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

          Thursday, November 28, 2019, Vol. 20, No. 238



ARGENTINA: President-Elect Plans to Hold Debt Talks with IMF


SEADRILL LTD: John Fredriksen Steps Down as Chairman

C A Y M A N   I S L A N D S

BANCO BTG PACTUAL: S&P Rates New Senior Unsecured Notes 'BB-'
BANCO BTG: Moody's Puts Ba2 Rating to Proposed USD Sr. Unsec. Notes
CARDINAL HOLDINGS 3: S&P Downgrades ICR to 'B-', Outlook Stable


DIGICEL GROUP: Earnings Dip for July to September Quarter


MEXARREND SAPI: S&P Places 'BB-' ICR on Watch Negative
MEXICO: Current Administration May Speed Up Plans for Tax Overhaul


PERU LNG: S&P Cuts ICR to BB+ on Slower-Than-Expected Deleveraging

                           - - - - -


ARGENTINA: President-Elect Plans to Hold Debt Talks with IMF
Juan Pablo Spinetto at Bloomberg News reports that Argentina's
President-elect Alberto Fernandez plans to hold debt negotiations
with private bondholders and the International Monetary Fund at the
same time as part of a strategy to obtain a better deal, according
to a person with direct knowledge of the matter.

According to Bloomberg, the person said Mr. Fernandez's incoming
government considers that holding simultaneous, yet separate, talks
is likely to give Argentina more bargaining power, as well as the
ability to adjust proposals on both ends.

The negotiations are set to begin after Mr. Fernandez takes office
Dec. 10, the person, as cited by Bloomberg, said who asked not to
be identified because the plans are not yet public.

The talks come after an August bond rout and a devaluation made the
country's debt load even harder to meet, Bloomberg notes.  The
current government of Mauricio Macri said it would seek to push out
maturities on as much as US$101 billion of debt, including payouts
from a record loan from the International Monetary Fund, Bloomberg
discloses.  Credit-default swaps imply a 96% probability of
non-payment in the next five years, with most sovereign bonds
trading around 40 cents on the dollar, Bloomberg states.  Mr.
Fernandez has said he doesn't want to default on debt, but can't
meet obligations under current conditions, Bloomberg relates.

Mr. Fernandez, who won the presidency in a first round in October,
held his first call with new IMF Managing Director Kristalina
Georgieva last week and told her that he has a plan to grow the
economy and tackle the nation's debt but that he won't impose more
austerity measures on the population, Bloomberg recounts.

                         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.

Back in July 2014, Argentina defaulted on some of its debt, after
expiration of a 30-day grace period on a US$539 million interest
payment.  The country hasn't been able to access international
credit markets since its US$95 billion default 13 years ago.  On
March 30, 2016, Argentina's Congress passed a bill that will allow
the government to repay holders of debt that the South American
country defaulted on in 2001, including a group of litigating hedge
funds that won judgments in a New York court.  The bill passed by
a vote of 54-16.


SEADRILL LTD: John Fredriksen Steps Down as Chairman
Mikael Holter at Bloomberg News reports that billionaire John
Fredriksen stepped down as chairman of Seadrill Ltd., raising the
question of whether he could become less supportive of an
offshore-rig company struggling with high debt.

Mr. Fredriksen was instrumental in pulling Seadrill through a
massive restructuring by injecting fresh cash, but the company
remains the most leveraged offshore driller and is getting little
help from a sluggish market recovery, Bloomberg notes.

The company also reported a third-quarter loss marked by
impairments on a debt-laden subsidiary, Bloomberg relates.

According to Bloomberg, Carnegie AS analyst Frederik Lunde said
Seadrill will probably need to restructure again, and it's not
clear what role Mr. Fredriksen might play then.

A more than 90% drop since the company emerged from bankruptcy
protection last year suggests investors aren't convinced that the
postponement of almost US$6 billion in bank debt will be enough to
pull through a market slump that has been much longer than most
expected, Bloomberg states.

Mr. Fredriksen will be succeeded by Glen Ole Rodland, who has 25
years in the shipping and oil industries and currently heads the
board at Prosafe SE, Bloomberg discloses.

                     About Seadrill Ltd.

Seadrill Limited is a deepwater drilling contractor providing
drilling services to the oil and gas industry.  It is
incorporated in Bermuda and managed from London.  Seadrill and
its affiliates own or lease 51 drilling rigs, which represents
more than 6% of the world fleet.

On Sept. 12, 2017, Seadrill Limited and 85 affiliated debtors each
filed a voluntary petition for relief
under Chapter 11 of the United States Bankruptcy Code (Bankr. S.D.
Tex. Lead Case No. 17-60079) after reaching terms of a
reorganization plan that would restructure $8 billion of funded

Together with the chapter 11 proceedings, Seadrill, North
Atlantic Drilling Limited ("NADL") and Sevan Drilling Limited
("Sevan") commenced liquidation proceedings in Bermuda to appoint
joint provisional liquidators and facilitate recognition and
implementation of the transactions contemplated by the RSA and
Investment Agreement.

On July 2, 2018, Seadrill emerged from U.S. Chapter 11 bankruptcy
protection. Seadrill also commenced dissolution proceedings in
Bermuda in accordance with the confirmed Chapter 11 Plan.

C A Y M A N   I S L A N D S

BANCO BTG PACTUAL: S&P Rates New Senior Unsecured Notes 'BB-'
S&P Global Ratings assigned its 'BB-' issue-level rating on Banco
BTG Pactual S.A. - Cayman Branch's proposed senior unsecured notes
of $500 million - $1 billion due 2025. The issuance is part of the
bank's $5 billion global medium-term notes program. The parent,
Banco BTG Pactual S.A. ("BTG Pactual"), will use the proceeds
primarily for general corporate purposes.

S&P said, "Our rating on the proposed notes reflects their pari
passu ranking with the bank's other senior unsecured debt
obligations. As a result, the rating is the same as the long-term
issuer credit rating on BTG Pactual. The notes will constitute
2.5%-4.5% of the bank's total funding base. In our view, this
issuance doesn't change our view of the bank's funding profile and
this doesn't increase refinancing risk.

"Our issuer credit ratings on BTG Pactual reflect its leading
position as the largest investment bank in Latin America with a
diversified revenue profile, as well as its stable earnings,
adequate liquidity, and conservative capital management. The bank's
substantial exposure to volatility in capital markets and its
reliance on wholesale funding, which we consider more
confidence-sensitive than a retail funding base, are negative
rating factors."

BTG Pactual has been strengthening its franchise, more recently by
creating a tech-enabled retail unit, which will consolidate all of
the bank's retail businesses including BTG's digital platform,
Banco Pan S.A., and its insurance unit. Through this platform, the
bank intends to offer services to individuals and medium-size
enterprises by combining all products in one unit. In addition, the
bank has one of the largest wealth and asset management business in
Latin America, which generates stable fee earnings to help offset
the volatility that can occur in its capital markets business.
However, the bank has a higher exposure to the volatility of sales,
trading, and investment banking compared with commercial banks,
many of which are difficult to model and predict.

  Ratings List

  New Rating
  Banco BTG Pactual S.A. - Cayman Branch

  Senior Unsecured    BB-

BANCO BTG: Moody's Puts Ba2 Rating to Proposed USD Sr. Unsec. Notes
Moody's Investors Service assigned a Ba2 foreign currency debt
rating to the proposed USD-denominated senior unsecured notes to be
issued by Banco BTG Pactual S.A., Grand Cayman Branch (BTG
Pactual). The notes will be issued under the existing $5 billion
Global Medium Term Note Program, rated (P)Ba2, and will be due in
2025. The outlook on the rating is stable.


Issuer: Banco BTG Pactual S.A., Grand Cayman Branch

Foreign Currency Senior Unsecured Debt Rating, Ba2


The rating agency explained that the foreign currency senior
unsecured debt rating derives from Banco BTG Pactual S.A.'s Ba2
global local currency deposit rating, which, in turn, reflects the
bank's baseline credit assessment (BCA) of ba2. The rating does not
benefit from any uplift from systemic support considerations
because of the bank's modest share of the deposits market in

Banco BTG Pactual S.A.'s ba2 baseline credit assessment (BCA)
incorporates the bank's strong profitability, which is in line with
the system's average, resulting from the consistent expansion into
business segments that generate recurring earnings, including asset
and wealth management activities. These segments reported
record-high growth rates in the past twelve months ended September
2019. For the first nine months of 2019, BTG Pactual reported net
income of 2.1% relative to tangible assets supported by more
favorable credit risk conditions as well as investors' appetite for
new investment options as interest rates remain low in Brazil.

While sales and trading accounted for 36% of BTG Pactual's total
revenues and more volatile earnings from principal investment
contributed to 12%, the bank's consolidated position in the
investment banking segment in Brazil has supported its performance,
particularly in the third quarter, with an increase of 51% in
September 2019, accounting for 13% of earnings in the third

BTG Pactual's capitalization, measured as tangible common equity as
a proportion of risk weighted assets (TCE/RWA), remained high at
11.2%, supported by internal earnings retention, and despite a
robust growth of assets on and off its balance sheet. The problem
loan ratio has remained low, at just 0.13% in September 2019, but
as a corporate lender, BTG Pactual tends to build long-term and
large single loans, exposing the bank to concentration risks.

Moody's believes BTG Pactual's exposure to environmental risks is
low, consistent with its general assessment for the global banking
sector. The bank'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 BTG
Pactual's governance. Nonetheless, corporate governance remains a
key credit consideration and requires continuous monitoring.


The Ba2 rating assigned to BTG Pactual's senior unsecured notes is
unlikely to face upward pressure, as the bank's adjusted BCA, which
is the anchor credit risk assessment for the instrument rating, is
currently at the same level of the Ba2 sovereign rating, which
carries a stable outlook.

Conversely, the rating could be downgraded if Brazil's sovereign
rating is downgraded, or if rapid loan growth leads to a sharp
increase in asset risk for BTG Pactual or if the bank's tangible
common equity ratio drops sharply. Downward rating pressure could
also be triggered by weakening liquidity which could increase the
bank's intrinsic vulnerability to its institutional-based funding


The principal methodology used in this rating was Banks Methodology
published in November 2019.

Banco BTG Pactual S.A. is headquartered in Sao Paulo, and had
consolidated assets in the amount of BRL168 billion and
shareholders' equity of BRL20.8 billion as of September 30, 2019.

CARDINAL HOLDINGS 3: S&P Downgrades ICR to 'B-', Outlook Stable
S&P Global Ratings lowered to 'B-' from 'B' the long-term issuer
credit ratings on Cardinal Holdings 3, LP and its finance
subsidiary Cardinal US Holdings Inc. and the issue ratings on the
senior secured facilities. The recovery rating on these facilities
remains unchanged at '3'.

S&P said, "The downgrades reflect Cardinal Holdings' weaker trading
performance year-to-date compared to our prior base-case forecasts
and our downward revision of our expectations for 2020, which lead
us to forecast materially weaker credit metrics for the group on an
ongoing basis."

Market conditions have been challenging in 2019 for management
consultancy firms servicing the financial services end market, due
to lower interest rates than expected and significant macro risks,
resulting in banks and other financial institutions showing greater
caution when committing to consultancy work following the turbulent
conditions in the financial markets toward the end of 2018 and
early 2019. As a result, Capco endured a slower-than-expected start
to the year, as lower levels of work were assigned than the group
had expected. These lower activity levels, coupled with the group's
decision to continue investment in growing its capability, resulted
in reported EBITDA of about $10 million (after deducting
restructuring and one-off costs) for the first half of 2019. Given
the seasonality in business, in which the group generates more than
two-thirds of annual EBITDA in the second half of the year, S&P
previously expected a greater recovery in activity than is evident
from the group's recent third-quarter results.

For the first nine months of 2019, Cardinal Holdings reported
EBITDA of about $29 million (after deducting restructuring and
one-off costs), which is roughly the same as in 2018. S&P said, "We
anticipate materially lower restructuring and one-off costs for the
full year, and forecast about $20 million of such costs in 2019
compared with about $45 million in 2018. However, we do not
consider that this reduction, and the addition of trading in the
fourth quarter, traditionally the strongest quarter, will be
sufficient to meet our previous full-year EBITDA forecasts for 2019
(of $77 million-$80 million on a reported basis or $87 million-$90
million on an S&P Global Ratings-adjusted basis)."

S&P said, "We now expect Cardinal Holdings to generate adjusted
EBITDA of about $60 million-$63 million in 2019, partly driven by
an anticipated year-on-year decline in revenues, alongside the
aforementioned higher costs related to investment in capability,
and our assumptions of full-year one-off costs of about $20
million. We take a cautious view of revenue development in 2020 due
to our expectation of a weakened macroeconomic outlook. However,
given Cardinal Holdings' expectation of underlying strong market
fundamentals, we expect adjusted EBITDA to improve beyond $75
million in 2020, as we expect minimal legacy costs relating to the
carve-out of the business from Fidelity National Information
Services (FIS). At these levels, the group's adjusted debt to
EBITDA would be close to 10x in 2019, and about 7.5x-7.7x in 2020."
S&P considers the group's adjusted debt to comprise:

-- About $245 million of senior secured term loans;
-- About $22 million of drawings under the senior secured
revolving credit facility (RCF);
-- About $271 million of preference shares that we consider to be
-- About $50 million of liabilities relating to non-cancellable
operating leases and pensions; and
-- $14 million of other debt.

S&P said, "We consider the group's preference shares to be
debt-like in nature as the terms and conditions provide that, where
the group has sufficient liquidity, management can decide to pay
cash dividends, or elect to pay in kind. On electing to pay in
kind, however, the group must extend a loan to the holders to cover
the tax implications of their dividends, which can be offset
against future cash payments. As a result, we consider that the
shares, while subordinated, will cause a consistent, periodic cash
outflow, even when management elects to capitalize the dividends.
We consider this akin to an interest payment, and therefore treat
it as such.

"Since the group has elected to make cash payments in the majority
of the quarters to date, we forecast that it will distribute
approximately $30 million per year in relation to the shares,
resulting in an adjusted interest expense of approximately $50
million per year. With our current operating expectations, we would
therefore expect the group to generate negative free operating cash
flow (FOCF) in excess of $35 million in 2019, improving to zero or
marginally negative in 2020, with funds from operations (FFO) cash
interest coverage below 1.5x. Credit metrics at these levels are
consistent with our previous downside scenario.

"The stable outlook reflects our expectation that the group's
ability to generate FOCF will recover in 2020, but with debt to
EBITDA in excess of 7x and FFO cash interest coverage below 2x.

"We could take a negative rating action if the group's operating
performance does not materially improve from 2019 levels in the
next 12 months and the group continues to elect to pay cash
dividends on its preference shares such that we expected the group
to continue to generate negative FOCF for the foreseeable future.
We could also take a negative rating action if liquidity became

"We could take a positive rating action if we expected that a
sustained improvement in operating performance would lead to
sustained positive FOCF, alongside debt to EBITDA and FFO cash
interest coverage sustained at less than 7x and greater than 2x,

Cardinal Holdings 3 LP is the ultimate holding company for the
group of companies that collectively form Capco, a global
management and technology consultancy serving the financial
services and energy industries. In 2018, the share of group
revenues by business line was as follows: Business Advisory: 38%;
Digital: 30%; Risk and Compliance: 20%; and Technology Solutions:

In 2017, the group's activities were carved out from FIS, with 60%
sold to financial sponsor Clayton, Dubilier and Rice. The remaining
40% is held by FIS and management.


DIGICEL GROUP: Earnings Dip for July to September Quarter
RJR News reports that on the heels of ratings agency Fitch warning
that Digicel faces imminent refinancing risk and will likely have
to restructure its 2021 bonds, news has emerged that the
telecommunications company saw its earnings dip in the three months
to the end of September.

RJR News, citing the Irish Times newspaper, relates that a slump in
the value of currencies in some of its main markets against the US
dollar offset an underlying improvement in revenues.

Despite this, Digicel bonds edged slightly higher on Nov. 25 as
investors took comfort from an improving business trend, excluding
foreign-exchange-rate effects, with data revenues continuing to
grow strongly, having overtaken flagging mobile voice revenues late
last year, RJR News says.

According to RJR News, sources said earnings before interest, tax,
depreciation and amortisation declined by one per cent in the
quarter to US$250 million compared with the same period last year.

While underlying revenues rose 4 per cent, they fell 1 per cent on
a reported basis to $554 million, dragged down by a $26 million
currency hit, RJR News discloses.

This was mainly as a result of a weakening of the Haitian gourde
against the US dollar, the currency in which Digicel reports
financials and in which most of its $7 billion debt pile is
denominated, RJR News relays.

Digicel's cash position declined, however, to US$180 million from
US$214 million earlier this year, adds RJR News.

RJR News says the Digicel update, issued to bondholders on Nov. 25,
did not address how it plans to go about refinancing US$1.3 billion
of bonds that mature in early 2021, which has become a growing
issue for the company's creditors and debt ratings firms.

                        About Digicel Group

Digicel Group is a mobile phone network provider operating in 33
markets across the Caribbean, Central America, and Oceania regions.
The company is owned by the Irish billionaire Denis O'Brien, is
incorporated in Bermuda, and based in Jamaica.

As reported in the Troubled Company Reporter-Latin America on July
16, 2019, Moody's Investors Service downgraded Digicel Group
Limited's corporate family rating to Caa2 from Caa1 and its
probability of default rating to Caa2-PD from Caa1-PD. At the same
time, Moody's downgraded the senior unsecured rating of Digicel
Limited to Caa2 from B3, the senior secured rating of Digicel
International Finance Limited to B3 from B1, the senior secured
rating of Digicel Group One Limited to Caa2 from Caa1 and the
senior unsecured ratings of both Digicel Group Two Limited and
Digicel to Ca from Caa3. The outlook is negative.


MEXARREND SAPI: S&P Places 'BB-' ICR on Watch Negative
S&P Global Ratings placed its 'BB-' global issuer credit and
issue-level ratings and its 'mxBBB+/mxA-2' Mexican national scale
ratings on Mexarrend S.A.P.I. de C.V. on CreditWatch with negative

The negative CreditWatch placement reflects the high impact on
Mexarrend's capital base from the recent one-off financial
developments. These were a potentially significant loss for the
prepayment of its $150 million notes issued in 2017, the unwinding
of the hedge associated to these notes, and the negative-carry of
its recent $300 million issuance. S&P said, "We believe these
factors could harm Mexarrend's 2019 bottom-line results and
pressure its RAC for the next two years. In our opinion, there's a
one-in-two likelihood that Mexarrend's RAC ratio could fall below
10% in 2020-2021, triggering a downgrade within 90 days. We
currently don't assume Mexarrend would receive capital injections
from its stockholders to alleviate pressure on capitalization."

MEXICO: Current Administration May Speed Up Plans for Tax Overhaul
Eric Martin and Andrea Navarro at Bloomberg News report that
Mexican President Andres Manuel Lopez Obrador's administration may
speed up plans for a tax overhaul to generate more revenue if 2020
budget assumptions turn out to be overly optimistic, a top official

According to Bloomberg, Finance Undersecretary Gabriel Yorio said
the finance ministry is exploring different scenarios to revamp
taxes rather than increase debt or implement additional spending
cuts if resources come up short next year.  He said changes would
need to be progressive and fair, Bloomberg notes.

"The finance team is making sure that we're ready with a fiscal
reform for the president starting next year if things don't turn
out the way that we expect," Bloomberg quotes Mr. Yorio as saying
in an interview at the National Palace on Nov. 26.  "If we need
more revenue to be able to spend more, we'll need to accelerate the

Mr. Yorio, as cited by Bloomberg, said any tax overhaul would
incorporate advice of the Organisation for Economic Co-operation
and Development, and the nation needs to do a better job of
collecting taxes under existing law.  He cited an analysis from the
International Monetary Fund that found Mexico's 16% value-added tax
has a 50% evasion rate, Bloomberg notes.  By reducing evasion by
half, he said, Mexico would raise 250 billion pesos (US$11.62
billion), or about 1% of gross domestic product, in additional
revenue, Bloomberg states.

Mr. Lopez Obrador has promised not to increase taxes in the first
half of his six-year administration, Bloomberg recounts.  But Mr.
Yorio said an overhaul could be debated in Congress next year,
rather than waiting until 2021, if conditions make it necessary,
Bloomberg relays.  He said it would require consensus among
political parties and economic players, Bloomberg recounts.

Mexico's tax collection amounts to about 16% of GDP, last among the
36 OECD countries and less than half the average, Bloomberg says.
Latin America's second-largest economy depends more on corporate
and value-added taxes, and less on social security, personal income
and property taxes, than the OECD average, according to Bloomberg.


PERU LNG: S&P Cuts ICR to BB+ on Slower-Than-Expected Deleveraging
S&P Global Ratings lowered its issuer credit and issue-level
ratings on Peru LNG S.R.L. (PLNG or the company) to 'BB+' from
'BBB-'. S&P's also removing the ratings from CreditWatch with
negative implications and assigning a negative outlook.

The negative outlook on PLNG reflects the possibility of a further
downgrade in the next six to 12 months if the company continues
facing unplanned stoppages or a further decrease in prices hurts
cash flow generation. More precisely, if the company does not
deleverage in line with S&P's projections, resulting in net debt to
EBITDA consistently above 4.5x, we could revise the ratings.

S&P said, "The downgrade of PLNG reflects our view that with its
weaker-than-expected results in 2018 and the first semester of
2019, and our updated base case, the company will deleverage more
slowly than we previously expected. Our updated base case includes
EBITDA generation of $100 million for 2019 and about $170 million
for 2020, resulting in debt to EBITDA of 8.0x and between
4.0x-4.5x, respectively.

"The negative outlook reflects our view that in the next six to 12
months, we could further lower the ratings if the company's
financial metrics does not improve as expected, for example, if net
debt to EBITDA remains consistently above 4.5x. In addition, we
could lower the ratings if we perceive a still high level of
volatility in cash flow generation that challenges the existing
business risk profile."


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.

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