/raid1/www/Hosts/bankrupt/TCRLA_Public/190819.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, August 19, 2019, Vol. 20, No. 165
Headlines
B R A Z I L
BANCO BRADESCO: Fitch Affirms 'BB' LT IDR, Outlook Stable
BRAZIL: Hopes to Raise BRL1 Trillion Selling Off Properties, Assets
OI SA: Brazil Government Considers Intervention in Firm
OI SA: Posts BRL1.5BB Loss in Q2, Missing Estimates
D O M I N I C A N R E P U B L I C
DOMINICAN REPUBLIC: Basic Products Prices Up Between DOP10-30
M E X I C O
TECAMAC: Moody's Upgrades Global Issuer Ratings to Ba2
P U E R T O R I C O
SEARS HOLDINGS: Seeks to Extend Exclusivity Period to Oct. 14
U R U G U A Y
URUGUAY: Keeps Eye Out for Potential Fallout From Argentine Crisis
V E N E Z U E L A
VENEZUELA: Talks w/ Opposition to Resume, But Under New Mechanism
X X X X X X X X
[*] BOND PRICING: For the Week August 12 to August 16, 2019
[*] LATIN AMERICA: Flows of FDI Up by 13.2% in 2018, ECLAC Says
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B R A Z I L
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BANCO BRADESCO: Fitch Affirms 'BB' LT IDR, Outlook Stable
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Fitch Ratings has affirmed Banco Bradesco S.A.'s Long-Term Issuer
Default Ratings in Foreign and Local Currencies at 'BB', and its
Long-Term National Rating at 'AAA(bra)'. NCF Participacoes S.A.'s
Long-Term National Rating was affirmed at 'AA+(bra)'. The Ratings'
Outlooks were Stable.
KEY RATING DRIVERS - BRADESCO
VR, IDRs AND NATIONAL RATINGS
Bradesco's IDRs, which are driven by its Viability Rating (VR),
remain one notch above Brazil's sovereign ratings (Long-Term
Foreign and Local Currency IDRs BB-/Stable), reflecting the bank's
very strong standalone credit profile. Fitch rates banks above the
sovereign if it believes that, in the case of a sovereign default,
the bank would probably retain the capacity to service its
obligations and the sovereign would not impose any restrictions on
the bank's ability to service its obligations. However, the uplift
of Bradesco's ratings relative to the sovereign is limited because
of the bank's high exposure to the sovereign, mainly through its
holdings of government securities, and since the majority of its
operations are concentrated in Brazil.
Bradesco's VR is highly influenced by the Brazilian operating
environment and the strong brand and diversified business model.
Bradesco's VR also reflects its consistent performance throughout
economic cycles, even in times of economic crisis, conservative
risk management, diversified revenue and funding base, strong
liquidity, adequate asset quality, and good capitalization.
Bradesco has a high market share in several segments in the
domestic financial system. It possesses a vast network of service
points, which covers the whole country and all economic classes,
through segmentation of the customer base. This has reflected on
stable low-cost deposits with 29.2 million current accounts and
60.1 million savings accounts, which accounted for 55% of funding
in June 2019 and great opportunities for the cross-selling of
products.
Bradesco has a relatively low and well-controlled risk appetite,
especially in loan, including its exposure to private securities
Market risk is low and risk controls were among the best in the
country. During 2018 and first-half 2019, the loan portfolio
increased 10.1% and 4.9%, respectively.
Along with private peers, credit quality indices have improved
since the beginning of 2017 (loans overdue for more than ninety
days, non-performing Loans [NPLs] of 3.2% in June 2019 and 3.5% in
December 2018, from 5.5% in December 2016), following the
improvement of the operating environment. Loss coverage was high at
267% of NPLs in June 2019 (245% in December 2018), with BRL6.9
billion in provisions above local regulations. Robust revenue
generation and the conservative level of reserves provide strong
loss-absorbing capacity.
Bradesco's recurring profitability remains better than the average
of the local retail banks (operating profits/risk weighted assets
ratio was 4.8% in June 2019). The bank has been keeping credit
expansion under control in traditional business segments and the
increased exposure in lower risk segments. This should continue to
minimize the pressures of the country's volatile operating
environment.
Bradesco's Fitch Core Capital (FCC, 13.2% in June 2019) is in line
with peers, and is following the gradual implementation of Basel
III local rules, which has not been a challenge for the bank.
Regulatory capital has remained stable (average of 17% since
2015).
Bradesco's broad customer base and conservative funding policies
ensure a strong liquidity position. Bradesco's liquidity remains
solid, Liquidity Coverage Ratio was 164% and loan/deposits
(including letras) 88% in June 2019, supported by the historical
stability of its deposits, its significant securities portfolio and
the bank's capacity to increase long-term financing. The bank
carefully evaluates its cash requirements and defines minimum
liquidity reserve levels for the regular flow of its operations and
stress scenarios. Its ample distribution network allows the bank to
continuously capture deposits at attractive cost. During stress
periods, the bank has benefited from flight-to-quality movements,
due to its position as one of the largest banks in the sector. In
recent years Bradesco has been growing its issuance of financial
bill in the local market steadily.
SUPPORT RATING AND SUPPORT RATING FLOOR
The '4' Support Rating and the 'B +' Support Rating Floor reflect
the size of the bank and the potential contagion effects of an
improbable default, but also indicate the Brazilian government's
reduced capacity to provide support. Bradesco is systemically
important for Brazil, since it is the second largest private bank
in the country. It holds a high market share in various segments of
the domestic financial system, with approximately 12% of loan
portfolio and 12% of demand deposits in the financial system in
March 2019, and plays a key role in the country's pension system
and insurance sector.
SUBORDINATED DEBT
Fitch affirmed Bradesco's legacy Tier 2 (T2) subordinated debts'
ratings at 'B+', two notches below its VR. Fitch notched down both
loss severity and non-performance risk by one level. The
subordinated debts carry a cumulative coupon deferral mechanism.
KEY RATING DRIVERS - NCF PARTICIPACOES AND DEBENTURES
NATIONAL RATINGS
The National Ratings of NCF and its debentures are one notch below
the rating of its main operating subsidiary, Bradesco. NCF is a
pure holding company and holds 5.35% of Bradesco's total capital,
its main source of support. According to Fitch criteria, the
company had a moderate double leverage (investments in subsidiaries
and intangible assets/equity) of 116% in March 2019. In addition,
despite the evident links with the group (common management and
aligned strategies), NCF holds a minority interest in Bradesco,
with no relevant dividend flow compared with its liability
structure.
NCF is a pure holding company, with no operating activities,
controlled by the holding companies "Cidade de Deus Participacoes
S.A." and "Fundacao Bradesco S.A.", both controlling shareholders
of Bradesco. NCF is also a minority controlling shareholder of
Bradespar S.A (Bradespar; AAA(bra)/Stable), a sister company of
Bradesco. NCF has no operational activities. Its assets are mainly
composed of interest and financial investments, both at Bradesco,
with liquidity and cash flow controlled by the bank.
In March of 2019, NCF presented total assets of BRL19.3 billion,
composed mainly of the participation and investments in Bradesco.
The net income for the first quarter was BRL286 million, with
revenue flow basically derived from equity income and its
securities portfolio, since the holding company does not have
operating activities. The liability predominantly consists of
equity and a debenture issue.
RATING SENSITIVITIES
IDRS, NATIONAL RATINGS AND SENIOR DEBT
BRADESCO
IDRS AND VRs
Bradesco's IDRs and VRs are constrained by the sovereign ratings.
Any changes in the sovereign ratings would lead to a review of
their IDRs and VRs.
Bradesco's VR may be adversely affected if its loss-absorbing
capacity decreases, if there is a sustained reduction of the FCC to
less than 11% and a decline in the provision for losses in relation
to current levels. An operating profits/risk weighted assets ratio
of below 3.0% may also lead to a downgrade of the bank's ratings.
NATIONAL RATINGS
Bradesco's National Ratings may be affected by a change in Fitch's
perception of the bank's relative creditworthiness with respect to
other Brazilian entities rated on the national scale.
SUPPORT RATING AND SUPPORT RATING FLOOR
The Support Rating is sensitive to any change in assumptions of
propensity or ability of the sovereign to provide support to the
bank.
SUBORDINATED DEBT
Bradesco's subordinated debt ratings are generally sensitive to the
same considerations that may affect the bank's VR.
NCF
NATIONAL RATINGS
Changes in Bradesco's ratings would alter those of NCF, as well as
a substantial increase in the holding's double leverage ratio, or
deterioration of its debt service indicators.
Fitch affirmed the following ratings:
Banco Bradesco S.A.
-- Long-term Issuer Default Ratings (IDRs) in Foreign and Local
Currencies at 'BB'; Outlook Stable;
-- Short-term IDRs in Foreign and Local Currencies at 'B';
-- Viability Rating at 'bb';
-- Support Rating at '4';
-- Support Rating Floor at 'B+';
-- National Long-Term Rating at 'AAA(bra)'; Outlook Stable;
-- Short-term National Rating at 'F1+(bra)'.
Subordinated Debts, due in September 2019, January 2021 and March
2022
-- Long-Term Foreign Currency Rating at 'B+'.
NCF Participacoes S.A.
-- National Long-Term Rating at 'AA+(bra)'; Outlook Stable;
-- Short-Term National Rating at 'F1+(bra)'.
Issue of Debentures due in December 2020
-- National Long-Term Rating at 'AA+(bra)'.
BRAZIL: Hopes to Raise BRL1 Trillion Selling Off Properties, Assets
-------------------------------------------------------------------
Lise Alves at Rio Times Online reports that Brazil's federal
government has decided to sell off more than 750,000 properties and
assets, to gain cash flow. The ambitious plan expects the sales
will raise over BRL1 trillion (US$ 250 billion), said government
officials.
"The Brazilian federal government is perhaps the largest real
estate owner in the world," privatization Secretary Salim Mattar
said at a seminar, according to Rio Times Online. According to
Mattar, the government's goal is to sell most of this real estate
to the private sector, the report notes.
As reported in the Troubled Company Reporter-Latin America on May
27, 2019, Fitch Ratings has affirmed Brazil's Long-Term
Foreign-Currency Issuer Default Rating (IDR) at 'BB-' with a Stable
Outlook.
OI SA: Brazil Government Considers Intervention in Firm
-------------------------------------------------------
Reuters reports that the Brazilian government is considering
intervention in telecommunications carrier Oi SA, as the company
struggles to recover since it filed for bankruptcy protection in
June 2016, newspaper O Estado de S. Paulo reported.
Brazilian telecoms regulator Anatel fears an interruption of Oi
services next year, Estado reported, without saying how it obtained
the information, according to Reuters.
As reported on the Troubled Company Reporter-Latin America on Sept.
27, 2018, S&P Global Ratings assigned its 'B' issue-level rating to
Oi S.A.'s (global scale: B/Stable/--; national scale:
brA/Stable/--) existing $1.6 billion senior unsecured notes due
2025. S&P also assigned a '4' recovery rating to the notes, which
indicates average recovery expectation of 30%-50% (rounded estimate
40%) in the event of payment default.
Oi filed for bankruptcy protection in June 2016 to restructure
approximately BRL65 billion of debt.
OI SA: Posts BRL1.5BB Loss in Q2, Missing Estimates
---------------------------------------------------
Gabriela Mello at Reuters reports that Brazilian telecom carrier Oi
SA reported a steepening second-quarter net loss, confounding
expectations for a narrower shortfall, as debt servicing costs rose
and the real currency weakened.
In a securities filing, the company posted a quarterly loss of
BRL1.559 billion ($384.81 million), compared to a loss of BRL1.258
billion in the same period of the previous year, according to
Reuters.
Analysts on average expected a net loss of BRL437 million,
according to Refinitiv data, the report relays.
Oi, which filed for bankruptcy protection in June 2016 to
restructure approximately BRL65 billion of debt, reported net
revenue of BRL5.091 billion, down 8.2% from a year before, the
report discloses.
Earnings before interest, tax, depreciation and amortization
(EBITDA), a gauge of operating performance, fell by 22% to BRL1.218
billion, missing a consensus estimate of BRL1.432 billion compiled
by Refinitiv, the report notes.
Oi's net debt at the end of June hit BRL12.6 billion, 25.5% higher
than a year before, the report says.
Brazil's largest fixed-line carrier also said its capital
expenditure climbed 50.7% in the second quarter to BRL2.06 billion,
the report notes.
Like its competitors in Brazil, Oi is focused in expanding its
fiber-to-the-home (FTTH) broadband service and 4.5G coverage ahead
of a hotly anticipated 5G spectrum auction next year, the report
adds.
As reported on the Troubled Company Reporter-Latin America on Sept.
27, 2018, S&P Global Ratings assigned its 'B' issue-level rating to
Oi S.A.'s (global scale: B/Stable/--; national scale:
brA/Stable/--) existing $1.6 billion senior unsecured notes due
2025. S&P also assigned a '4' recovery rating to the notes, which
indicates average recovery expectation of 30%-50% (rounded estimate
40%) in the event of payment default.
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D O M I N I C A N R E P U B L I C
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DOMINICAN REPUBLIC: Basic Products Prices Up Between DOP10-30
-------------------------------------------------------------
Dominican Today reports that merchants and housewives complain
about the rise between 10 and 30 pesos of basic food in the family
basket, saying that despite the increase of 14% to the
non-sectorized minimum wage, remains small compared to the
increases.
"Everything is expensive," "nothing is as before" are the
complaints that are heard from merchants and housewives when asked
about the cost of some foods in the family basket that has
experienced a 0.47% rise in the Index of Consumer Prices, according
to Dominican Today. "The onion one once bought at 30 and 25 pesos,
one now buys it at 2,000 pesos per bag and goes out at 40 pounds,"
explained the merchant Salomon Zabala, the report notes.
Zabala, who has a position in the Villa Consuelo market, explained
to EL DIA that at sales levels the price increase affects them
because they have to invest more money to meet the needs of their
customers, the report relays. As for the chicken meat that
according to the Consumer Price Index had an increase of 1.55%, in
the places of sale is 50 pesos per pound, the report discloses.
Dominican Today notes that regarding the increase in the products
of the basic family basket, the president of the Autonomous Trade
Union Confederation Clasista, Gabriel del Rio, said that it is
necessary to make a review so that employees can have a decent
salary to be able to approach the cost of the family basket.
Dominican Family Basket - Costs
The Central Bank established that the national cost of the family
basket as of July 2019 has a cost of DOP30,832, the report relays.
While for the same period of 2018 it was at DOP30,406, the report
adds.
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.
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."
An ongoing concern in the Dominican Republic is the inability of
participants in the electricity sector to establish financial
viability for the system.
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).
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M E X I C O
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TECAMAC: Moody's Upgrades Global Issuer Ratings to Ba2
------------------------------------------------------
Moody's de Mexico S.A. de C.V. upgraded the baseline credit
assessment and the issuer ratings of the Municipality of Tecamac to
ba2 from ba3 and to Ba2/A2.mx (Global Scale, local currency/Mexico
National Scale) from Ba3/A3.mx, respectively, and also changed the
outlook to stable from positive.
At the same time, Moody's de Mexico upgraded the debt ratings of
the municipality's MXN 160 million loan (original face value) with
Banorte to Baa1/Aa1.mx from Baa2/Aa2.mx (Global Scale, local
currency/Mexico National Scale).
RATINGS RATIONALE
RATINGS RATIONALE FOR THE BCA AND ISSUER RATINGS
The upgrade of the bca and the issuer ratings reflects the improved
cash financing balance, strengthening liquidity, very low debt
levels, strong continued operating surpluses and a high own source
revenues collection.
In 2018 Tecamac's cash financing balance increased to 7.6% of total
revenues compared with 1% average registered from 2014-2018, result
that was driven by a significant increase in the own source
revenues, non-ear marked transfers or "participaciones" as well as
a reduction in the capex. As consequence of the improved cash
financing balances, the liquidity position of the municipality has
been strengthening. As of May 2019, both the cash financing balance
and the cash to current liabilities ratio have maintained the
positive performance, registering a 58.9% cash financing surplus
and a cash to current liabilities ratio of 11.68 times (x) compared
with the 21.6% and 0.96x of May 2018. Moody´s expects that in
2019-20 Tecamac will maintain positive cash financing balances that
will support a continued improvement in the liquidity. In addition,
the entity has a null track record of use of short-term debt, which
will be maintained in the medium term, situation that also reduces
possible pressures in the liquidity.
In terms of debt and the gross operating balance (GOB), the
municipality has also continued its strong behavior with a
declining trend in the net direct and indirect debt to operating
revenues, the one that was equivalent to a very low 5%. Meanwhile,
the GOB consolidated its positive trend reaching a maximum of 23.3%
of the operating revenues in 2018. Since the entity has no plans to
acquire new long-term debt, only plans to refinance the current
long-term loan in order to improve its conditions, particularly the
interest rate, and given the historical growth in the operating
revenues, that compensates the registered in the operating
expenditures, Moody´s expects that the net direct and indirect
debt and the GOB will stand at an average of 4.2% and 22% of the
operating revenues, respectively, in 2019-20, comparing favorably
with the Ba2 Mexican rated peers. Finally, from 2014 to 2018
Tecamac has registered a high own source revenues collection
equivalent to 45% in average, (Ba2 median, 40.9%) prompted by a
growth in the property taxes, which have been growing at a
cagr14-18 of 21%.
RATIONALE FOR THE STABLE OUTLOOK
The stable outlook reflects Moody's expectation that Tecamac will
maintain positive financial and operating balances, an adequate
liquidity position, and a declining debt level in the medium term.
RATINGS RATIONALE FOR THE ENHANCED LOANS RATINGS
The upgrade of the rating assigned to the Banorte MXN 160 million
enhanced loan was prompted by the strengthening of the debt service
coverage under both Moody's base case and stress case scenarios.
Moody's reviewed cash flow analyses of the rated enhanced loan to
estimate future monthly DSC ratios. From this review, DSC for this
enhanced loan improved, allowing an additional uplift from the
issuer ratings as described in the Enhanced Municipal and State
Loans in Mexico rating methodology.
WHAT COULD CHANGE THE RATING UP/DOWN
If the municipality maintain stable and positive financial balances
while the liquidity continues to strength, the municipality ratings
could face positive pressure. Also, lower debt levels could also
drive positive pressure in the municipality's ratings. In contrast,
if Tecamac's financial balances would present a deterioration or
higher volatility that the observed, which consequently would have
a negative impact the liquidity, the ratings could present negative
pressure.
Given the link between the loan and the credit quality of the
obligor, a downgrade/upgrade of the municipality of Tecamac could
exert downward/upward pressure on the loan's ratings. The ratings
could also face downward/upward pressure if debt service coverage
levels fall/improve materially below/above its expectations.
The methodologies used in these ratings were Regional and Local
Governments published in January 2018, and Enhanced Municipal and
State Loans in Mexico Methodology published in May 2019.
=====================
P U E R T O R I C O
=====================
SEARS HOLDINGS: Seeks to Extend Exclusivity Period to Oct. 14
-------------------------------------------------------------
Sears Holdings Corporation asked the U.S. Bankruptcy Court for the
Southern District of New York to extend the period during which
only the company and its affiliates can file a Chapter 11 plan to
Oct. 14 and the period to solicit acceptances for the plan to Dec.
16.
The court will hold a hearing on Aug. 22 at 10:00 a.m. to consider
extending the exclusivity periods.
The companies' latest plan contemplates an orderly wind down of
their remaining assets following the sale of substantially all of
their assets to Transform Holdco LLC and distribution to
creditors.
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.
The U.S. Trustee for Region 2 on July 9, 2019, appointed five
retirees to serve on the committee representing retirees with life
insurance benefits in the Chapter 11 cases.
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U R U G U A Y
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URUGUAY: Keeps Eye Out for Potential Fallout From Argentine Crisis
------------------------------------------------------------------
Federico Anfitti Montevideo at EFE News reports that Uruguay is
watching the economic crisis unfold in Argentina with a mixture of
concern and confidence due to the decoupling of its economy from
that of its neighbor in a year in which both countries will elect
new presidents.
While Argentina is dealing with turmoil in the currency market,
rising country-risk premiums on its debt and surging inflation,
Uruguay appears to offer a more stable economic panorama despite
having to juggle a budget deficit that has expanded in recent
years, according to EFE News.
At the start of this century, Uruguay experienced one of the worst
economic downturns in its history due, in part, to the collapse of
Argentina's economy, EFE recounts.
Regarding the turmoil in Argentina's financial markets over the
past few days, Deloitte Uruguay economic analyst Florencia
Carriquiry told EFE that the "very negative" results for President
Mauricio Macri's governing party in last Sunday's primaries had not
been "the most likely scenario," notes the report.
"The effect of the political surprise was to have a big shock. We
knew on Sunday night that we were going to have a complicated
Monday in terms of the financial variables in Argentina. It was to
be expected that there would be turmoil on Monday in terms of the
dollar, the stock market (and) the country risk," the report quoted
Carriquiry as saying.
Carriquiry said that while Uruguay was "less dependent" on
Argentina than in the past, it would be "too much" to say that the
nation was "completely separated" from what happens in the
neighboring country, EFE News relates.
"Uruguay itself today, in fact, has (economic) fundamentals that
are much more deteriorated, so the capacity to absorb new negative
shocks from the region is much lower too," the economic analyst
said, notes EFE.
According to the report, while Carriquiry said she did not expect
an economic meltdown in Uruguay similar to that in Argentina, she
did warn that some sectors, such as the tourist industry, might
experience a "negative shock."
"Argentina is going to have a much higher real exchange rate for a
longer time, so Uruguay will be very expensive in relation to
Argentina for, probably, a long time. That not only means a strong
shock for tourism, but for some sectors of industry," Carriquiry
said, adds the report.
=================
V E N E Z U E L A
=================
VENEZUELA: Talks w/ Opposition to Resume, But Under New Mechanism
-----------------------------------------------------------------
EFE News reports that Venezuela's foreign minister said that
Norway-mediated negotiations between the government and opposition
will surely be resumed but will need to be held under a revised
mechanism.
Jorge Arreaza, a member of President Nicolas Maduro's delegation to
those talks, said in remarks to reporters that government
negotiators was to meet with a Norwegian mission in Venezuela last
week to push for a resumption of dialogue, according to EFE News.
"President Nicolas Maduro put (the talks) on pause. We haven't
withdrawn from the dialogue process with the opposition or with the
Venezuelan opposition politicians that the Kingdom of Norway has
facilitated," Arreaza said before participating in a signature
drive against Trump's executive order that stated that "all
property and interests in property of the Government of Venezuela
that are in the United States . . . are blocked and may not be
transferred, paid, exported, withdrawn or otherwise dealt," the
report relates.
Arreaza said the government was reflecting on the dialogue process,
the result of which, he said, was an escalation in hostility, notes
EFE News.
"The result was an attack. The result was to continue resorting to
a conspiracy, to a coup. We have to be in a mechanism that ensures
peace, coexistence among all Venezuelans," he added, says the
report.
EFE News relates that Guaido, the speaker of the opposition-led but
toothless National Assembly (unicameral legislature), said that a
delegation from Norway was in Venezuela in a bid to get the
government and opposition back to the negotiating table.
Little is known about the content of the talks, although
negotiators have said a six-point agenda is being discussed,
relates EFE.
EFE News says Maduro's administration is calling for a lifting of
foreign-imposed sanctions on senior Venezuelan government
officials, while the leftist president has stressed that his
administration will not be blackmailed in the talks nor allow any
agreements to be imposed by the US or its allies.
The opposition, which says Maduro's May 2018 re-election victory
was marred by fraud, insists that any agreement must include new
presidential elections, adds the report.
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.
===============
X X X X X X X X
===============
[*] BOND PRICING: For the Week August 12 to August 16, 2019
-----------------------------------------------------------
Issuer Name Cpn Price Maturity Country Curr
----------- --- ----- -------- ------- ---
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
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
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
KrisEnergy Ltd 4.0 40.4 6/9/2022 SG SGD
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 6.0 16.4 4/5/2023 KY USD
Cia Latinoamericana de 9.5 73.9 7/20/2023 AR 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
MIE Holdings Corp 7.5 56.4 4/25/2019 HK USD
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
[*] LATIN AMERICA: Flows of FDI Up by 13.2% in 2018, ECLAC Says
---------------------------------------------------------------
In an international context of reduced flows and strong
competition, national policies must attract FDI that contributes to
creating local capacities and fostering sustainable development,
ECLAC says in its annual report.
In contrast to the global trend, flows of Foreign Direct Investment
(FDI) to Latin America and the Caribbean increased by 13.2% in 2018
versus 2017, totaling $184.287 billion dollars and putting an end
to five years of declines, although last year's figure was still
below the values recorded during the boom cycle for commodities
prices, the Economic Commission for Latin America and the Caribbean
(ECLAC) indicated in Santiago, Chile.
"Upon analyzing the different components of FDI, it can be seen
that the dynamism regained in 2018 was not based on the entry of
capital contributions--which would be the most representative
source of companies' renewed interest in establishing themselves in
the region's countries--but instead on the growth in profit
reinvestment and loans between companies," states the document
Foreign Direct Investment in Latin America and the Caribbean 2019,
launched at a press conference by the United Nations regional
organization's Executive Secretary, Alicia Barcena.
The study shows great heterogeneity in national trends: in 16
countries, inflows increased versus 2017, whereas in 15 other
countries, they declined. Most of the growth in FDI in 2018 is due
to greater investment in Brazil ($88.319 billion dollars, 48% of
the regional total) and Mexico ($36.871 billion dollars, or 20% of
the total).
In terms of amounts, they are followed by Argentina ($11.873
billion dollars, a 3.1% increase from 2017), Colombia ($11.352
billion dollars, an 18% decline), Panama ($6.578 billion dollars, a
36.3% increase) and Peru ($6.488 billion dollars, a 5.4% decline).
Inflows to Chile ($6.082 billion dollars) grew slightly (3.9%),
but, as in 2017, capital flows into the country were clearly below
the average notched in the last decade.
"In an international context of a reduction in FDI flows and strong
competition for investments, national policies should not be
oriented towards returning to the sums recorded at the start of the
decade, but rather towards attracting ever more FDI that
contributes to forming knowledge-based capital and advancing
towards sustainable patterns of production, energy and
consumption," Alicia Barcena, ECLAC's Executive Secretary,
contended.
"The growing incorporation of a sustainable development approach in
the strategic decisions of the world's main transnational companies
constitutes an opportunity for designing policies that accompany
this paradigm shift," the senior official underscored. The
prospects for 2019 are not encouraging due to the international
context: a decline of up to 5% in FDI inflows is forecast,
according to the report.
In 2018, FDI in Central America grew 9.4% compared with 2017 due to
the impetus of Panama. In the Caribbean, inflows shrank by 11.4%
due to lower investment in the Dominican Republic ($2.535 billion
dollars, -29%), which is the main receiver in that subregion.
Forty-seven percent (47%) of FDI inflows in 2018 corresponded to
the manufacturing industry, 35% to services, and 17% to natural
resources. Meanwhile, the largest cross-border merger and
acquisition operations were concentrated in Chile and Brazil, in
the mining, hydrocarbons and basic services (electricity and water)
sectors.
With regard to the behavior of Latin American transnational
companies, known as "traslatinas," ECLAC's document specifies that
FDI outflows from Latin American countries declined in 2018 for a
fourth straight year, totaling $37.870 billion dollars. Of the
direct investment abroad coming from Latin America, 83% originated
in Brazil, Chile, Colombia and Mexico.
The majority of capital that entered the region came from Europe
(which has a bigger presence in the Southern Cone) and from the
United States (the main investor in Mexico and Central America).
China, meanwhile, had less participation in mergers and
acquisitions in Latin America and the Caribbean, according to the
report Foreign Direct Investment in Latin America and the Caribbean
2019.
The document also analyzes the contribution of transnational
companies from the Republic of Korea to the region's productive
transformation, along with the advantages that quality FDI could
have for the agro-food chain.
Latin America and the Caribbean was the destination for around 5%
of all Korean investments in the 2007-2018 period. This Asian
country, which mainly uses the modality of greenfield projects, has
supported the development of high-value-added manufacturing in the
region, especially in the automotive industry in Mexico and Brazil.
The location of Korean companies in the region represents an
opportunity to foster a more sophisticated productive fabric, as
long as the policies for attracting and maintaining FDI are
integrated into a national development project, ECLAC indicates.
Finally, the report notes that 7.9% of the FDI received by Latin
America between 2012 and 2016 went to the agro-food chain,
especially the agro-industrial sector, a percentage that rises to
15.5% in the case of Uruguay, 14.5% in Paraguay, 14.4% in Mexico
and 11.9% in Argentina. "FDI can contribute to producing in
regional agro-food chains the change needed to tackle the
environmental and social challenges of the coming decades."
*********
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
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Information contained herein is obtained from sources believed to
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