/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/170412.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, April 12, 2017, Vol. 18, No. 73 Headlines B R A Z I L BRAZIL: President May Dial Back Pension Reform Plan PETROLEO BRASILEIRO: Moody's Ups CFR to B1; Outlook to Positive C A Y M A N I S L A N D S ARKONA LIMITED: Creditors' Proofs of Debt Due April 24 BOAT LIMITED: Commences Liquidation Proceedings CFG MEXICO: Commences Liquidation Proceedings DIDI INVESTMENT: Creditors' Proofs of Debt Due April 27 FASHAM INTERNATIONAL: Creditors' Proofs of Debt Due April 19 HARMONY PEACE: Creditors' Proofs of Debt Due April 28 MALOU INVESTMENTS: Creditors' Proofs of Debt Due April 27 NANU INVESTMENTS: Creditors' Proofs of Debt Due April 27 SYMBEST LTD: Placed Under Voluntary Wind-Up VERTIGO LIMITED: Creditors' Proofs of Debt Due April 27 D O M I N I C A N R E P U B L I C DOMINCAN REP: Employers Challenge the 20% Raise on Minimum Wage E L S A L V A D O R EL SALVADOR: Fitch Cuts Long-Term Local Currency IDR to RD J A M A I C A DIGICEL GROUP: Sells Communication Towers in El Salvador M E X I C O MEXICO: Frayed U.S. Ties Mend as Trump Refrains From Attacks MEXICO: Fitch Says NAFTA Unwind Manageable for Nonfood Retailers P U E R T O R I C O DORAL FINANCIAL: Trustee Wants to Recoup $5.3MM From Paul Hastings DORAL FINANCIAL: Ex-Executive's $12MM Claim Cut to $242,000 MARKETS & FUN: Seeks Extension of Plan Filing Date Until May 25 X X X X X X X X X LATAM: Spending Better, Key to Improving Infrastructure - - - - - =========== B R A Z I L =========== BRAZIL: President May Dial Back Pension Reform Plan --------------------------------------------------- Paul Kiernan and Paulo Trevisani at The Wall Steet Journal report that Brazilian President Michel Temer signaled he may scale back a proposed overhaul to the social security system, as opposition from legislators threatens to derail the linchpin of his plan to revive the economy. The pension reform, which seeks to establish a minimum retirement age of 65 years and reduce generous payouts and perks, would fail to pass Congress if a vote were held now, a survey of legislators by newspaper Estadao found, according to the WSJ. Only 94 of 513 legislators in the lower House support Mr. Temer's proposal, while 256 oppose it, the report notes. The bill would need 60% approval to move on to the Senate, the report relays. Estadao's tally was only the latest sign that Mr. Temer's 10% approval rating may be eroding his sway over Brazil's fractious legislature, the report discloses. The timetable for a vote on the bill has repeatedly been pushed back in recent months as congressmen sought to water it down by excluding some civil servants, maintaining lower retirement requirements for women and dragging out the transition from the old social security regime to the new one, the report notes. "When I say we're going to make the pension reform more flexible, it's exactly and precisely to meet the complaints of the public and . . . Congress," Mr. Temer said in a radio interview, the report relays. In a subsequent news release, the government said its aim is to "increase protection for disadvantage people while at the same time preserving essential points to balance public accounts," the report notes. Economists said Brazil's hopes of recovering from its worst recession on record rest on Mr. Temer's ability to overcome rock- bottom popularity and pass what may be the most significant economic reform in decades, the report says. Brazilians currently retire in their mid-50s, on average, and a ballooning deficit in the social security system is already squeezing public spending on infrastructure, health care and education as the population ages, the report notes. Mr. Temer, who assumed office following the impeachment of leftist ex-President Dilma Rousseff last year, plans to step down after his term finishes at the end of 2018, the report relays. Legislators hoping to win reelection next year worry that they will bear a big share of the political costs of overhauling the pension system, the report notes. The plan has sparked protests throughout the country since late last year, when it was being completed by the Temer administration, the report discloses. The president's allies are also growing weary of repeated rounds of budget tightening that Mr. Temer's government has implemented to stave off a fiscal crisis, the report notes. At a dinner earlier this week at the house of ruling-party Sen. K†tia Abreu, frustration with Mr. Temer became a major topic of discussion, the report says. "Billions have been cut from the budget, and that's left the Senate upset as well as the House, I think," said Sen. Helio Jose, of Mr. Temer's PMDB party, who attended the dinner, the report notes. He said legislators are particularly disillusioned with reduced funding for pork-barrel projects and lagging political appointments, the report relays. "There hasn't been a debate. The things that are agreed upon with the senators haven't been followed through with," he added. The discontent stands in contrast to Mr. Temer's first few months in office, when he managed to pass a flurry of economic measures that revived business confidence and sent Brazil's financial markets soaring, the report notes. But with Brazil's population rapidly aging, economists say it will all be useless without pension reform, the report relays. Brazil currently has 11 retirees for every 100 working-age citizens, but that ratio is set to rise to 44 per 100 by 2060, the report notes. Despite its relatively young population, Brazil's social-security system already posts a fat deficit and is reliant on transfers from the Treasury, squeezing other types of spending, the report discloses. Retirement outlays are projected to eat up 43% of the $422 billion national budget this year compared with 7% for health care and 3% for education, according to official projections, the report relays. Some investors say Brazil's stocks and currency are valued as though a robust pension reform will occur, the report notes. Brazil's real has recovered to 3.12 per dollar after weakening to nearly 4.2 in early 2016, before Ms. Rousseff's ouster, the report says. The Bovespa stock index has recovered to 64,548 points from a pre-impeachment low of less than 38,000, making it one of the world's best performers over the past year, the report relays. Adam Choppin, an equity analyst at Philadelphia-based FIS Group, said the gains were largely driven by "hot money" -- exchange- traded funds, retirement accounts and hedge-fund investors -- whose managers rarely looked past the positive headlines coming from Brazil, the report notes. He said he sees the odds of a crisis in Brazil's financial markets at 40%-50%, as social- security reform founders, the report discloses. "The notion that there was going to be sufficient political capital -- amongst this caretaker government and a bunch of elected officials who have no mandate for reform from the voters to do really heavy lifting like pension reform, I think was always a pipe dream," Mr. Choppin said, the report adds. As reported in the Troubled Company Reporter-Latin America on Nov. 15, 2016, Fitch Ratings has affirmed Brazil's Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) at 'BB'/ Negative Outlook. Brazil's senior unsecured Foreign- and Local- Currency bonds are also affirmed at 'BB'. The Country Ceiling is affirmed at 'BB+' and the Short-Term Foreign and Local-Currency IDRs at 'B'. PETROLEO BRASILEIRO: Moody's Ups CFR to B1; Outlook to Positive --------------------------------------------------------------- Moody's Investors Service upgraded all ratings of Petroleo Brasileiro S.A. (Petrobras)'s and ratings based on Petrobras' guarantee, including the company's senior unsecured debt and corporate family rating (CFR), to B1 from B2 given lower liquidity risk and prospect of declining debt leverage. At the same time, Moody's raised the company's baseline credit assessment (BCA) to b2 from b3. The outlook for all ratings was changed to positive from stable. Upgrades: Issuer: Petrobras Global Finance B.V. -- Backed Senior Unsecured Shelf, Upgraded to (P)B1 from (P)B2 -- Backed Senior Unsecured Regular Bond/Debenture, Upgraded to B1 from B2 Issuer: Petrobras International Finance Company -- Backed Senior Secured Shelf, Upgraded to (P)Ba3 from (P)B1 -- Backed Senior Unsecured Shelf, Upgraded to (P)B1 from (P)B2 -- Backed Subordinate Shelf, Upgraded to (P)B2 from (P)B3 -- Backed Senior Unsecured Regular Bond/Debenture, Upgraded to B1 from B2 Issuer: Petroleo Brasileiro S.A. - PETROBRAS -- Corporate Family Rating, Upgraded to B1 from B2 -- Senior Secured Shelf, Upgraded to (P)B1 from (P)B2 -- Senior Unsecured Shelf, Upgraded to (P)B1 from (P)B2 -- Subordinate Shelf, Upgraded to (P)B2 from (P)B3 -- Preferred Shelf, Upgraded to (P)Caa1 from (P)Caa2 Outlook Actions: Issuer: Petrobras Global Finance B.V. -- Outlook, Changed To Positive From Stable Issuer: Petrobras International Finance Company -- Outlook, Changed To Positive From Stable Issuer: Petroleo Brasileiro S.A. - PETROBRAS -- Outlook, Changed To Positive From Stable RATINGS RATIONALE The actions on Petrobras' ratings, BCA and outlook reflect Moody's expectation of continued improvement in the company's liquidity profile and financial metrics over the next 12 months, which reduces Petrobras' credit risk. Liquidity and financial metrics have improved further over the last few quarters as a result of lower capex in 2016 than planned; gains from disciplined operating management and local currency appreciation, which positively affected operating costs; and the company's new fuel pricing policy, which increased flexibility to sustain downstream margins and wholesale market share. These factors helped Petrobras maintain access to the capital markets and refinance debt: so far in 2017 the company has tendered approximately $6 billion in notes and issued $4 billion in new notes, which allowed it to reduce debt and extend its debt maturity profile. The regulatory environment has also improved in Brazil, supporting better return on investment in the long term. Moody's recognizes that Petrobras' management has shown commitment to its financial and operating targets, as shown in recent debt refinancing transactions, disciplined use of cash, increasing crude production and declining costs. Despite the material improvements, liquidity risk remains a concern. As of December 31, 2016, Petrobras' maturing debt in 2017 and 2018 was $8.8 billion and $11.3 billion, respectively, for a total of $19 billion in the next 2 years. Other threats to Petrobras' liquidity, as well as to its operating and financial performance, include execution risk related to the 2017-21 business plan and potential delays in fully executing its asset sales plan. It is positive, however, that the company has managed to settle with 19 out of 27 individual investors on legal disputes related to the Car Wash investigation, somewhat reducing uncertainty about the amounts of additional settlements and fines, including the ones related to the U.S. Securities Exchange Commission (SEC)'s the U.S. Department of Justice (DoJ)'s investigations. Petrobras' b2 BCA, which indicates Moody's view of the company's standalone credit strength, considers its high debt, low to negative free cash flow, high refinancing risk, local currency volatility risk and operating challenges in a difficult industry and economic environment; for instance, debt maturing over the next five years amounts to $75 billion. In addition, free cash flow will remain under pressure in the next couple of years as its upstream business suffers from low oil prices and downstream operations are hurt by still low demand, high competition and local currency volatility, at the same time that the fuel pricing strategy evolves. Petrobras' b2 BCA and B1 rating are supported by the company's solid reserve base and dominance in the Brazilian oil industry, and its importance to the Brazilian economy. Furthermore, the ratings reflect the company's sizeable reserves at 9,677 Mboe, its renown high technological offshore expertise and potential for continued growth in production over the long-term. Petrobras' B1 ratings also consider Moody's joint-default analysis for the company as a government-related issuer. Petrobras' ratings reflect Moody's assumption for a moderate likelihood of timely extraordinary support from the government of Brazil. Despite its stated willingness to stand behind Petrobras, Moody's believes that the government's current fiscal situation tempers its capacity to support Petrobras sufficiently to avoid a default. Petrobras' rating incorporates one notch of uplift between Petrobras' BCA and its senior unsecured rating given the company's lower liquidity risk and thus lower need of support, which is favorable in the context of government's persistently tight fiscal position. Moody's continues to assume moderate default dependence between Petrobras and the government. Petrobras' ratings have a positive outlook, reflecting Moody's expectation that, in the next 18 months, if the company's liquidity and overall credit risk continues to improve, further positive rating actions could occur. Positive rating actions could be considered if the company raises sufficient sums through asset sales or new debt arrangements to reduce debt and refinance upcoming maturities and significantly strengthen its liquidity profile while also improving operating and financial performance. In addition, for a rating upgrade to occur, Petrobras' leverage as adjusted by Moody's should move sustainably closer to 4 times. Negative actions on Petrobras' ratings could result from deterioration in operating performance or external factors that increase liquidity risk or debt leverage from current levels. Downgrades could also be prompted if negative developments from the corruption investigations or litigation against the company appear to have the potential to significantly worsen the company's liquidity or financial profile. The principal methodology used in these ratings was Global Integrated Oil & Gas Industry published in October 2016. Other methodologies used include the Government-Related Issuers methodology published in October 2014. Petrobras is an integrated energy company, with total assets of $247 billion as of December 31, 2016. Petrobras dominates Brazil's oil and natural gas production, as well as downstream refining and marketing. The company also holds a significant stake in petrochemicals and a position in sugar-based ethanol production and distribution. The Brazilian government directly and indirectly owns about 46% of Petrobras' outstanding capital stock and 60.5% of its voting shares. ========================== C A Y M A N I S L A N D S ========================== ARKONA LIMITED: Creditors' Proofs of Debt Due April 24 ------------------------------------------------------ The creditors of Arkona Limited are required to file their proofs of debt by April 24, 2017, to be included in the company's dividend distribution. The company commenced liquidation proceedings on March 6, 2017. The company's liquidator is: Matthew Wright c/o Omar Grant Windward 1, Regatta Office Park P.O. Box 897 Grand Cayman KY1-1103 Cayman Islands Telephone: (345) 949 7576 Facsimile: (345) 949 8295 BOAT LIMITED: Commences Liquidation Proceedings ----------------------------------------------- The sole shareholder of Boat Limited, on March 15, 2017, passed a resolution to liquidate the company's business. Creditors are required to file their proofs of debt to be included in the company's dividend distribution. The company's liquidator is: Christopher McLoughlin c/o John O'Driscoll Walkers 6 Gracechurch Street London EC3V 0AT United Kingdom Telephone: +44 (0)20 7220 4987 CFG MEXICO: Commences Liquidation Proceedings --------------------------------------------- The sole shareholder of CFG Mexico Holdings (Cayman) Ltd., on March 13, 2017, passed a resolution to liquidate the company's business. Creditors are required to file their proofs of debt to be included in the company's dividend distribution. The company's liquidator is: Walkers Liquidations Limited Cayman Corporate Centre 27 Hospital Road, George Town Grand Cayman KY1-9008 Cayman Islands Telephone: +1 (345) 949 0100 DIDI INVESTMENT: Creditors' Proofs of Debt Due April 27 ------------------------------------------------------- The creditors of Didi Investment Company are required to file their proofs of debt by April 27, 2017, to be included in the company's dividend distribution. The company commenced liquidation proceedings on March 14, 2017. The company's liquidator is: CDL Company Ltd. P.O. Box 31106 Grand Cayman KY1-1205 Cayman Islands FASHAM INTERNATIONAL: Creditors' Proofs of Debt Due April 19 ------------------------------------------------------------ The creditors of Fasham International Limited are required to file their proofs of debt by April 19, 2017, to be included in the company's dividend distribution. The company commenced liquidation proceedings on March 13, 2017. The company's liquidator is: Christopher Smith c/o Orla O'Regan KRYS Global VL Services Ltd KRyS Global, Governors Square Building 6, 2nd Floor 23 Lime Tree Bay Avenue P.O. Box 31237 Grand Cayman KY1-1205 Cayman Islands Telephone: (345) 947 4700 HARMONY PEACE: Creditors' Proofs of Debt Due April 28 ----------------------------------------------------- The creditors of Harmony Peace Holding Limited are required to file their proofs of debt by April 28, 2017, to be included in the company's dividend distribution. The company commenced liquidation proceedings on March 8, 2017. The company's liquidator is: Karen Anne Marshall Level 3, 18 Stanley Street Auckland Central 1010 New Zealand MALOU INVESTMENTS: Creditors' Proofs of Debt Due April 27 --------------------------------------------------------- The creditors of Malou Investments Limited are required to file their proofs of debt by April 27, 2017, to be included in the company's dividend distribution. The company commenced liquidation proceedings on March 15, 2017. The company's liquidator is: Zedra Directors (Cayman) Limited c/o Enola Reid 136 Shedden Road One Capital Place, 3rd Floor P.O. Box 487, George Town Grand Cayman KY1-1106 Cayman Islands Telephone: +1 (345) 914-5413 NANU INVESTMENTS: Creditors' Proofs of Debt Due April 27 -------------------------------------------------------- The creditors of Nanu Investments Limited are required to file their proofs of debt by April 27, 2017, to be included in the company's dividend distribution. The company commenced liquidation proceedings on March 14, 2017. The company's liquidator is: Russell Smith c/o Antoine Powell BDO CRI (Cayman) Ltd. Building 3, Floor 2, Governors Square 23 Lime Tree Bay Ave P.O. Box 31229 Grand Cayman, KY1 1205 Cayman Islands Telephone: (345) 815 4558 SYMBEST LTD: Placed Under Voluntary Wind-Up ------------------------------------------- The sole shareholder of Symbest Ltd., on March 9, 2017, passed a resolution to wind up the company's operations. Creditors are required to file their proofs of debt to be included in the company's dividend distribution. The company's liquidator is: Trident Liquidators (Cayman) Ltd. c/o Lisa Thoppil One Capital Place, 4th Floor P.O. Box 847, George Town Grand Cayman KY1-1103 Cayman Islands Telephone: (345) 949 0880 Facsimile: (345) 949 0881 VERTIGO LIMITED: Creditors' Proofs of Debt Due April 27 ------------------------------------------------------- The creditors of Vertigo Limited are required to file their proofs of debt by April 27, 2017, to be included in the company's dividend distribution. The company commenced liquidation proceedings on March 9, 2017. The company's liquidator is: CDL Company Ltd. P.O. Box 31106 Grand Cayman KY1-1205 Cayman Islands =================================== D O M I N I C A N R E P U B L I C =================================== DOMINCAN REP: Employers Challenge the 20% Raise on Minimum Wage --------------------------------------------------------------- Dominican Today reports that Dominican Republic's employers grouped in Copardom, and the small and medium businesses (Codopyme) on April 10 filed an appeal for arbitration against the National Wage Committee resolution which raises the minimum wage by 20%. The appeal filed jointly by Copardom president Fermin Acosta, and Codopyme president Luis Miura cites "duly reasonable objections to the decision of the National Wage Committee regarding the minimum wage rates recommended for the non-sectorized private sector as of March 31, 2017," says the report. They note that the resolution was published "to initiate the deadlines established in Law 16-92 that stipulates the Labor Code, on April 6 of this year," reports Dominican Today. The request for arbitration filed at the Labor Ministry cites the legal and economic arguments and norms to base their challenge to the decision by the Salaries Committee, and propose a return to the negotiating table, notes the report. As reported in the Troubled Company Reporter-Latin America on Nov. 22, 2016, Fitch Ratings has taken the following rating actions on the Dominican Republic: -- Long-Term Foreign Currency Issuer Default Rating (IDR) upgraded to 'BB-' from 'B+'; assigned Stable Outlook; -- Long-Term Local Currency IDR upgraded to 'BB-' from 'B+'; assigned Stable Outlook; -- Senior unsecured Foreign and Local Currency bonds upgraded to 'BB-' from 'B+'; -- Short-Term Foreign Currency IDR affirmed at 'B'; -- Short-Term Local Currency IDR affirmed at 'B'. ==================== E L S A L V A D O R ==================== EL SALVADOR: Fitch Cuts Long-Term Local Currency IDR to RD ---------------------------------------------------------- Fitch Ratings has downgraded El Salvador's Long-term (LT) Local Currency Issuer Default Rating (IDR) to 'RD' (Restricted Default) from 'B'/Negative. Fitch has also downgraded El Salvador's LT Foreign Currency IDR to 'CCC' from 'B'/Negative. El Salvador's senior unsecured foreign currency bonds are downgraded to 'CCC' from 'B'. The LT Local and Foreign Currency IDRs do not have an Outlook. The Country Ceiling is downgraded to 'B-' from 'BB-' and the Short-Term Local and Foreign Currency IDRs are downgraded to 'C' from 'B'. KEY RATING DRIVERS The downgrade of El Salvador's LT Local-Currency IDR to 'RD' reflects the following key rating drivers: According to the statement made by El Salvador's Ministry of Finance dated April 7, 2017, the government failed to make interest payments on debt to the local private pension funds issued under domestic law, Certificados de Inversion Previsional (CIPs). In line with its criteria, Fitch therefore judges El Salvador to be in default on its sovereign obligations. The amounts due April 7-10, 2017 total $28.8 million. This credit event follows a period of heightened political polarization in El Salvador that has resulted in a prolonged period of congressional gridlock, has hindered meaningful fiscal measures to arrest the deterioration of public finances, and has severely limited the government's financing options. The performing LT Foreign Currency bonds have been downgraded to 'CCC' from 'B'. The intensified political polarization could make it difficult for the government to secure approval for additional long-term external borrowing that is needed to bridge the financing needs for 2017, highlighting the increased risks for default. The government issued USD601 million in February out of USD1.2 billion projected total financing needs for 2017 (excluding CIP amortizations). A two-thirds majority in congress is needed to get approval for long-term borrowing, which has been difficult to get given the strong opposition the government faces from Arena (the main opposition party). CRITERIA VARIATION Fitch has adjusted the application of its Sovereign rating criteria to address the specific situation that El Salvador is an officially dollarized currency regime and the government defaulted on instruments that are issued under local law. Fitch believes that the distinction in this case applies to the jurisdiction of the applicable laws relating to the debt issuance and has made a distinction between the Local Currency IDRs and the Foreign Currency IDRs. RATING SENSITIVITIES The curing of the default through resumption of debt service payments would lead to an upgrade of the LT Local Currency IDR. At such time, Fitch would review the ratings of El Salvador and place them at a level consistent with the sovereign's ability and willingness to service debt. ============= J A M A I C A ============= DIGICEL GROUP: Sells Communication Towers in El Salvador -------------------------------------------------------- RJR News reports that Mobile phone company Digicel has sold 202 communication towers in El Salvador to Florida-based Phoenix Tower International in a multi-million-dollar deal. The report, citing the Irish Times, says the terms of the transaction were not disclosed but other deals in the region have been valued at between $85,000 and $300,000 per tower. This would suggest a valuation range of between $17 million and $60 million for Digicel. Digicel is the number four player in El Salvador, having previously tried to sell the business to Carlos Slim's America Movil, the report notes. That transaction was blocked by regulators. As reported in the Troubled Company Reporter-Latin America on May 27, 2016, Fitch Ratings has affirmed the ratings of Digicel Group Limited (DGL) and its subsidiaries Digicel Limited (DL) and Digicel International Finance Limited (DIFL), collectively referred to as 'Digicel' as follows. DGL -- Long-Term Issuer Default Rating (IDR) at 'B'; Stable Outlook; -- $US 2.0 billion 8.25% senior subordinated notes due 2020 at 'B-/RR5'; -- $US 1 billion 7.125% senior unsecured notes due 2022 at 'B-/RR5'. DL -- Long-Term IDR at 'B'; Stable Outlook; -- $US 250 million 7% senior notes due 2020 at 'B/RR4'; -- $US 1.3 billion 6% senior notes due 2021 at 'B/RR4'; -- $US 925 million 6.75% senior notes due 2023 at 'B/RR4'; DIFL -- Long-Term IDR at 'B'; Stable Outlook; -- Senior secured credit facility at 'B+/RR3'. The Rating Outlook is Stable. =========== M E X I C O =========== MEXICO: Frayed U.S. Ties Mend as Trump Refrains From Attacks ------------------------------------------------------------ David Luhnow and Jacob Schlesinger at The Wall Street Journal report that earlier this year, U.S.-Mexican relations hit their worst crisis in decades when Presidents Donald Trump and Enrique Pena Nieto quarreled over who would pay for a proposed border wall, prompting the Mexican president to call off a planned trip to Washington. But then a funny thing happened: Mr. Trump, at the urging of senior aides, stopped attacking Mexico on Twitter and in public statements, opening up space to officials from both countries to markedly improve ties since then, U.S. and Mexican officials said, according to WSJ. "The relationship is much more constructive," said a senior Mexican government official. A senior U.S. official agreed, saying the greater contact between the sides had improved ties, the report notes. Mexican officials say they are more confident now that the two countries can strike a deal to renegotiate the North American Free Trade Agreement, which Mr. Trump attacked repeatedly on the campaign trail as the worst trade deal the U.S. ever signed, the report discloses. "We've gone from panic to concern," said another top Mexican official. The White House declined to comment, notes the report. Financial markets are also more sanguine, the report relays. Mexico's peso has been the world's best-performing currency since Mr. Trump's Jan. 20 inauguration, up nearly 16%, the report notes. "The radio silence from the president's Twitter feed has been extremely important to provide breathing room [to both sides]," said Arturo Sarukhan, Mexico's former ambassador to the U.S., who advises the Mexican government, the report says. Many people in Mexico City remain nervous about Mr. Trump's trade stance, the report notes. But the cautious sigh of relief there that his administration may not disrupt the world economic order as much as once feared is echoed in capitals around the world, and in Washington, the report discloses. Mr. Trump had, by public accounts, a calm two-day summit with Chinese President Xi Jinping, where the American leader raised concerns about Chinese behavior but didn't repeat the stinging public rhetoric he has had previously launched at Beijing, the report relays. Mr. Trump's strike on Syria also signaled a turn from his rhetoric of isolationism, while his action to date on trade has mainly revolved around calls for more study of the U.S. trade deficit rather than urgent, radical action to shrink it, the report notes. Government and business officials on both sides of the Rio Grande credit the improved mood over U.S.-Mexican ties to a variety of factors, the report discloses. They cite numerous face-to-face meetings between top officials, a behind-the-scenes pro-Nafta lobbying effort from big U.S. firms and farmers, and the Trump administration's progress along the learning curve facing any new crew in Washington, the report relays. At least seven top-level meetings between various cabinet members of both governments have occurred in the past eight weeks, U.S. and Mexican officials said, the report notes. Mexican Foreign Minister Luis Videgaray and Economy Minister Ildefonso Guajardo have met repeatedly with Secretary of State Rex Tillerson, Homeland Security Secretary John Kelly and Commerce Secretary Wilbur Ross, the report relays. The sides are also getting better acquainted personally. Mr. Videgaray has cultivated a close relationship with Mr. Trump's son-in-law and key aide, Jared Kushner, the report notes. And after a recent meeting between Mr. Guajardo and Mr. Ross, the men met for dinner, joined by Mr. Ross's wife, at an upscale Georgetown restaurant, the report discloses. At the same time, big American companies -- in consultation with Mexican and Canadian officials -- have launched an aggressive, behind-the-scenes effort to explain what they consider Nafta's benefits to the Trump White House and trade-related agencies, the report says. Union Pacific CEO Lance Fritz published an op-ed in the Journal of Commerce on March 1 titled "U.S. must modernize Nafta, not withdraw," and Cargill Inc. CEO David MacLennan defended the trade pact in a February speech in St. Paul, Minn, the report notes. U.S. farm groups have also lobbied against changes to the pact that could restrict access to their No. 1 market for export products like corn, grown mostly in states that voted for Mr. Trump, the report relays. Upping the ante, Mexico has threatened to buy more grain and corn from other producers such as Brazil and Argentina, the report notes. The lobbying could be paying off. A recent draft memo from the U.S. Trade Representative's office to Congress outlined mostly modest changes to the 23-year-old trade pact, although the White House later distanced itself from the memo, the report notes. Members of Congress have also begun to defend Nafta and ties to Mexico. In a rare bipartisan move, six senators -- three Republicans led by Texas Sen. John Cornyn and three Democrats led by Maryland Sen. Ben Cardin -- recently introduced a resolution "recognizing bilateral cooperation that advances the national security and national interests of both countries," the report notes. During the mid-March confirmation hearing for Mr. Trump's nominee for U.S. Trade Representative, Robert Lighthizer, a half-dozen Republican senators pleaded with Mr. Lighthizer to recognize Nafta's importance, particularly for agricultural exports, the report notes. In private meetings they were even blunter, according to a person familiar with the discussions, the report relays. "My sense is the new administration . . . is learning fast that the depth of those cross-border commercial ties and the interests that have been created by them are far stronger and deeper than they imagined," said Jaime Zabludovsky, a member of the Mexican team that negotiated Nafta who now advises the Mexican government on trade, the report relays. President Trump's top trade adviser, Peter Navarro, has said trade deficits are bad for the U.S., yet he has begun to echo a key Mexican talking point by saying North America can compete best together against China, the report notes. In recent interviews, Mr. Navarro has talked about a Nafta-bloc manufacturing powerhouse that could compete against the rest of the world and help U.S. workers by keeping out parts from elsewhere, the report relays. A realization has also grown within the new administration that attacking Mexico was prompting a nationalist backlash south of the border, the report says. Analysts said Mr. Trump's rise has aided the political fortunes of leftist Andres Manuel Lopez Obrador, who has vowed to take on Mr. Trump more forcefully if he wins 2018 presidential elections, the report notes. "If the election were tomorrow in Mexico, you'd probably get a left-wing anti-American president of Mexico," Sen. John McCain (R., Ariz.) said in a recent senate hearing, notes the report. "That can't be good for America," she added. MEXICO: Fitch Says NAFTA Unwind Manageable for Nonfood Retailers ---------------------------------------------------------------- A slowdown in the Mexican economy resulting from an unwinding of NAFTA could affect retailers' revenues and profitability, although changes would be manageable for nonfood retailers, according to Fitch Ratings. Historically, nonperforming loans (NPLs) for retailers have risen under unfavorable economic conditions and decreasing consumption. However, Fitch does not expect a material impact on most Mexican retailers' credit profile as they currently present low levels of NPLs. As of December 2016, companies rated above BB- such as El Puerto de Liverpool S.A. de C.V. and Grupo Elektra S.A.B. de C.V. present average NPLs of 3.3%, meaning credit quality deterioration could be manageable. Grupo Famsa (rated B-/Stable by Fitch) is the most vulnerable of Fitch-rated Mexican retailers. As of December 2016, the company had NPLs for 11.2% so a potential deterioration in its credit portfolio could negatively affect profitability and cash flow generation, increasing its adjusted debt to EBITDAR ratio above 6.0x. Retailers in Mexico are exposed to foreign currency exchange volatility, offset to varying degrees by sales made in USD and hedging practices. Companies that can pass through higher prices onto the customer are better positioned to withstand potential negative impact to their credit profiles. However, higher prices should affect sales volume. Overall, Fitch expects the Latin American retail sector to be stable during 2017 due to single-digit revenue growth and steady profitability. Large merger and acquisition (M&A) transactions are not anticipated this year as retailers focus on integrating 2016 acquisitions and operating efficiencies. Fitch does not anticipate deleveraging as retailers focus on controlling costs and extracting synergies from recent mergers. Free cash flow should remain pressured by expansion and maintenance capex. Like in 2016, aggregate capex to sales should reach 5% in 2017. Continued local currency depreciation could hurt leverage for companies that do not hedge USD-denominated debt. A deterioration of Mexican retailers' credit portfolios is also possible as further rising inflation and interest rates might hurt the capacity for customers to repay. Rising unemployment, stagnant real wages, less credit availability or further than anticipated deterioration of retailers' credit portfolios could result in negative rating actions. Furthermore, this could pressure profitability and capital structures. Large debt-funded acquisitions could also drive negative rating actions, although Fitch do not anticipate a heavy M&A year in this space. ====================== P U E R T O R I C O ====================== DORAL FINANCIAL: Trustee Wants to Recoup $5.3MM From Paul Hastings ----------------------------------------------------------------- Ryan Boysen, writing for Bankruptcy Law360, reports that the trustee of Doral Financial Corp. said it wants Paul Hastings LLP to return $5.3 million allegedly paid to settle old debts in full just before the 2015 Chapter 11 filing. According to Law360, the trustee told the U.S. Bankruptcy Court for the Southern District of New York the firm should've waited its turn and taken a haircut like all the other creditors. About Doral Financial Corp. Doral Financial Corp. is a holding company whose primary operating asset was equity in Doral Bank. DFC maintains offices in New York City, Coral Gables, Florida and San Juan, Puerto Rico. The Company has three wholly-owned subsidiaries: Doral Properties, Inc., Doral Insurance Agency, LLC, and Doral Recovery, Inc. On Feb. 27, 2015, regulators placed Doral Bank into receivership and named the Federal Deposit Insurance Corp. as receiver. Doral Bank served customers through 26 branches located in New York, Florida, and Puerto Rico. DFC sought Chapter 11 protection (Bankr. S.D.N.Y. Case No. 15-10573) in Manhattan on March 11, 2015. The case is assigned to Judge Shelley C. Chapman. It estimated $50 million to $100 million in assets and $100 million to $500 million in debt as of the bankruptcy filing. DORAL FINANCIAL: Ex-Executive's $12MM Claim Cut to $242,000 ----------------------------------------------------------- Rick Archer, writing for Bankruptcy Law360, reports that the Hon. Shelley C. Chapman of the U.S. Bankruptcy Court for the Southern District of New York capped a $12 million whistleblower claim that Ronald Stewart, a former senior vice-president for Doral Financial Corp., brought against the Debtor at $242,000. According to Law360, Judge Chapman agreed with the trustee that Mr. Stewart will be limited by bankruptcy law to a year's salary plus unpaid benefits if he prevails with his claim he was fired for expressing concerns about the Debtor's financial reporting. About Doral Financial Corp. Doral Financial Corp. is a holding company whose primary operating asset was equity in Doral Bank. DFC maintains offices in New York City, Coral Gables, Florida and San Juan, Puerto Rico. The Company has three wholly-owned subsidiaries: Doral Properties, Inc., Doral Insurance Agency, LLC, and Doral Recovery, Inc. On Feb. 27, 2015, regulators placed Doral Bank into receivership and named the Federal Deposit Insurance Corp. as receiver. Doral Bank served customers through 26 branches located in New York, Florida, and Puerto Rico. DFC sought Chapter 11 protection (Bankr. S.D.N.Y. Case No. 15-10573) in Manhattan on March 11, 2015. The case is assigned to Judge Shelley C. Chapman. It estimated $50 million to $100 million in assets and $100 million to $500 million in debt as of the bankruptcy filing. MARKETS & FUN: Seeks Extension of Plan Filing Date Until May 25 --------------------------------------------------------------- Markets & Fun, LLC, asks the U.S. Bankruptcy Court for the District of Puerto Rico to extend the exclusive period for filing its plan and disclosure statement until May 25, 2017, and to extend the deadline to procure the votes under the plan for a term of 60 days. On Oct. 5, 2016, the Debtor filed a voluntary petition for relief pursuant to 11 U.S.C. Chapter 11. Since then, the Debtor has managed its affairs and continued to operate its business as debtor-in-possession. The Debtor has moved forward in its reorganization process and is in compliance with all of its duties under the Bankruptcy Code and the Guidelines of the U.S. Trustee. The Debtor's exclusive period to file a Plan and Disclosure Statement expires 180 days after the entry of the order for relief. In the instant case, the Debtor's exclusivity period to file its Plan and Disclosure Statement expired on April 3, 2017. According to the notice of deadlines issued by the Court, the deadline for all creditors to file their claims was Feb. 6, 2017, and for governmental entities is on April 10, 2017. The Debtor asserts that it is indispensable for them to be able to reconcile all claims in order to propose a complete, viable, and effective plan that account for all claims. Due to the need of reconciling all timely filed claims and concluding negotiations with creditors, the Debtor contends that it is not in a position, at this juncture, to file its Plan and Disclosure Statement. The Debtor says it is presenting the instant request to extend the exclusivity period in good faith. Within such time, the Debtor will be able to submit a Plan and Disclosure Statement that considers all of the claims filed and the additional agreements it may reach with its creditors. The Debtor is represented by: Myrna L. Ruiz-Olmo, Esq. MRO Attorneys at Law LLC PO Box 367819 San Juan, PR 00936-7819 Tel. 787-237-7440 Email: mro@prbankruptcy.com Web: www.prbankruptcy.com Markets & Fun, LLC, filed a Chapter 11 petition (Bankr. D.P.R. Case No. 16-08010) on October 5, 2016, and is represented by Myrna L Ruiz Olmo, Esq., at MRO Attorneys at Law, LLC. ================= X X X X X X X X X ================= LATAM: Spending Better, Key to Improving Infrastructure ------------------------------------------------------- Latin America and the Caribbean (LAC) can dramatically improve its infrastructure by better assessing priorities and improving spending efficiency, says a new World Bank report. Rethinking Infrastructure in Latin America and the Caribbean -- Spending Better to Achieve More argues that although the region trails others in infrastructure investment, it should focus on spending better before thinking of spending more. While Latin America and the Caribbean spends 3 percent of GDP on average -- compared to 7.7 percent in East Asia and Pacific for instance -- many countries spend more than 4 percent. "Infrastructure investment can be a powerful engine for growth in Latin America and the Caribbean as the region emerges from six years of slowdown, including two of recession," said Jorge Familiar, World Bank Vice President for Latin America and the Caribbean. "In today's tight fiscal context, it is essential that investments are as efficient as possible, and that the full potential of the private sector be tapped." Rather than focusing on often poorly defined financing gaps, the report advocates for addressing "service gaps," according to countries' development priorities. This means putting in place efficient ways of addressing these needs, and developing clear rules for deciding when taxpayers should finance services, instead of users. Priorities and Efficiency Improving performance in a constrained fiscal environment will require well-identified priorities. The report singles out sanitation and transport, in which LAC lags behind other middle- income regions, as potential focus areas. In addition, the region should also factor concerns such as climate change, urbanization and its changing socioeconomic profile, in particular a larger middle class, which are changing infrastructure service demands -- especially on energy and transport. "Latin America and the Caribbean has long been an innovator in infrastructure," said Marianne Fay, Chief Economist for the World Bank's Sustainable Development Vice-Presidency, and one of the authors of the report. "With its expertise in sophisticated regulations and its experience with public-private partnerships, the region has the means to improve its infrastructure services by spending better and on the right things." Spending more efficiently could have enormous benefits. In the case of the energy sector, where transmission and distribution losses are high, LAC would need $23 billion per year if it were to follow the same investment path of the past. Costs would at least halve under an approach that favors efficiency, climate resiliency and renewable energy solutions. According to the report, many of the causes for inefficient infrastructure investment have roots beyond the sector, including lack of institutional capacity for planning, regulatory uncertainty, and budgeting and implementation issues in many countries. Inefficient procurement processes, for instance, contribute to excess costs. Adequate pricing for infrastructure services is another important potential area for increased efficiency. The report argues that pricing should go beyond simple cost recovery and take into account issues like social acceptability, quality, equity and attraction of commercial financing. In order to preserve tax- payers money, the report says that public and concessional resources should only be deployed where commercial financing is not viable or cost-effective. Finally, the report concludes that allowing infrastructure operators to diversify their revenue can contribute to easing the fiscal cost. Water treatment plants, for instance, can generate electricity for self-consumption and even sale, and sanitized sludge can be sold as fertilizer, instead of having to be disposed at high cost in sanitary landfills, options not currently available. *********** Monday's edition of the TCR-LA delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR-LA editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR-LA constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR-LA editor holds some position in the issuers' public debt and equity securities about which we report. Tuesday's edition of the TCR-LA features a list of companies with insolvent balance sheets obtained by our editors based on the latest balance sheets publicly available a day prior to publication. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. Submissions about insolvency-related conferences are encouraged. Send announcements to conferences@bankrupt.com *********** 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, Valerie U. Pascual, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A. Chapman, Editors. Copyright 2017. 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 or Nina Novak at 202-362-8552. * * * End of Transmission * * *