/raid1/www/Hosts/bankrupt/TCRLA_Public/191111.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, November 11, 2019, Vol. 20, No. 225
Headlines
A R G E N T I N A
ARGENTINA: To Carve Niche in Chinese Market
B R A Z I L
BANCO BMG: Fitch Affirms B+ LT IDRs & Alters Outlook to Positive
BANCO PAN: Fitch Affirms B+ LT IDRs, Outlook Stable
BRAZIL: Sells Just 1 Oil Block in Latest Disappointing Auction
ITAU UNIBANCO: Moody's Cuts Sub. Medium Term Note Rating to (P)B1
JBS SA: Grows Value-Added Offering With Marba Acquisition
D O M I N I C A N R E P U B L I C
DOMINICAN REPUBLIC: Macadamia Heralds Highlands' Agro Recovery
P U E R T O R I C O
PUERTO RICO: Eyes New Debt Policy, Will Pay Holiday Bonus
V E N E Z U E L A
VENEZUELA: Currency Has Depreciated by 97.36% So Far This Year
X X X X X X X X
[*] BOND PRICING: For the Week November 4 to November 8, 2019
- - - - -
=================
A R G E N T I N A
=================
ARGENTINA: To Carve Niche in Chinese Market
-------------------------------------------
EFE News reports that Argentina is trying to carve a niche in the
Chinese market by building a brand it has launched at the
International Import Expo in Shanghai.
"We are working to be able to enter (the Chinese market) with other
products and especially to find an identity, a brand as a country
in China that we still do not have," Argentine Minister of
Agriculture, Livestock and Fisheries Luis Miguel Etchevehere told
EFE.
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.
===========
B R A Z I L
===========
BANCO BMG: Fitch Affirms B+ LT IDRs & Alters Outlook to Positive
----------------------------------------------------------------
Fitch Ratings affirmed Banco BMG S.A.'s Viability Rating at 'b+'
and its Long-Term Foreign and Local Currency Issuer Default Ratings
at 'B+'. At the same time, Fitch upgraded BMG's Long-Term National
Rating to 'A(bra)' from 'A-(bra)' and the Short-Term National
Rating to 'F1(bra)' from 'F2(bra)' The Rating Outlook for the
long-term ratings has been revised to Positive from Stable.
KEY RATING DRIVERS
IDRs, VR AND NATIONAL RATINGS
The affirmation of BMG's IDR and the Rating Outlook revision to
Positive from Stable reflect improvements in the bank's
profitability, asset quality and liquidity, which presented a
positive trend during the last few years, trends that Fitch expects
will continue over the foreseeable future. Since national ratings
are local relativities of creditworthiness within the country, the
recent developments are commensurate with a relatively better
credit profile in the local scale, which has triggered the upgrade
of BMG's national scale ratings.
The operating profit-to-risk-weighted assets ratio improved to 3.4%
as of June 2019. Rating action also considers as high importance
factor recent improvements in the bank's company profile driven by
its sustained ability to continue to grow and generate capital from
its franchise in the payroll-backed credit card segment, which
accounts for 74% of the total portfolio and has a relatively lower
credit risk as compared to the previous business mix.
Fitch also acknowledges the expected improvement in BMG's
capitalization ratios, which follows the bank's successful IPO of
October 2019 where it raised BRL 1.2 billion in new capital. The
Fitch Core Capital ratio (FCC) at June 30, 2019 was already at a
satisfactory 14.8% up from 14.5% at YE 2018. The regulatory capital
indicator was 13.6% at June 30, 2019. With the additional capital,
(which represents a Free Float of approximately 20%), the new BIS
ratio could initially rise to slightly above 20%.
While BMG's asset quality indicators improved during 2019, the bank
still shows elevated impaired loans, especially when compared to
peers in the same rating category and considering the main product
offered by the bank. As of June 30, 2019, the BACEN D-H loans
represented 6.6% of the total loans. This is expected to improve as
the bank continues is run-off of higher risk assets and grows its
main business line of payroll-backed credit card loans.
Even before the IPO, BMG has been operating with a more comfortable
liquidity position, which was partially enhanced by securitizations
of its credit card receivables, funding from pulverized customer
deposits and the downsizing of its commercial credit portfolio. The
volume of deposits captured mainly by distributors/brokers is
increasing, and the bank has been growing its own funding platform.
Fitch also believes the bank has an adequate ALM.
SUPPORT RATING AND SUPPORT RATING FLOOR
BMG's Support Rating and Support Rating Floor are based on Fitch's
belief that the bank is not considered to be a significant
financial institution locally because of the size of its market
share in deposits and credits. Thus, it is unlikely to receive
external support from the Brazilian sovereign.
SUBORDINATED DEBT
BMG's subordinated debt is rated two notches below its VR to
reflect its subordinated status. Recovery Rating was unchanged at
'RR6' for subordinated notes, according to the agency's rating
criteria.
RATING SENSITIVITIES
IDRs, VR AND NATIONAL RATINGS
Positive rating actions can occur from a consolidation of its
business model, which would present a relevant and sustained
improvements in its operating profitability, especially if coupled
with further and sustained declines in its impaired loan ratio
(D-H) to below 5% of total loans, without deteriorating charge-offs
and foreclosed assets, and to keep its FCC ratio above 15%.
BMG's ratings could be downgraded from a sustained deterioration in
its asset quality (non-performing loans over 90 days remaining
above 8%) and weak performance (negative trend on operating
profit-to-risk-weighted assets from current levels), and/or a
deterioration in capitalization (FCC ratio falling below 12%).
SUBORDINATED DEBT
Subordinated TIER II debt ratings would generally move together
with the bank's IDR. However, Fitch's criteria factor in the
compression issue where the VR is 'bb+' or lower provides some room
for a narrower notching. Thus, BMG's subordinated notes is notched
down two degrees below the anchor rating, given that BMG's VR (B+)
is non-investment grade.
SUPPORT RATING AND SUPPORT RATING FLOOR
A potential upgrade of BMG's Support Rating and/or Support Rating
Floor is unlikely in the foreseeable future, since this would arise
only from a material gain in systemic importance.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of 3 - ESG issues are credit
neutral or have only a minimal credit impact on the entity, either
due to their nature or the way in which they are being managed by
the entity.
BANCO PAN: Fitch Affirms B+ LT IDRs, Outlook Stable
---------------------------------------------------
Fitch Ratings upgraded the Viability Rating of Banco Pan to 'b+'
from 'b', and has affirmed its Long-Term Foreign and Local Currency
Issuer Default Ratings at 'B+' and its Long-Term National rating at
'A(bra)'. The Rating Outlooks for the Long-Term IDRs and National
Rating are Stable. Fitch also affirmed Pan's Support Rating at
'4'.
The upgrade of Pan's VR mainly reflects material improvements in
its business model and profitability over the past two years. Fitch
acknowledges that the bank has demonstrated strong loan origination
capacity and has gradually reduced its reliance on funding with its
controlling shareholders, as well as reducing credit assignment
agreements, which has favored its profitability. Fitch considers
company profile as a high influence factor for the VR.
Pan's IDRs now are driven by its intrinsic strength (as reflected
by its VR) and are also underpinned by the potential support of its
co-controlling shareholders, Caixa Economica Federal (Caixa:
BB-/Stable) and Banco BTG Pactual S.A. (BTG: BB-/Stable).
KEY RATING DRIVERS
Pan's ratings continue to be influenced by its business model,
which has gradually reduced its dependence on loan sales, which has
favored its profitability and funding lines carried out by Caixa,
which went from BRL 11 billion in September 2016 to BRL 6.5 billion
in September 2019. Pan's strategy has been stable over the past
years, focusing on the payroll-deductible and financing used
vehicles, where the bank has a strong origination capacity and
track record. Similarly to other midsize banks, the bank has
recently adopted the strategy to build its digital bank, being an
additional channel for reaching its clients.
Pan's profitability has been rising in recent periods, and now are
close to its peers. ROAE stood at 10.7% in September 2019, from
5.6% at the end of 2018 and 6.1% a year earlier while the operating
profit/RWA ratio reached good 3.5% in September 2019, from 2.7% and
0.7% in 2018 and 2017 respectively. The increase in portfolio
retention given a larger capital base, previously sold to Caixa,
combined with improvements in efficiency and reduction in
provisioning expenses, resulted in improved profitability. Fitch
expects that Pan's profitability will remain in line with its peers
and better than historical figures.
Pan's asset quality indicators improved over the last periods, the
bank shows adequate impaired loans, especially when compared to
peers in the same rating category and considering the main product
offered by the bank. As of September 2019, 'D-H' loans reached
8.4%, from 9.7% and 11.3% at the end of 2018 and 2017,
respectively. At the same period, the over 90-day NPL ratio for its
core activities (payroll and vehicles) was at 5.4%, from 5.4% and
6.2%.
Pan's capitalization has been improving in recent quarters due to
the improvement on its internal capital generation. Although the
financial statements of September 2019 do not reflect the capital
increase after the follow-on, Pan's regulatory capital ratio stood
at adequate 12.8% (15.8% considering the follow-on), entirely
composed by common equity tier 1 (CET 1). Fitch no longer considers
this a short-term need but believes that, if necessary,
shareholders would support the bank with ease due to the relatively
small size of Pan compared to its controlling shareholders.
Fitch's assessment of Pan's funding and liquidity continues
positively influenced by Caixa's significant and stable support,
which it realizes by acquiring loans from Pan and interbank deposit
agreements. However, the volume of deposits captured mainly by
distributors/brokers is increasing. Pan's dependency on Caixa is
declining as part of its funding diversification and higher loan
portfolio retention following the 2018 capital injection. As of
September 2019, Caixa's representation in Pan's funding base
dropped to 29% from 54% in September 2017.
SUPPORT RATING AND SUPPORT RATING FLOOR
The affirmation of Pan's Support Rating at '4' reflects the
moderate likelihood of support from Caixa. Fitch believes that the
cost of not providing support to Pan would be greater than
providing it because of the reputational risk to the federal bank.
RATING SENSITIVITIES
Positive rating actions could occur from a consolidation and the
successful development of its business model, while Pan continues
to present relevant and sustained improvement in its operating
profitability. Also, Pan needs to sustain its other credit metrics
such as asset quality and FCC above 11%.
Pan's ratings could be downgraded by a severe deterioration in
asset quality and earnings, operating profit/RWA below 2%, and/or
deterioration in capitalization, FCC ratio falls below 10% on a
sustained basis.
Pan's National ratings may be affected by a change in Fitch's
perception of a change in local relativities to other local
issuers.
PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS
Banco Pan's Support Rating Floor considers the support of its
Shareholders (Caixa Econômica Federal and Banco BTG).
ESG CONSIDERATIONS
Banco Pan has an ESG Relevance Score of 4 for Group Structure due
to its organizational structure: Joint Venture between a
specialized bank (BTG Pactual) and a state owned bank (Caixa),
which at times has made corporate strategies difficult to implement
(such as the capital injection in 2018, which took longer than
expected).
BRAZIL: Sells Just 1 Oil Block in Latest Disappointing Auction
--------------------------------------------------------------
EFE News reports the Brazilian state oil company Petrobras and
Chinese partner CNODC were awarded a prime pre-salt block in the
second oil auction in as many days in the South American country.
Neither of the auctions met expectations, with the other four
blocks on offer not receiving a single bid, according to EFE News.
The government earned $1.26 billion from the sale of the block,
compared to expectations that proceeds would amount to $1.96
billion, the report notes.
As was the case the "mega-auction," there was no interest from
large oil multinationals that had been approved to participate, the
report notes.
The consortium, in which the Brazilian company has an 80 percent
stake and the Chinese firm has 20 percent, pledged to pay BRL5.05
billion ($1.26 billion) for licensing fees alone and offered the
Brazilian government 29.96 percent of "profit oil," or profits left
over after money is spent by the consortium to recover capital and
operational expenses, the report discloses.
That level of profit oil was the minimum required by Brazil's ANP
petroleum, natural gas and biofuels regulator, the report relays.
The lack of interest among the participants in the auction took the
Brazilian government by surprise, the report relays.
"The lack of interested parties is bad, although it doesn't change
the forecasts we'd made on investments, production increases and
tax collection," ANP director Decio Oddone said in a post-auction
press conference, the report notes.
"We have to rethink the current model that gives preference to
Petrobras and inhibits competition," he added.
Although Petrobras had said it would exercise its preemptive rights
for three of the blocks on offer, it only submitted a bid for the
largest one -- Aram, a 4,475-square-kilometer (1,728-square-mile)
block located in the Santos basin, some 300 km southeast of Santos,
Brazil, the report discloses.
Having exercised its preemptive rights (in which the state company
tells the government before each pre-salt auction if it intends to
impose its minimum 30 percent interest as a partner of the winning
consortium), Petrobras also was expected to bid for the Sudoeste de
Sagitario and Norte de Brava blocks in the Santos and Campos
basins, respectively, the report says.
But no Brazilian or international company ended up submitting a bid
for those areas, nor for the Bumerangue or Cruzeiro do Sul blocks,
the report relays.
The areas auctioned are located in the coveted, deep-water pre-salt
region, an offshore area that is so-named because its massive
reserves are located under a thick layer of salt and which is said
to have the potential to transform Brazil into the world's
fifth-largest hydrocarbons exporter, the report relates.
With the exception of CNODC, no other multinational submitted bids
in Thursday's auction even though the signing bonuses were
significantly lower, the report says.
A record 17 companies from 11 countries had been approved to
participate in the auction, although just one of the Chinese
companies submitted a bid, the report notes.
The list of participants was headed by American multinationals
Chevron, ExxonMobil and Murphy Exploration, the United Kingdom's BP
Energy and Shell and China's CNOOC and CNODC, the report relays.
Also approved to participate were Spain's Cepsa, Brazil's Enauta,
Portugal's Petrogal, Norway's Equinor, Germany's Wintershall DEA,
Qatar's QPI and Malaysia's Petronas, the report adds
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 led 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).
ITAU UNIBANCO: Moody's Cuts Sub. Medium Term Note Rating to (P)B1
-----------------------------------------------------------------
Moody's Investors Service downgraded to (P)B1, from (P)Ba3, the
provisional subordinated debt ratings under the Global Medium Term
Note program of Itau Unibanco Holding S.A. and Itau Unibanco
Holding S.A. (Cayman Islands) to reflect the correction of an error
in Moody's prior analysis. All other ratings, assessments and the
respective stable outlook on IUH and IUH Cayman's ratings were
unaffected.
The following actions were taken:
Issuer: Itau Unibanco Holding S.A.
Subordinated Medium Term Note Program provisional rating
downgraded to (P)B1 from (P)Ba3
Issuer: Itau Unibanco Holding S.A. (Cayman Islands)
Subordinated Medium Term Note Program provisional rating
downgraded to (P)B1 from (P)Ba3
RATINGS RATIONALE
The downgrade of IUH's and IUH Cayman's provisional subordinated
ratings reflects the correction of an error. The $100 billion
Global Medium Term Note Program was launched in 2010 and updated in
2016 following the implementation of Basel III rules in Brazil
(Resolution 4,192, Central Bank of Brazil), which introduced
principal write-down clauses to enhance loss absorption features on
new instruments issued under the program. The program update added
the new clauses to the terms and conditions of new Tier 2 and
Additional Tier 1 debt instruments that could be issued under the
program. Rating actions taken after 2016 on the provisional
subordinated ratings of IUH and IUH Cayman under the program,
however, did not take the added principal write-down clauses into
account. In the action, Moody's has corrected this error by
downgrading the provisional subordinated ratings assigned to IUH
and IUH Cayman under the Global MTN program to (P)B1, two notches
below Itau Unibanco S.A.'s (IU) ba2 adjusted baseline credit
assessment (adjusted BCA), to incorporate the principal write-down
clause added to the terms and conditions of the program in 2016.
This action does not affect the Ba3 subordinated debt rating
assigned to the outstanding Tier 2 subordinated notes, issued by
IUH Cayman Branch between 2010 and 2013 under Resolution 3,444. In
addition, this action does not affect any of Moody's other ratings
and assessments of IUH and IUH Cayman.
Moody's believes IUH's exposure to environmental risks is low,
consistent with its general assessment for the global banking
sector. IUH's exposure to social risks is moderate, consistent with
Moody's general assessment for the global banking sector. As well,
governance risks are largely internal rather than externally
driven. Moody's does not have any particular concerns with IUH's
governance.
WHAT COULD MOVE THE RATINGS -- UP/DOWN
The ratings of the subordinated MTN program are notched from IU's
adjusted BCA. As such, the ratings of the securities will move in
tandem with IU's adjusted BCA, which does not incorporate any
affiliate support. IU's ba2 BCA has a stable outlook and is
currently constrained by Brazil's sovereign debt rating of Ba2,
with stable outlook.
IU's BCA could be upgraded if Brazil's sovereign rating is
upgraded, and if the bank maintains strong asset quality, capital
and profitability metrics supporting a continued strengthening in
its loss-absorbing capital buffers.
Conversely, the rating assigned to the subordinate MTN program
would face downward pressure if Brazil's sovereign rating is
downgraded or if IU's asset quality, capital and profitability
weaken materially.
PRINCIPAL METHODOLOGY
The principal methodology used in these ratings was Banks published
in August 2018.
JBS SA: Grows Value-Added Offering With Marba Acquisition
---------------------------------------------------------
Global Meat News reports that red meat processor JBS SA has entered
into agreement to purchase branded and value-added protein business
Frigorifico Marba.
In a statement, the business said this acquisition is in line with
the company's strategy to increase the share of higher value-added
and branded products in its portfolio, according to Global Meat
News. With annual revenues of around R$350 million, Marba is one
of the most traditional brands of cold cuts and sausages, and a
reference in the bologna segment in the state of Sao Paulo, the
report relays.
The transaction is subject to the approval of the Brazilian
Administrative Council for Economic Defense CADE, the report
discloses.
Founded in 1961, Marba offers a variety of smoked, sliced and
jerked red meat products.JBS recently came under fire for its
changes to how it provides details of its beef sources, the report
discloses. It has also recently invested in its Ituiutaba site in
Minas Gerais, helping to create 700 new jobs in the region, the
report relays.
As reported in the Troubled Company Reporter-Latin America on Nov.
1, 2019, S&P Global Ratings raised its long-term issuer credit
ratings on Brazil-based protein processor JBS S.A. (JBS) and JBS
USA Lux S.A. to 'BB' from 'BB-'.
===================================
D O M I N I C A N R E P U B L I C
===================================
DOMINICAN REPUBLIC: Macadamia Heralds Highlands' Agro Recovery
--------------------------------------------------------------
Dominican Today reports that Oscar Cruz, Adonis Quezada and
Norberto Torres proudly teach a group of visitors how macadamia
trees grow in their plots located on the hills of Los Montones, in
the highland town, San Jose de las Matas (central).
The three joined the program "A future for La Sierra" of the
Dominican Environmental Consortium (CAD), confirming with the
results achieved to date that youth are interested in farming,
inclusion and sustainable development of their communities,
according to Dominican Today.
Officially initiated last May, one of the purposes of the program
is to "restore the ecosystems of La Sierra through the planting of
perennial and profitable crops such as macadamia, deciduous trees
with deep roots that retain water, prevent erosion of the soil,
capture CO2 and generate income that helps maintain a decent life
for producers," Cesar Rodriguez, executive director of the CAD, the
report notes.
The program is subsidized by German Cooperation -GIZ- and supported
by Macadamia La Loma, Propagas Foundation, CCN, the Ministry of
Agriculture, BONAgro, DelaCasa Pasteleria, EcoMundo and Ecoselva,
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
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).
=====================
P U E R T O R I C O
=====================
PUERTO RICO: Eyes New Debt Policy, Will Pay Holiday Bonus
---------------------------------------------------------
Luis Valentin Ortiz at Reuters reports that Puerto Rico would place
restrictions on its future debt sales under proposed legislation
that won praise from the bankrupt U.S. commonwealth's federally
created financial oversight board.
Puerto Rico's bankruptcy takes up the bulk of the island's $120
billion of debt and pension obligations and analysts have raised
questions about the island's future market access due to the
board's attempt to void some outstanding bonds, according to
Reuters.
Under legislation backed by Governor Wanda Vazquez Garced, the
Puerto Rico Fiscal Agency and Financial Advisory Authority would be
charged with developing a policy for the government and its public
corporations that sets a limit on tax-backed debt, the report
notes.
The agency would also have to approve any debt issuance, which
would be limited to maturities of no more than 30 years with
proceeds allocated for only capital improvements. Principal
payments would be required to begin within two years of issuance,
the report relays.
Debt refinancings would have to produce debt service savings
without extending maturity dates beyond those on existing bonds.
Exceptions would be made for bond refundings to address natural
disasters or emergencies, the report discloses.
"Upon the possibility and need that the government returns to
capital markets and in accordance with our public policy, this law
establishes uniform and responsible processes for any future debt
issuance," the governor said in a statement, the report relates.
The board said it welcomed a policy to prevent a repetition of
"irresponsible fiscal management and debt issuances" that led to
the island's financial crisis and subsequent 2017 bankruptcy
filing, the report notes.
The bill now heads to the legislature, where support for the
measure was unclear, the report says.
Concerns have been raised about Puerto Rico's future ability to
access the U.S. municipal market without paying a bruising penalty
given the board's contention that more than $6 billion of general
obligation bonds sold in 2012 and 2014 should be invalidated
because they breached a debt limit in the island's constitution,
the report relays.
Meanwhile, the governor and the board announced that public sector
workers will receive about $60 million in Christmas bonuses this
year, the report relays.
In July, the board said its $20.2 billion, fiscal 2020 budget for
Puerto Rico's central government would prohibit officials from
moving money around to pay for things not in the board's fiscal
plan like the bonus, which has been the subject of past spending
disputes, the report discloses.
The board said that the bonus is "part of the routine compensation
package provided to public employees," and that it worked with the
governor to identify funding to pay for it, the report adds.
About Puerto Rico
Puerto Rico is a self-governing commonwealth in association with
the United States that's facing a massive bond debt of $70 billion,
a 68% debt-to-GDP ratio and negative economic growth in nine of the
last 10 years.
The Commonwealth of Puerto Rico has sought bankruptcy protection,
aiming to restructure its massive $74 billion debt-load and $49
billion in pension obligations.
The debt restructuring petition was filed by Puerto Rico's
financial oversight board in U.S. District Court in Puerto Rico
(Case No. 17-01578) on May 3, 2017, and was made under Title III of
2016's U.S. Congressional rescue law known as the Puerto Rico
Oversight, Management, and Economic Stability Act ('PROMESA').
The Financial Oversight and Management Board later commenced Title
III cases for the Puerto Rico Sales Tax Financing Corporation
(COFINA) on May 5, 2017, and the Employees Retirement System (ERS)
and the Puerto Rico Highways and Transportation Authority (HTA) on
May 21, 2017. On July 2, 2017, a Title III case was commenced for
the Puerto Rico Electric Power Authority ("PREPA").
U.S. Chief Justice John Roberts has appointed U.S. District Judge
Laura Taylor Swain to oversee the Title III cases. The Honorable
Judith Dein, a United States Magistrate Judge for the District of
Massachusetts, has been designated to preside over matters that may
be referred to her by Judge Swain, including discovery disputes,
and management of other pretrial proceedings.
Joint administration of the Title III cases, under Lead Case No.
17-3283, was granted on June 29, 2017.
The Oversight Board has hired as advisors, Proskauer Rose LLP and
O'Neill & Borges LLC as legal counsel, McKinsey & Co. as strategic
consultant, Citigroup Global Markets, as municipal investment
banker, and Ernst & Young, as financial advisor.
Martin J. Bienenstock, Esq., Scott K. Rutsky, Esq., and Philip M.
Abelson, Esq., of Proskauer Rose; and Hermann D. Bauer, Esq., at
O'Neill & Borges are on-board as attorneys.
McKinsey & Co. is the Board's strategic consultant, Ernst & Young
is the Board's financial advisor, and Citigroup Global Markets Inc.
is the Board's municipal investment banker.
Prime Clerk LLC is the claims and noticing agent. Prime Clerk
maintains a case web site at
https://cases.primeclerk.com/puertorico
Epiq Bankruptcy Solutions LLC is the service agent for ERS, HTA,
and PREPA.
O'Melveny & Myers LLP is counsel to the Commonwealth's Puerto Rico
Fiscal Agency and Financial Advisory Authority (AAFAF), the agency
responsible for negotiations with bondholders.
The Oversight Board named Professor Nancy B. Rapoport as fee
examiner and to chair a committee to review professionals' fees.
Bondholders' Attorneys
Kramer Levin Naftalis & Frankel LLP and Toro, Colon, Mullet, Rivera
& Sifre, P.S.C. and serve as counsel to the Mutual Fund Group,
comprised of mutual funds managed by Oppenheimer Funds, Inc., and
the First Puerto Rico Family of Funds, which collectively hold over
$4.4 billion of GO Bonds, COFINA Bonds, and other bonds issued by
Puerto Rico and other instrumentalities.
White & Case LLP and Lopez Sanchez & Pirillo LLC represent the UBS
Family of Funds and the Puerto Rico Family of Funds, which hold
$613.3 million in COFINA bonds.
Paul, Weiss, Rifkind, Wharton & Garrison LLP, Robbins, Russell,
Englert, Orseck, Untereiner & Sauber LLP, and Jimenez, Graffam &
Lausell are co-counsel to the ad hoc group of General Obligation
Bondholders, comprised of Aurelius Capital Management, LP, Autonomy
Capital (Jersey) LP, FCO Advisors LP, and Monarch Alternative
Capital LP.
Quinn Emanuel Urquhart & Sullivan, LLP and Reichard & Escalera are
co-counsel to the ad hoc coalition of holders of senior bonds
issued by COFINA, comprised of at least 30 institutional holders,
including Canyon Capital Advisors LLC and Varde Investment
Partners, L.P.
Correa Acevedo & Abesada Law Offices, P.S.C., is counsel to Canyon
Capital Advisors, LLC, River Canyon Fund Management, LLC, Davidson
Kempner Capital Management LP, OZ Management, LP, and OZ
Management
II LP (the QTCB Noteholder Group).
Committees
The U.S. Trustee formed an official committee of retirees and an
official committee of unsecured creditors of the Commonwealth. The
Retiree Committee tapped Jenner & Block LLP and Bennazar, Garcia &
Milian, C.S.P., as its attorneys. The Creditors Committee tapped
Paul Hastings LLP and O'Neill & Gilmore LLC as counsel.
=================
V E N E Z U E L A
=================
VENEZUELA: Currency Has Depreciated by 97.36% So Far This Year
--------------------------------------------------------------
EFE News reports that the Venezuelan currency, the bolivar, has
depreciated by 97.36 percent so far in 2019.
On Nov. 7, the bolivar stood at 24,228.33 bolivars per dollar,
compared to 638.18 bolivars to the US currency on Jan. 2, according
to the Central Bank of Venezuela (BCV), the report relays.
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
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 November 4 to November 8, 2019
-------------------------------------------------------------
Issuer Name Cpn Price Maturity Country Curr
----------- --- ----- -------- ------- ---
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
KrisEnergy Ltd 4.0 40.4 6/9/2022 SG SGD
Noble Holding Internat 5.3 60.5 3/15/2042 KY USD
AES Tiete Energia SA 6.8 1.2 4/15/2024 BR BRL
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
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
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
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
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
MIE Holdings Corp 7.5 56.2 4/25/2019 HK USD
Enel Americas SA 5.8 32.7 6/15/2022 CL CLP
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
Argentine Republic Gov 8.3 72.9 12/31/2033 AR USD
MIE Holdings Corp 7.5 56.2 4/25/2019 HK USD
China Huiyuan Juice Gr 6.5 46.6 8/16/2020 CN USD
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
YPF SA 16.5 67.3 5/9/2022 AR ARS
Provincia del Chubut A 4.5 2208 3/30/2021 AR 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
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 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
*********
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 * * *