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

          Wednesday, December 4, 2019, Vol. 20, No. 242

                           Headlines



B R A Z I L

BANCO MERCANTIL: Moody's Ups National Scale Deposit Rating to B3.br
JBS SA: BNDES May Sell $1.9 Billion of Shares in January
ODEBRECHT SA: Awaits Creditor Approval of Recovery Plan


C H I L E

CHILE: Government Unveils Stimulus Package as Economy Slumps


M E X I C O

BLUE STAR: Incurs $1.3MM Net Loss for the Quarter Ended Sept. 30
CORE MOLDING: Needs More Financing to Continue as Going Concern
CTI INDUSTRIES: Reports $1.2MM Net Loss for Quarter Ended Sept. 30

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B R A Z I L
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BANCO MERCANTIL: Moody's Ups National Scale Deposit Rating to B3.br
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Moody's Investors Service upgraded to B3.br, from Caa1.br, the long
term national scale deposit rating assigned to Banco Mercantil do
Brasil S.A. Moody's also upgraded to B1.br, from B2.br, Mercantil's
long-term National Scale Counterparty Risk rating. At the same
time, Moody's affirmed Banco Mercantil's long-term local and
foreign currency deposits ratings at Caa1, its baseline credit
assessment at caa1 and its long-term counterparty risk rating at
B3. The outlook was changed to stable, from negative to reflect the
bank's better results that have allowed it to improve capital
ratios.

RATINGS RATIONALE

The upgrade of Banco Mercantil's long-term national scale ratings
and the change in the outlook to stable, from negative, incorporate
the steady improvement in the bank's profitability over the past 12
months driven by lower funding and credit costs, and in capital,
following the modestly better earnings, lower dividend payout and
less capital consuming assets. The affirmation of Mercantil's
global scale ratings reflects Moody's expectation that the bank's
financial performance will remain under pressure by persistently
weak asset risk, by heightened competition and by a still heavy
cost structure that will continue to limit the bank's ability to
generate sustainable and recurring results.

Banco Mercantil's loan portfolio contracted 12% in 3Q 2019 when
compared to one year prior mostly reflecting the runoff of
problematic corporate loans, as well as true sales of payroll
loans, which Mercantil resumed in mid 2019. At the same time,
Mercantil expanded into riskier unsecured consumer lending , and
this asset class accounted for more than one fourth of the bank's
loan portfolio in 3Q2019. While consumer loans yield high margins,
the delinquencies have been high at 9.2%, and above the system's
personal lending average nonperforming loan (NPL) ratio of 7.4%,
thus, putting further pressure on the bank's weak asset risk.
Therefore, the buildup of this riskier portfolio and the continuous
contraction of corporate loans have resulted in a 9.4% problem loan
ratio in September 2019, about 3 times higher than the banking
system's average, and worse than the 8.9% reported one year prior.
High asset risk, even if partially offset by adequate loan loss
reserves, also stems from the fact that high net charge off ratios,
averaging 8.1% of loans from 2014 June 2019, have not been enough
to curtail the volume of problem loan volume.

Mercantil delivered stronger bottom-line results in 3Q 2019 as
evidenced by the ratio of net income to tangible banking assets at
1.1%, up from the 0.5% average reported in the past three years.
The reduction in funding costs, aided by the decline in policy rate
and a higher-yielding loan mix supported net interest margins,
despite the contraction in the loan book. However, Mercantil still
reports high and volatile provisions as a percentage of its
pre-provision income, at above 60%, while operating costs remain
high, with the cost to income ratio at levels of 63%, and above the
50.3% average reported by the Brazil banking system in 3Q2019. The
key drivers of Mercantil's improved profitability were therefore
the gains on sales of payroll loans in the period. Excluding the
gains on credit sales, Mercantil's adjusted net income to tangible
banking assets would have declined to less than 1%, a level that is
more in line with its historical performance. With credit costs
expected to remain high, the sustainability of Mercantil's
profitability will depend on further credit sales or continuing
cost cutting measures.

Moody's upgrade of Mercantil's NSR acknowledges the bank's improved
capital position over the past quarters, following the regulatory
approval of a BRL 60 million capital injection in mid 2018 and
higher earnings generation. Mercantil's capital ratio, measured by
Moody's as tangible common equity as a percentage of adjusted risk
weighted assets (TCE/RWA) increased to 10.4% in September 2019,
from 7.8% in September 2018 and 5.6% in September 2017. Mercantil's
stronger capital position also resulted from a reduced loan
portfolio as well as lower capital requirements for credit risk as
the bank increased the share of consumer loan in its loan mix,
which tends to consumes less capital.

Banco Mercantil's ratings are also supported by its predominantly
deposit based funding structure, which has been stable in recent
quarters. While more than one third of the bank's funding is
sourced from institutional investors and beneficiaries of Social
Security, this is somewhat offset by the bank's historical sizeable
holdings of liquid assets, which accounted for 36% of tangible
banking assets in September 2019 and has been higher than 25% since
2016. Liquid assets cover more than 100% of the bank's deposits
with daily withdrawal clauses. Also, the bank presents a positive
tenor gap of 5.9 months in June 2019.

Moody's believes Banco Mercantil's exposure to environmental risks
is low, consistent with its general assessment for the global
banking sector. Banco Mercantil's exposure to social risks is
moderate, consistent with Moody's general assessment for the global
banking sector. Moody's does not apply any corporate behavior
adjustment to the bank, considering recent and improved measures to
enhance transparency and to strengthen corporate governance,
including a recently renewed management team. Moody's incorporated
concerns about risk and corporate governance in its assessment of
asset risk and profitability, especially concerning weak credit
concession parameters of corporate lending in the past.

WHAT COULD CHANGE THE RATING -- DOWN/UP

The ratings could be downgraded if Mercantil's earnings decline as
a result of its inability to generate sustainable results and of a
further deterioration on its already weak asset quality position,
which could put downward pressure on capital. The ratings could be
upgraded if the bank demonstrates ability to generate consistent
and sustainable earnings within the next 12-18 months with
controlled credit costs and manageable cost structure under
heightened competitive conditions. Upward pressure on the ratings
will also derive from declining asset risk and maintenance of
adequate capital ratios.

METHODOLOGY USED

The principal methodology used in these ratings was Banks
Methodology published in November 2019.

Banco Mercantil is headquartered in Belo Horizonte Brazil, and
reported BRL 9.9 billion (USD 2.5billion) in assets and BRL 878
million (USD 220 million) in shareholders' equity as of September
30, 2019.

LIST OF AFFECTED RATINGS AND ASSESSMENTS

The following ratings of Banco Mercantil do Brasil S.A were
upgraded:

  - Long-term Brazilian national scale counterparty risk rating to
B1.br from B2.br

  - Long-term Brazilian national scale deposit rating to B3.br from
Caa1.br, outlook revised to stable from negative

The following ratings and assessments of Banco Mercantil do Brasil
S.A. were affirmed:

  - Long-term global local and foreign-currency deposit ratings of
Caa1, outlook revised to stable from negative

  - Short-term global local and foreign-currency deposit ratings of
Not Prime

  - Long-term global local and foreign-currency counterparty risk
ratings of B3

  - Short-term global local and foreign-currency counterparty risk
ratings of Not Prime

  - Long term foreign-currency senior unsecured medium-term note
program of (P)Caa1

  - Long-term foreign currency subordinated debt rating of Caa2

  - Long-term counterparty risk assessment of B3(cr)

  - Short-term counterparty risk assessment of Not Prime (cr)

  - Short-term Brazilian national scale deposit rating of BR-4

  - Short-term Brazilian Counterparty Risk Rating of BR-4

  - Baseline credit assessment of caa1

  - Adjusted baseline credit assessment of caa1

Outlook changed to stable from negative

JBS SA: BNDES May Sell $1.9 Billion of Shares in January
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Bloomberg News reports that Brazilian state development bank BNDES
will likely sell part of its stake in JBS SA in January, people
familiar with the matter said.

The January date would give BNDES and banks coordinating the public
offering more time to work out red tape, said one of the people,
who asked not to be identified because talks are private, Bloomberg
relates. While BNDES hadn't committed to a schedule, local media
reported the sale could take place this year, Bloomberg says.

BNDESPar, the development bank's investment arm, holds a 21.3%
interest in JBS, the world's biggest meat supplier, and plans to
sell a stake totaling about BRL8 billion ($1.9 billion), Bloomberg
discloses. Banco Bradesco BBI, Banco BTG Pactual, Bank of America
Corp., Banco Itau BBA and UBS Brasil Corretora have been hired as
legal and financial advisers.

According to the report, JBS shares have surged 147% this year,
fueled by pork-supply disruptions in China that pushed up global
protein prices. The gains have lifted the value of BNDES's stake in
JBS to BRL16.5 billion from about BRL5 billion a year ago. Still,
the prospect of the development bank's offering has tapped the
brakes on the rally, with the stock down about 14% from a record
high in September, the report relates.

Bloomberg says the divestment is part of President Jair Bolsonaro's
plan to shrink the size of the state. The development bank, the
biggest JBS shareholder after the Batista family, which founded the
company, played a crucial role in the meat producer's expansion
overseas, adds Bloomberg.

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-'.

ODEBRECHT SA: Awaits Creditor Approval of Recovery Plan
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Cristiane Lucchesi at Bloomberg Law reports that Odebrecht SA and
each of its 20 units under bankruptcy protection will need to hold
separate creditor meetings to approve a recovery plan, according to
a decision from Judge Alexandre Lazzarini in Sao Paulo.

While lawyers from Odebrecht are still analyzing the case, their
initial conclusion is not to fight Judge Lazzarini's decision as
the company doesn't see it as a hurdle for approval of the
restructuring plan it is negotiating with creditors, Bloomberg
relays, citing a person familiar with the company's thinking.

According to Bloomberg, Odebrecht management believes that
creditors from most units will vote to consolidate the
restructuring into a single, unified plan.

                      About Odebrecht SA

Odebrecht S.A. -- www.odebrecht.com -- is a Brazilian conglomerate
consisting of diversified businesses in the fields of engineering,
construction, chemicals and petrochemicals.  Odebrecht S.A. is a
holding company for Construtora Norberto Odebrecht S.A., the
biggest engineering and contracting company in Latin America, and
Braskem S.A., the largest petrochemicals producer in Latin America
and one of Brazil's five largest private-sector manufacturing
companies. Odebrecht controls Braskem, which by revenue is the
fourth largest petrochemical company in the Americas.

On June 17, 2019, Odebrecht filed for bankruptcy protection, aiming
to restructure BRL51 billion (US$13 billion) of debt.

The bankruptcy filing comes after years of struggles for Odebrecht,
the biggest of the Brazilian engineering groups caught in a
sweeping political corruption investigation that has rippled across
Latin America, Reuters relayed, as reported by The Troubled Company
Reporter - Latin America.

On August 28, 2019, the Troubled Company Reporter - Latin America,
citing The Wall Street Journal, reported that Odebrecht and its
affiliates filed for chapter 15 bankruptcy, seeking U.S.
recognition of the largest-ever bankruptcy in Latin America.
Odebrecht SA and several of its affiliates has filed for bankruptcy
protection in the U.S. Bankruptcy Court for the Southern District
of New York on Aug. 26.  The case is assigned to Hon. Stuart M.
Bernstein.




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C H I L E
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CHILE: Government Unveils Stimulus Package as Economy Slumps
------------------------------------------------------------
Bloomberg News reports that Chile's government announced a $5.5
billion stimulus package as the economy contracted at the fastest
pace since at least 1996 following weeks of riots and protests.

Bloomberg relates that the spending program will help create
100,000 jobs next year, Finance Minister Ignacio Briones said at a
press conference from the presidential palace late on Dec. 2.
President Sebastian Pinera followed up on Dec. 3 with a plan to
make a 100,000-peso ($125) one-time payment to 1.3 million
families, the report says.

"These measures are on the whole transitory and designed to create
jobs both directly and indirectly through public investment and
support for smaller companies," the report quotes Mr. Briones as
saying.

According to Bloomberg, the announcement came hours after the
central bank reported that the Imacec index, a proxy for gross
domestic product, tumbled 5.4% in October from the month before.
Violent protests that broke out on Oct. 18 have forced the closure
of shops, paralyzed much of the public transport system and led
many people to cut short their working hours, the report says.
Business confidence has nosedived, while retail sales slumped 12.1%
in October from the year earlier, the statistics agency said Dec.
3.

What is remarkable is that October's Imacec decline was even bigger
than the 4.1% drop in March 2010 that followed an earthquake and
tsunami which devastated much of the center-south of the country,
Bloomberg states. The quake was the sixth biggest ever recorded in
the world, killed more than 500 people and knocked out electricity
to 93% of the population.

"The collapse of economic activity in the second half of October
was in the order of 10%," Sebastian Cerda, head of research at
Econsult Capital, told the Pauta Bloomberg radio show. "This is
much worse than the collapse after the earthquake."

Bloomberg says digging Chile out of this mess won't come cheaply.
Government spending will rise 9.8% next year, the biggest increase
in a decade, pushing the fiscal deficit to 4.4% of gross domestic
product.

The fiscal debt won't stabilize until 2024 at about 38% of GDP, Mr.
Briones said, Bloomberg relays.

"There is a great effort being made, not only by the government,
but also by the opposition," the minister told Infinita radio on
Dec. 3, Bloomberg relays. "A lot has been done, and that marks a
change in direction."

The announcement on Nov. 2 came with a quid pro quo, Bloomberg
notes. Interior Minister Gonzalo Blumel called on everyone to
categorically condemn the recent violence, pledged more police on
the streets and backed the security forces despite allegations of
human rights violations.

The spending package will only work if the violence stops, he
said.

According to Bloomberg, Chile's central bank has brought forward
its next monetary policy decision by two days to Dec. 4 to provide
"timely information" about the economy following weeks of unrest.

Interest-rate swaps currently show less than 50% chance of another
rate cut, after the central bank lowered its key policy rate to
1.75% in prior months, Bloomberg discloses.

Despite the human and physical cost of the 2010 earthquake, the
economy bounded back in April as the country started to rebuild.
That is unlikely to be the case now, Bloomberg says.

"The reality is that we are going to have two quarter of
consecutive declines," Bloomberg quotes Mr. Cerda as saying.

October's month-on-month decline in the Imacec was the biggest
since at least 1996, while the year-on-year drop of 3.4% was the
largest in a decade, Bloomberg notes.

Bloomberg adds that the central bank cited declines in
manufacturing as well as a range of services including education,
transportation, restaurants and hotels. Excluding mining, economic
activity fell 4% in October from a year prior, also the biggest
decline on record.



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M E X I C O
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BLUE STAR: Incurs $1.3MM Net Loss for the Quarter Ended Sept. 30
----------------------------------------------------------------
Blue Star Foods Corp. filed its quarterly report on Form 10-Q,
disclosing a net loss of $1,288,238 on $5,081,164 of net revenue
for the three months ended Sept. 30, 2019, compared to a net
income
of $346,907 on $6,815,000 of net revenue for the same period in
2018.

At Sept. 30, 2019, the Company had total assets of $11,534,643,
total liabilities of $13,758,151, and $2,223,508 in total
stockholder's deficit.

For the nine months ended September 30, 2019, the Company incurred
a net loss of $3,480,979, has an accumulated deficit of $7,418,898
and working capital deficit of $2,524,506, with the current
liabilities inclusive of $2,910,136 in stockholder loans that are
subordinated to the provider of the working capital facility, and
$124,244 in the current portion of the lease liability
recognition.
These circumstances raise substantial doubt as to the Company's
ability to continue as a going concern.

The Company's ability to continue as a going concern is dependent
upon the Company's ability to increase revenues, execute on its
business plan to acquire complimentary companies, raise capital,
and to continue to sustain adequate working capital to finance its
operations.  The failure to achieve the necessary levels of
profitability and cash flows would be detrimental to the Company.

A copy of the Form 10-Q is available at:

                       https://is.gd/i0jGYR

Blue Star Foods Corp. processes, imports, packages, and sells
refrigerated seafood products.  It offers pasteurized blue and red
crab meat, and other seafood products, including crab cake,
finfish, and wakami salad under the Blue Star, Oceanica, Pacifika,
Crab & Go, and Harbor Banks brands.  The company sells its
products
to food service distributors, wholesalers, retail establishments,
and seafood distributors in the United States, Canada, Europe,
Mexico, Central America, the Caribbean, the United Arab Emirates,
Singapore, and Hong Kong.  Blue Star Foods Corp. was founded in
1995 and is headquartered in Miami, Florida.


CORE MOLDING: Needs More Financing to Continue as Going Concern
---------------------------------------------------------------
Core Molding Technologies, Inc. filed its quarterly report on Form
10-Q, disclosing a net loss of $6,125,000 on $74,655,000 of net
sales for the three months ended Sept. 30, 2019, compared to a net
loss of $1,802,000 on $64,676,000 of net sales for the same period
in 2018.

At Sept. 30, 2019, the Company had total assets of $195,038,000,
total liabilities of $105,119,000, and $89,919,000 in total
stockholders' equity.

Core Molding said, "While the Company is working with the existing
lenders to enter into a forbearance agreement, it cannot guarantee
the parties will be able to reach mutually agreeable terms, or
predict if the Lenders will exercise their rights and remedies
under the A/R Credit agreement beyond the term of any forbearance
agreement.  Additionally, since the Company has no firm
commitments
for additional financing, there can be no assurances that the
Company will be able to secure additional financing on terms that
are acceptable to the Company, or at all.  As there can be no
assurance that the Company will be able to successfully implement
its refinancing plan, these conditions raise substantial doubt
about the Company's ability to continue as a going concern."

A copy of the Form 10-Q is available at:

                       https://is.gd/6E6zE1

Core Molding Technologies, Inc., together with its subsidiaries,
manufactures sheet molding compound (SMC) and molder of thermoset
and thermoplastic products. It specializes in large-format
moldings
and offers a range of fiberglass processes, including compression
molding of SMC, glass mat thermoplastics, bulk molding compounds,
and direct long-fiber thermoplastics; and spray-up, hand lay-up,
resin transfer molding, structural foam and structural Web
injection molding, reaction injection molding, and utilizing
dicyclopentadiene technology. The company serves various markets,
including medium and heavy-duty trucks, automobiles, marine,
construction, and other commercial markets. It sells its products
in the United States, Mexico, and Canada. The company was formerly
known as Core Materials Corporation and changed its name to Core
Molding Technologies, Inc. in August 2002. Core Molding
Technologies, Inc. was incorporated in 1996 and is headquartered
in
Columbus, Ohio.


CTI INDUSTRIES: Reports $1.2MM Net Loss for Quarter Ended Sept. 30
------------------------------------------------------------------
CTI Industries Corporation filed its quarterly report on Form
10-Q,
disclosing a net loss of $1,238,924 on $8,537,475 of net sales for
the three months ended Sept. 30, 2019, compared to a net loss of
$546,225 on $11,525,469 of net sales for the same period in 2018.

At Sept. 30, 2019, the Company had total assets of $32,897,091,
total liabilities of $30,949,876, and $1,947,215 in total equity.

The Company said, "During 2019 we attempted to execute a major
capital event with a partner that would infuse money, among other
attributes.  That effort was unsuccessful as envisioned.  We are
currently seeking to execute on one or more smaller transactions,
as well as pursue other financing options.  There is no assurance
that any of these efforts will be successful.

"In addition, due to financial performance in 2016, 2017 and 2018,
including net income/(losses) attributable to the Company of $0.7
million, ($1.6 million), and ($3.6 million), respectively, we
believe that substantial doubt about our ability to continue as a
going concern exists at September 30, 2019."

A copy of the Form 10-Q is available at:

                       https://is.gd/yf2yfy

CTI Industries Corporation develops, produces, and distributes
consumer and film products for commercial and industrial uses in
the United States, the United Kingdom, Europe, and Mexico. The
company sells its products directly, as well as through a network
of distributors and wholesalers, and independent sales
representatives. CTI Industries Corporation was founded in 1975
and
is headquartered in Lake Barrington, Illinois.


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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.
.


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