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                 L A T I N   A M E R I C A

          Thursday, October 24, 2019, Vol. 20, No. 213



ARGENTINA: IMF Will Stand by Country During Crisis


BRAZIL: Series of Challenges Jeopardize Recovery
RENOVA ENERGIA: Court Okays Filing for Bankruptcy Protection

D O M I N I C A N   R E P U B L I C

DOMINICAN REPUBLIC: Has More Loans From China


JAMAICA: Emergency Trigger Canada to Issue Travel Advisory


ENGENCAP HOLDING: Fitch Affirms BB- LT IDRs, Outlook Stable
RASSINI AUTOMOTRIZ: Fitch Affirms Then Withdraws BB- IDR


PROMERICA FINANCIAL: Fitch Affirms B+ LT IDR, Outlook Negative


SAN MIGUEL INDUSTRIAS: Fitch Affirms BB+ LT IDR, Outlook Stable


PETROLEOS DE VENEZUELA: Guaido Proposed 90-Day Truce to Bondholders
VENEZUELA: Can Afford Payment to Keep Control of Citgo

                           - - - - -


ARGENTINA: IMF Will Stand by Country During Crisis
Andrea Shalal and David Lawder at Reuters report that the
International Monetary Fund will stand by Argentina as it works
through its economic crisis, Managing Director Kristalina Georgieva

She added that the Fund was waiting to see the future policy
framework adopted by the Latin American country, which holds an
election later this month in which a change of government is widely
predicted, according to Reuters.

"We are fully committed to work with Argentina and we are closely
engaged," Georgieva told reporters, when asked about the future of
a record $57 billion line of credit given to Argentina by the IMF
last year, after a market crash exacerbated a debt crisis and
pushed the grain producer towards default, the report notes.

Georgieva, who took over as IMF chief last month, said the IMF's
will to stand by Argentina remained "as strong" as it had been
under her predecessor Christine Lagarde, the report relays.

Reuters notes that IMF officials are expected to meet with
officials from Argentina during the IMF/World Bank annual meetings
in Washington, but sources familiar with the issue said no decision
was expected on the release of the next $5.4 billion tranche of the
IMF facility.

Georgieva told reporters the IMF was closely following developments
in Argentina, and suggested the global lender was awaiting the
outcome of the Oct. 27 presidential election, the report

"We will be very interested to see what policy framework will be
put in place, and when we know that, we can continue this
conversation," she said in answer to a question about the IMF's
plans regarding the credit facility, the report relays.

Presidential election front-runner Alberto Fernandez has said the
IMF should give Argentina time to revive economic growth to be able
to pay off its debts, the report notes.

Argentina is facing a debt crunch after a sharp market crash in
August pushed the country toward default and forced President
Mauricio Macri to roll out plans to delay payments on around $100
billon of debt, the report adds.

                           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.

Standard & Poor's foreign and local currency sovereign credit
ratings for Argentina stands at CCC- with negative outlook. S&P
said, "The negative outlook reflects the prominent downside risks
to payment of debt on time and in full per our criteria over the
coming months amid very complex political, economic, and financial
market dynamics."  Moody's credit rating for Argentina was last set
at Caa2 from B2 with under review outlook. Fitch's credit rating
for Argentina was last reported at CC with n/a outlook. DBRS's
credit rating for Argentina is CC with under review outlook.  S&P,
Moody's and DBRS ratings were issued on Aug. 30, 2019; Fitch rating
on Sept. 3, 2019.

The next general elections in Argentina will be held on October 27,
2019, to elect the president of Argentina, members of the national
congress and governors of most provinces.  Incumbent President
Mauricio Macri is running for re-election and his top opponent is
Alberto Fernandez.  If no candidate reaches certain thresholds, a
runoff vote between the top two candidates will be held on Nov.


BRAZIL: Series of Challenges Jeopardize Recovery
EFE News reports that after a devastating crisis and two years of
sluggish growth, Brazil is struggling to get its economy moving
amid a series of thorny challenges.

South America's biggest economic power is navigating through
difficult terrain, prompting rightist President Jair Bolsonaro's
administration, financial analysts and the International Monetary
Fund to forecast growth of less than 1 percent for 2019, according
to EFE News.

                       About Brazil

The Federal Republic of Brazil is the largest country in Latin
America.  Sao Paulo is the most populated city and Brasilia is the
capital.  The federation is composed of the union of 26 states, the
Federal District and more than 5,000 municipalities.  Its
government is headed by President Jair Bolsonaro.  Among other
things, Brazil's government is hounded by corruption allegations.

Brazil has an advanced emerging economy.  Amid growth in recent
decades, the country entered an ongoing recession in 2014 amid a
political corruption scandal and nationwide protests.

Standard & Poor's credit rating for Brazil stands at BB- with
stable outlook (January 2018). Moody's credit rating for Brazil was
last set at Ba2 with stable outlook (April 2018). Fitch's credit
rating for Brazil was last reported at BB- with stable outlook
(February 2018). DBRS's credit rating for Brazil is BB (low) with
stable outlook (March 2018).

RENOVA ENERGIA: Court Okays Filing for Bankruptcy Protection
Gabriela Mello at Reuters reports that a Brazilian court has
accepted a bankruptcy protection request filed by renewable energy
firm Renova Energia SA, nominating KPMG Corporate Finance as the
court administrator, the company said in a securities filing.

Renova Energia said earlier its bankruptcy filing involved a total
debt of BRL3.1 billion (US$745.5 million), according to Reuters.

The announcement, which drove its shares sharply lower, came two
days after key shareholder Light SA sold its 17.17% stake in Renova
to an investment fund for a symbolic value of 1 real, leading Chief
Financial Officer Claudio Ribeiro to resign, the report notes.

The exits of Light and Ribeiro follow years of unsuccessful talks
to sell Renova's wind farm projects, which have racked up debt and
raised concerns about their timely completion, the report relays.

Renova's largest creditor is Brazil's development bank BNDES.

As part of the bankruptcy procedure, all creditors actions against
Renova will be suspended for 180 days, the report notes.  The
company will also be obliged to submit all account reports by the
30th of each month, the report adds.

D O M I N I C A N   R E P U B L I C

DOMINICAN REPUBLIC: Has More Loans From China
Dominican Today reports that in recent years, China has
strengthened its presence in Latin America.  New investments, more
exports and imports, according to the report.

It is estimated that more than 2,000 Chinese companies have been
installed in the region, generating more than 1.8 million local
jobs, according to "The State of China-Latin America Relations" of
the Carolina Foundation, according to Dominican Today.

Although in 2016, Foreign Direct Investment (FDI) in the region
fell significantly, that year China became the second-largest
investor country, after the United States and in 2017 already
contributed around 15% of total FDI, noted the publication, the
report relays.

"It is estimated that the volume of loan commitments to the
governments of the region in the 2005-2016 period amounts to a
total of over 141,000 million dollars," the study indicates based
on data from the Economic Commission for Latin America and the
Caribbean (ECLAC), the report notes.

                      Countries With More Loans

In the mentioned period, most of the amounts (93%) were granted to
Venezuela (44%), Brazil (26%), Ecuador (12%) and Argentina (11%).
Since 2005, Argentina, Brazil and Peru concentrate more than 80% of
Chinese investment focused on energy and mining, the report
details, the report notes.

These data coincide with a list prepared by the Latin American
Federation of Banks (Felaban), which also includes Trinidad and
Tobago, Bolivia, Jamaica, Mexico and the Dominican Republic among
the countries that have most received loans from the Government of
China, the report says.

In the list of Felaban, Venezuela appears with 18 loans, Brazil,
Argentina and Jamaica with 11, Ecuador with 15, Bolivia with 9,
Cuba with 3, Guyana, Bahamas and Trinidad and Tobago with 2 and
Mexico, Dominican Republic, Costa Rica, Barbados and Peru with 1,
the report adds.

                     About Dominican Republic

The Dominican Republic is a Caribbean nation that shares the island
of Hispaniola with Haiti to the west. Capital city Santo Domingo
has Spanish landmarks like the Gothic Catedral Primada de America
dating back 5 centuries in its Zona Colonial district.

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

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).


JAMAICA: Emergency Trigger Canada to Issue Travel Advisory
---------------------------------------------------------- reports that the Canadian Government has issued a
travel advisory for Jamaica due to "a significant increase in
violent crime since the beginning of the year" that has caused
several states of emergency (SOEs) to be imposed across the

It has advised Canadians to "exercise a high degree of caution" in
the island, according to

The update issued a few days ago, pointed to the SOEs in the
parishes of Clarendon and St Catherine, which are in effect until
October 19; the three in effect until October 28 -- Hanover, St
James where the popular vacation resort town of Montego Bay is
located, and Westmoreland, also home to the resort area of Negril;
and the St Andrew SOE which will remain in place until January 4,
the report notes.

Under the SOEs, security forces have increased power to conduct
searches, seizures, and detain persons of interest, the report
relays.  Curfews may also be imposed without notice.

The Canadian government has advised citizens from the North
American country who are in the areas affected by the SOEs to:
-- always cooperate with military and police officers;
-- carry valid ID at all times and be prepared for various  
-- checkpoints;
-- avoid outings outside the resort after dark;
-- allow extra time to reach your destination;
-- follow the instructions of local authorities; and
-- monitor local news to stay informed on the current situations.

Jamaica's Tourism Minister Edmund Bartlett acknowledged that the
travel advisory is a cause for concern, but he also said the
international travel market had become more aware of efforts by
Jamaica to address its crime problem, the report adds.

As reported in the Troubled Company Reporter-Latin America on Oct.
1, 2019,  S&P Global Ratings, on Sept. 27, 2019, raised its
long-term foreign and local currency sovereign credit ratings on
Jamaica to 'B+' from 'B'. The outlook is stable. At the same time,
S&P Global Ratings affirmed its 'B' short-term foreign and local
currency sovereign credit ratings on the country. S&P Global
Ratings also raised its transfer and convertibility assessment to
'BB-' from 'B+'.

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.


ENGENCAP HOLDING: Fitch Affirms BB- LT IDRs, Outlook Stable
Fitch Ratings affirmed the Local and Foreign Currency Long-Term
Issuer Default Ratings at 'BB-'and Local and Foreign Currency
Short-Term IDRs at 'B' for Engencap Holding, S. de R.L. de C.V. The
Rating Outlook of the Long-Term IDR is Stable.



Engencap Holding's ratings are highly influenced by its
strengthened franchise and business scale after the acquisition of
TIP de Mexico, S.A. de C.V. (TIP), which has positioned the company
as second in the leasing segment in Mexico. Nevertheless, its
company profile continues to be of a niche nature and of a moderate
size in the national financial sector. The ratings also consider as
a relevant factor for the rating its weak profitability levels,
which have begun to revert the trend due to the company's business
evolution as an independent company and positively influenced by
TIP's improved profit generation, which has been reflected in the
post-acquisition consolidated figures in positive operational
profit (1.8% as of July 2019). Though pre-tax profit remains
impacted by non-recurring expenses from acquisition (-0.2% as of
July 2019).

Engencap Holding's ratings also reflect its pressured
capitalization levels due to the goodwill and intangible assets
generated by TIP's acquisition, its asset quality, which is
commensurate to the rating level, and the reasonable
diversification in its founding sources, though with a low level of
unsecured funding in comparison with some of its peers.

Profitability is the weakest link of the financial profile.
However, YE 2019 pro forma figures of the entity are expected to
reach around 2.4%. Engencap Holdings's net result continues to be
affected by the "negative carry" of the structured notes and the
effect of FX. Fitch considers currency risk continues to be
relevant but will decrease as the company services its U.S. dollar
securitization transaction with restricted cash and portfolio
amortization. Fitch highlights that profitability levels are
benefited in the sector by the lower reserve levels (38% as of July

As of July 2019, consolidated impaired loans increased to 4.4%
(from 2.2% pre-acquisition as of December 2018), mainly due to
higher and more volatile impairments from TIP. This metric is
higher than the pro forma figures provided to Fitch for YE 2019
(3.2%), although the agency considers this ratio continues at
reasonable levels in respect to market participants. Common in the
sector, asset quality is pressured by low reserve coverage metrics.
Consolidated write-offs figures are low, which represented an
annualized ratio of 0.03% of the average gross loans in comparison
with 0.3% at the end of 2018. Fitch considers that Engencap Holding
faces the challenge to contain and control its delinquency metrics
considering the less benign operating environment, its plans to
offer new kind of equipment for lease and the more volatile
delinquency ratios that TIP has shown in the past.

Leverage metrics relevantly increased from TIP acquisition. Debt to
tangible equity was affected by increasing goodwill and intangible
assets of the consolidated figures post acquisition. As of July
2019, this ratio was 7.2x, above the pro forma indicator of 7.0x
previously expected for the end of 2019. Considering the cushion
provided by restricted cash to service debt obligations, its net
debt to tangible equity ratio (net only of restricted cash) reduced
to 6.3x at the date mentioned. Before TIP's transaction, Engencap
Holding's leverage was reasonable at 5.1x as of December 2018.
Fitch believes capital metrics are additionally stressed by high
concentrations in its credit portfolio. The minority interests from
new transactions are not being deducted from Tangible Equity as
they relate to TIP's purely common equity (not hybrids or
subordinated issuances), and because the entity is a fully
operational subsidiary and is a non-regulated entity with no
restrictions to upload dividends. Tangible leverage metrics are
forecast to ease to 18% as of 2020 by the entity.

After TIP's acquisition, the combined entity has increased its
funding diversification, given the relatively greater amount of
funding lines from TIP, while its unsecured funding will remain at
low levels of 6% of total funding, behind most of its globally
rated peers. The combined funding sources include secured credit
lines from commercial banks, securitizations, leasing and unsecured
credit lines form development banks. Fitch considers the credit
facilities that TIP has provided to Engencap's profile to be credit
positive. Liquidity management is reasonable, as the combined
entity presents positive accumulated liquidity gaps over the coming
three years. The pro forma cash flow generation provided by the
entity exhibited an increasing ending balance at the end of 2019
due to TIP's cash flow generation.



The ratings could be downgraded if the combined company is not able
to consistently sustain a pre-tax income to average assets ratio
above 1% and if its debt to tangible equity ratio is sustained
consistently above 7x. A material increase in non-performing loans
or in concentrations per debtor, coupled with a relevant increase
in tangible leverage could also negatively affect ratings. Evidence
of weaknesses in corporate governance or internal controls, or the
materialization of higher than expected costs arising from the
integration process could also pressure ratings downward.

Upside potential in the short term is limited. The ratings could be
upgraded in the medium term if the company materially strengthens
its franchise and competitive position under its new strategy as an
independent leasing company. At the same time, Fitch expects the
company to achieve and maintain a pre-tax income to average assets
ratio consistently above 3%, reduce concentrations per debtor, and
sustain a tangible leverage ratio below 6x, while it maintains
asset quality metrics around current levels. In addition, an
improvement in the flexibility of its funding mix driven by a
materially larger contribution of unsecured facilities or a
significantly larger portion of unencumbered assets would also
benefit creditworthiness.

Fitch has affirmed the following ratings:

Engencap Holding, S. de R.L. de C.V.:

  -- Long-Term Local and Foreign Currency IDRs at 'BB-';
     Outlook Stable;

  -- Short-Term Local and Foreign Currency IDRs at 'B'.

RASSINI AUTOMOTRIZ: Fitch Affirms Then Withdraws BB- IDR
Fitch Ratings has affirmed and withdrawn Rassini Automotriz, S.A.
de C.V's 'BB-' foreign and local currency Issuer Default Ratings.
The Rating Outlook is Stable. Fitch has withdrawn RA's ratings as
the entity has no public debt outstanding and does not intend to
issue debt in the near term. Accordingly, Fitch will no longer
provide ratings for RA.

The ratings reflect RA's business position as a Tier-1 supplier of
suspension and brake components, its geographic diversification,
efficient operations and low cost structure. The company's ratings
are limited by the cyclicality of the automotive industry as well
as RA's regional and customer concentration in North America, small
scale and capital structure.


Strong Business Position: RA is a subsidiary of Rassini, S.A.B. de
C.V. Rassini manufactures suspension and brake components for light
and heavy vehicles, with leading positions in North America and
Brazil. The company's main product line, leaf springs, which
accounted for 49% of total sales as of the latest 12 months ended
June 30, 2019 has historically had a dominant market position in
North America.

Product Diversification Positive: Rassini was awarded new brake
contracts over the last several years, which has allowed the brakes
division to grow, reducing Rassini's dependence on leaf springs.
This division has been an increasing contributor to Rassini's
EBITDA as the company has increased brake rotor production and
machining capabilities to meet demand.

Customer and Regional Concentration: Rassini is an essential
supplier to several original equipment manufacturers (OEMs),
including General Motors Co., Fiat Chrysler Automobiles N.V. and
Ford Motor Co. Detroit's Big Three OEMs represented 77% of
Rassini's total revenues during 2018. North America accounted for
89% and 93% of Rassini's total revenues and EBITDA, respectively.

Leverage Expected to Trend Down: Fitch expects Rassini's net
adjusted leverage ratio to decline to around 2.2x in 2020 and to
2.0x in 2021 compared with 2.8x as of LTM to Jun 30, 2019. Expected
deleveraging is driven mainly by FCF expectations of approximately
USD20 million-USD30 million per year. Rassini's adjusted net
leverage ratio mainly includes USD443 million of debt at GGI INV
SPV, S.A.P.I., which is guaranteed by Rassini's North American
operating subsidiaries. GGI, which is owned by Rassini's
controlling shareholders, acquired approximately 52% of Rassini's
shares in 2018. As a result, Rassini's controlling shareholders now
hold over 99% of its shares.

Stable FFO Generation: The company is expected to generate FFO of
about USD110 million in 2020, which compares with USD99 million
during 2018. Modest declines in FFO are mainly the result of higher
interest expenses due to increased debt. Rassini's FFO is not
expected to strengthen materially in the near term due to slowing
North American vehicle production growth.


Rassini's business profile and scale is similar to companies such
as Tupy S.A. (BB/Stable). Both companies have operations primarily
in North America and Brazil. Rassini's concentration in North
America of around 90% of revenue is higher than its peers. Although
Tupy has concentration in the North American market above 60% and
some exposure to South America, it has diversified its revenue
sources to Europe. Rassini's exposure to Detroit's Three OEMs is
high at around 75% and compares unfavorably to Tupy's more
diversified customer portfolio.

Positively, Rassini's operating EBITDA is slightly higher at around
USD160 million relative to Tupy's, at USD140 million, and its
business profile, particularly in leaf springs, is considered
stronger than Tupy's. Rassini's net leverage is expected to be
slightly above 2x, which is higher by about 1x to expectations for
Tupy. Rassini's FFO fixed charge coverage is expected to be nearly
5x, which is weaker than Tupy's at 7x. Larger peers such as Nemak,
S.A.B. de C.V. (BBB-/Stable) or Dana Incorporated (BB+/Stable) have
greater financial market and banking access; more product, customer
and geographic diversification; and typically hold committed credit
facilities or large cash balances relative to short-term


Fitch's Key Assumptions Within Its Rating Case for the Issuer

  -- Consolidated volumes remain relatively flat over the
intermediate term;

  -- Rassini's EBITDA in 2020 and beyond hovers around USD160

  -- Total debt/EBITDA considering guaranteed debt peaks at 3.5x
and declines over the intermediate term;

  -- Rassini remains FCF-positive over the intermediate term.


Rating Sensitivities do not apply as the ratings have been


Adequate Liquidity: Rassini's liquidity is adequate and primarily
supported by solid cash flow generation, which should allow the
company to manage debt amortizations of approximately USD80 million
per year. Fitch estimates Rassini's cash flow from operations at
about USD110 million over the intermediate term and readily
available cash at USD57 million. An undrawn USD30 million committed
credit facility due in 2021 provides additional liquidity support.

Rassini uses receivable factoring facilities in an average amount
of USD40 million. Fitch treats these facilities as debt because
immediate replacement funding is required if the receivables
financing shuts down or eligible receivables decline in quality and
the facility ceases to fund ongoing receivables. Fitch includes the
SPV debt for debt and ratio calculations since Rassini's operating
companies are guarantors of the SPV's debt.


Fitch has affirmed and withdrawn the following ratings:

Rassini Automotriz, S.A. de C.V.

  -- Foreign-currency long-term IDR at 'BB-';

  -- Local-currency long-term IDR at 'BB-'.

The Rating Outlook is Stable.


PROMERICA FINANCIAL: Fitch Affirms B+ LT IDR, Outlook Negative
Fitch Ratings affirmed Promerica Financial Corporation Long-Term
Issuer Default Rating at 'B+'. The Rating Outlook is Negative.



PFC's IDR is driven by its Viability Rating (VR) of b+. The holding
company VR reflects the agency's opinion on its consolidated
business and risk profile. PFC's VR reflects with high importance
the challenging operating environments of most countries where the
group has presence. Fitch's assessment of PFC's operating
environment deteriorated since the agency's last review due to
negative sovereign rating actions. However, PFC's relatively well
positioned regional franchise and diversified business model has
sustained its risk profile and financial performance at a level
consistent with its current rating level. The Outlook remains
Negative as the challenging operating environment and weak economic
prospects mainly in the markets where PFC has the largest exposures
(i.e. Nicaragua and Ecuador) may pressure the group's profitability
and asset quality.

Fitch's Assessment of PFC's Operating Environment considers the
group's broad geographic diversification into countries with
relatively higher risk. PFC consolidates the group's operations in
nine locations with an average rating in the 'B' rating category.
As of June 2019, 63% of the group's profits attributable to the
controlling shareholders were coming from locations with Negative
Outlooks (Costa Rica, Guatemala and Nicaragua).

PFC's performance benefits from its geographic diversification and
the strength of the franchise of the largest subsidiaries. Banco de
la Produccion S.A. (Banpro) in Nicaragua and Banco de la Produccion
, S.A. (Produbanco Grupo Promerica) in Ecuador stand out among the
largest private banks in their respective markets. Other operations
such as Guatemala, Costa Rica and El Salvador maintain meaningful
local franchises in consumer and credit card segments, in spite of
their smaller market shares by total assets.

Asset quality metrics remain consistent with the rating category in
spite of a deteriorating trend driven by the challenges of the
operating environment in Nicaragua, the seasoning of the consumer
and credit card portfolio and lower loan growth. As of June 2019,
consolidated 90 days past due loans accounted for 1.6% of total
loans, loan loss reserves coverage was sound at 175.4% of past due
loans, reflecting prudent regulatory guidelines in most countries
of operations.

Profitability has decreased as a result of the challenging economic
conditions in some locations, which have limited growth
opportunities and pressured delinquency rates. In Fitch's view, the
group's core profitability metric remains sensitive to further
deterioration of the operating environment driven by generally low
economic growth and political uncertainty.

Capitalization is adequate at a consolidated level. The group's
Fitch Core Capital ratio of 9.0% compares unfavorably to its peers'
reflecting lower capital generation over the past year, partly
compensated by lower asset growth. Additional loss absorption
capacity is also provided by preferred shares (The capital is 75%
tier 1) and adequate loan loss reserves coverage. The group and its
subsidiaries maintain adequate diversification by deposit type and
moderate concentrations in the bank's largest deposits. The group
also has access to other funding sources and has issued debt in the
international markets.


PFC Support Rating (SR) of '5' and Support Rating Floor (SRF) of
'NF' reflect Fitch's view that external support for the bank,
though possible, cannot be relied upon given Panama's longstanding
dollarized economy and lack of a lender of last resort.


The rating assigned to PFC's senior notes is at the same level as
PFC's Long-Term IDR, as the likelihood of default on the notes is
the same as PFC's. Despite being senior secured and unsubordinated
obligations, in Fitch's view, the shares pledged would not have a
significant impact on recovery rates. Based on the agency's
assessment of the default risk/recovery prospects, the issuance has
average recovery prospects. Fitch believes the pledged shares are
not traded and have not been rated by Fitch in its opinion on
recovery prospects.



The Rating Outlook is Negative; therefore, a rating upgrade is
unlikely. If the weaker operating environment results in a material
deterioration of the subsidiaries' financial performance,
specifically a sustained decline in PFC's Fitch Core Capital ratio
below 8%, the ratings could be downgraded. The Rating Outlook could
be revised to Stable if PFC is able to sustain its current
financial performance despite operating environment challenges.


As Panama is a dollarized country with no lender of last resort, a
change in PFC's SR or SRF is unlikely.


Senior secured debt rating would mirror any change to PFC's IDRs.


SAN MIGUEL INDUSTRIAS: Fitch Affirms BB+ LT IDR, Outlook Stable
Fitch Ratings affirmed San Miguel Industrias PET S.A.'s Long-Term
Issuer Default Rating and senior unsecured notes at 'BB+'.The
Rating Outlook is Stable. The Stable Outlook reflects Fitch's
expectation that SMI's net leverage will be below 3.5x by YE20 due
to improved EBITDA, working capital and positive FCF.


Accelerated Deleveraging Expected: Although SMI's net leverage
remains high for the rating, Fitch expects net leverage to decrease
to levels commensurate with the rating category within the next 12
months. SMI's net leverage is expected to be approximately 4.2x
(including nonrecourse factoring) in 2019 vs. 4.5x in 2018 due to
increased EBITDA fuelled by volume growth. Fitch projects EBITDA of
about US$96 million compared to US$88 million in 2018. FCF is
expected to be neutral in 2019 due to negative working capital
changes resulting from the sharp increase in resin prices of about
25% year-over-year. Fitch forecasts SMI's net leverage to decrease
towards 3.2x by YE 2020 due to organic revenues growth and the new
contracts signed in 2019 in HDPE and Thermoforming and lower capex.
Fitch expects strong cash inflow from working capital in 2020
thanks to initiatives undertaken by the company to extend payables
days with suppliers.

Capex to Moderate: Fitch expects SMI's expansionary capex to
moderate going forward after peaking in 2017 at approximately US$96
million, which would reduce FCF pressure and help the company
achieve its net deleveraging targets. Fitch projects capex to
decline to approximately US$45 million in 2019 and about US$40
million in 2020 from US$55 million in 2018 and US$96 million in
2017 as the company has completed its expansion program in the
Andean region and Central America. SMI's ratings may see negative
pressure should the company resume its aggressive expansionary
capex at the expense of hitting its deleveraging targets of below
4x by the end of 2020.

Geographic and Product Diversification: The company has diversified
its operations by expanding operations in Colombia, Ecuador and
Central America over the years. Fitch estimates that 57% of the
group's EBITDA was generated outside of Peru as of YE 2018 (Central
America, Colombia Ecuador, Mexico and Argentina). This expansion is
positive from a business risk perpective as it enables the company
to dilute cost by gaining economy of scale.This geographic and
product diversification also enables SMI to bid for international
contracts and gives it more flexibility regarding negotiations with
international suppliers

Contracted Sales: Fitch estimates that SMI's weighted average life
of contracts is above seven years with no large contract due before
2021. This long-term contracts gives predictability in terms of
cash flow generation for the upcoming years, reducing business
risk, and therefore it is positive for the rating. About 86% of
SMI's sales are based on long-term contract agreements. Fitch
estimates that preforms to remain close to 67% of container volumes
in 2019 (66% in 2018). The company has a pass-through model that
gives margin protection against price volatility in resin and
natural hedges against currency fluctuation, as equipment and
client contracts are in U.S. dollars.

Leading Position in the Region: SMI is the leading rigid plastic
company in the Andean and Central American and Caribbean regions,
with injection, blowing, cap molding, and thermoforming operations
in Peru, Colombia, Ecuador, El Salvador, Panama, Guatemala, Mexico
and Argentina. This geographical diversification is positive for
the rating as it enable SMI to become the one-stop-shop regional
suppliers with a comprehensive packaging solution which create
barriers of entry for other competitors. SMI also has recycling
operations in Peru and Colombia in line with the company aims to
develop added-value and sustainable products. The company has
significantly increased its scale and product diversification over
the past three years. Fitch expects EBITDA to reach about USD96
million in 2019, driven mainly by single-digit volume growth and
operating efficiency measures (EBITDA of US$88 million in 2018).


The 'BB+' rating reflects SMI's solid business profile as the
leading rigid plastic company in the Andean and CA&C regions, with
injection, blowing, cap molding and thermoforming operations in
Peru, Colombia, Ecuador, El Salvador, Panama, Guatemala, Mexico and
Argentina, and recycling operations in Peru and Colombia. In market
where SMI operates the company benefits from strong market share,
notably in Peru and Ecuador.

The rating factors SMI's geographic and product diversification,
its highly contracted revenues, and its pass-through model that
gives margin protection against price volatility. However, the
company is smaller than international peers such as Amcor Limited
(BBB+). Bigger size enables companies to dilute fixed costs and
reduce client and country concentration risk. SMI's client
concentration remains high with the top seven clients representing
a large part of total revenues. SMI has more than doubled its size
over the last six years. Because of its bigger size, Fitch expects
the company to get better payable terms with its suppliers. The
company's leverage is higher than Amcor at YE18.

Fitch expects SMI's net debt/EBITDA to trend toward 3.2x by 2020
thanks to increased volumes, positive FCF and reduced capex.


Fitch's Key Assumptions Within Its Rating Case for the Issuer

  - EBITDA of about U$96 million in 2019;

  - Capex of about US$45 million;

  - No dividend payments in 2019-2020.


Developments That May, Individually or Collectively, Lead to
Positive Rating Action

  -- Net leverage below 2.5x on a sustained basis;

  -- Strong FCF;

  -- Improved client diversification.

Developments That May, Individually or Collectively, Lead to
Negative Rating Action

  -- Net debt leverage above 4.0x on a sustainable basis;

  -- Non-renewal of a large supply contract or sharp contraction of


The company had cash and cash equivalents of about US$18 million
and short-term debt of USD105million as of June 2019. The
short-term debt is mainly related to working capital. The USD300
million senior unsecured notes mature in 2022. SMI is a private
company majority-owned by Nexus Group (leading private equity fund
in Peru) that is associated to Intercorp, one of Peru's largest
conglomerates. Fitch believes the Nexus Group could provide
additional support if needed.


Fitch has affirmed the following ratings:

San Miguel Industrias PET S.A

  -- Long-Term Foreign Currency IDR at 'BB+';

  -- Senior unsecured notes at 'BB+'.

The Rating Outlook is Stable.


PETROLEOS DE VENEZUELA: Guaido Proposed 90-Day Truce to Bondholders
Marianna Parraga and Corina Pons at Reuters report that Venezuela's
opposition sent holders of state oil company Petroleos de
Venezuela, S.A. (PDVSA)'s 2020 bond a proposal to suspend legal
actions for 90 days, the latest maneuver to avoid losing U.S.
refiner Citgo Petroleum, three sources familiar with the talks

The investors have not yet responded.  The bond is backed by a
50.1% stake in Citgo Holding, a PDVSA subsidiary, and the
opposition says it does not have the money to make a $913 million
payment due Oct. 28, according to Reuters.

The bondholders' ability to attempt to seize that stake if the
payment is missed gives them significant leverage compared with
other creditors, which are also pursuing Citgo's assets, the report

The proposal, known as a forbearance agreement, is one of several
concurrent strategies the board is trying to implement to save
Citgo, a major priority for Venezuelan opposition leader Juan
Guaido, who is recognized as the country's rightful president by
more than 50 countries including the United States, the report

"Our short-time goal is to stop immediate legal action from both
sides.  Then, to reach a payment agreement," one of the sources
said, adding that a forbearance deal could pave the way for more
negotiations with the bondholders, the report discloses.

The team is simultaneously focused on two other strategies, the
sources said, the report relays.  The first is to prepare a lawsuit
in a U.S. court to argue the bond's issuance was illegal because
President Nicolas Maduro did not seek the approval of the
opposition-controlled National Assembly, the report notes.  The
second is to press U.S. President Donald Trump to take executive
action to protect Citgo, the report says.

"It's not credible to ask bondholders for forbearance while calling
the PDVSA 2020 bond illegal.  I doubt the forbearance route will
succeed under the current threatening stance," said a holder in New
York, who did not want to be named because he was not authorized to
speak to the media, the report relates.

Guaido, who presides over the National Assembly, invoked the
constitution to assume a rival presidency in January, arguing
Maduro's 2018 re-election was illegitimate, the report relays.  His
appointees now control Citgo, but Maduro has retained a firm grip
on power in the OPEC nation, the report notes.

Maduro, a socialist who has overseen an economic collapse and is
accused of corruption and human rights violations, calls Guaido a
U.S. puppet seeking to oust him in a coup and "steal" Citgo, the
report discloses.

Washington sanctioned PDVSA in January as part of its push to cut
off cash flow from Maduro, in the process also freezing PDVSA's
proceeds from oil sales to U.S. customers, the report says.  It is
not clear how much money was affected, and Guaido's team has not
been able to access it to make the payment, the report relays.

Citgo's own debt covenants currently prevent it from making
dividend payments to PDVSA, meaning it cannot use its considerable
cash reserves to help the ad-hoc board pay the bond, the report

U.S. investment fund T. Rowe Price also offered to lend the
opposition the money needed to make the payment, but only if the
U.S. government eliminated an element of the sanctions preventing
U.S. funds from trading Venezuelan bonds, the report relates.

"There was expectation from some bondholders that money will show
up, but the truth is that it is not possible to fully pay in the
short term," one of the sources said, the report adds.

                            About PDVSA

Founded in 1976, Petroleos de Venezuela, S.A. (PDVSA) is the
Venezuelan state-owned oil and natural gas company, which engages
in exploration, production, refining and exporting oil as well as
exploration and production of natural gas.  It employs around
70,000 people and reported $48 billion in revenues in 2016.

As reported in Troubled Company Reporter-Latin America on June 3,
2019, Moody's Investors Service withdrew 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.

Citgo Petroleum Corporation (CITGO) is Venezuela's main foreign
asset.  CITGO is majority-owned by PDVSA.  CITGO is a United
States-based refiner, transporter and marketer of transportation
fuels, lubricants, petrochemicals and other industrial products.

However, CITGO formally cut ties with PDVSA at about February 2019
after U.S. sanctions were imposed on PDVSA.  The sanctions are
designed to curb oil revenues to the administration of President
Nicolas Maduro and support for the Juan Guaido-headed party.

VENEZUELA: Can Afford Payment to Keep Control of Citgo
Andrew Scurria at The Wall Street Journal reports that Venezuela
can afford to make a payment to bondholders, avoiding a $913
million debt default that would cost the country control of Citgo
Petroleum Corp., according to a lawyer for creditors circling the
Houston-based refiner.

Andrew Rosenberg, who represents creditors with collateral rights
over Citgo, said he believes Venezuela's U.S.-backed opposition
leaders have access to enough cash to make an upcoming payment on
bonds backed by a majority stake in the company, a Venezuelan state
asset since 1990, according to The Wall Street Journal.  But
bondholders are also drawing up plans to take over Citgo if they
aren't paid, he said, the report notes.

The report notes that the looming payment has the opposition
government led by Juan Guaido scrambling.  After taking control of
Citgo from Venezuela's ruling leftist government in February,
opposition leaders now risk losing control of the company,
considered the country's most valuable foreign asset, the report

It is also an obvious source of repayment for creditors-bondholders
that lent money to Venezuela under President Nicolas Maduro and
multinational companies that had property in the country
nationalized under his late predecessor, Hugo Chavez, the report
notes.  There isn't nearly enough of Citgo to go around, sparking a
race among creditors to lay claim to the company, the report

Off all the claimants circling Citgo, its most immediate threat is
from bondholders including Ashmore Group PLC, BlackRock Financial
Management Inc. and Contrarian Capital Management LLC that are
represented by Mr. Rosenberg and hold a 50.1% stake in the company
as collateral, the report relays.

While Venezuela has been careful so far to pay down the
Citgo-backed bonds, Mr. Guaido's parallel government has signaled
they won't be paid in full on Oct. 28, the report says.

A voluntary restructuring of the debt could avert a default, Mr.
Rosenberg said, the report notes.  Bondholders have signed
confidentiality agreements to negotiate with the opposition but
haven't reached a standstill agreement, a person familiar with the
matter said, the report discloses.  Citgo has considered bankruptcy
as one option if creditors closed in, and companies often file for
chapter 11 protection shortly before an expected foreclosure, the
report relays.  Citgo declined to comment.

After a default, the bondholders can try to foreclose on the
collateral and put the shares up for sale, which could take Citgo
out of Venezuelan control and deal a crippling blow to the
opposition movement in Caracas, the report relays.

Bondholders would appoint a board of directors consisting of
Americans to run Citgo for an interim period while the stock is put
up for auction, Mr. Rosenberg said, the report notes.  Financial
adviser Ducera Partners LLC has been hired to assist in a potential
marketing process, he said, the report relates.

The WSJ relates that after the bondholders are repaid, excess value
from the sale would return to the opposition, Mr. Rosenberg said.
He said the most likely buyer was a major U.S. oil company.

Mr. Guaido's aides have been lobbying the Trump administration to
modify U.S. sanctions on Venezuela to take away bondholders'
ability to foreclose on the shares, the report notes.  Seven mostly
Republican lawmakers have urged President Trump to order the
modification, which would shield Citgo from the consequences of
default, the report relays.

So far, the Treasury Department hasn't done so, the report notes.
Mr. Rosenberg dismissed lawmakers' concerns that Citgo would be
dismantled and sold for parts after a foreclosure, saying that
creditors have no reason to push for a liquidation because they can
only recoup what they are owed - and no more, the report

"Corporate raiders who break up companies, it's because they bought
it for $6 a share and they think they can get $9", Mr. Rosenberg
said.  "There's no possible upside to us in disrupting operations.
It's entirely fearmongering," he added.

He also said the opposition can pay bondholders either from cash
held by Citgo itself or from blocked accounts that came under Mr.
Guaido's control when the U.S. recognized him as Venezuela's
rightful leader in January, the report notes.

Other Venezuela bondholders including T. Rowe Price Group Inc. had
offered to cover the debt payment, but only if the Treasury
Department's trading restrictions on Venezuelan debt were lifted, a
person familiar with the matter said, the report relates.  The
Treasury Department has signaled it isn't inclined to lift the
restrictions, which block sales of Venezuela bonds between U.S.
entities, the report notes.

Jose Ignacio Hernandez, Mr. Guaido's attorney general, disputed
that the opposition had the resources to pay in full on Oct. 28.
Its goal is "finding a reasonable solution in an orderly and
consensual process," he said, the report relays.

The opposition-controlled National Assembly in Caracas passed a
resolution on declaring the pledge of Citgo stock by state oil
giant Petroleos de Venezuela SA to be illegal, showing the
political difficulties of dealing with debt incurred under Mr.
Maduro, the report discloses.

With U.S. support, Mr. Guaido and his allies wrested control of
Citgo's boardroom in February, severing its ties with PdVSA and
installing friendly directors, the report notes.  In August, a
Delaware judge ratified them as the company's rightful board, the
report relays.  The takeover marked a victory for the opposition,
but meant the bond payments were now its responsibility to make,
the report says.

The uncertainty surrounding Citgo underscores the difficulties in
the Trump administration's strategy of putting financial pressure
on Mr. Maduro to try to force his ouster, the report relays.  Last
year, before Mr. Guaido made his bid for Venezuela's presidency,
the Treasury Department authorized bondholders to pursue Citgo
after a default, the report notes.

Citgo has argued the policy no longer makes sense with the company
now under the control of Mr. Guaido, a U.S. ally. Mr. Maduro, who
retains control of most key state institutions in Venezuela
including the military, has accused the U.S. of "stealing" Citgo by
funneling it to the opposition, the report says.

"Citgo at this point is more than Venezuela's refiner in the U.S.,"
said Amir Richani, a risk analyst with ClipperData.  "It represents
the internal struggle of the country's politics," the report adds.

                       About Venezuela

Venezuela, officially the Bolivarian Republic of Venezuela, is a
country on the northern coast of South Ameri ca, 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

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
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Chapman, Editors.

Copyright 2019.  All rights reserved.  ISSN 1529-2746.

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