/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/170906.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, September 6, 2017, Vol. 18, No. 177 Headlines B A R B A D O S BARBADOS: International Fin'l. Services Sector Getting Overhaul B R A Z I L BANCO DE DESENVOLVIMENTO: S&P Affirms B- Global Scale ICR TAKATA CORP: Honda Reaches US$605MM Settlement Over Airbags C A Y M A N I S L A N D S OCEAN RIG: U.S. Court Recognizes Cayman Islands Proceedings RONSHINE CHINA: Moody's Revises Outlook to Neg.; Affirms B2 CFR D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: Agro Sector Gets a 1-Stop Foreign Trade Window DOMINICAN REP: Project Aims to Make Panning for Gold Profitable P U E R T O R I C O LRJ GLOBAL: Hires Santiago & Gonzalez Law as Attorney PUERTO RICO: Governor Must Comply with Fiscal Plan, FOMB Asserts S T. L U C I A ST. LUCIA: Banana Industry on the Rebound T R I N I D A D & T O B A G O PETROTRIN: Big Changes Coming for Firm, Rowley Says V E N E Z U E L A CORPORACION ELECTRICA: Fitch Cuts ST National Scale Rating to C PROVINCIAL DE REASEGUROS: Fitch Lowers IFS Rating to CC X X X X X X X X X LATAM: Faces Critical Skills Gap, IDB Study Finds - - - - - =============== B A R B A D O S =============== BARBADOS: International Fin'l. Services Sector Getting Overhaul --------------------------------------------------------------- Caribbean360.com reports that Barbados' international business and financial services sector is in for a major overhaul. Minister of International Business Donville Inniss said his ministry has started a full review of the sector and changes are in the works, according to Caribbean360.com. "I can report to you that we have accepted that we will have to make important changes to the various pieces of legislation that govern our international business and financial services sector in Barbados. We have to be far more proactive and realize that there are some inherent dangers in our present suite of legislation, which must be amended," Mr. Inniss disclosed at a recent seminar organized by the Institute of Chartered Accountants of Barbados, the report notes. Caribbean360.com discloses that the Minister said the aim of the overhaul is to have "a product mix that fits into global standards, ensures greater substance in our jurisdiction and better positions Barbados to be a more significant domicile for international business". Mr. Inniss added that changes may have to be made to the tax rates as the authorities establish the foundation for the new regime for the international business and financial services sector, the report relays. Mr. Inniss said it was critical that Barbados "exploit the foreign exchange earning potential" of the sector while adopting international best practices for risk and compliance, the report notes. "We are therefore now poised to restructure, reengage and redirect Barbados' international business and financial services sector to make it an even greater contributor to our economy. Part of that restructuring must include methodologies that allow us to better measure the contribution of the international business and financial service sector to the economy," said Mr. Inniss, the report relays. In that regard, he said he recently put together a team, consisting primarily of public officers and officials from the Barbados International Business Association (BIBA), to "device mechanisms that will allow us to better define the international business and financial services sector, capture the data on them and be able to report it in a timely fashion and therefore be in a better position to make informed decisions about the sector," the report discloses. Pointing out that a number of administrative and compliance matters were to be completed by the end of the current financial year, Mr. Inniss said he had asked the Ministry of Finance to grant a waiver of penalties for the sector in relation to tax filing at the Corporate Affairs and Intellectual Property Office, the report relays. "While the state needs the revenue, my perspective is that more revenue will come when we have a less burdensome administrative arrangement that caters to private enterprises in Barbados," the Minister said, the report says. Mr. Inniss pointed out that the sector was also being impacted by a number of international sanctions and tax laws including those coming from the Organization for Economic Corporation and Development (OECD), the report notes. However, Mr. Inniss insisted that Barbados would not roll over and play dead. "We can quarrel and curse about being picked on by the big boys or we can cry foul and say that there . . . [is a] lot of hypocrisy because there are a lot of member states in the OECD that have regimes that are deliberately more harmful than any that we can have in the Caribbean. But the approach that my ministry has been made to undertake is a detailed self-assessment of our current suite of products and to admit to where we have efficiencies and to identify strategies to [fix] such," he contended, the report adds. As reported in the Troubled Company Reporter-Latin America on March 7, 2017, S&P Global Ratings lowered its long-term foreign and local currency sovereign ratings on Barbados to 'CCC+' from 'B-'. The outlook is negative. S&P also lowered the short-term ratings to 'C' from 'B.' At the same time, S&P lowered its transfer and convertibility assessment for Barbados to 'CCC+' from 'B-'. =========== B R A Z I L =========== BANCO DE DESENVOLVIMENTO: S&P Affirms B- Global Scale ICR --------------------------------------------------------- S&P Global Ratings affirmed its 'B-' global scale issuer credit ratings on Banco de Desenvolvimento de Minas Gerais S.A. - BDMG. S&P also affirmed its 'brB+' national scale issuer credit rating on the bank. The outlook on both ratings remains stable. S&P said, "The ratings on BDMG continue to be limited by those on the state of Minas Gerais, because we believe the bank is subject to adverse intervention due to the latter's high degree of control and strong influence on the lender's strategy and business plans. Due to the bank's sharply deteriorating asset quality since 2015, we revised the bank's stand-alone credit profile (SACP) to 'b+' from 'bb-'. Our assessment also incorporates BDMG's concentrated funding base and narrow geographic mix of business activities, which are counterbalanced by the bank's solid capitalization and prudent liquidity management. "The ratings on Minas Gerais reflect the state's eroded fiscal position and its difficulty implementing tougher cost-control measures to improve public finances. Although these financial constraints raise doubts about the government's capacity to support BDMG's debt, we still believe that there is a moderately high likelihood of extraordinary support from the state to the bank in the event of financial distress. This assessment is due to BDMG's very important role in Minas Gerais, as it facilitates access to credit in the state, lending primarily to sectors that the government considers critical for the state's economic development. The state has a long track record of support to BDMG through capital injections, corroborating our assessment, and we anticipate that this support should continue over the next two years despite the state's financial difficulties due to law 4.135/2017, which the state's local legislature approved in July 2017. This new law dictates that one-half of the resources from several state funds must be injected into BDMG, while the other half will constitute a new state fund managed by the development bank. We expect those resources to support BDMG's solid capitalization despite Brazil's challenging economy. "We revised our assessment of BDMG's risk position because of the sharp asset quality deterioration on its loan portfolio. The bank's nonperforming loans (NPLs) and net charge-offs reached 6.2% and 1.9%, respectively, of the loan portfolio in March 2017 against an average of 1.4% and 0.8% from December 2012 to December 2015. Furthermore, BDMG's concentrated portfolio makes it more vulnerable to distress. As of March 2017, its top-20 clients represented 36% of its total loans, against an average of 17% for peers with a relevant share of loans to private companies in their portfolio. In light of BDMG's significant credit losses since 2015, the bank has recently tightened the credit limits for its clients to reduce single-name exposures. Clients now have a maximum limit of 8% of BDMG's regulatory capital, unless they have more than R$1 billion of net worth, in which case their limit is 15% of the bank's regulatory capital. Still, because the bank has a long-term loan portfolio, improvements in underwriting policies usually take years to positively affect asset quality indicators. Therefore, we expect high credit losses will continue generating negative bottom-line results over the next 12 months. Additionally, since the beginning of the recession in Brazil, the bank has materially increased its renegotiated loan portfolio, which represented 14.0% of total loans as of March 2017 against 4.3% in June 2014. We believe that this increase indicates that the bank's asset quality is weaker than what we would conclude just based on its NPLs and net charge-offs. "Conversely, BDMG's capitalization is stronger than that of peers, and we assume it will keep supporting its creditworthiness. The bank has a comfortable regulatory capital level of 15.3% as of March 2017, and we project that its risk-adjusted capital ratio will range between 10.6% and 10.9% for the next few years. Our forecast considers our base-case scenario, which includes the following assumptions: -- Brazil's real GDP growth of 0.5% in 2017 and 2.0% in 2018; -- BDMG's loan growth of 1.0% in 2017 and 2.0% in 2018; -- BDMG's net interest margins (NIM) to decrease in 2017 and 2018, due to higher funding costs and a more aggressive renegotiation strategy; -- The bank's asset quality to improve in 2018 as the economy starts to recover. Still, we expect NPLs to remain around 4.1%, significantly above historical levels; -- Negative bottom-line results, with ROAA ranging around -0.40% and -0.80% for the next two years; and -- Capital injections of R$37 million in 2017 and R$56 million in 2018, as the bank benefits from capital inflows from state funds. S&P said, "In our view, BDMG's narrow mix of business activities and its geographic concentration continues to limit its business position. Over the past five years, the bank has extended its reach to geographically isolated customers in the state of Minas Gerais, particularly to micro and small companies only have access to credit through BDMG, which has allowed the bank to increase its market share and improve its market position. However, with R$7.2 billion in total assets, the bank still represents less than 1% of the Brazilian banking system as of March 2017. Furthermore, the bank remains concentrated in Minas Gerais, providing mainly working capital and long-term loans for investments for local companies. Mitigating these factors, the bank has no relevant trading gains or market-sensitive activities. The new state fund created by the law 4.135/2017 now generates a recurring fee income for BDMG, supporting its revenue stability. "We believe that BDMG's concentrated funding base is also a weakness. In contrast to other government-related banks, BDMG has no retail funding base, which we view as inexpensive and stable, because it has no license to receive core deposits. Thus, its funding sources are wholesale-oriented; 72% of which consisted of funding from BNDES (the Brazilian National Development Bank) and its subsidiaries as of March 2017, which we view as a material funding concentration. Still, due to the long-term maturity profile of its funding base, BDMG's stable funding ratio (SFR) is 85.3% as of March 2017, which we deem adequate. Aside from the funding from BNDES, the bank counts on lending from foreign development agencies such as the European Investment Bank, Development French Agency, and Inter-American Development Bank-- this amounted to around R$507 million as of June 2017. BDMG also has resources from financial bills and, in an effort to diversify its funding base, the bank recently issued R$180 million of agribusiness-linked securities (LCA). "In our opinion, BDMG has well-defined policies to manage liquidity risk. It assesses liquidity daily and considers different time horizons for its cash flow analysis. The bank also applies stress tests that consider, among other assumptions, a default of its largest clients and a limited ability to roll-over its maturing debt in different time horizons, which is used to establish a minimum level of liquid assets. Finally, BDMG has a contingency plan with established procedures to deal with a breach of liquidity limits: an action plan is defined in an internal committee whose results will be reported recurrently to the board of directors. As of March 2017, BDMG's broad liquid assets (cash + liquid securities + short-term repos + short-term interbank deposits) amounted to R$913 million. The broad liquid assets to short-term wholesale funding ratio reached 0.84x in the same period, down from 1.11x one year before. Still, we believe that the bank is likely to survive for more than six months even if under stressful conditions, as nearly all of its funding sources have no daily liquidity. Therefore, we expect this ratio to remain above 0.5x over the next 12 months. "The stable outlook on BDMG reflects our expectation that Minas Gerais will keep its commitment to control the growth of operating spending to avoid higher fiscal deficits in the next 12 months, reducing the risk of a negative intervention on the bank. It also reflects our expectation that the bank will maintain a comfortable liquidity cushion to cover its 12-month debt service and solid capitalization despite the losses we expect over the same period. "We could lower the ratings on BDMG if its liquidity plummets or if its business is severely impaired due to government intervention in the bank's strategy, exposing it to risky activities that could threaten its asset quality, capitalization, and bottom-line results. Those scenarios are not in our base case for the next 12 months. "We could raise the ratings on the bank following a similar rating action on the state. An improvement on the bank's SACP will not affect the rating of the bank since it is limited by our rating on the state." TAKATA CORP: Honda Reaches US$605MM Settlement Over Airbags ----------------------------------------------------------- Jessica Dye at The Financial Times reports that Honda has struck a proposed $605 million settlement to resolve US consumer claims in connection with recalled Takata airbags. Honda, which was Takata's largest customer, is the sixth car maker to settle US litigation over the recall, the FT notes. In addition to compensating customers for out-of-pocket losses stemming from the recall, the settlement would also create an outreach programme to help speed up the recall and replacement of the recalled parts, among other features, the FT discloses citing court filings. "In reaching this agreement, Honda, to its credit and the benefit of its customers, has complemented and enhanced its ongoing industry-innovative efforts to remove the defective Takata airbags from its vehicles. This agreement will not only expand awareness of the Takata recalls and improve driver safety by accelerating the removal of defective airbags from our roads, but will provide compensation to affected Honda consumers. We will continue prosecuting our claims against Ford and other automobile manufacturers to ensure that our clients receive the relief they deserve," the FT quotes Peter Prieto, a lead lawyer for the consumers bringing the cases, as saying in a statement. Honda, which was Takata's biggest customer, was hit especially hard by the recall, which has encompassed millions of vehicles made by numerous companies and has been linked to at least 17 deaths and more than 100 injuries worldwide, according to the FT. Takata has paid a $1 billion criminal penalty in the US in connection with the recall and filed for bankruptcy. Toyota, Subaru, Mazda and Subaru have already agreed to pay $553 million to settle US consumer litigation over the recall. Nissan agreed to a separate $97.7 million deal, the report notes. The settlement will require court approval and does not cover personal injury or property damage claims, the FT adds. About Takata Corp Japan-based Takata Corporation (TYO:7312) -- http://www.takata.com/en/-- develops, manufactures and sells safety products for automobiles. The Company offers seatbelts, airbags, steering wheels, child seats and trim parts. Headquartered in Tokyo, Japan, Takata operates 56 plants in 20 countries with approximately 46,000 global employees worldwide. The Company has subsidiaries located in Japan, the United States, Brazil, Germany, Thailand, Philippines, Romania, Singapore, Korea, China and other countries. Takata Corp. filed for bankruptcy protection in Tokyo and the U.S., amid recall costs and lawsuits over its defective airbags. Takata and its Japanese subsidiaries commenced proceedings under the Civil Rehabilitation Act in Japan in the Tokyo District Court on June 25, 2017. Takata's main U.S. subsidiary TK Holdings Inc. and 11 of its U.S. and Mexican affiliates each filed voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 17-11375) on June 25, 2017. Together with the bankruptcy filings, Takata announced it has reached a deal to sell all its global assets and operations to Key Safety Systems (KSS) for US$1.588 billion. Nagashima Ohno & Tsunematsu is Takata's counsel in the Japanese proceedings. Weil, Gotshal & Manges LLP and Richards, Layton & Finger, P.A., are serving as counsel in the U.S. cases. PricewaterhouseCoopers is serving as financial advisor, and Lazard is serving as investment banker to Takata. Ernst & Young LLP is tax advisor. Prime Clerk is the claims and noticing agent. Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal counsel, KPMG is serving as financial advisor, Jefferies LLC is acting as lead financial advisor. UBS Investment Bank also provides financial advice to KSS. On June 28, 2017, TK Holdings, as the foreign representative of the Chapter 11 Debtors, obtained an order of the Ontario Superior Court of Justice (Commercial List) granting, among other things, a stay of proceedings against the Chapter 11 Debtors pursuant to Part IV of the Companies' Creditors Arrangement Act. The Canadian Court appointed FTI Consulting Canada Inc. as information officer. TK Holdings, as the foreign representative, is represented by McCarthy Tetrault LLP. The U.S. Trustee has appointed an Official Committee of Unsecured Trade Creditors and a separate Official Committee of Tort Claimants. The Official Committee of Unsecured Creditors has selected Christopher M. Samis, Esq., L. Katherine Good, Esq., and Kevin F. Shaw, Esq., at Whiteford, Taylor & Preston LLC, in Wilmington, Delaware; Dennis F. Dunne, Esq., Abhilash M. Raval, Esq., and Tyson Lomazow, Esq., at Milbank Tweed Hadley & McCloy LLP, in New York; and Andrew M. Leblanc, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in Washington, D.C., as its bankruptcy counsel. Chapter 15 Cases Takata Corporation ("TKJP") and affiliates Takata Kyushu Corporation and Takata Services Corporation commenced Chapter 15 cases (Bankr. D. Del. Case Nos. 17-11713 to 17-11715) on Aug. 9, 2017, to seek U.S. recognition of the civil rehabilitation proceedings in Japan. The Hon. Brendan Linehan Shannon oversees the Chapter 15 cases. Young, Conaway, Stargatt & Taylor, LLP, serves as Takata's counsel in the Chapter 15 cases. ========================== C A Y M A N I S L A N D S ========================== OCEAN RIG: U.S. Court Recognizes Cayman Islands Proceedings ----------------------------------------------------------- In these four jointly administered chapter 15 cases, Simon Appell and Eleanor Fisher, the joint provisional liquidators and authorized foreign representatives of Ocean Rig UDW Inc., Drill Rigs Holdings Inc., Drillships Financing Holding Inc. and Drillships Ocean Ventures Inc. seek recognition as foreign main proceedings or foreign nonmain proceedings of four proceedings pending before the Grand Court of the Cayman Islands. The JPLs' goal is to have the Cayman Court sanction four schemes of arrangement (one for each of the Foreign Debtors) negotiated and proposed by the Foreign Debtors, and then, if sanctioned by the Cayman Court, have this Court recognize and enforce the schemes in these chapter 15 cases. Judge Martin Glenn of the U.S. Bankruptcy Court for the Southern District of New York ruled that the Cayman Court proceedings should be recognized as a foreign main proceeding. Judge Glenn finds that the Foreign Debtors satisfy section 109(a)of the Bankruptcy Code's requirement of property in the US. Each of the four Foreign Debtors paid its New York counsel a separate $250,000 retainer, for a total of $1 million, currently held in counsel's client trust account in New York, where they will remain pending final billing in these proceedings. The indebtedness that is the subject of the Debtors' restructuring efforts consists of approximately $4.5 billion face amount of U.S. dollar denominated debt, with approximately $3.7 billion outstanding on the Petition Date. This debt is governed by four instruments, each of which was admitted in evidence at the hearing and each of those debt instruments is governed by New York law. The two term loan agreements, accounting for $3.2 billion face amount of the $4.5 billion total indebtedness, include exclusive New York forum selection provisions. The Foreign Debtors' debt instruments governed by New York law also satisfy the venue requirements for these proceedings in the Southern District of New York. The Foreign Debtors have no substantial assets in the United States other than the New York law governed debt. The venue requirement in 28 U.S.C. section 1410 to maintain these chapter 15 cases in the Southern District of New York is satisfied. The chapter 15 cases were also properly commenced in accordance with sections 1504, 1509 and 1515. The Verified Petition for recognition of foreign proceedings was filed pursuant to section 1515(a) and was accompanied by all documents and information required by sections 1515(b) and (c) and the relevant Bankruptcy Rules. The Court also finds that The Cayman Proceedings are "foreign main proceedings" within the meaning of section 1502(4) of the Bankruptcy Code because each Debtor's center of main interests is the Cayman Islands. In this case, the Foreign Debtors shifted their COMI from the Republic of the Marshall Islands to the Cayman Islands. The Court finds that the Foreign Debtors' COMI shift was done for proper purposes to facilitate a value maximizing restructuring of the Foreign Debtors' financial debt. The Foreign Debtors' COMI shift to the Cayman Islands was "real," satisfying the factors or indicia considered by courts in determining a foreign debtor's COMI. For these reasons, the Court finds and concludes that the Foreign Representatives established by a preponderance of the evidence that each of the four Foreign Debtors' proceedings pending in the Cayman Court is entitled to recognition as a foreign main proceeding. A full-text copy of Judge Glenn's Memorandum Decision is available at http://bankrupt.com/misc/nysb17-10736-129.pdf Counsel for the Petitioners, Simon Appell and Eleanor Fisher in their capacities as the Joint Provisional Liquidators and Proposed Foreign Representatives: Evan C. Hollander, Esq. Raniero D'Aversa, Jr., Esq. Monica A. Perrigino, Esq. ORRICK, HERRINGTON & SUTCLIFFE LLP 51 West 52nd Street New York, New York 10019 echollander@orrick.com rdaversa@orrick.com mperrigino@orrick.com -and- Steven J. Fink, Esq. LAW OFFICE OF STEVEN J. FINK PLLC 81 Main Street, Suite 405 White Plains, NY 10601 Objector to Recognition: Tally M. Wiener, Esq. LAW OFFICES OF TALLY M. WIENER, ESQ. 119 West 72nd Street, PMB 350 New York, NY 10023 tally.wiener@thecomi.com About Ocean Rig UDW Inc. Ocean Rig. (NASDAQ: ORIG) -- http://www.ocean-rig.com/-- is an international offshore drilling contractor providing oilfield services for offshore oil and gas exploration, development and production drilling, and specializing in the ultra-deepwater and harsh-environment segment of the offshore drilling industry. On March 24, 2017, the Debtors filed winding up petitions with the Cayman Court and issued summonses for the appointment of joint provisional liquidators for the purpose of the Restructuring. By orders of the Cayman Court dated March 27, 2017, Simon Appell and Eleanor Fisher were appointed as the JPLs and duly authorized foreign representatives, and the Cayman Provisional Liquidation Proceedings were commenced. Simon Appell and Eleanor Fisher of AlixPartners, LLP, in their capacities, as the joint provisional liquidators and authorized foreign representatives, filed for Chapter 15 protection for Ocean Rig and its affiliates (Bankr. S.D.N.Y. Lead Case No. 17-10736) to seek recognition of the Cayman proceedings. The JPLs' U.S. counsel are Evan C. Hollander, Esq., and Raniero D'Aversa Jr., Esq., at Orrick, Herrington & Sutcliffe LLP, in New York. RONSHINE CHINA: Moody's Revises Outlook to Neg.; Affirms B2 CFR ---------------------------------------------------------------- Moody's Investors Service has revised to negative from stable the outlook on Ronshine China Holdings Limited's B2 corporate family rating and B3 senior unsecured rating. Moody's has also affirmed the ratings. RATINGS RATIONALE "The change in outlook to negative reflects Moody's concerns over Ronshine's increased level of refinancing risk, stemming from its escalating short-term debt and declining cash balances, as well as higher financing risk because of higher-than-expected debt leverage," says Anthony Lee, a Moody's Analyst. Ronshine's short-term debt increased by 144% to RMB18.9 billion at end-June 2017 from RMB7.7 billion at end-December 2016. At the same time, the company's cash and deposits (including restricted cash) declined by 32% to RMB11.0 billion at end-June 2017, despite the reported 64.3% increase in contracted sales in 1H 2017. As a result, cash & deposits/short-term debt weakened materially to 58% at end-June 2017 from 208% at end-December 2016. Accordingly, debt refinancing risk has unexpectedly risen. This adverse development was due to Ronshine's aggressive land acquisitions in 1H 2017. Moody's estimates that the company's land premium payments of around RMB15 -- 18 billion in 1H 2017 were in excess of its pre-sales of RMB10 -- 11 billion over the same period. Another reason for the lower cash balances was weaker cash collections from presales in 1H 2017. The company's cash proceeds from presales and contracted sales declined to 70% in 1H 2017 from around 90% in 2016, partially driven by delays in disbursements from banks which provide mortgage financing. Given that the company will have around RMB12 billion of debt that will mature or be putable by investors in 2018, its high level of refinancing risk will likely continue over the next 12 months. In addition, Ronshine's debt leverage is high. Revenue/adjusted debt, including its share in JVs and associates, was around 30% and 28% at end-December 2016 and end-June 2017 respectively. These levels were weak for its B2 ratings. Ronshine's refinancing risk and high debt leverage could improve through more disciplined policy on land acquisitions and strong sales growth. On the other hand, Ronshine's future growth in contracted sales is supported by its high quality land reserve. At end-June 2017, the company's projects in Fuzhou, Hangzhou, Nanjing, Shanghai, Xiamen and Tianjin accounted for 67% of its total land reserve, in term of gross floor area. Moody's believes that housing demand in these cities is stronger than the national average, due to the increasing numbers of buyers with high purchasing power. Ronshine's B2 corporate family rating continues to reflect its fast growing scale and its track record of developing properties in Fujian Province. The rating also factors in the high financial risk from the company's aggressive land acquisition strategy, resulting in high debt leverage, as well as limited but developing funding channels. Moody's will monitor any improvements to the company's cash collections from presales and any slowdown in land acquisitions as well as its actions to manage forthcoming debt repayments. Upgrade pressure is limited, given the negative outlook. However, the outlook could return to stable if the company shows (1) continued growth in presales; and (2) improvements in cash collections from presales, as well as its liquidity position and debt leverage. Revenue/adjusted debt at 40% and cash/short term debt at 1x could be indicators of returning the rating outlook to stable. On the other hand, the ratings could be downgraded if Ronshine is unlikely to turn around its high refinancing risk, weak liquidity and high debt leverage. The principal methodology used in these ratings was Homebuilding And Property Development Industry published in April 2015. Ronshine China Holdings Limited was incorporated in the Cayman Islands in 2014 and listed on the Hong Kong Stock Exchange in January 2016. As a property developer, it focuses on mid- to high- end residential units in Fujian Province, Yangtze River Delta, Pearl River Delta, Central China and Bohai Sea Region. The company was founded by its Chairman, Mr. Ou Zonghong, who owns 75% of Ronshine. =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: Agro Sector Gets a 1-Stop Foreign Trade Window ------------------------------------------------------------------ Dominican Today reports that Dominican Republic Agriculture Ministry and the Customs Agency established a One-stop Foreign Trade Window (VUCE-RD), to expedite the procedures to export and import agro products. In a statement, Agriculture minister Angel Estevez said the system will digitize his entity's internal processes and simplify the procedures for users, according to Dominican Today. Mr. Estevez called the one-top window "a transcendental pilot plan" for the Dominican Republic's business abroad and an example of efficiency, transparency and technological advancement as envisioned in president Danilo Medina's Digital Republic project, the report notes. Mr. Estevez said the system will save the more than 4,000 export- import companies registered in Agriculture over RD$1.0 billion per year, the report relays. Days Away For his part Customs director, Enrique Ramirez affirmed that the agribusiness companies will have access to the efficient system "in the coming days." As reported in Troubled Company Reporter-Latin America on July 24, 2017, Moody's Investors Service has upgraded the Dominican Republic's long term issuer and debt ratings to Ba3 from B1 and changed the outlook to stable from positive, based on the following key drivers: (1) The Dominican Republic's continued robust growth outlook compared to rating peers, coupled with a reduction in external risks as current account deficits have declined and international reserves have increased. (2) The reduction in fiscal deficits over the last four years and Moody's expectation that fiscal deficits will remain shy of 3% of GDP, supported by fiscal restraint and reduced transfers to the electricity sector. DOMINICAN REP: Project Aims to Make Panning for Gold Profitable --------------------------------------------------------------- Dominican Today reports that submerged in holes next to streams, rivers and canyons, dozens of men pan for alluvial gold every day as has been done for over 500 years, as a source of income for many families of La Mina village and other towns near Miches, El Seibo province (east). Gensy Diaz, 29, who works the holes that emanate gold with his mother, grandmother and uncle since a boy, affirms that it's been his only income, with as much as RD$427,000 in one day, when he and three companions found 388 grams, according to Dominican Today. Veteran digger Marino Sanchez estimates that there are around 40 points in the province where as many as 300 men search for gold, the report notes. Haitian miner Felix Timo affirms that nuggets weighing up to 73 grams have been found while panning. Each gram sells for RD$1,300 to middlemen, who also lend money to the miners when they have a run of bad luck, and have to resort to farm labor, construction and other work, the report relays. Germany Push The activity's economic importance has prompted the Mining Dept.'s interest, and has obtained Germany's support with geological studies to locate gold veins, the report notes. The report discloses that the project by Germany's Geosciences Institute aims to improve the sustainability of panning for gold, with plans to invest US$2.0 million in several countries over the next two years. As reported in Troubled Company Reporter-Latin America on July 24, 2017, Moody's Investors Service has upgraded the Dominican Republic's long term issuer and debt ratings to Ba3 from B1 and changed the outlook to stable from positive, based on the following key drivers: (1) The Dominican Republic's continued robust growth outlook compared to rating peers, coupled with a reduction in external risks as current account deficits have declined and international reserves have increased. (2) The reduction in fiscal deficits over the last four years and Moody's expectation that fiscal deficits will remain shy of 3% of GDP, supported by fiscal restraint and reduced transfers to the electricity sector. ====================== P U E R T O R I C O ====================== LRJ GLOBAL: Hires Santiago & Gonzalez Law as Attorney ----------------------------------------------------- LRJ Global Quality Concrete, Inc. seeks approval from the U.S. Bankruptcy Court for the District of Puerto Rico to employ Nydia Gonzalez Ortiz, Esq., and the Law Offices of Santiago & Gonzalez Law, LLC as Chapter 11 counsel. Nydia Gonzalez Ortiz, Esq., and Santiago & Gonzalez Law, LLC, have bee paid a $4,000 retainer fee, against which the law firm will bill on the basis of $250.00 per hour, plus expenses, for work to be performed by Nydia Gonzalez Ortiz, Esq., and $125.00 per hour, plus expenses, for work to be performed by the firm's associate. Nydia Gonzalez Ortiz, Esq. attests that she and her law firm are disinterested persons or entities, as defined in 11 U.S.C. Section 101(14). The Counsel can be reached through: Nydia Gonzalez Ortiz, Esq SANTIAGO & GONZALEZ LAW, LLC 11 Betances Street Yauco, PR 00698 Tels: (787) 267-2205/267-2252 Email: bufetesg@gmail.com About LRJ Global Quality Concrete, Inc Based in Yauco, Puerto Rico, LRJ Global Quality Concrete filed a voluntary petition for reorganization pursuant to Chapter 11 of the Bankruptcy Code (Bankr. D.P.R. Case No. 17-04359) on June 19, 2017. The Debtor is represented by Nydia Gonzalez Ortiz, Esq. of Santiago & Gonzalez. The Debtors' assets and liabilities are both below $1 million. PUERTO RICO: Governor Must Comply with Fiscal Plan, FOMB Asserts ---------------------------------------------------------------- BankruptcyData.com reported that the Financial Oversight and Management Board for Puerto Rico (FOMB) filed with the U.S. Bankruptcy Court an adversary complaint against the Hon. Ricardo Antonio Rossello (in his official capacity as the Governor of the Commonwealth of Puerto Rico). The complaint alleges, "PROMESA dictates that '[a] Fiscal Plan . . . shall . . . . provide a method to achieve fiscal responsibility and access to the capital markets.' Any fiscal plan that would 'achieve fiscal responsibility and access to the capital markets' in Puerto Rico may require unpopular and difficult choices. Congress insulated the FOMB from political and other pressures by providing that whether a fiscal plan satisfies the requirements set forth in PROMESA is a matter reserved to the FOMB 'in its sole discretion.' Congress also deprived federal district courts of subject-matter jurisdiction over challenges to the FOMB's fiscal plan certifications. PROMESA does not countenance any role for the Governor to determine whether the FOMB-certified Commonwealth Fiscal Plan (or any fiscal plan) satisfies PROMESA, or whether to comply with any portion of the FOMB-certified Commonwealth Fiscal Plan (or any certified fiscal plan). Once certified by the FOMB in its sole discretion, the Governor must comply with the fiscal plan. Accordingly, the FOMB seeks a declaration that (i) the furlough program and the pension overhaul are mandatory parts of the Commonwealth Fiscal Plan certified by the FOMB pursuant to PROMESA section 201, and (ii) the Governor must enforce and comply with all aspects of the Commonwealth Fiscal Plan, including but not limited to the furlough program and the pension overhaul." About Puerto Rico Puerto Rico is a self-governing commonwealth in association with the United States that's facing a massive bond debt of $70 billion, a 68% debt-to-GDP ratio and negative economic growth in nine of the last 10 years. The Commonwealth of Puerto Rico has sought bankruptcy protection, aiming to restructure its massive $74 billion debt-load and $49 billion in pension obligations. The debt restructuring petition was filed by Puerto Rico's financial oversight board in U.S. District Court in Puerto Rico (Case No. 17-01578) on May 3, 2017, and was made under Title III of 2016's U.S. Congressional rescue law known as the Puerto Rico Oversight, Management, and Economic Stability Act ("PROMESA"). The Financial Oversight and Management Board later commenced Title III cases for the Puerto Rico Sales Tax Financing Corporation (COFINA) on May 5, 2017, and the Employees Retirement System (ERS) and the Puerto Rico Highways and Transportation Authority (HTA) on May 21. On July 2, 2017, a Title III case was commenced for the Puerto Rico Electric Power Authority ("PREPA"). U.S. Chief Justice John Roberts has appointed U.S. District Judge Laura Taylor Swain to oversee the Title III cases. The Honorable Judith Dein, a United States Magistrate Judge for the District of Massachusetts, has been designated to preside over matters that may be referred to her by Judge Swain, including discovery disputes, and management of other pretrial proceedings. Joint administration of the Title III cases, under Lead Case No. 17-3283, was granted on June 29, 2017. The Oversight Board has hired as advisors, Proskauer Rose LLP and O'Neill & Borges LLC as legal counsel, McKinsey & Co. as strategic consultant, Citigroup Global Markets, as municipal investment banker, and Ernst & Young, as financial advisor. Martin J. Bienenstock, Esq., Scott K. Rutsky, Esq., and Philip M. Abelson, Esq., of Proskauer Rose; and Hermann D. Bauer, Esq., at O'Neill & Borges are onboard as attorneys. McKinsey & Co. is the Board's strategic consultant, Ernst & Young is the Board's financial advisor, and Citigroup Global Markets Inc. is the Board's municipal investment banker. Prime Clerk LLC is the claims and noticing agent. Prime Clerk maintains a case web site at: https://cases.primeclerk.com/puertorico Epiq Bankruptcy Solutions LLC is the service agent for ERS, HTA, and PREPA. O'Melveny & Myers LLP is counsel to the Commonwealth's Puerto Rico Fiscal Agency and Financial Advisory Authority (AAFAF), the agency responsible for negotiations with bondholders. The Oversight Board named Professor Nancy B. Rapoport as fee examiner and to chair a committee to review professionals' fees. Bondholders' Attorneys Toro, Colon, Mullet, Rivera & Sifre, P.S.C. and Kramer Levin Naftalis & Frankel LLP serve as counsel to the Mutual Fund Group, comprised of mutual funds managed by Oppenheimer Funds, Inc., Franklin Advisers, Inc., and the First Puerto Rico Family of Funds, which collectively hold over $3.5 billion in COFINA Bonds and over $2.9 billion in other bonds issued by Puerto Rico and other instrumentalities, including over $1.8 billion of Puerto Rico general obligation bonds ("GO Bonds"). White & Case LLP and Lopez Sanchez & Pirillo LLC represent the UBS Family of Funds and the Puerto Rico Family of Funds, which hold $613.3 million in COFINA bonds. Paul, Weiss, Rifkind, Wharton & Garrison LLP, Robbins, Russell, Englert, Orseck, Untereiner & Sauber LLP, and Jimenez, Graffam & Lausell are co-counsel to the ad hoc group of General Obligation Bondholders, comprised of Aurelius Capital Management, LP, Autonomy Capital (Jersey) LP, FCO Advisors LP, Franklin Mutual Advisers LLC, Monarch Alternative Capital LP, Senator Investment Group LP, and Stone Lion Capital Partners L.P. Quinn Emanuel Urquhart & Sullivan, LLP and Reichard & Escalera are co-counsel to the ad hoc coalition of holders of senior bonds issued by COFINA, comprised of at least 30 institutional holders, including Canyon Capital Advisors LLC and Varde Investment Partners, L.P. Correa Acevedo & Abesada Law Offices, P.S.C., is counsel to Canyon Capital Advisors, LLC, River Canyon Fund Management, LLC, Davidson Kempner Capital Management LP, OZ Management, LP, and OZ Management II LP (the QTCB Noteholder Group). Committees The U.S. Trustee formed a nine-member Official Committee of Retirees and a seven-member Official Committee of Unsecured Creditors of the Commonwealth. The Retiree Committee tapped Jenner & Block LLP and Bennazar, Garcia & Milian, C.S.P., as its attorneys. The Creditors Committee tapped Paul Hastings LLP and O'Neill & Gilmore LLC as counsel. =============== S T. L U C I A =============== ST. LUCIA: Banana Industry on the Rebound ----------------------------------------- Caribbean360.com reports that banana production is at an all-time high in St Lucia with the country on track to record a near 300 per cent rise in output. According to Agriculture Minister Ezechiel Joseph, based on current trends, the island could see the production of almost 20,000 tonnes for 2017, which could be an over 300 per cent increase compared to 2016 figures, the report notes. "We might reach almost 20,000 tonnes for the year 2017, despite the fact that [for] the first quarter of 2017, we were recovering from Tropical Storm Matthew," Minister Joseph said, Caribbean360.com relays. Minister Joseph noted that the development comes as the country continues the search for new markets to boost its exports, the report discloses. Officials have already targeted France, and according to the minister, they are hoping to start the shipment of 3,000 boxes on a weekly basis from January, the report relays. "They [French officials] have given a commitment. They are still interested in purchasing our bananas through . . . our established mechanism -- that's through Winfresh. So we are looking at starting sometime in January," the report quoted Mr. Joseph as saying. Mr. Joseph added that the demand for bananas from the Windward Islands remains strong and he was confident farmers could meet that demand, the report relays. "When I went to London, I had the opportunity to meet with some of the major supermarkets and they are saying that they want more of the Windward Islands bananas, so there is a market. It's for farmers now to be able to produce the fruit on a sustainable basis to increase the productivity so they can generate the type of returns," Mr. Joseph said, the report notes. Globalization and changes in the European market since the early 90s decimated the fragile banana industry in the Windward Islands, the report relays. Exports declined from 132,000 tons in 1992, to just 42,000 tons in 1995 and have declined further since, with exports sometimes lower than 5,000 tons, the report adds. As reported in the Troubled Company Reporter-Latin America on April 6, 2017, on March 24, 2017, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with St. Lucia, and considered and endorsed the staff appraisal without a meeting. Driven by agriculture and construction, GDP growth is estimated to have reached 0.8 percent in 2016, down from 1.8 percent in 2015. ================================ T R I N I D A D & T O B A G O ================================ PETROTRIN: Big Changes Coming for Firm, Rowley Says --------------------------------------------------- Anna Ramdass at Trinidad Express reports that Trinidad and Tobago Prime Minister Dr. Keith Rowley disclosed that State-owned Petroleum Co. of Trinidad & Tobago (Petrotrin) will be restructured and a new board headed by businessman Wilfred Espinet will be installed to spearhead this exercise. Mr. Espinet shared some of the issues plaguing Petrotrin which have rendered it in a woeful financial state with a US$850 million debt due in 2019 which it cannot pay, according to Trinidad Express. Mr. Espinet also noted that its infrastructure is outdated and poses a safety risk, the report relays. Dr. Rowley was speaking at Piarco International Airport before departing for vacation during which he will have a routine medical check-up, the report notes. Oilfields Workers' Trade Union (OWTU) president general, Ancel Roget, said the union will make a "comprehensive statement" on Petrotrin and the changing of the board at a press conference, the report relays. "We do have serious misgivings about the way in which this was done," Mr. Roget said via telephone, notes Trinidad Express. Mr. Rowley said Cabinet took a decision to install a new board with a mandate to make the company sustainable, work towards profitability and restructure it in the best interest of the national community, taking into account all the competing interests and challenges, the report relays. The report notes that the new board will include Wilfred Espinet (chairman), Reynold Ajodhasingh (vice-chairman), Eustace Nancis, Randhir Rampersad, Joel Harding, Linda Rajpaul, Nigel Edwards, Anthony Chan Tack and permanent secretary in the Energy Ministry, Selwyn Lashley. Dr. Rowley said these nine people, who were "carefully selected", come from both the private and public sectors and are very experienced in their various endeavors of business, the report relays. Some, Dr. Rowley said, have "deep" experience on Petrotrin itself and they are all highly qualified, the report discloses. "We are hoping that within a period of two to three years we can turn around the arrangements at Petrotrin so that company can get out of, or at least be on a path towards making a contribution of its promise," Dr. Rowley said, the report notes. Ward of the State Dr. Rowley said, in doing this, Government acknowledges the challenges elsewhere in the national community, especially in the Finance Ministry, where there are "dire situations" in some other State enterprises, the report relays. Dr. Rowley made reference to WASA and T&TEC. Dr. Rowley said WASA's payment to its supplier of desalinated water put it in a financial situation which realizes the concerns they had when the company entered into the process of desalination as a means of supplying water to the country, the report relays. Dr. Rowley said T&ETC owes the National Gas Company (NGC) billions of dollars and cannot pay at this point in time and if not paid will leave the NGC with a bottom line that could "reflect itself in the red," the report notes. With respect to Petrotrin he reminded that a committee was established to look into the company's affairs and a report was submitted to the Cabinet which was further examined by a Cabinet sub-committee on energy which he chairs and comprises a large body of persons from the energy sector, the report relays. "A decision was taken to begin the process of restructuring Petrotrin by converting Petrotrin in the shortest possible time from being a ward of the State to a company that not only conducts a stable business but conducts business as profitable and will continue to contribute profits to other benefits of national improvement," the report quoted Dr. Rowley as saying. Dr. Rowley said this requires certain resolutions, robust examination and a certain amount of acceptance as the situation is "very serious," the report relays. Huge Debts Dr. Rowley explained that Petrotrin has incurred significant liabilities in the form of "huge debts" which the Government cannot now discharge, the report notes. Dr. Rowley said one of these debts is due in 2019 and the Finance Minister cannot be undertaking activities to repay US$850 million in one single payment, the report relays. Dr. Rowley disclosed that a payment of a similar nature leans just beyond this debt, the report notes. Dr. Rowley said Finance Minister Colm Imbert is "struggling" to pay other expenses in his ministry, the report relays. Dr. Rowley noted that Petrotrin has been suffering numerous challenges as its oil production has been falling considerably, the report discloses. Dr. Rowley added that its infrastructure is "very worrisome" as it is outdated and could see significant problems arising with safety, the report says. Dr. Rowley said there is also a question on its sustainability in meeting its contractual agreements as the Finance Minister has to provide money to Petrotrin to buy oil and refine and lose money on that process, the report notes. Dr. Rowley said these serious matters, if not addressed definitively, threaten the very foundation of the country, the report relays. Dr. Rowley said this could lead to the "downgrading of the country as a whole" and impact on the country's ability to borrow and the cost of borrowing, the report adds. As reported in the Troubled Company Reporter-Latin America on April 28, 2017, Moody's Investors Service downgraded Petroleum Co. of Trinidad & Tobago corporate family rating and senior unsecured debt ratings to B1 from Ba3. Simultaneously, Moody's lowered Petrotrin's Baseline Credit Assessment ("BCA") to caa1 from b3. The outlook on the ratings is stable. The rating actions are linked to Moody's April 25, 2017 downgrade of the government of Trinidad & Tobago bond ratings to Ba1 from Baa3, with a stable outlook. ================= V E N E Z U E L A ================= CORPORACION ELECTRICA: Fitch Cuts ST National Scale Rating to C --------------------------------------------------------------- Fitch Ratings has downgraded Corporacion Electrica Nacional S.A.'s (CORPOELEC) Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDR) to 'CC' from 'CCC'. The rating action also affects the company's senior unsecured notes' rating which has been downgraded to 'CC'/'RR4' from 'CCC'/'RR4'. Additionally, Fitch has downgraded CORPOELEC's Long-Term National Rating to 'CCC(ven)' from 'AA(ven)' and Short-Term National Scale Rating to 'C(ven)' from 'F1+(ven)'. CORPOELEC's downgrade follows the recent downgrade of the Venezuelan sovereign (see 'Fitch Downgrades Venezuela's Ratings to 'CC'' dated August 30, 2017) and reflects Fitch's view that a default is probable given the parent's perceived increased default risk given the further reduction in financing options for the Venezuelan government following the imposition of additional sanctions on Venezuela by the U.S. government on Aug. 25, 2017. The sanctions prohibit U.S. persons or entities based in the U.S. from a series of financial transactions with the government and Petroleos de Venezuela S.A. (PDVSA), including any dealings in new debt as well as dealings in certain existing bonds owned by the Venezuelan public sector and dividend payments to the Venezuelan government. KEY RATING DRIVERS Ratings Linked to Sovereign: CORPOELEC's ratings are linked to the Republic of Venezuela, reflecting the sovereign's ownership of the issuer, and CORPOELEC's dependence on current public transfers (39% of total revenues as of December 2016) to carry out its day- to-day operations, other public transfers to finance its investment needs and transfers to third parties on its behalf to meet its financial obligations. Monopolistic Position: CORPOELEC is a vertically integrated public utility responsible for the operation of the country's electricity sector. The company was created in 2007 when the government nationalized the electricity sector. The entity absorbed all of the country's generation assets along with transmission, distribution and electric power retail infrastructure during 2010- 2011. CORPOELEC had an installed capacity of 29.180 MW and a client base of 6.4 million users as of December 2016 (28,998 MW in FY 2015). Results Affected by Tariff Lag: The government implemented tariff adjustments during 2013-2014-2015, resulting in a 29.8% increase in 2015 over the prior year. No adjustments were made to the tariff structure in 2016, while the company implemented a tariff increase of 142.5% in February 2017. The issuer continued to post a large operational deficit during FY 2016, despite the price adjustments, demonstrating that current prices for electricity do not allow for cost recovery and prolong dependence on the government's current and capital transfers for its day-to-day operations. Fitch expects CORPOELEC's dependence on public funding to remain unchanged, preserving the linkage to the sovereign. CORPOELEC's EBIT (presented by management in its interim figures) stood at negative VEB166 billion measured at constant prices, a figure that includes current public transfers accounted for as revenues of VEB147 billion, equivalent to 39% of total revenues in FY 2016. Sovereign Funds Capex: CORPOELEC executed USD1 billion in capex during 2016 a substantially lower investment outlay than in 2014- 2015 (USD2.6 billion in 2015 and USD4.1billion in 2014). The low level of additional capex and the progress in on going capex execution funded with public transfers allowed CORPOELEC to incorporate 870 MW of new capacity and re-establish 3,340 MW to the national electric system in 2016. Poor Quality of Information: The company is expected to make available a first draft of the auditor notes of its 2016 consolidated financial statements sometime during the second half of 2017. Previously, the auditor (Deloitte) could not issue an opinion on the reasonability of 2015 statements, given the weaknesses observed in the administrative control environment and lack of accounting support to establish an opinion on key components of the company's financial statements. According to management, 2016 statements will carry a similarly qualified opinion, with a marginal improvement at best over 2015 statements in terms of the number of issues raised. DERIVATION SUMMARY CORPOELEC's Long-Term Foreign- and Local-Currency IDRs are not well-positioned relative to peers as a result of insufficient cost recovery which is explained by a continuing tariff lag that impedes a sustainable CFFO performance, especially when compared with peers such as CFE and ICE. CORPOELEC depends on public fund transfers from its parent to carry on its day-to-day operations, meet its financial obligations and finance its capital expenditure. Specifically, the company's 2018 bond financial obligations are paid by the central government, through the Ministry of Finance's Public Credit Office, which transfers the funds directly to the paying agent (Citi Bank). KEY ASSUMPTIONS Fitch's key assumptions include: - The maintenance of the tariff lag further consolidates the sovereign linkage as Fitch expects the company's dependence of current and capital transfers to continue. - The company continues to depend on transfers from the central government to allow it to meet its financial obligations. CORPOELEC's 'CC' rating suggests that default of some kind appears probable. If a default or restructuring occurs, Fitch anticipates average recovery for CORPOELEC's bondholders of 31%-50%, and likely closer to the lower end of the range. Fitch's recovery analysis yields a recovery rating commensurate with an average recovery of 50%, but the willingness of Venezuela's government to extend concessions to investors will likely move actual recovery closer to the lower end of the 31%-50% range. RATING SENSITIVITIES Future Developments That May, Individually or Collectively, Lead to Positive Rating Action - Positive rating action is unlikely at this time. However, an upgrade of the sovereign would lead to an upgrade of Corpoelec's ratings. Future Developments That May, Individually or Collectively, Lead to Negative Rating Action - A downgrade of the sovereign, the announcement of a debt restructuring and/or government failure to honor its financial obligations. LIQUIDITY Liquidity is determined by timely access to government transfers that allow CORPOELEC to meet operating costs, finance its capex and meet its financial obligations. The company's liquidity is expected to be pressured over the next 12 months as a result of the sizable foreign-currency denominated payments of USD650 million due April 2018. FULL LIST OF RATING ACTIONS Corporacion Electrica Nacional S.A. -- Long-Term Foreign- and Local-Currency IDRs downgraded to 'CC' from 'CCC' -- EDC's USD650 million senior unsecured bond issuance due 2018 downgraded to 'CC/RR4' from 'CCC/RR4' -- National Long-Term Rating downgraded to 'CCC(ven)' from 'AA(ven)' -- National Short-Term Rating downgraded to 'C(ven)' from 'F1+(ven)' PROVINCIAL DE REASEGUROS: Fitch Lowers IFS Rating to CC ------------------------------------------------------- Fitch Ratings has downgraded Provincial de Reaseguros, C.A.'s (Pro Re) Insurer Financial Strength (IFS) rating to 'CC' from 'CCC'. The rating action on Pro Re follows the downgrade of Venezuela's Long-term Foreign and Local Currency IDRs to 'CC' from 'CCC' (for further information, see 'Fitch Downgrades Venezuela's Ratings to 'CC', dated Aug. 30, 2017, at 'www.fitchratings.com'). KEY RATING DRIVERS Fitch believes that Pro Re's financial performance will remain highly influenced by its operating environment and remain vulnerable to political uncertainty in Venezuela. The company has not achieved sizable international business diversification, given that 99.9% of its premium income comes from Venezuela and 6% of its assets are invested in sovereign debt as of June 2016. Therefore, the exposure to the local operating environment constrains the company's rating and is highly correlated with the sovereign's credit quality. RATING SENSITIVITIES Pro Re's rating is sensitive to any further changes in Venezuela's sovereign ratings or material deterioration of the local operating environment over the foreseeable future. In Fitch's view, there is a material possibility that the reinsurer's IFS rating would be downgraded in the event of a sovereign downgrade, given its income exposure to the local industry. FULL LIST OF RATING ACTIONS Provincial de Reaseguros --IFS to 'CC' from 'CCC'. ================= X X X X X X X X X ================= LATAM: Faces Critical Skills Gap, IDB Study Finds ------------------------------------------------- Despite well-intentioned efforts, many government programs fail to provide Latin American and Caribbean children and adults with the skills they need to thrive, the Inter-American Development Bank's 2017 flagship study finds. On the other hand, a shift towards evidence-based policies could provide the region with a much- needed skills windfall that boosts productivity and economic growth. While the region spends on average about the same percentage of GDP on education and skills development as more developed nations, the results fall well short. The average Latin American and Caribbean student is more than one year behind what is expected based on the region's level of economic development. Only 30 percent of children in third and fourth grade in Latin America and the Caribbean meet the minimum benchmark for math proficiency, compared to 66 percent for nations with similar levels of development and 93 percent in developed nations. Learning Better: Public Policy for Skills Development takes a critical look at government efforts to improve skills acquisition from birth to adulthood. The study identifies certain programs that are more effective and often cheaper than others. More successful programs include those that improve the quality of interactions at home and at school, provide incentives for young people to stay in school, and help businesses foster a learning environment in the workplace, among others. A complete copy of the press release is available here: https://is.gd/99zOU0 *********** 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, 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 Joseph Cardillo at 856-381-8268. * * * End of Transmission * * *