TCRLA_Public/191113.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

          Wednesday, November 13, 2019, Vol. 20, No. 227

                           Headlines



A R G E N T I N A

ARGENTINA: Economists Predict Higher Inflation in First Bank Poll
ARGENTINA: Shale Trove Risks Staying Buried, Oil Chiefs Say


B R A Z I L

BANCO BS2: Fitch Affirms B+ Issuer Default Ratings, Outlook Stable
BRAZIL: Financial Market Inflation Estimate Rose, Now at 3.31%
ENERGEST SA: Moody's Withdraws Ba2 Issuer Rating
LINHA AMARELA: Moody's Cuts Global Scale Sr. Sec. Debt to B3


C O S T A   R I C A

BANCO NACIONAL DE COSTA RICA: Fitch Affirms B+ IDRs, Outlook Neg.
BANCO POPULAR: Fitch Affirms B+ LT IDRs, Outlook Negative


D O M I N I C A N   R E P U B L I C

DOMINICAN REPUBLIC: Banks Are Lagging Behind the Digital Race
DOMINICAN REPUBLIC: Political Component Drives Farm Goods Prices


N I C A R A G U A

NICARAGUA: S&P Alters Outlook to Negative & Affirms 'B-/B' SCRs


P U E R T O   R I C O

CUSTOMED INC: Santander, FirstBank Puerto to Vote vs. Plan

                           - - - - -


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A R G E N T I N A
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ARGENTINA: Economists Predict Higher Inflation in First Bank Poll
-----------------------------------------------------------------
Jorge Otaola at Reuters reports that Argentine economists predicted
a worsening recession and a slightly higher inflation forecast of
just under 56% in a central bank monthly poll of analysts released,
the first since the victory of leftist Peronist candidate Alberto
Fernandez in the country's presidential election.

Inflation was seen at 55.6% for the year, up from 54.9% in the same
central bank poll last month, according to Reuters.  It will ease
to 42.9% by 2020, slightly higher than the previous prediction,
according to the survey of 45 analysts, the report notes.

Gross domestic product was forecast to shrink 3.0% this year, the
poll said, versus 2.9% in the previous month's survey, the report
discloses.

The prediction comes just over a week since the government imposed
stricter currency controls to defend the peso currency following
Fernandez's defeat over business-friendly incumbent Mauricio Macri
on Oct. 27, the report says.

Reuters relays that markets are watching closely for any signals
from Fernandez on future economic policies or how he will approach
negotiations for the restructuring of some $100 billion in
sovereign debt.

Fernandez, while visiting Mexico on his first foreign trip as
President-elect, said that Argentina's debt in a problem that must
be resolved, the report adds.

                      About Argentina

Argentina is a country located mostly in the southern half of South
America.  It's capital is Buenos Aires. Alberto Angel Fernandez is
the President-elect of Argentina after winning the October 2019
general election. He succeeded Mauricio Macri in the position.

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.

ARGENTINA: Shale Trove Risks Staying Buried, Oil Chiefs Say
-----------------------------------------------------------
Jonathan Gilbert at Bloomberg News reports that drillers in
Argentina are scared that interventionist economic policies will
foil the world's next big shale hope.

Investments had been picking up in Vaca Muerta, a Maryland-sized
shale formation in Patagonia that could turn the troubled nation
into a global energy provider, according to Bloomberg News.  But
that was before leftist Alberto Fernandez won the presidential
election last month, Bloomberg News relates.  He takes office in
four weeks.

Bloomberg News discloses now oil explorers are in the lurch,
wondering whether Fernandez will embrace some of the free-market
policies that outgoing President Mauricio Macri has championed.
After all, Fernandez and Vice President-elect Cristina Fernandez
campaigned on regulating energy markets, Bloomberg News says.
"This is a crunch moment," German Macchi, Argentina manager for
Pluspetrol SA, said at a conference last week in the port city of
Mar del Plata, Bloomberg News says.  "We're waiting for clarity to
continue," he added.

In the past, strictly regulated prices thwarted oil exploration and
weighed on the economy in the long term, said Jose Gabriel Lopez,
deputy minister for energy, mining and hydrocarbons in Neuquen
province, the epicenter of Vaca Muerta drilling, Bloomberg News
relays.

                               Fenced In

Oil executives at the conference said they were particularly
concerned about how Fernandez will manage the broader economy,
Bloomberg News notes.  That's because if he reels in Macri's
business-oriented reforms -- by limiting exports, tightening
currency controls, or antagonizing creditors -- that would cripple
their ability to tap capital markets, Bloomberg News says.

"If we're fenced in by country risk, this type of development won't
be possible," said Danny Massacese, chief operating officer for Pan
American Energy, Argentina's largest privately run driller,
Bloomberg News relays.

High country risk may be especially troublesome for pipeline
companies like Transportadora Gas del Norte SA that will require
outside financing to build the 650-mile (1,050-kilometer) conduit
needed to haul Vaca Muerta output to markets. It's unclear whether
Fernandez will pursue the tender, Bloomberg News discloses.

"The opportunity is now," said Daniel Ridelener, TGN's chief
executive officer, Bloomberg News relays.  "If we sleep on this for
10 years, it'll be too late," he added.

                            Change History

Political uncertainty comes at a time when oil companies in
Argentina seeking to replicate the success of the U.S shale boom
are already suffering from crude price caps, Bloomberg News notes.
The caps were put in place by Macri in August to tame inflation in
a failed, last-ditch bid to win re-election, Bloomberg News says.
Drilling has consequently slowed in Vaca Muerta, emphasizing the
need for consistent policies under the next government, Bloomberg
News discloses.

"Vaca Muerta can change the course of history for Argentina," said
Ricardo Markous, a top executive at Tecpetrol SA, a unit of the
Techint Group that's spent $2 billion on producing shale gas over
the past two years, Bloomberg News notes.  "The rock is there. We
need clear, steady rules of play," he added.

                      About Argentina

Argentina is a country located mostly in the southern half of South
America.  It's capital is Buenos Aires. Alberto Angel Fernandez is
the President-elect of Argentina after winning the October 2019
general election. He succeeded Mauricio Macri in the position.

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.



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B R A Z I L
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BANCO BS2: Fitch Affirms B+ Issuer Default Ratings, Outlook Stable
------------------------------------------------------------------
Fitch Ratings affirmed Banco BS2 S.A.'s Long-Term Foreign and Local
Currency Issuer Default Ratings at 'B+' and Viability Rating at
'b+'. At the same time, Fitch upgraded BS2's Long-Term and
Short-Term National Ratings to 'BBB+(bra)'/'F2(bra)' from
'BBB(bra)'/'F3(bra)'. The Rating Outlooks for the Long-Term IDRs
and National Scale Ratings are Stable.

The upgrade of BS2's National Ratings reflect Fitch's view on the
bank's ongoing efforts over the last years to consolidate its
different business lines in a service-oriented platform that is
expected to lead the bank to a better diversified revenues
composition in the medium term among domestic peers.

KEY RATING DRIVERS

KEY RATING DRIVERS

VR, IDRs, NATIONAL RATINGS

BS2's VR and IDRs are highly influenced by its company profile. It
primarily reflects the challenges inherent to the development of
its new business lines, as well as by the pressures on
profitability and regulatory capital ratios by the ongoing growth
of assets, despite successive capital injections made over the last
two years.

BS2 strategy is to become a service-oriented digital business hub,
providing both own and third-party products to its customer base
through partnerships. In early 2019, BS2 launched its own digital
platform for both individuals and SME clients. At the same time,
the bank continues to expand in other areas. Currently, BS2 also
operates with judicial securities issued by Brazil's federal and
states governments (Precatorios), SME lending, foreign exchange and
acquiring operations. A good part of BS2's business units have been
performing well and are already contributing to bank profitability.
However, other segments benefits (especially those linked to its
digital strategy) will likely come in the medium term, as the bank
gains scale and its new businesses are more relevant to its
results. Fitch notes that BS2's digital platform implementation has
required material investments throughout 2019. As any other entity
opening a new business strategy, BS2 is exposed to potential
regulatory and/or operational risks, which may reduce as its new
businesses' evolves and consolidates.

Fitch also positively factors BS2's strategy on revenue
diversification through fee products, which has brought higher and
more diverse revenues (that tend to be more stable along the
cycles) while requires less capital, allowing the expansion of its
credit activities. BS2's profitability during 2019 was pressured,
operating profit/risk-weighted assets ratio stood at weak 0.16% as
of 1H19 and 2.8% in 1H18. Weaker results in 2019 reflect the
substantial investments and expenses derived from the development
and launch - including marketing and staff - of BS2's digital
platform.

Despite the modest results in 2019, Fitch expects that BS2's trend
in results, observed during 2017 and 2018, will return in 2020,
despite still slightly lower than in previous years given the
upfront costs that are necessary in its digital effort.

BS2 continues to post good asset quality ratios, consolidated loan
portfolio (which include receivables) classified as 'D-H' ratings
reached 2.6% in June 2019, from to 2.3% at the end of 2018, while
non-performing loans (NPLs) represented a low level of 0.7% of the
total portfolio on both periods which is better than the average of
its peers, benefited by the strong growth of the portfolio of
receivables. Fitch notes that the maintenance of rapid loan growth
pose some risks. At the same time, given the successive capital
injections, 10 largest loan exposures to Core Equity Tier 1 (CET1)
has considerably fell over the last two year, now representing 1.4x
the CET1 , from 2.2x in June 2018 and 3.2x in June 2017.

BS2's capitalization ratios have remained adequate, even
considering the strong growth of assets in recent years. Over the
last 18-24 months, shareholders injected, through the holding,
BRL245 million - last injection occurred in September 2019 and
totaled BRL 100 million, to support the pace of growth of the
bank's operations. In June 2019, the FCC ratio rose to 11.4% from
10.3% and 10.2% at the end of 2018 and 2017 - CET1 ratio of 11.2%,
9.6% and 9.5% respectively, while total regulatory capital reached
12.8% from 11.5% and 13.1%. Considering the last injection, CET1
and total regulatory would be close to adequate 12.5% and 14.6%,
respectively. Although the capital injections increased BS2's
capital position, its reported FCC and CET1 level are still below
the average of other midsize banks.

The bank's funding profile has been focused on its institutional
investors and later on brokerage agreements, which, in turn,
distribute BS2's funding products to its retail customers through
its own platforms. BS2 digital platform is another step towards
funding diversification, which Fitch considers to have potential to
become relevant in the medium term. Despite the greater
diversification of investors, with granularity on the final end of
the brokerage companies, BS2 still shows concentrations in specific
dealers. Its liquidity remained strong and well above its
short-term needs, cash totaled BRL1.1 billion in June 2019,
covering high 1.9x of its funding with maturities of less than one
year, BRL716 million and 0.9x in June 2018.

SUPPORT RATING AND SUPPORT RATING FLOOR

BS2's Support Rating of '5' and its Support Rating Floor of 'No
Floor' were affirmed, reflecting the bank's low systemic
importance. In Fitch's view, the bank is not likely to benefit from
external support.

RATING SENSITIVITIES

IDRs, VR and NATIONAL RATINGS

Although unlikely in the short term, BS2's ratings could arise from
the consolidation of its business model and a significant
improvement in its franchise, together with the ability to maintain
its risk appetite under control, while posting adequate and
consistent financial metrics in the upcoming years. BS2's ratings
could be downgraded if the bank does not achieve its operational
breakeven point during 2020 and/or its FCC and/or CET1 ratios fall
to a level below 10%.

SUPPORT RATING AND SUPPORT RATING FLOOR

A potential upgrade of BS2's Support Rating and Support Rating
Floor is unlikely in the foreseeable future, since this would only
arise from a material gain in the bank's 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.

BRAZIL: Financial Market Inflation Estimate Rose, Now at 3.31%
--------------------------------------------------------------
Adele Cardin at Rio Times Online reports that the forecast for
inflation, calculated weekly using the Broad National Consumer
Price Index (IPCA), rose from 3.29 to 3.31 percent.

There has been no change in the forecasts for the following years:
3.60 percent in 2020, 3.75 percent in 2021, and 3.50 percent in
2022, according to Rio Times Online.

These are estimates from a survey of financial institutions,
prepared weekly by the Central Bank (BC), the report relays.

                           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).

ENERGEST SA: Moody's Withdraws Ba2 Issuer Rating
------------------------------------------------
Moody's America Latina Ltda. withdrawn Energest S.A.'s Ba2/Aa2.br
issuer ratings. Prior to the withdrawal, the outlook on the rating
was stable.

The following ratings were withdrawn:

Issuer: Energest S.A.

Issuer Ratings: Ba2 (Global Scale Rating), Aa2.br (National Scale
Rating)

RATINGS RATIONALE

Moody's has decided to withdraw the ratings for its own business
reasons.

Energest, a wholly owned subsidiary of EDP - Energias do Brasil
S.A. (Ba2/Aa2.br stable), is a hydro generation company with an
installed capacity of 198 megawatts (MW; 134.8 MW of assured
energy) consisting of a single hydropower plant, UHE Mascarenhas,
located between the states of Espirito Santo and Minas Gerais (B2
stable). The concession was granted in July 1995 for 30 years and
will expire in July 2025, subject to a 20-year renewal depending on
regulatory approvals. In 2018, Energest posted consolidated net
sales of BRL283 million and a net income of BRL127 million.

LINHA AMARELA: Moody's Cuts Global Scale Sr. Sec. Debt to B3
------------------------------------------------------------
Moody's America Latina Ltda. downgraded the ratings assigned to
Linha Amarela S.A.'s senior secured debentures to B3 from B1 on the
global scale and to Ba3.br from Baa1.br the national scale rating.
The ratings remain under review for further downgrade. These
actions are related to the ratings' review process initiated on
October 29, 2019.

Downgrades:

Issuer: Linha Amarela S.A. (Linha Amarela)

Senior Secured Regular Bond/Debenture: to B3 from B1 (global scale)
and to Ba3.br from Baa1.br (national scale rating), kept under
review for further downgrade

Outlook, kept under review for downgrade

RATING RATIONALE

The downgrade of Linha Amarela's ratings was prompted by the
disruption of its normal toll road operations following recent
actions taken by the government of the Municipality of Rio de
Janeiro (Ba3 stable) seeking to terminate its concession
agreement.

On Nov. 5, the Rio de Janeiro's city council approved a municipal
law supporting the takeover of Linha Amarela's concession. After
that, municipal servers backed by the city police, proceeded with
another intervention at the concessionaire to suspend toll
collections. This was the fifth incident to disrupt the normal toll
road operations time since December 2018.

The law approved by the city council considered auditing procedures
on the concessionaire's economic equilibrium that were concluded in
July 2019. Those reports identified that the pricing of
construction works executed from 2010 through 2012 were above that
of the reference cost list adopted by the municipality and that
actual traffic volumes exceeded the initial forecast, leading the
internal rate of return for the concession being higher than the
10.90% per year defined in the concession agreement for eventual
adjustments in the economic-financial equilibrium. As a result, the
municipality claims that there is an economic imbalance of BRL1.65
billion in favor of the city to justify taking over the concession
without payment of the indemnification to the concessionaire
provided in the contractual agreement.

Throughout the disputes with municipality, Linha Amarela has been
able to suspend or revert in court the adverse actions on the
concession. Moody's notes that the contractual provisions and its
numerous amendments comprise robust legal provisions in favor of
the concessionaire. However, Moody's considers that the risk of
further interventions remains elevated, which leaves the company
greatly exposed to a material deterioration of its financial
metrics and its ability to continue servicing its obligations on
time. Additionally, Moody's sees the concessionaire increasingly
exposed to social risks, while the current toll rates are under
dispute in face of the real or perceived quality of service to a
road that is located in a region that still suffers from the
negative impact of the most recent economic recession, such as high
unemployment rate and lower income, and elevated urban violence,
which can prompt other demonstrations challenging the company's
reputation, regardless of their legal rights to enforce the current
contract agreement.

A continuing dispute with the concession authority will continue to
affect Linha Amarela's liquidity, with potential contagious risk to
the overall credit profile of its parent company INVEPAR, as well
as and its sister company Concessao Metroviaria do Rio de Janeiro
S/A (MetroRio; B3/Ba3.br ratings under review for downgrade) due to
existing cross default provisions within its debt arrangements. In
the absence of revenues from toll collections, Moody's estimates
that the company has a cash availability that covers less than
three months of debt service and operating and maintenance costs.

WHAT COULD CHANGE THE RATING UP/DOWN

The review process will focus on Linha Amarela's ability to quickly
reinstate normal tolling operations and mitigate financial losses
in order to maintain adequate liquidity cushion to support its debt
service. In addition, the review will follow the evolution of the
ongoing dispute with the concession authority and the possibility
that Linha Amarela loses its concession without adequate
compensation or renegotiates the concession agreement with the
granting authority at unfavorable terms. Failure to reestablish
normal operations or any adverse judicial resolution will most
likely result in another downgrade. A reversal of the downgrade is
unlikely at this time, but stabilization of the outlook will be
considered if there is a constructive resolution to the dispute
around the terms of the concession agreement that supports the
solid financial profile for Linha Amarela to continue to service
its debt on time.

Linha Amarela S.A. (Linha Amarela) has the concession to operate
the toll road services of a 17.4 km urban route in the City of Rio
de Janeiro, Brazil. The concession was granted by the Municipality
of Rio de Janeiro (Ba3, stable) in 1994, and toll road operation
started in 1998, for a 25-year period. On May 14, 2010, LAMSA
signed an amendment to its concession contract, whereby the
Municipality of Rio de Janeiro (the Granting Authority) granted a
15-year extension of the Concession, until December 2037. In the
last twelve months ended June 30, 2019, Linha Amarela reported net
revenues (excluding construction revenues) of BRL275 million and
net profit of BRL109 million.

Linha Amarela is wholly owned by Investimentos e Participacoes em
Infraestrutura S.A. - INVEPAR (INVEPAR, unrated), a holding company
controlled by three of the largest Brazilian pension funds (PREVI,
FUNCEF and PETROS) and the FIP Yosemite.

The principal methodology used in these ratings was Privately
Managed Toll Roads published in October 2017.



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C O S T A   R I C A
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BANCO NACIONAL DE COSTA RICA: Fitch Affirms B+ IDRs, Outlook Neg.
-----------------------------------------------------------------
Fitch Ratings affirmed the Long- and Short-Term Foreign and Local
Currency Issuer Default Ratings of Banco Nacional de Costa Rica at
'B+' and 'B', respectively. The Rating Outlook for the Long-Term
Rating is Negative. In addition, Fitch has affirmed BNCR's
Viability Rating at 'b+', National Scale Ratings at 'AA+(cri)' and
'F1+(cri)'.

The Negative Outlook on BNCR's Long-Term Foreign and Local Currency
IDRs is aligned with Costa Rica's sovereign ratings due to its
policy role and high strategic importance for the government. The
Negative Outlook highlights the downside potential from a sovereign
downgrade.

KEY RATING DRIVERS

IDRs, NATIONAL RATINGS AND DEBT

BNCR's IDRs, national ratings and senior unsecured debt ratings,
both in the local and international market, are based on the
potential support the bank would receive from the Costa Rican
government (rated B+/Negative Outlook). The bank's IDRs are aligned
with the sovereign and reflect BNCR's explicit guarantee stated in
the National Banking System Law and complete ownership by the Costa
Rican government. According to the law, the Costa Rican government
is responsible for all unsubordinated liabilities of the
state-owned banks in the event of the banks' liquidation. In
addition, Fitch's support assessment considers the high and
long-lasting policy role, which would be difficult to transfer, and
the systemic importance of the bank for the Costa Rican
government.

VIABILITY RATING (VR)

In Fitch's opinion, BNCR's VR is highly influenced by the operating
environment and its company profile, which is marked by a strong
franchise and consistent business model as reflected in its
financial performance. BNCR's has leading franchise in terms of
loan portfolio and customer deposits, reasonable asset quality,
profitability improving, appropriate capitalization levels and
solid funding profile.

BNCR is the largest bank in Costa Rica and benefits from its solid
franchise, occupying the first position in terms of assets and
loans, with a market share of 27.0% and 20.8%, respectively as of
first half of 2019 (1H19). In Fitch's view this places the bank as
a systemically important entity.

Fitch believes BNCR's asset quality is reasonable. The NPL ratio
(+90 days past due) showed an increasing trend from 2016 to 2018,
but stabilizing in 3.3% at 1H19, which reflects the actions taken
by the institution to control asset quality deterioration; however,
this compares negatively with the industry (average 2015-1H19:
2.1%). The agency expects the NPLs ratio to remain in similar level
of 1H19.

As of 1H19, the bank's profitability improved after exhibiting a
downward trend in past years. Fitch expects the positive trajectory
to continue in the medium term due to better operating efficiency
and other initiatives. The operating profit to risk-weighted assets
(RWA) ratio was 1.6% at June 2019 from 0.7% in 2018 (2016: 1.7%);
although this contrast negatively with some peers.

According to Fitch, the bank's capital levels are appropriate. The
Fitch Core Capital (FCC) to RWA ratio averaged 12.4% from 2015 to
2017. However, in 2018 the ratio went down to 11.5%, and at 1H19 it
reversed the trend to reach 12.5%, which was driven by the measures
taken by the entity to continue strengthening its equity position,
as well as by a small reduction of the RWA due to the contraction
of the loan portfolio.

The agency believes BNCR's funding structure is solid, supported by
its robust franchise and sovereign support. The bank has an ample
and stable deposit base, with the highest market share in customer
deposits, accounting 82.9% of the total funding as of June 2019. In
addition, the entity has relationships with diverse national and
global institutions, which generates additional financing
alternatives. At the same date, the loans to customer deposits
ratio was 86.8% (industry: 98.1%), the best among Costa Rican
banks.

SUPPORT RATING (SR) AND SUPPORT RATING FLOOR (SRF)

BNCR's SR of '4' and the SRF of 'B+' reflect the limited
probability of support from the Costa Rican government and reflect
the current ability of the sovereign to support the bank. This
despite the bank's important policy role as the largest bank in
Costa Rica with a market share in deposits of 28.3% on average and
the full guarantee it has from the sovereign.

SENIOR UNSECURED DEBT

BNCR's senior unsecured debt is rated at the same level of the
bank's rating in both international and local scales, as the
likelihood of default on the debt is the same as BNCR's. In
accordance with Fitch's rating criteria, the recovery prospects in
the event of a default of the senior unsecured debt of BNCR is
average and is reflected in a Recovery Rating of 'RR4'.

RATING SENSITIVITIES

IDRs, SR AND SRF

Any changes in Costa Rica's Sovereign rating may trigger similar
movements in BNCR's IDRs, SR and SRF. In Fitch's opinion, the
bank's ratings will likely remain aligned with Costa Rica's
sovereign rating, considering the sovereign guarantee.

VR

The bank's VR is sensitive to Costa Rica's sovereign rating or
material weakening of the operating environment. Additionally, the
VR could be downgraded by a material deterioration of asset quality
and profitability affecting the FCC to RWA ratio consistently below
9%. Upside potential could only occur in the event of a sovereign
upgrade, since this rating is already at the sovereign level.

NATIONAL RATINGS

BNCR's Long-Term National Rating has a Stable Outlook as this
reflect the relative strength of the sovereign compared to other
issuers rated in Costa Rica. BNCR's national ratings are subject to
changes in the ability of the Costa Rican State to provide support.
Movements in the sovereign rating would not necessarily affect
national ratings, since these are relative ratings of
creditworthiness within a particular jurisdiction.

SENIOR UNSECURED DEBT

The bank's senior unsecured debt would mirror any potential change
in the BNCR's International and National Scale Ratings.

SUMMARY OF FINANCIAL ADJUSTMENTS

Pre-paid expenses, guarantee deposits, constructions in process and
other deferred assets were reclassified as intangibles and deducted
from Fitch Core Capital or tangible equity because of their low
loss absorption capacity. Impaired Loans were adjusted to reflect
only loans that are overdue by 90 days or more to be consistent
with Fitch's criteria and global industry practices. Recoveries
from write-offs were reclassified as non-operating income.

PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS

BNCR's ratings are based on the potential support the bank would
receive from the Costa Rican government (rated 'B+/Negative
Outlook'). The bank's IDRs are aligned with the sovereign and
reflect BNCR's explicit guarantee stated in the National Banking
System Law and complete ownership by the Costa Rican government.

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.

BNCR has ESG Relevance Scores of '4' for Governance Structure Issue
driven by its State ownership that could potentially influence the
business model and financial performance of the bank due to the
government's plans and incentives.

BANCO POPULAR: Fitch Affirms B+ LT IDRs, Outlook Negative
---------------------------------------------------------
Fitch Ratings affirmed Banco Popular y de Desarrollo Comunal's
Long-Term Foreign and Local Currency Issuer Default Ratings at
'B+'. The Rating Outlook is Negative. Fitch has also affirmed the
bank's Short-Term Foreign and Local Currency IDRs at 'B' and its
Viability Rating at 'b+'.

KEY RATING DRIVERS

IDRs, VR, National Ratings and Senior Debt

BPDC's IDRs and National ratings are driven by its intrinsic
creditworthiness, as reflected in its VR. The bank's VR and IDRs
are highly influenced by the operating environment and the bank's
company profile, given its public nature and the benefits conferred
by its constitutive law. The ratings also consider, with moderate
importance, their higher risk appetite relative to its peers due to
its focus to retail segment sector, the controlled asset quality,
the high levels of capitalization ratios and the reasonable
profitability levels.

The bank's ratings are at the same level as Costa Rica sovereign
rating (B+/Negative), reflecting the high influence of the
operating environment on the bank's financial performance. BPDC's
ratings and Outlook highlights downside potential from a sovereign
downgrade. Also BPDC's ratings reflect the challenges that the
operating environment exerts on the entity, limiting growth and
profitability prospects for the bank.

BPDC's company profile and business model support its financial
performance. The bank, by its public nature, has benefits granted
by law, such as mandatory capitalization. It also collects savings
and mandatory contributions from all workers and employers in Costa
Rica, as established by Law. In Fitch's view, the bank has a
systemic importance reflected in its role in the pension regime as
the depositary of mandatory savings from Costa Rican workers, as
well as by its relatively relevant local franchise. BPDC is the
fourth largest bank in Costa Rica by assets with a market share of
14% total assets and nearly 11.2% of public deposits as of June
2019.

Fitch believes the bank's risk appetite within Costa Rica's current
economic condition could pressure asset quality and other financial
metrics over the next 12 months. Despite the fact that the bank has
demonstrated a higher-than-peers risk appetite due to its
retail-oriented business model with higher sensitivity to an
economic downturn, the bank has demonstrated the ability to control
asset quality deterioration.

The bank's capitalization levels are sound and consistently above
local peers. As of June 2019, the Fitch Core Capital to Risk
Weighted Asset (RWA) ratio was 29.8%, benefiting from the
advantages granted by its founding law. The agency estimates that
the bank's capitalization will remain at sound levels, allowing it
to maintain a solid loss absorption capacity.

Asset quality metrics are adequate in Fitch's view, in light of the
bank's retail nature. Its 90 days past-due ratio of 2.4%, as of
June 2019, showed a slight deterioration, but remains below its
closest peers (2.6%). The ratio reflects the bank's efforts to
improve the effectiveness of its collection mechanisms, along with
more conservative credit policies and the calibration of scoring
models. The sufficient reserve coverage for non-performing loans
(NPLs) also is considered in the agency's asset quality
assessment.

As of June 2019, BPDC's profitability compares favorably with the
average of the banking system, despite an adverse environment that
constrains profit generation. The operating profit to RWA was 1.7%
(average for 2018-2015 of 1.5%). Fitch estimates that profitability
would maintain a similar level to that observed as the bank
continues to focus on stronger NIM generation, improving
efficiency, while maintaining stable asset quality.

Client deposits are the main source of funding for the bank and
this source has showed stability over the economic cycle. BPDC's
liquidity and funding profile compares unfavorably with that shown
by its peers as reflected in ratio of loans to customer deposits of
131% (System average: 98%) and less diversified funding structure.

Support Rating (SR) and Support Rating Floor (SRF)

The bank's SR of '4' and SRF of 'B' reflect the limited probability
of support from the Costa Rican government and the sovereign's
current ability to support the bank. This is despite the bank's
public nature and its law benefits, as well as its systemic
importance.

RATING SENSITIVITIES

IDRs, VR, National Ratings and Senior Debt

BPDC's IDRs and VR are sensitive to Costa Rica's sovereign rating
or material weakening of the operating environment. Changes in
company profile that diminish the advantages granted by law would
put pressure on the bank's international and national ratings.
Additionally, the VR could be downgraded by a material
deterioration of asset quality, specifically if the banks show a
NPL ratio consistently above 3.5%.

Potential upgrades of BPDC's IDRs and VR are unlikely in the
foreseeable future.

Changes triggered by movements in the sovereign rating would not
affect National ratings in Costa Rica, as this would not alter
local relativities.

The bank's senior debt would reflect any change in BPDC's national
ratings.

SR and SRF

BPDC's SRF is also sensitive to changes in the sovereign rating.
Fitch's base case scenario anticipates BPDC maintaining its current
systemic importance and company profile and, therefore, changes to
the SR are not likely.

SUMMARY OF FINANCIAL ADJUSTMENTS

All intangible assets and were deducted from FCC since the agency
considers these to have low capacity to absorb losses. Recoveries
from write-offs were reclassified as non-operating income.

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.



===================================
D O M I N I C A N   R E P U B L I C
===================================

DOMINICAN REPUBLIC: Banks Are Lagging Behind the Digital Race
-------------------------------------------------------------
Dominican Today reports that in the Dominican Republic, long lines
are still plaguing banking entities because these don't allow some
processes to be totally digital.

For the former Chief Executive Officer of Google for Spain and
Portugal, Isabel Aguilera, this is because the banks have a
"protective legislation" that prevents them from being the focus of
their digital strategies, according to Dominican Today.

"Currently, the financial ecosystem is beginning to open with new
tools and many customers are leaning towards those other ways of
doing business," said Aguilera, who gave a conference during the IN
2019 Event, the report notes.

Quoted by Listin Diario, Aguilera believes that the big banks have
incorporated some digital practices into their daily routine in the
face of the demands that citizens are requiring, but to further
promote technology, some risks, investments and change the culture
of people and entrepreneurs must be overcome, 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).

DOMINICAN REPUBLIC: Political Component Drives Farm Goods Prices
----------------------------------------------------------------
Dominican Today reports that Agriculture Minister Osmar Benitez
disclosed that the massive sale of farm products at popular prices
will be expanded starting this week.

Since the end of October, agriculture, along with other agencies,
initiated a plan to sell plantains and bananas at low prices to
counter an upward trend, according to Dominican Today.

The report notes that Benitez said the program, in some 25
neighborhoods of Santo Domingo, will be expanded to 50
neighborhoods, adding cassava, sweet potatoes, chickens and eggs,
at RD$3 each.

Through this initiative, plantains are being sold between RD$5.50
and RD$7, and bananas for RD$2, the report relays.  "This measure
has helped stabilize the price of these supplies downwards," he
added.

"That program is going to double now. From today we will make that
effort," the report notes.

                               Politicized

Benitez added that the increase in prices of some farm products has
a "political component," the report discloses.

As proof of this, he said that, according to statement by
producers, there were people who were buying plantains for as much
as RD$16 when they were selling costing RD$12, the report notes.

                   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).



=================
N I C A R A G U A
=================

NICARAGUA: S&P Alters Outlook to Negative & Affirms 'B-/B' SCRs
---------------------------------------------------------------
S&P Global Ratings, on Nov. 8, 2019, revised its outlook on
Nicaragua to stable from negative. At the same time, S&P affirmed
its 'B-/B' long-term and short-term foreign and local currency
sovereign credit ratings. S&P also affirmed its 'B-' transfer and
convertibility (T&C) assessment.

Outlook

The stable outlook balances the recent stabilization of liquidity
and continuing access to domestic and external funding for the
government with enduring political uncertainty, a severe economic
contraction, and important weaknesses in the financial sector. S&P
expects that the government will implement additional adjustments
to monetary and fiscal policy, if needed, to prevent a further
erosion of liquidity in the financial system and potential loss of
foreign exchange reserves.

S&P said, "We could lower the rating in the next 12-24 months if
Nicaragua's access to domestic and external financing deteriorates
again, or if worsening political dynamics further strain the
exchange rate, undermining domestic confidence and damaging the
domestic financial system.

"We could raise the ratings over the same period if political and
policy developments raise investor confidence, reverse the recent
contraction in GDP, and improve access to funding the country's
fiscal deficit and debt service payments. A clear track record of
strengthening economic and fiscal results and improvement in
Nicaragua's external liquidity on a sustainable basis could lead to
an upgrade."

Rationale

S&P said, "The outlook revision reflects our view that Nicaragua's
fiscal and financial profiles are likely to stabilize following a
notable deterioration in the aftermath of the April 2018 political
and social conflict. The government has reduced its fiscal deficit,
thanks to higher taxes introduced in March 2019 and substantial
spending control measures. Nicaragua has maintained access to
external financing while current account balances have shifted to
surplus as a result of a collapse in imports and steady remittances
inflows, temporarily abating balance-of-payment pressures.

"While sizable downside risks remain, mainly related to the severe
economic contraction and continued political impasse, we believe
the likelihood of them materializing is now lower.

"Our ratings are supported by Nicaragua's moderate net general
government debt burden and authorities' commitment to undertake
sharp adjustment measures to stabilize the negative financial and
economic impact of the political conflict that erupted in 2018.
Conversely, Nicaragua's low per capita GDP, its narrow and
concentrated economic base, and its limited monetary policy
flexibility weigh on the ratings. In addition, the ratings are
constrained by its institutional challenges. Lasting political
deadlock prevents a more rapid economic recovery as business sector
confidence remains low and hurts investment and GDP growth
prospects.

Flexibility and performance profile: External liquidity pressures
abate on shift to current account surpluses and continued access to
external loans

-- The general government deficit should narrow this year,
stemming from consolidation efforts.

-- S&P believes Nicaragua will record current account surpluses in
2019-2020, reflecting continuing import compression and steady
remittances inflows.

-- International reserves have stabilized, reducing pressures on
the crawling peg regime.

Given uncertainties regarding future access to domestic and
external financing, the government has carried out fiscal
consolidation to narrow its fiscal deficit as the economy
contracted sharply. A tax reform implemented in March 2019 helped
to raise revenue significantly while wage freezes, cuts in capital
spending, and lower transfers to municipalities have resulted in
reduced spending. S&P expects Nicaragua's fiscal position to
strengthen as the government will run smaller-than-expected
deficits in 2019 and 2020 of 1.8% and 2.1% of GDP, respectively.

S&P said, "Our general government deficit calculation includes the
social security system (INSS), which provides pensions and other
services to workers in the formal sector and has run growing
deficits since 2013. The government introduced a social security
reform in February 2019, which included a rise in contribution
rates. The impact of this measure was partially offset by the
increase in unemployment. We estimate the INSS deficit around 0.8%
of GDP in 2019. In addition, the government has committed to pay a
debt to INSS, arising from arrears accumulated on the nonpayment of
the contribution required on the total wage bill, through annual
installments. In 2019-2020, this payment will amount to around
US$110 million.

"We assume fiscal imbalances will increase slightly as current
spending will rise related to the general election scheduled for
2021. In our opinion, Nicaragua's shortfall in basic services and
infrastructure limits the room to significantly reduce capital
spending. The change in net general government debt is likely to
average 2.6% of GDP in the coming three years, although we see
risks of additional debt stemming from potential quasi-fiscal
activities.

"Although Nicaragua has fewer options to finance its fiscal
deficits than before the crisis, we expect the government to be
able to close its financing gap. The government has historically
relied heavily on multilateral funding. It is increasingly relying
on non-concessional lending from multilateral institutions and
other sources. Local political developments and economic sanctions
from the U.S. government have restricted the approval of new loans
from IDB and the World Bank, except for loans meant for
humanitarian needs. The Central American Bank for Economic
Integration (CABEI) has recently signed new loan commitments worth
US$585 million with the government of Nicaragua."

In its draft 2020 budget, the government assumes it will receive
around US$364 million in external loans. On the domestic front,
sales of Nicaraguan Treasury bonds to the private sector have
accelerated in recent months, boosted by high local interest rates.
The government is aiming to issue around US$140 million in 2020 of
Treasury bonds with maturities of one year and six years.

S&P said, "We expect Nicaragua's net general government debt to
increase to 41.7% of GDP in 2019 and to continue to rise over the
next three years to around 45% of GDP in 2022. All of the general
government debt is denominated in foreign currency, making it
vulnerable to abrupt changes in the exchange rate. Although, a
large portion is under concessionary terms. Official creditors
account for 99% of external amortization payments in the coming two
to three years, serving to contain rollover risk. We project
interest payments on the debt to remain below 5% of general
government revenues in 2019-2022."

S&P includes the moderate contingent liabilities stemming from the
domestic banking system in our fiscal assessment.

The high liquidity and capitalization of financial institutions
prior to the political crisis, along with subsequent policy
measures to contain the negative fallout of the crisis, have helped
contain the damage to the financial system. The bank regulator and
the central bank took measures--including debt restructuring for
households and small businesses, temporary suspension of the
countercyclical provision fund, and reduction of the reserve
requirements in local currency--to support the banking system.

Since April 2018, deposits in the financial system fell by around
32%, the largest amount being deposits in dollars. They have
stabilized since the second quarter of 2019, and deposits in local
currency increased for the first time (since the political crisis
began in 2018) in August.

The recent events forced banks to curtail lending to maintain
liquidity. Bank loans fell 24% year over year in August 2019. The
liquidity ratio is at a record high, around 46% in August 2019.
Reported nonperforming loans (NPLs) were around 3% at the end of
August, while those at risk of entering default were another 10%.
Moreover, reported bank profitability has deteriorated, falling 47%
year over year in August, because of lower financial income and
higher provisions. The central bank has access to a US$200 million
revolving credit line, made available by CABEI, for liquidity
management purposes.

S&P said, "Our assessment of Nicaragua's monetary flexibility
reflects the country's crawling peg exchange-rate regime, a high
level of dollarization (deposits and loans denominated in U.S.
dollars), and a small domestic capital market that limits the
effectiveness of monetary policy. Since Nov. 1, 2019, the central
bank adjusted the peg so that the nominal value of the córdoba
will depreciate by 3% annually (compared with 5% previously). This
change should ease inflationary pressures, partly compensating the
increase in prices caused by recent higher taxes.

"We now expect inflation of 5% at year-end 2019. Given weak demand,
inflation should fall to around 4% in 2020-2022. In our opinion,
monetary policy transmission channels are weak because of high risk
aversion in the domestic market, low exchange-rate flexibility,
high dollarization in the financial system, and significant
liquidity held by banks."

The current account balance showed a surplus of 0.6% of GDP in
2018, as opposed to its historical deficit position, on a much
lower trade deficit (12.5% of GDP in 2018 compared with 18% of GDP
in 2017). As of April 2019, the trade deficit narrowed by 40%
annually as imports declined 22%, reflecting sluggish domestic
demand. This largely offset the 6% fall in exports (mainly stemming
from a deterioration in prices for coffee, gold, meat, and sugar).

In addition, the service balance surplus has narrowed because of
the decline in tourism activity, a booming sector before the
outbreak of the crisis. During the period, remittances inflows
(close to 12% of GDP) increased steadily, around 10% annually. S&P
expects the current account balance, which largely reflects
movements on the trade balance, to remain in surplus in the next
three years, at 3% of GDP on average. S&P assumes a narrowing
surplus after 2020 as domestic demand should gradually improve.

Foreign direct investment (FDI) inflows collapsed 53% year over
year in 2018 and 70% during first-quarter 2019. S&P sid, "We expect
FDI to remain weak since investors' confidence will take time to
recover. We expect Nicaragua's gross external financing needs to
average 98% of current account receipts (CARs) and usable reserves
for 2019-2022, below previous years' levels."

The combination of current account surpluses, a reduction in
deposits withdrawals in dollars, and continued access to official
lending has resulted in a stabilization of international reserves.
This stabilization alleviates pressures on the crawling peg regime.
International reserves totaled US$2.3 billion in August 2019,
unchanged compared to December 2018.

S&P's external assessment considers that a deterioration in
investors' and official lenders' sentiment renders Nicaragua
vulnerable to a marked deterioration in external financing
conditions.

Projected at 115% of CAR in 2019, narrow net external debt is
relatively high, despite substantial debt relief in earlier years
under various multilateral initiatives. Private-sector external
debt accounts for just over one-half of total external debt. Debt
owed to Venezuela under the PetroCaribe program (likely the largest
component of private-sector external debt) is classified as
private-sector debt and does not have a sovereign guarantee.
Meanwhile, external debt of state-owned enterprises, worth 0.7% of
CAR, does carry a government guarantee. All government external
debt is with official (bilateral or multilateral) creditors.

S&P's assessment of Nicaragua's external risks reflects
still-sizable shortcomings in data on the country's balance of
payments.

Institutional and economic profile: Very slow economic recovery
expected amid seriously damaged business confidence

-- S&P now expects the economy to contract by 5% in 2019 and 1% in
2020, underpinned by weak consumption, investment, and exports.

-- Economic growth is projected to recover slowly in 2021-2022 but
will remain vulnerable to political developments

-- In S&P's view, political risks remain high. Elections are
currently scheduled for November 2021.

Nicaragua continues to struggle with a political crisis that began
in April 2018 and was triggered by a controversial reform of the
social security system. Protests and conflict reached their highest
point during May-July 2018 and have abated since then, but the
political situation remains at an impasse. President Daniel Ortega
of the governing Sandinista Party, now in his third consecutive
term (2016-2021), has consolidated political power. Despite various
efforts by external mediators, there has not been any meaningful
negotiations between the government and opposition forces, or with
the organized private sector. Since the outbreak of the crisis, the
rule of law has eroded, further damaging business confidence.

S&P said, "In the absence of a negotiated resolution, we expect the
executive branch will continue to dominate decision-making, with
few checks and balances in place. The risk of additional sanctions
from the international community will remain.

"We expect economic growth to remain subdued over the next two to
three years, far below the strong pace in the years preceding the
crisis. Nicaragua's growth prospects are now below those of other
countries at a similar stage of development, in our view. We expect
GDP to contract by 5% in 2019, equivalent to a reduction of 6% in
per capita terms. The tax reform and the double-digit fall in
banking credit have had a severe effect on large segments of the
economy in 2019. Falling investment is currently the largest driver
of economic contraction. Private consumption, affected by the loss
of around 20% of jobs in the formal sector since April 2018, and
exports also contribute negatively to growth.

"We project GDP to decline by another 1% in 2020. Assuming
political and economic conditions gradually return to normal, we
expect a return to positive growth from 2021 onward. GDP per capita
is projected at US$1,906 in 2019."

In addition, economic reports are released with important delays
(particularly tourism, public finances, trade, economic activity,
and employment reports), deepening the sentiment of mistrust among
the private sector.

In accordance with S&P's relevant policies and procedures, the
Rating Committee was composed of analysts that are qualified to
vote in the committee, with sufficient experience to convey the
appropriate level of knowledge and understanding of the methodology
applicable. At the onset of the committee, the chair confirmed that
the information provided to the Rating Committee by the primary
analyst had been distributed in a timely manner and was sufficient
for Committee members to make an informed decision.

After the primary analyst gave opening remarks and explained the
recommendation, the Committee discussed key rating factors and
critical issues in accordance with the relevant criteria.
Qualitative and quantitative risk factors were considered and
discussed, looking at track-record and forecasts.

The committee's assessment of the key rating factors is reflected
in the Ratings Score Snapshot above.

The chair ensured every voting member was given the opportunity to
articulate his/her opinion. The chair or designee reviewed the
draft report to ensure consistency with the Committee decision. The
views and the decision of the rating committee are summarized in
the above rationale and outlook. The weighting of all rating
factors is described in the methodology used in this rating
action.

  Ratings List

  Ratings Affirmed; Outlook Action  
                                 To              From
  Nicaragua

   Sovereign Credit Rating  B-/Stable/B     B-/Negative/B

  Ratings Affirmed
  
  Nicaragua

   Transfer & Convertibility
   Assessment                    B-



=====================
P U E R T O   R I C O
=====================

CUSTOMED INC: Santander, FirstBank Puerto to Vote vs. Plan
----------------------------------------------------------
Secured creditor Banco Santander Puerto Rico objects to the
approval of Joint Disclosure Statement for the Joint Plan of
Reorganization filed by Puerto Rico Hospital Supply, Inc. and
Customed, Inc.

According to Santander, The Debtors' proposed Disclosure Statement
cannot be approved by the Court because it fails to comply with the
requirement of adequate information under Section 1125 of the
Bankruptcy Code and the proposed Plan is unconfirmable as it
violates multiple provisions of Section 1129 of the Code.

According to Santander, the Disclosure Statement contains
insufficient and misleading information regarding Santander's
collateral and the availability of such collateral as the principal
means of funding the proposed Plan.  The Disclosure Statement fails
to disclose to creditors that the proceeds received by Debtors from
any awards or judgments entered against Johnson & Johnson
International, Inc. are part of Santander's collateral.

Santander avers that the Debtors' principal and sole stockholder
cannot be legally entitled to retain his equity interest in the
Debtors while Santander is paid 62% of its claims and unsecured
creditors stand to receive a mere 5% of their claims.  As a result,
the proposed plan runs afoul of the Absolute Priority Rule and
makes it patently unconfirmable.  Santander and FirstBank Puerto
Rico will vote against the Debtors' proposed Plan.

The Disclosure Statement, Santander claims, fails to explain the
source of the $1,000,000 that Debtors' shareholder will provide
and should clarify whether these funds will come from the payments
of more than $1 million that upon belief Mr. Santos received during
the 90 days before the filing of the Bankruptcy Petition. There is
no information supporting the financial capacity of Mr. Santos to
provide the funds that are both required for the proposed DIP
Financing and compliance with the payments to creditors as per the
projections.

According to Santander, the Plan fails to comply with the absolute
priority rule under 11 U.S.C. Sec. 1129(b)(2)(B) inasmuch as
general unsecured creditors will receive just a 5% distribution,
whereas the Debtors' principal (e.g., equity) will retain their
ownership in Debtors.

Banco Santander is represented by:

         O'NEILL & BORGES, LLC
         Hermann D. Bauer
         Ubaldo M. Fernandez
         Martha L. Acevedo-Peruela
         Gabriel A. Miranda
         250 Munoz Rivera Avenue, Suite 800
         San Juan, Puerto Rico 00918-1813
         Tel: (787) 764-8181
         Fax: (787) 753-8944
         E-mail: hermann.bauer@oneillborges.com
                 ubaldo.fernandez@oneillborges.com
                 martha.acevedo@oneillborges.com
                 gabriel.miranda@oneillborges.com

                 About Puerto Rico Hospital Supply

Puerto Rico Hospital Supply, Inc., distributes medical supplies in
Puerto Rico.  Customed Inc., founded in 1991, manufactures surgical
appliances and supplies.

Puerto Rico Hospital Supply, Inc., and Customed, Inc., filed
voluntary Chapter 11 petitions (Bankr. D.P.R. Case Nos. 19-01022
and 19-01023) on Feb. 26, 2019.  The petitions were signed by Felix
B. Santos, president.  At the time of the filing, Puerto Rico
Hospital was estimated to have $50 million to $100 million in
assets and $10 million to $100 million in liabilities while
Customed Inc. was estimated to have $10 million to $50 million in
both assets and liabilities.

The cases are assigned to Judge Enrique S. Lamoutte Inclan.  

Alexis Fuentes Hernandez, Esq., at Fuentes Law Offices, represents
the Debtors.


                           *********


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.

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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 * * *