domestic currency) ratings on review for downgrade because the proposed acquisition by GNB Sudameris, if carried out as planned, could lead to the elimination of the one notch support uplift. BBVA Paraguay's deposit rating currently benefits from uplift derived from its assessment of affiliate support from Banco Bilbao Vizcaya Argentaria, S.A. (BBVA Spain) to its Paraguayan subsidiary. The review of BBVA Paraguay's ratings will assess the risks of integrating the operations and any potential client and business attrition that could negatively affect earnings generation, or substantially change its risk appetite. WHAT COULD CHANGE THE RATINGs -- DOWN/UP Moody's review for downgrade is unlikely to conclude until after the deal has received regulatory approvals and the transaction closes. The banks' management teams anticipate this will likely occur in the next 4 to 6 months. However, Moody's may take rating actions in the interim and prior to the close, as it gains further understanding of the transaction and relevant implications for the creditors of both banks and for the holding. GNB SUDAMERIS Moody's review for downgrade will focus on the risks associated with the transaction, including the increased exposure to a potentially more volatile market and likely change in GNB Sudameris' weighted Macro Profile and downward pressures on its baseline credit assessment (BCA). In addition, the review will evaluate the bank's capitalization levels in conjunction with the transaction. Given the direction of the ratings review, positive rating movement is unlikely. GILEX HOLDING Downward pressures on Gilex Holding's ratings would be associated with similar pressures on GNB Sudameris' BCA. The ratings could also face downward pressures if the group's double leverage appear likely to exceed 115% by a meaningful amount on a sustained basis and/or the interest coverage ratio decreases significantly. BBVA PARAGUAY Given the planned sale, the bank's rating does not face upward pressure at this time. If the sale does not materialize, however, Moody's may reassess BBVA's commitment and willingness to support its Paraguayan operation, which could put downward pressure on the ratings. ISSUERS AND RATINGS AFFECTED The following GNB Sudameris S.A.'s ratings and assessments were placed under review for downgrade: - Long term local currency deposit rating of Ba2, stable - Long term foreign currency deposit rating of Ba2, stable - Long-term global foreign currency subordinated debt rating of B1 - Long term local currency counterparty risk rating of Ba1 - Long term foreign currency counterparty risk rating of Ba1 - Adjusted Baseline Credit Assessment of ba3 - Baseline Credit Assessment of ba3 - Long-term counterparty risk assessment of Ba1(cr) The following ratings and assessments assigned to GNB Sudameris S.A. were affirmed: - Short term local currency deposit ratings of Not Prime - Short term foreign currency deposit rating of Not Prime - Short term local currency counterparty risk rating of Not Prime - Short term foreign currency counterparty risk rating of Not Prime - Short term counterparty risk assessment of NP(cr) - Outlook, changed to Rating Under Review from Stable The following Gilex Holding S.a.r.l.'s ratings were placed under review for downgrade: - Long-term global local currency issuer rating of B2, stable - Long-term global foreign currency senior secured rating of B2, stable - Outlook, changed to Rating Under Review from Stable The following ratings and assessments assigned to Banco Bilbao Vizcaya Argentaria Paraguay (BBVA Paraguay) were placed on review for downgrade: - Long local currency deposit ratings of Ba1, stable - Long foreign currency deposit rating of Ba2, stable - Long and short term local currency counterparty risk ratings of Baa3 and P-3 - Long and short term foreign currency counterparty risk ratings of Baa3 and P-3 - Adjusted baseline credit assessment of ba1 - Baseline credit assessment of ba2 - Long and short term counterparty risk assessments of Baa3(cr) and P-3(cr) The following ratings and assessments assigned to BBVA Paraguay were affirmed: - Short term local currency deposit ratings of Not Prime - Short term foreign currency deposit rating of Not Prime - Outlook, changed to Rating Under Review from Stable The principal methodology used in these ratings was Banks published in August 2018. =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: Dam in the South Advances; So Does Controversy ------------------------------------------------------------------ Dominican Today reports President Danilo Medina headed the opening of the Monte Grande dam service tunnels, which is expected to have a significant socio-economic impact in the Enriquillo region. It will also will meet a need of piped water for more than 20 years of people in the Barahona area (south), according to Dominican Today reports. "The two tunnels will divert the Yaque del Sur river from its natural course, which will allow the construction of the crown or dam wall, moving to a new stage of the reservoir and will make it possible to continue the work," the govt. said, the report relays. Dream to a Reality Dams and canals institute (INDRHI) director Olgo Fernandez, said Monte Grande dam went from being a dream to a reality in which the Government puts all its effort, the report discloses. The dam however is controversial. Journalist Marino Zapete affirms that the cost of construction has skyrocketed from less than US$200 million, to over US$400 million, the report adds. Standard & Poor's credit rating for Dominican Republic stands at BB- with stable outlook (2015). Moody's credit rating for Dominican Republic was last set at Ba3 with stable outlook (2017). Fitch's credit rating for Dominican Republic was last reported at BB- with stable outlook (2016). DOMINICAN REPUBLIC: Most Employers Ready to Pay 14% Salary Hike --------------------------------------------------------------- Dominican Today reports that the Dominican Merchants Federation said more than 2.5 million MSMEs employees would benefit from the 14% increase approved by the National Wage Committee (CNS), and should take effect today, August 15. But federation president, Ivan Garcia noted, however, that they will raise the salaries of their sector according to what law 187-17 stipulates, according to Dominican Today. "We are going to increase the salary of all workers based on this classification that has the 14% wage increase with which we agree. Until the National Wage Committee issues another resolution with the classification of companies, prior agreement with us, we will proceed with this salary increase with this classification," he said, the report notes. Garcia was referring to some micro companies that for now are exempt from paying the entire 14%, the report adds. Standard & Poor's credit rating for Dominican Republic stands at BB- with stable outlook (2015). Moody's credit rating for Dominican Republic was last set at Ba3 with stable outlook (2017). Fitch's credit rating for Dominican Republic was last reported at BB- with stable outlook (2016). ============= E C U A D O R ============= BANCO GUAYAQUIL: Fitch Assigns B- LT IDR, Outlook Negative ---------------------------------------------------------- Fitch Ratings assigned Banco Guayaquil S.A. a 'B-' Long-Term Issuer Default Rating. The Rating Outlook is Negative. KEY RATING DRIVERS VRS AND IDRs Banco Guayaquil's Viability Rating (VR), or standalone creditworthiness, drives its Long-Term IDR. The bank's VR is highly influenced by its operating environment and risk appetite. The Negative Outlook on Banco Guayaquil reflects Ecuador's Negative Rating Outlook, revised on Jan. 10, 2019, as the operating environment limits potential growth and profitability for the bank. In the event of a sovereign downgrade, Fitch would expect the bank's VRs to mirror the downgrade of the sovereign's rating. The bank's risk appetite amid Ecuador's evolving economic condition could pressure asset quality and other financial metrics over the next 12-24 months. Profitability metrics have improved over the past three years. Operating Profit to Risk Weighted Assets (RWA) of 3.26% at March 2019 is above the largest Ecuadorian banks and international peers. Given the bank's sound efficiency and impairment charges, Fitch expects the ratio to remain above the current average in the system; however, current operating environment challenges could influence performance. The bank's capitalization is at the highest levels among the largest Ecuadorian banks and international peers with a Fitch Core Capital (FCC) to Risk Weighted Assets (RWA) of 13.55% at March 2019. The bank's FCC/RWA is bolstered by its improving profitability and moderate dividend distribution policy (subject to regulatory approvals), which is capped at 40% of net income. Furthermore, the bank surpasses the local regulatory capital ratio minimum of 9%, as its total capital ratio at March 2019 was 14.38%. Banco Guayaquil's impairment ratios compare favorably with local and international peers representing 1.62% of total loans at March 2019 and the lowest in a four-year period. The bank's asset quality is further supported by good coverage of impairments of 206.29%, above its immediate domestic and international peers. Nevertheless, the bank held higher net-charge offs of 2.13% in December 2018 compared with immediate and international peers. Concentrations are considered relatively moderate by Fitch, as the top 20 main debtors represented 21% of total loans plus contingent loans and 126% of the FCC. The bank's liquidity is solid and compares favorably with international peers, given the higher credit quality of a significant portion of its liquid assets. Loans accounted for 84% of deposits at year-end March 2019, while liquid assets covered a sound 24% of deposits and short-term funding in the same period. The bank's ample base of liquid assets (19% of total assets) materially exceeds the local regulator's minimum requirements and benefits from passing the local regulator's liquidity stress test as of March 2019. SUPPORT RATING AND SUPPORT RATING FLOOR Fitch assigned Guayaquil a Support Rating (SR) of '5' and Support Rating Floor (SRF) of 'NF', reflecting that despite the bank's moderate systemic importance and local franchise, Fitch believes that sovereign external support cannot be relied upon due to Ecuador's limited funding flexibility as well as the lack of a lender of last resort. RATING SENSITIVITIES VRS AND IDRs Limited Upgrade Potential: Guayaquil's IDRs and VR are sensitive to changes in the sovereign rating and its rating Outlook. Potential upgrades of the IDRs and VR are unlikely in the foreseeable future. Financial Performance: A significant reduction in the bank's earnings retention or an acceleration of growth that leads to a decrease in FCC/RWA metric consistently below 9%, along with a material decline in excess loan loss reserves and an uptick in net-charge offs could also result in negative rating actions. SUPPORT RATINGS AND SUPPORT RATING FLOOR Ecuador's propensity or ability to provide timely support to Guayaquil is not likely to change given the sovereign's sub-investment-grade IDR. As such, the SR and SRF have no upgrade potential. ESG CONSIDERATIONS Banco Guayaquil S.A. has an ESG Relevance Score of 4 for Governance Structure due to its exposure to high government intervention reflected in its regulatory framework, which has a negative impact on the credit profile and is relevant to the ratings in conjunction with other factors. Fitch has assigned the following ratings: Banco Guayaquil, S.A. -- Long-Term IDR 'B-'; Outlook Negative; -- Short-Term IDR 'B'; -- Viability Rating 'b-'; -- Support Rating '5'; -- Support Rating Floor 'NF'; ============= J A M A I C A ============= JAMAICA: Allocates $15MM to Farmers Affected by Ongoing Drought --------------------------------------------------------------- Latronya Linton at Caribbean News Now reports that the ministry of industry, commerce, agriculture, and fisheries, through the Rural Agricultural Development Authority (RADA), is spending $15 million to assist farmers affected by the ongoing drought. Portfolio Minister, Audley Shaw, said a proper assessment is being done to determine further assistance or interventions, according to Caribbean News Now. In a statement to the House of Representatives on July 31, minister Shaw also informed that under the ministry's production incentive program, some $19.95 million is being allocated via members of parliament [MPs] to assist in providing inputs to farmers island wide, the report relays. "MPs in the rural parishes are being allocated $350,000 per constituency, while MPs in urban constituencies are being allocated $250,000," he pointed out, the report discloses. The report relays that Shaw informed that based on an assessment by RADA's technical team, there has been less than required rainfall in all parishes. He noted that an estimated 5,600 farmers have been affected with losses of 500 hectares, the report notes. The crops most affected include vegetables, condiments, fruits, cereal roots, and tubers. Additionally, 99 farmers in the parishes of St Andrew and St Thomas have sustained an estimated loss of $20.9 million as a result of bush fires. The crops impacted are coffee and fruit trees, as well as farm buildings, goats and pasture lands, the report relays. "I wish to extend greatest sympathies to our farmers and their families who have been affected, even as others continue to prepare for what lies ahead. Let me assure our farmers that our team of officers from RADA is on the ground and the Ministry is paying the keenest attention to this situation," the report quoted Mr. Shaw as saying. As it relates to the availability and cost of produce, the minister advised that there is a trending increase in prices of agricultural food items, to include vegetables and tubers, the report relays. "However, there will be no need for any large-scale importation of these items as our valued farmers have been responding to the need for increased production and, with the assistance being provided, are expanding production in our irrigated areas," he noted, says the report. Meanwhile, the ministry is now engaged in a number of long-term strategies to address the challenges associated with climate change, the report relays. The report notes that these strategies include the buildout of the irrigation infrastructure as exemplified by the Essex Valley Agriculture Development Project, with the aim of reducing the water-related challenges being faced by the over 700 farmers of Essex Valley, St Elizabeth, the report discloses. He also noted that the improved irrigation systems on about 700 hectares of land are to include the development of a climate-resilient off-farm irrigation system consisting of six irrigation wells and restoration of approximately 30 kilometres of farm/community roads, the report relays. "Work is currently well underway on the Essex Valley Project, with four of six wells drilled and land surveying fieldwork completed. We are confident that the Essex Valley project will unleash a new wave of agricultural development in Essex Valley and bolster the agriculture growth targets of the country," the report quoted Mr. Shaw as saying. The government is also addressing small-scale irrigation needs of farmers across the country and, through the Jamaica Social Investment Fund (JSIF) and the Caribbean Development Bank (CDB), handed over drip irrigation systems to benefit some 300 farmers in South St Elizabeth, the report notes. "It is also through a grant of approximately £17.5 million from the United Kingdom Caribbean Infrastructure Fund (UK-CIF), administered by the CDB, that the ministry will be developing and initiating the development of arable lands in St Catherine and Clarendon under the proposed South Plains Agricultural Development (SPAD) Project," Shaw said, the report says. In addition, the minister said he is making formal approaches to the Food and Agriculture Organization of the United Nations (FAO) and the UN Green Climate Fund for assistance in identifying small portable drip irrigation systems to assist the small farmers, the report relates. "I am also putting together an ambitious National Fruit Tree Planting Programme that will lead to a more dynamic fruit industry for local consumption and export as well as assisting in our reforestation efforts at the same time," Shaw added. About Jamaica Jamaica is an island country situated in the Caribbean Sea. It is the fourth largest country in the Caribbean. Standard & Poor's credit rating for Jamaica stands at B with positive outlook. Moody's credit rating for Jamaica was last set a B3 with positive outlook. Fitch's credit rating for Jamaica was last reported at B+ with stable outlook. As reported in the Troubled Company Reporter-Latin America on June 27, 2019, RJR News said that Steven Gooden, Chief Executive Officer of NCB Capital Markets, is warning that the increasing liquidity in the Jamaican economy might result in heightened risk to the financial market if left unchecked. This, he said, is against the background of the local administration seeking to reduce the debt to GDP to 60% by the end of the 2025/26 fiscal year, which will see Government repaying more than J$600 billion which will get back into the system, according to RJR News. UC RUSAL: Revenue Drops Due to Unfavorable Market Environment ------------------------------------------------------------- RJR News reports that UC Rusal, the Russia-based parent company of Jamaica's Windalco alumina plant, had mixed financial results for the first half of its financial year stating that the market environment was unfavorable for the aluminum industry. First-half revenue totaled US$4.7 million, down by $261 million, according to RJR News. Sixth month gross profit fell by $588 million to $805 million, the report notes. Aluminium prices declined by more than 17%, year-on-year, the report relays. Rusal reported improved production levels during the six months under review, the report discloses. The mining conglomerate refined 3.8 million metric tons of alumina, better than last year by 34,000 metric tons, the report says. The first half saw Rusal harvest 8.7 million wet metric tons of bauxite, the report notes. That was an increase of 1,793 thousand metric tons over 2018, the report adds. As reported in the Troubled Company Reporter-Latin America on April 8, 2019, Moody's Investors Service has assigned a corporate family rating (CFR) of Ba3, probability of default rating (PDR) of Ba3-PD to United Company RUSAL Plc (UC RUSAL), one of the largest aluminium producers in the world. Concurrently, Moody's assigned a B1 (LGD 5) rating to the senior unsecured notes issued by Rusal Capital D.A.C., a wholly owned subsidiary of RUSAL. The outlook is stable. =========== M E X I C O =========== MEXICO: Inflation Eased in July to Lowest Since 2016 ---------------------------------------------------- Anthony Harrup at The Wall Street Journal reports that Mexico's inflation rate eased in July as lower energy costs partially offset moderate increases in prices of other goods and services. The consumer price index rose 0.38% last month, bringing the annual inflation rate down to 3.78% from 3.95% in June, the National Statistics Institute said, according to The Wall Street Journal. Core CPI, which excludes energy and agricultural products, rose 0.26%, nudging the annual rate down to 3.82% from 3.85% in June, the report notes. With consumer prices increasing at their slowest pace since the end of 2016, and the economy barely growing, the Bank of Mexico is widely expected to start lowering interest rates from their current 10-year high, the report relates. Fifteen of the 23 banks polled by Citibanamex predict that the central bank will make its first rate cut in September, and four of them expect the bank to lower rates at the Aug. 15 meeting, the report discloses. "We think the Bank of Mexico will make its statement significantly more flexible in August and start a gradual and cautious monetary easing in September," BBVA said in a report, The WSJ relays. The central bank left the overnight interest rate at 8.25% in June, with one of the five board members voting to cut it to 8%, the report adds. ===================== P U E R T O R I C O ===================== HOTEL CUPIDO: Seeks to Hire Carlos Quintana as Accountant --------------------------------------------------------- Hotel Cupido Inc. seeks approval from the U.S. Bankruptcy Court for the District of Puerto Rico to hire CPA Carlos Quintana Santiago as its accountant. The firm will assist the Debtor in the preparation of monthly operating reports, prepare financial documents in support of its Chapter 11 reorganization plan, and assist in the reconciliation of proofs of claim filed in its bankruptcy case. The firm's hourly rates are: Carlos Quintana Santiago $125 Staff Accountant $50 Support Personnel $30 Mr. Santiago disclosed in court filings that he does not hold any interest adverse to the Debtor or the properties of its bankruptcy estate. The firm can be reached through: Carlos Quintana Santiago CPA Carlos Quintana Santiago P.O. Box 604 Road, 104 Mayaguez, PR 00682-7714 Tel: 787-805-3700 Fax: 787-805-3750 Email: cqs@cpanetpr.com About Hotel Cupido Hotel Cupido Inc. is a privately held company that owns and operates hotels and motels. Hotel Cupido sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D.P.R. Case No. 19-03799) on June 30, 2019. At the time of the filing, the Debtor disclosed $488,176 in assets and $3,213,031 in liabilities. The case is assigned to Judge Edward A. Godoy. The Debtor is represented by Bufete Quinones Vargas & Asoc. MONTE IDILIO: Hires Carlos Quintana Santiago as Accountant ---------------------------------------------------------- Monte Idilio, Inc., seeks authority from the U.S. Bankruptcy Court for the District of Puerto Rico to employ Carlos Quintana Santiago, as accountant to the Debtor. Monte Idilio requires Carlos Quintana Santiago to: a. reconcile financial information to assist the Debtor in the preparation of monthly operating reports; b. assist in the reconciliation and clarification of proofs of claims filed; and c. consult financial services for the preparation of supporting financial documents for the Disclosure Statement and the Chapter 11 Plan of Reorganization. Carlos Quintana Santiago will be paid at these hourly rates: Accountants $125 Staff Accountants $50 Support Personnel $30 Carlos Quintana Santiago will also be reimbursed for reasonable out-of-pocket expenses incurred. Carlos Quintana Santiago assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtor and its estates. Carlos Quintana Santiago can be reached at: Carlos Quintana Santiago P.O. Box 604, Road 104 Mayaguez, PR 00682-7714 Tel: (787) 805-3700 Fax: (787) 805-3750 E-mail: cqs@cpanetpr.com About Monte Idilio Monte Idilio Inc., based in Hormigueros, PR, filed a Chapter 11 petition (Bankr. D.P.R. Case No. 19-03828) on July 1, 2019. In the petition signed by Wilmer Tacoronte Negron, administrator, the Debtor disclosed $1,300,000 in assets and $2,777,793 in liabilities. The Hon. Edward A. Godoy oversees the case. Damaris Quinones Vargas, Esq., at LCDA Damaris Quinones, and Jose F. Cardona, Esq., serve as the Debtor's bankruptcy attorneys. SEARS HOLDINGS: Indenture Trustee Objects to Confirmation of Plan ----------------------------------------------------------------- Wilmington Trust National Association, as indenture trustee objects to the confirmation of Sears Holding Corporation and affiliates' joint modified second amended chapter 11 plan of liquidation. Wilmington Trust complains that the Debtors fail to sufficiently justify their reason(s) for entering into their settlement with the PBGC providing for substantive consolidation given that the parties originally reached an agreement that prohibited substantive consolidation. The initial plan did not provide for substantive consolidation and the Plan will revert to an unconsolidated plan in the event the court does not approve the Plan Settlement. It is difficult to understand how substantive consolidation could be necessary if the Plan can revert to an unconsolidated plan if the Court does not approve the Plan Settlement. The Debtors cannot bypass the Second Circuit's standard for evaluating substantive consolidation by incorporating substantive consolidation into a "settlement," particularly with the PBGC Settlement. Alternatively, if the Court were to find the Debtors satisfied either of the Second Circuit's two disjunctive factors required for substantive consolidation, the Debtors still would not be justified in substantively consolidating their estates due to the inequitable treatment and undue prejudice that substantive consolidation would pose on Debtors' remaining creditors. In addition, PBGC's classification and settlement unfairly discriminates against other creditors and is not reasonable. Wilmington Trust also asserts that the Plan has not been proposed in good faith and violates public policy. A copy of Wilmington Trust's Objection is available at https://tinyurl.com/y4v5u4kr from Pacermonitor.com at no charge. The Troubled Company Reporter previously reported that PBGC will receive from the Liquidating Trust, (i) the PBGC Liquidating Trust Priority Interest and (ii) in respect of the Allowed PBGC Unsecured Claims, subject to Section 9.2(a)(viii) of the Plan, PBGC's Pro Rata share of (w) Kmart WA Guarantee General Unsecured Liquidating Trust Interests; (x) Kmart WA Guarantee Specified Unsecured Liquidating Trust Interests; (y) the General Unsecured Liquidating Trust Interests; and (z) the Specified Unsecured Liquidating Trust Interests, in full and final satisfaction, settlement, release, and discharge of all PBGC Claims against Kmart of Washington LLC. A full-text copy of the Modified Second Amended Disclosure Statement dated July 9, 2019, is available at https://tinyurl.com/y4uwv3ba from PacerMonitor.com at no charge. A redlined version of Modified Second Amended Disclosure Statement dated July 9, 2019, is available at the https://tinyurl.com/y4cqzvs2 from Prime Clerk at no charge. 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. The Debtors tapped Weil, Gotshal & Manges LLP as legal counsel; M-III Partners as restructuring advisor; Lazard Freres & Co. LLC as investment banker; DLA Piper LLP as real estate advisor; and Prime Clerk as 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 the official committee of unsecured creditors. The committee tapped Akin Gump Strauss Hauer & Feld LLP as legal counsel; FTI Consulting as financial advisor; and Houlihan Lokey Capital, Inc. as investment banker. ================= V E N E Z U E L A ================= VENEZUELA: Congress to Create Committee for Debt Renegotiation -------------------------------------------------------------- Mayela Armas at Reuters reports that Venezuela's opposition-run congress said it will form a commission that will eventually renegotiate the country's debt, much of which is in default, and protect the OPEC nation's offshore assets from seizure by creditors. President Nicolas Maduro's government has defaulted on most of roughly $60 billion in foreign bonds issued by Venezuela and state oil company Petroleos de Venezuela, S.A., or PDVSA, but has had minimal contact with creditors about addressing the situation, according to Reuters. The measure follows U.S. President Donald Trump's executive order that froze Venezuelan government assets in the United States, the report relays. Opposition leader Juan Guaido wants to prevent creditors from taking the country's main foreign asset, U.S. refiner Citgo as partial repayment for debt, the report notes. Reuters discloses that the commission would be tasked with "the study of debt, and of course, protection of our assets," Guaido told reporters. In January, he invoked the constitution to assume a rival presidency, arguing Maduro's 2018 re-election was illegitimate, the report notes. The seven-member commission will include legislators and economists, and be formally approved in upcoming congressional sessions, Guaido said, the report discloses. It will carry out "actions to design and prepare for the renegotiation of public debt, including proposals for refinancing or restructuring," according to a preliminary proposal, the report relays. Opposition leaders said the new U.S. sanctions will help them protect Citgo and would pave the way for the renegotiation of a bond backed by Citgo shares, the report notes. Reuters relays that creditors have had little contact with Venezuelan officials because Maduro is not seen as credible negotiator and because U.S. sanctions prevent many from holding such meetings. Guaido, who has been recognized by more than 50 countries as Venezuela's legitimate president, is preparing for a renegotiation process after Maduro leaves power, the report notes. Maduro calls him a U.S.-backed puppet seeking to oust him in a coup, and has accused the opposition of trying to "steal" Citgo, the report adds. 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 on the other hand 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. ********* 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 * * *