/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/180411.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 11, 2018, Vol. 19, No. 71 Headlines B R A Z I L ALUPAR INVESTIMENTO: Fitch Assigns First-Time 'BB' FC IDR BRAZIL: Former President Misses Deadline to Turn Himself In RADIO E TELEVISAO: Fitch Lowers Long-Term FC IDR to 'CC' D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: Industries 'Experience' Growth Forecast DOMINICAN REPUBLIC: Cement Makers Say Sales Slump E L S A L V A D O R BANCO AGRICOLA: Fitch Affirms 'B' Long-Term IDR; Outlook Stable BANCO DAVIVIENDA: Fitch Affirms 'B' Long-Term IDR; Outlook Stable M E X I C O MEXICO: Nafta Partners Seek Deal by Early May P U E R T O R I C O COOPERATIVA DE SEGUROS: AM Best Reviews C+ Fin'l. Strength Rating JML INVESTMENT: Case Summary & 4 Unsecured Creditors MINI MASTER: Files Amendment to Second Amended Plan V E N E Z U E L A VENEZUELA: Debt Crisis Nears New Low as Riskiest Bond Matures - - - - - =========== B R A Z I L =========== ALUPAR INVESTIMENTO: Fitch Assigns First-Time 'BB' FC IDR --------------------------------------------------------- Fitch Ratings has assigned Alupar Investimento S.A. (Alupar) a first-time 'BB' Foreign Currency Issuer Default Rating (IDR) and 'BBB-' Local Currency IDR. The Rating Outlook is Stable. Fitch currently rates Alupar's National Scale rating 'AAA(bra)'/Stable and local issuances ratings 'AAA(bra)'. Alupar's ratings reflect Fitch's view that the company will be able to strengthen its already diversified asset base while preserving a robust financial profile compatible with companies in the industry with the same rating category. Benefiting from the capital increase made over the last two years (BRL1.2 billion), Fitch believes Alupar can support the equity contributions necessary for the development of the projects in progress and for debt refinancing at the holding level, without compromising its liquidity position. Alupar's FC IDR is constrained by Brazil's country ceiling at 'BB', as the company generates the large majority of its revenues in local currency (BRL), with no cash and committed credit facilities abroad. Fitch also considers the three-notch difference between the company's LC IDR and the sovereign rating as appropriate due to its regulated nature. The Stable Outlook for the FC and LC IDRs mirrors the Outlook on Brazil's 'BB-' sovereign rating. The company's credit profile reflects the low business risk of its operations in the electric energy transmission segment, which is characterized by high EBITDA margins and great predictability of operating cash generation. Generation assets, in turn, despite having higher volatility than transmission, contribute to a greater dilution of potential operational risks. In addition, the company has around 83% of its assured energy contracted up to 2025 and has adhered, through its contracts of sale of energy in the regulated market, to the proposal of the hydrological risk mitigation by government, which is currently above average. To Fitch, the increase in construction risk arising from Alupar's participation in 10 new transmission line concessions and three generation projects is partially mitigated by the company's experience in implementing projects and proven financial flexibility. The new investments will partially offset the fall in revenue and operating cash generation that will come over the next few years with the reduction of annual allowable revenue (RAP) of some older transmission lines concessions. KEY RATING DRIVERS Low Business Risk: Alupar's ratings consider the group's low business risk associated with the combination of its activities in the transmission and generation of electric energy. In transmission, the concessions are long-term contracts and revenue, adjusted annually by inflation, is generated from by the availability of its current 18 assets in operation, without demand risk. The company also has customer diversification and receivables structure that include guarantees. In the generation segment, the long-term contracts for the sale of a large part of the assured energy of the assets and the partial protection for the hydrological risk also generate an expectation of strong operational cash generation. Strong Financial Profile: Fitch believes that the consolidated financial metrics will remain strong during the asset growing phase, with net financial leverage less than 3.6x in the next three years. Based on year-end 2017, the net debt / EBITDA ratio was 2.4x. In the same period, the holding received BRL236 million in dividends, registering a total debt / dividends ratio of 3.1x, and the liquidity position of BRL936 million was higher than its total debt of BRL727 million. Negative FCF Over The Next Years: On a consolidated basis, Fitch expects that Alupar will present cash flow from operations (CFFO) in the range of BRL700 million to 800 million in the coming years. Free cash flow (FCF) will be slightly negative in 2018 and increasing in the following three years, when the disbursement of the investment program, of approximately BRL5 billion for the next five years is higher. In addition, the dividend distribution of 50% of net income should also pressure the FCF. In 2017, the CFFO of BRL753 million was sufficient to cover investments and dividends, with the FCF at BRL73 million. Positive Asset Re-composition: Fitch considers Alupar's new investments important to maintaining a significant operating cash flow for the group. Of the total RAP of operating assets corresponding to the period from July 2017 to June 2018 of BRL 615 million, about BRL523 million are exposed to a 50% reduction as of 2018, in a phased manner. The company was active in the last transmission auctions and ensures the entry of BRL636 million of revenues when the projects are completed. Fitch believes that the group's proven experience and the new conditions of the auctions, with greater returns and deadlines of execution of the projects mitigate the execution risk associated with the construction of these projects. Strategic Sector for the Country: In Fitch's analysis, the credit profile of agents in the Brazilian electricity sector benefits from its strategic importance to sustain the country's economic growth potential and foster new investments. The federal government has acted to circumvent systemic problems that impact the cash flow of companies and guided discussions to improve the current regulatory framework in order to reduce the risk of the sector. DERIVATION SUMMARY Alupar has a stronger financial profile compared to its peers in Latin America, such as, Interconexion Electrica S.A. E.S.P. (ISA, BBB+/Stable), Transelec S.A. (BBB/Stable) and Consorcio Transmantaro S.A. (CTM, BBB-/Stable). All of the companies have low business risk profiles and predictable cash flow generation, which is a characteristic of transmission electricity companies operating in a regulated industry. The main differentiation in the ratings of these companies is the country where their main revenues are generated and the location of their assets. While its peers are located in investment grade countries, Alupar's ratings are negatively impacted by the country ceiling of Brazil (BB). The same rational is applied in the case of Transmissora Alianca de Energia Eletrica S.A.'s (Taesa) FC and LC IDRs of 'BB' and 'BBB-', respectively, both with Stable Outlooks. KEY ASSUMPTIONS Fitch's key assumptions within Fitch rating case for the issuer include: -- RAPs adjusted annually by inflation, with a 50% reduction for companies whose concession agreement contemplates this movement after the 15th year of operation; -- 83% of the assured energy of the generation segment already sold in long-term contracts, readjusted by inflation; -- Generation Scaling Factor (GSF) of 81% in 2018, 88% in 2019 and 93% in 2020; -- Operating expenses adjusted by inflation; -- Distribution of dividends equivalent to 50% of net income; -- Total investments of BRL4.7 billion by 2022 and absence of acquisitions and/or new investments out of the current portfolio. RATING SENSITIVITIES Future Developments That May, Individually or Collectively, Lead to Positive Rating Action -- As the FC IDR is capped by the country ceiling (BB) and the LC is three notches above the sovereign rating, an upgrade is unlike in the short term. Future Developments That May, Individually or Collectively, Lead to Negative Rating Action -- Deterioration in Alupar's consolidated financial profile with net leverage above 3.5x on a sustainable basis; -- Total debt / dividends received over 3.0 times and net debt / dividends received over 2.0 times at the holding level; -- Investments in projects with risks significantly higher than existing ones and weak financial structures; -- A more challenging environment in the power sector in Brazil; -- Negative rating actions on Brazil's sovereign rating may also pressure Alupar's IDRs. LIQUIDITY Strong Liquidity Profile: Fitch expects that the holding company will use its robust cash reserves to meet the needs of the projects and that the group will continue to have broad access to the capital market and bank debt, maintaining a debt maturity schedule in the compatible with the expectation of cash generation. At the end of 2017, the consolidated cash and cash equivalents position of BRL2.1 billion, reinforced by the capital increase of BRL833 million, in April 2017, represented 1.9x short- term debt of BRL1.1 billion. FULL LIST OF RATING ACTIONS Fitch has assigned the following first-time ratings: -- Long-Term Foreign Currency IDR 'BB'; Outlook Stable; -- Long-Term Local Currency IDR 'BBB-'; Outlook Stable. Fitch's existing ratings for Alupar are: -- National Scale Rating 'AAA(bra)', Outlook Stable; -- 5th Debenture Issuance of BRL 300 million due in 2027 'AAA(bra)'; -- 6th Debenture Issuance of BRL 250 million due in 2021 'AAA(bra)'. BRAZIL: Former President Misses Deadline to Turn Himself In ----------------------------------------------------------- Jeffrey T. Lewis, Luciana Magalhaes and Paulo Trevisani at The Wall Street Journal report that Brazil's former president, Luiz Inacio Lula da Silva, missed a deadline to turn himself in as he negotiated the terms of his surrender to begin serving a 12-year jail term in a case that has mesmerized this country, said a person familiar with the talks. The 72-year-old was expected to spend at least a second night in a trade union hall after being ordered to surrender by 5 p.m. local time April 6 or face arrest, according to The WSJ. Mr. da Silva was holed up in the headquarters of a metalworkers union hall in this industrial suburb of Sao Paulo where he began his rise to national prominence as a union activist in the 1970s, Bloomberg News says. Both a polarizing and popular figure, the man known across Latin America as Lula had quickly attracted supporters from his Workers' Party, who gathered outside the union hall and pledged to protect their leader from the police, the report notes. The former president's defenders gathered on a narrow, mostly residential street as Mr. da Silva conferred inside the six-story building, which was draped with banners reading "No to Lula's imprisonment" and "Election without Lula is a fraud," the report relays. A sound truck was parked outside, its giant loudspeakers blasting samba between speeches from Mr. da Silva's supporters. Street vendors sold beer, ice cream and barbecued meat, the report notes. "An innocent man does not surrender," said Angela Kinzu, 62, who was among those who arrived at the union headquarters, the report discloses. "We are in a war," he added. They and other Brazilians who support Mr. da Silva see the court order and last year's conviction against him -- part of a broad investigation of corruption that has led to the jailing of dozens of public officials and businessmen -- as a conspiracy to end his drive to win back the presidency, the report notes. Polls showed the former president topped all candidates ahead of the October election, the report says. At the union hall, Mr. da Silva's supporters formed a human barrier to protect their leader through much of Friday, April 6. Many wore the red that symbolizes the Workers' Party, which held power here from 2003 until 2016, the report relays. The case against Mr. da Silva has led to a spectacular fall from grace for a man who went from fighting a military dictatorship in the early 1980s to leading an increasingly powerful labor movement that brought him to the presidency in 2003, the report recalls. Assisted by high commodity prices and demand from China, Brazil under Mr. da Silva maintained a balanced federal budget while attracting investment and funding social programs that helped 30 million rise from poverty, the report says. That made him famous world-wide, with Barack Obama once hailing him as "the most popular politician on Earth," the report notes. But the China-fueled boom waned in the last decade, the report relays. His handpicked successor, Dilma Rousseff, saw Brazil's debt plunge back into junk status as the economy sank into recession, the report notes. In 2016, she was impeached and replaced by her conservative former ally, Michel Temer, the report says. Mr. da Silva was found guilty of accepting a penthouse apartment from a construction firm in exchange for favors, the report discloses. The ex-president has denied the charges, and his lawyers have said that he should remain free as he exhausts all appeals, the report adds. As reported in the Troubled Company Reporter-Latin America on Feb. 28, 2018, Fitch Ratings has downgraded Brazil's Long-Term Foreign Currency Issuer Default Rating (IDR) to 'BB-' from 'BB' and revised the Rating Outlook to Stable from Negative. RADIO E TELEVISAO: Fitch Lowers Long-Term FC IDR to 'CC' ------------------------------------------------------- Fitch Ratings has downgraded Radio e Televisao Bandeirantes Ltda.'s (RTB) Long-Term Foreign-Currency and Local-Currency Issuer Default Ratings (IDR) to 'CC' from 'CCC'. Fitch has also downgraded the company's National long-term rating to 'CC(bra)' from 'CCC(bra)'. Fitch has simultaneously withdrawn the ratings and will no longer provide ratings or analytical coverage of the issuer. The downgrades reflect Fitch's view that a default is probable in the near term for RTB given its limited financial flexibility with high reliance on short-term debt, which would require continued support from banks for credit extension at high interest expenses. The company has failed to materially improve its liquidity profile and cash flow generation during 2017. Fitch does not foresee any meaningful improvement in RTB's precarious liquidity profile in 2018, which would require restructuring of its capital structure. KEY RATING DRIVERS Fitch has withdrawn RTB's ratings as they are no longer considered by Fitch to be relevant to the agency's coverage. RATING SENSITIVITIES Rating Sensitivities are not applicable as the ratings have been withdrawn. FULL LIST OF RATING ACTIONS Fitch has downgraded and withdrawn the following ratings: Radio e Televisao Bandeirantes Ltda. -- Long-Term Foreign-Currency and Local-Currency IDRs to 'CC' from 'CCC'; -- National long-term rating to 'CC(bra)' from 'CCC(bra)' =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: Industries 'Experience' Growth Forecast ----------------------------------------------------------- Dominican Today reports that the Dominican Republic Central Bank's forecast 6.7% economic growth in the first six months is backed by Dominican Republic's Industries Association (AIRD), whose president Campos de Moya calls results "very optimistic," which the sector has "experienced it." He said the figure is corroborated by the increase in the many vehicles in the street, the infrastructure and the entire structures that compose it, according to Dominican Today. "I have the privilege of having an office that offers a view of the entire East of the city, those streets crammed with vehicles, all those apartments, are part of the growth that we industrialists are experiencing, because we are the producers of steel, cement, paint, pipes, etc.," Mr. De Moya said, the report notes. He said that in addition to industrialists, importers benefit because many of these components are imported, the report relays. "I think we have a very healthy economy, an economy that we have to applaud and do whatever it takes to make it last," he added. The report discloses that Mr. De Moya spoke prior to the signing of a multisector agreement to promote the use of plastics in construction. As reported in the Troubled Company Reporter-Latin America on Nov. 20, 2017, Fitch Ratings has affirmed Dominican Republic's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'BB-' with a Stable Outlook. DOMINICAN REPUBLIC: Cement Makers Say Sales Slump ------------------------------------------------- Dominican Today reports that Dominican Republic's cement industry is currently facing the effects of an economic slowdown and rising fuel prices, the Dominican Portland Cement Producers Association (Adocem) affirmed. It said the price of cement in bags fell 1.5% at the end of last year, and the situation hasn't reverted at the start of 2018, with a 3.5% drop in January and February, according to Dominican Today. "As is well known, although construction is a sector that often determines the rhythm of the national economy, in turn it is directly influenced by it," said Adocem president Rayza Rodriguez during the release of the annual report 2017, the report notes. That year, 4.18 million metric tons of cement were sold in the local market, while the volume was 4.24 million metric tons in 2016, the report relays. Cemex "While these results didn't meet our expectations, we must acknowledge the efforts made by the Dominican State to boost the economy through the release of amounts of the bank reserve, the maintenance of social housing projects and the construction of schools," said Cemex Dominicana president Alberto Rodriguez, the report notes. Resent in the event that gathered representatives of Adocem members, Domicem, Argos Dominicana and Cementos Cibao, the report says. In its 2017 report, Adocem notes that large cement companies are wagering on exports, as a way of "minimizing the negative impact of the national market as much as possible," the report discloses. Last year, 20.1% of the production was exported, compared to the 17.3% posted in 2016, the report adds. As reported in the Troubled Company Reporter-Latin America on Nov. 20, 2017, Fitch Ratings has affirmed Dominican Republic's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'BB-' with a Stable Outlook. ==================== E L S A L V A D O R ==================== BANCO AGRICOLA: Fitch Affirms 'B' Long-Term IDR; Outlook Stable --------------------------------------------------------------- Fitch Ratings has affirmed Banco Agricola, S.A.'s (Agricola) Long- Term Issuer Default Rating (IDR) at 'B' and its Viability Rating (VR) at 'b-'. KEY RATING DRIVERS IDRS, NATIONAL RATINGS AND SENIOR DEBT Agricola's IDRs, national and senior debt ratings reflect the potential support it would receive from its shareholder the Colombian bank Bancolombia S.A. (BBB/Stable). Agricola's IDR is constrained by El Salvador's country ceiling of 'B', which according to Fitch's criteria, captures transfer and convertibility risks. This caps the subsidiary's IDR to a lower rating than would be possible based solely on Bancolombia's ability and propensity to provide support. Fitch's assessment of Bancolombia's propensity to support Agricola reflects that any required support would likely be manageable relative to the ability of the parent to provide it and that default by this subsidiary would constitute high reputational risk to its parent. Fitch assessment also considers Agricola's relevance to its shareholder, as a key and integral part of the group's business. In Fitch's view, Agricola's strong local franchise and long track record of successful operations support the group's objectives and performance. Agricola is the largest bank in El Salvador, contributes with 9% of the group's combined profits and maintains steady dividend payments to its shareholder. Agricola's issuer and senior debt national ratings are at the highest point of the national ratings scale given the relative strength of the shareholder compared to other rated issuers in El Salvador. VR The bank's VR reflects, with high importance, El Salvador's operating environment. As per Fitch's criteria, the assessment of the operating environment incorporates both sovereign risk and broader country risks, and this is a constraining factor for Agricola's VR due to its influence on other aspects of the bank's risk profile. Agricola's VR also considers the strength of its local franchise, as El Salvador's largest bank, accounting for 26.2% of the banking system's loans, 44.7% of its profits, and 27.0% of deposits. In Fitch view, Agricola maintains a direct exposure to domestic economy, local financial markets and to the financial health of the government through its investment portfolio. Agricola's exposure to sovereign debt, although still material, has decreased to 18.6% of its Fitch Core Capital and 8% of liquid assets as of December 2017. The bank's consistent underwriting standards sustain adequate asset quality metrics and contain credit costs. Agricola's non- performing loan ratios and reserves coverage ratios remain adequate in spite of low economic growth. The quality of its liquid assets has also increased, and the bank now maintains a larger share of its liquid assets as deposits. Agricola's capital position is sound and consistent with its rating level and the relatively high risk of the operating environment. While adequate buffers over the regulatory minimum are still present, the Fitch Core Capital ratio and the regulatory ratio have decreased consistently due to the high dividend pay-out ratio. Agricola's profitability remains sound and consistent with the increased operating environment risk, but operating profits have been challenged by increasing credit costs, low asset growth and decreased interest income from the investment portfolio. The investment portfolio has decreased in size and reduced its exposure to short-term debt issued by the sovereign (Letes). Agricola's strong local franchise and ample geographic coverage allows a stable and granular deposit base, which is the core of its funding structure. Local deposits account for 83.2% of total funding. Deposits growth was above its historic average in 2017, driven by high remittances inflows from the U.S. in response to uncertainty around migratory policy, including the non-renewal of the TPS. Agricola has captured a significant proportion of these remittances inflows and posted a record deposit growth rate of 10.46% (average 2016-2013: 1.65%). SUPPORT RATING The bank's Support Rating reflects Fitch's opinion on Bancolombia' ability and propensity of the potential supporter to provide assistance to banco Agricola, should the need arise. Agricola's support rating is also constrained by El Salvador's sovereign rating, as reflected in the country ceiling. As per Fitch's criteria, Agricola's IDR of 'B' maps to a support rating of '4'. Agricola Senior Trust's Loan Participation Notes The rating for Agricola Senior Trust's (AST) five-year USD loan participation notes (the notes) is aligned with the bank's IDR. The loan under the Senior Unsecured Loan Agreement ranks pari passu in right of payment to all of Agricola's existing and future senior indebtedness and is effectively subordinated to all of the bank's secured indebtedness with respect to the value of the assets securing such indebtedness and to all of the existing and future liabilities of its subsidiaries. Inversiones Financieras Banco Agricola The national ratings assigned to Agricola's Holding Company in El Salvador, Inversiones Financieras Banco Agricola (IFBA) reflect the ability and propensity to support it of its shareholder Bancolombia. The 'AAA(slv)' ratings show the relative strength of the shareholder, which is rated several notches above El Salvador's sovereign rating. RATING SENSITIVITIES IDRS Agricola's ratings remain sensitive to changes in El Salvador's sovereign and Country Ceiling ratings. Changes in the bank's IDR would mirror changes in El Salvador's country ceiling as it constrains Agricola's IDR. VR Agricola's VR is sensitive to changes in El Salvador's operating environment, including its sovereign rating. Downgrades in Agricola's VR could also come from a material deterioration in the bank's financial profile, although the latter is not Fitch's base case scenario. SUPPORT RATING Agricola's support rating is constrained but could be upgraded if El Salvador's sovereign and Country Ceiling rating are upgraded by more than one notch as this would reflect a reduction in the potential constraints on the bank's capacity to receive extraordinary support. A downgrade of the support rating is also possible should the sovereign rating and Country Ceiling be downgraded. AGRICOLA SENIOR TRUST The rating of the notes is aligned with the bank's long term IDR, hence would mirror any change in the bank's ratings. NATIONAL RATINGS The Rating Outlook is Stable as Fitch does not anticipate any changes to IFBA's and Agricola's national ratings. The ratings are at the highest point of the national rating scale and therefore have no upside potential. In turn, a rating downgrade is unlikely given the strength of the parent relative to other rated issuers in El Salvador. SENIOR DEBT The rating of the senior long term debt is aligned with the bank's national rating and so would mirror any change in the bank's ratings. Fitch has affirmed the following ratings: Banco Agricola -- Long-term IDR at 'B'; Outlook Stable; -- Short-term IDR at 'B'; -- Viability Rating at 'b-'; -- Support Rating at '4'; -- National Long Term Rating at 'AAA(slv)'; Outlook Stable; -- National Short Term at 'F1+(slv)'; -- Senior Unsecured Debt at 'AAA(slv)'; -- Senior Secured Debt at 'AAA(slv)'. Inversiones Financieras Banco Agricola S.A. -- National Long Term Rating at 'AAA(slv)'; Outlook Stable; -- National Short Term at 'F1+(slv'); Agricola Senior Trust -- Loan participation notes at 'B'/'RR4'. BANCO DAVIVIENDA: Fitch Affirms 'B' Long-Term IDR; Outlook Stable ----------------------------------------------------------------- Fitch Ratings has affirmed Banco Davivienda Salvadoreno, S.A.'s (Davivienda Sal) Long-Term Issuer Default Rating (IDR) at 'B'. The Rating Outlook is Stable. Fitch has also affirmed the bank's Short-Term IDR at 'B' and its Viability Rating (VR) at 'b-'. KEY RATING DRIVERS IDRS, NATIONAL RATINGS AND SENIOR DEBT The IDRs, National Ratings and senior debt of Davivienda Sal reflect the potential support from its shareholder Banco Davivienda, S.A. (Davivienda; BBB/Stable). In Fitch's view, the owners' commitment to its subsidiaries is sufficiently strong to allow it to be rated above the sovereign rating. However, the IDRs remain constrained at El Salvador's Country Ceiling of 'B', which according to Fitch's criteria, captures transfer and convertibility risks. This caps the subsidiary's IDR to a lower rating than would be possible based solely on Davivienda's ability and propensity to provide support. Fitch's view on Davivienda's propensity to support the Salvadorian subsidiary reflects the high reputational risks for the bank's parent in the event of subsidiary default and that any required support would be manageable relative to the parent's ability to provide it. Davivienda Sal represents nearly 7% of total consolidated assets of Davivienda. Fitch's support assessment also considers Davivienda Sal's relevance to its shareholder, as a key and integral part of the group's business. Davivienda Sal's issuer and senior debt national ratings are at the highest point of the national ratings scale given the relative strength of the shareholder relative to other issuers rated in El Salvador. VR Davivienda's VR is rated at the same level of the sovereign rating reflecting the high influence of the operating environment. The sizable local franchise of Davivienda Sal (second largest bank by assets, with 14.7% of market share) results in high exposure to changes in the operating environment, including the government's financial health. The bank's VR is also moderately influenced by its company profile, improving asset quality, adequate capitalization levels, modest and decreasing profitability, and a lower funding profile than its peers. Davivienda Sal is the second largest bank in El Salvador. Its franchise is well-positioned in the country due to its size and long track record. The bank is the leader in the services credit segment (22.7%), second position in construction (28.9%) and third in commercial loans (12.7%), mortgages (12.3%) and consumer loans (16.1%). Fitch views the bank's asset quality as good following a consistent decline in delinquency levels to levels closer to 2% from 3% in a five-year span. This is closer to the banking industry average of 1.9%, which is also trending up. Improved asset quality metrics in the loan portfolio are mainly driven by the collection of big ticket impaired loans. Allowances are adequate at 1.1x and have improved in terms of impairment coverage. Capitalization, while adequate, has declined mainly due to a dividend payment in 2017 that represented 145% of that year's net income, calling resources from different fiscal years. As of December of 2017, the Fitch Core Capital ratio was 13.6% (2016: 16.2%). The bank intends to maintain its dividend pay-out ratio close to 50% of net income starting in 2018, and Fitch estimates that the FCC ratio will remain above 12% for the next two years. Profitability is one of the weakest aspects of the bank's financial profile at below average levels compared to local industry and international peers. During 2017, the bank's operating profit to risk weighted assets remained weak at 0.7%, mainly driven by lower than industry margins, higher than average cost of credits and moderate operating efficiency. The bank's funding structure relies on customer deposits, which represented 72.4% of total funding as of YE17. These exhibit a reasonable track of stability. Fitch believes that given the bank's franchise, support from its parent and deposit structure, the bank's deposit base will continue increasing in the foreseeable future. Notably, the loan to deposit ratio compares below the local industry average (113.4% vs. 101.6%) given its relatively higher reliance on wholesale sources. SUPPORT RATING The bank's Support Rating reflects Fitch's opinion on Davivienda's ability and propensity to provide assistance to Davivienda Sal, should the need arise. Davivienda Sal's support rating is also constrained by El Salvador's sovereign rating, as reflected in the country ceiling. As per Fitch's criteria, Davivienda Sal's IDR of 'B' maps to a support rating of '4'. Inversiones Financieras Davivienda, S.A. The national ratings assigned to Davivienda Sal's Holding Company in El Salvador, Inversiones Financieras Davivienda (IFD) reflect the ability and propensity to support it of its shareholder Davivienda. The 'AAA(slv)' ratings show the relative strength of the shareholder, which is rated several notches above El Salvador's sovereign rating. RATING SENSITIVITIES IDRS Davivienda Sal's ratings remain sensitive to a change in the Sovereign Rating and Country Ceiling of El Salvador. Changes in the bank's IDR would mirror changes in El Salvador country ceiling as it constrains Davivienda Sal's IDR. VR Davivienda Sal's VR is sensitive to changes in El Salvador's operating environment, including its sovereign rating. Downgrades in the bank's VR could also come from a material deterioration its intrinsic financial profile, although this is not Fitch's base case scenario. SUPPORT RATING Davivienda Sal's support rating is constrained but could be upgraded if El Salvador's sovereign and Country Ceiling rating are upgraded by two or more notches as this would reflect a reduction in the potential constraints on the bank's capacity to receive extraordinary support. A downgrade of the support rating is also possible should the sovereign rating and Country Ceiling be downgraded. NATIONAL RATINGS The Rating Outlook is Stable as Fitch does not anticipate any changes in Davivienda Sal's and IFD's national ratings. The ratings are at the highest point of the national rating scale and therefore have no upside potential. In turn, a rating downgrade is unlikely given the strength of the parent relative to other rate issuers in El Salvador. SENIOR DEBT The rating of the senior long-term debt is aligned with the bank's national rating and so would mirror any change in the bank's ratings. Fitch has affirmed the following ratings: Banco Davivienda Salvadoreno -- Long-term IDR at 'B'; Outlook Stable; -- Short-term IDR at 'B'; -- Viability Rating at 'b-'; -- Support Rating at '4'; -- National Long-term Rating 'AAA(slv)'; Outlook Stable; -- National Short-term Rating at 'F1+(slv)'; -- Senior unsecured long-term debt 'AAA(slv)'; -- Senior secured long-term debt 'AAA(slv'); -- Senior unsecured short-term debt 'F1+(slv)'; -- Senior secured short-term debt 'F1+(slv)'. Inversiones Financieras Davivienda S.A. -- National Long-term Rating 'AAA(slv)'; Outlook Stable; -- National Short-term Rating at 'F1+(slv)'. =========== M E X I C O =========== MEXICO: Nafta Partners Seek Deal by Early May --------------------------------------------- Santiago Perez at The Wall Street Journal reports that trade negotiators from the U.S., Canada and Mexico are looking to agree on a revamp of the North American Free Trade Agreement in early May, Mexico's Economy Minister Ildefonso Guajardo said. "There's a very high probability of reaching an agreement in principle, an 80% chance," Mr. Guajardo said in an interview on the Televisa network, according to The Wall Street Journal. U.S. negotiators have accelerated negotiations and want to reach a deal in principle that they can present to the U.S. Congress under the existing trade promotion authority, the report notes. Mr. Guajardo, U.S. Trade Representative Robert Lighthizer and Canadian Foreign Minister Chrystia Freeland met in Washington last week seeking to step up negotiations and clear roadblocks on the most controversial issues, such as rules of origin for cars and light trucks manufactured in North America, the report relays. Mr. Guajardo said there were no conditions to reach an agreement in principle at that meeting, but that trade teams agreed to be in "permanent talks" instead of having a formal eighth round of negotiations, the report notes. "The teams are in Washington," he added. The official confirmed that negotiators are discussing a proposal from the U.S. that calls for certain vehicle parts to be made in zones where wages average at least $15 an hour, which excludes Mexico, as part of the content calculation, the report says. "The proposal would be aspirational, unreachable for Mexico in the short-term," because the country doesn't have such wage levels, he said, the report relays. But the U.S. government first needs to reach an agreement with its own car manufacturers on such a plan, the report discloses. "The devil is in the details," Mr. Guajardo added. With U.S. eagerness to reach a deal soon, "when there's urgency, there must be flexibility," notes the report. The Nafta countries originally set January 2018 as the goal for concluding Nafta talks, then pushed the deadline to March 31, the report relays. ====================== P U E R T O R I C O ====================== COOPERATIVA DE SEGUROS: AM Best Reviews C+ Fin'l. Strength Rating ----------------------------------------------------------------- A.M. Best has placed under review with negative implications the Financial Strength Rating of C+ (Marginal) and the Long-Term Issuer Credit Rating of "b-" of Cooperativa de Seguros de Vida de Puerto Rico (COSVI) (San Juan, Puerto Rico). The under review status with negative implications reflects A.M. Best continuing concerns about COSVI's exposure to Puerto Rico bonds and the volatility this represents to COSVI's capital and surplus. A.M. Best also is concerned about a potential decline in either absolute or risk-adjusted capital at year-end 2017 once the company's annual statement is filed. The ratings will remain under review until A.M. Best has received COSVI's 2017 annual statement and conducted conversations with the company's management team regarding the results contained in the filing. JML INVESTMENT: Case Summary & 4 Unsecured Creditors ---------------------------------------------------- Debtor: JML Investment, Inc. Hermanas Davila #142 Calle 3A Bayamon, PR 00956 Business Description: JML Investment, Inc., is a privately held company in Bayamon, Puerto Rico. The Company is a small business Debtor as defined in 11 U.S.C. Section 101(51D). Chapter 11 Petition Date: April 8, 2018 Case No.: 18-01881 Court: United States Bankruptcy Court District of Puerto Rico (Old San Juan) Debtor's Counsel: Gilbert Lopez-Delgado, Esq. LOPEZ DELGADO LAW OFFICE Villa Nevarez Development, #301, 17 St. San Juan, PR 00927 Tel: (787) 603-4910 E-mail: voxpopulix@gmail.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Jose Sabater, authorized representative. A full-text copy of the petition containing, among other items, a list of the Debtor's four largest unsecured creditors is available for free at: http://bankrupt.com/misc/prb18-01881.pdf MINI MASTER: Files Amendment to Second Amended Plan --------------------------------------------------- Mini Master Concrete Services, Inc., filed with the U.S. Bankruptcy Court for the District of Puerto Rico an amendment to its second amended plan of reorganization dated March 20, 2018. The treatment of Class 1 Economic Development Bank has been changed as follows: EDB's secured claims for $3,198,012.66 arose from two commercial loans issued to the Debtor. EDB's secured claims will be totally paid as by the transfer of the Debtor's properties in Vega Alta, Puerto Rico with a combined value of $480,000; the transfer of the Debtor's parcel of land in Isabela, Puerto Rico with an appraised value of $670,000 and; a cash payment to be made on the Effective Date for $250,000. The transfers and payments totaling $1,400,000 will be in full payment and release of all of EBD's claims. A full-text copy of the Amendment to the Second Amended Plan is available at: http://bankrupt.com/misc/prb16-09956-11-217.pdf About Mini Master Concrete Services Mini Master Concrete Services, Inc. filed a Chapter 11 bankruptcy petition (Bankr. D.P.R. Case No. 16-09956) on December 22, 2016. The Hon. Mildred Caban Flores over the case. Charles A. Cuprill, PCS Law Offices represents the Debtor as counsel. The Debtor disclosed total assets of $15.78 million and total liabilities of $5.46 million. The petition was signed by Carmen M. Betancourt, president. ================= V E N E Z U E L A ================= VENEZUELA: Debt Crisis Nears New Low as Riskiest Bond Matures ------------------------------------------------------------- Ben Bartenstein at Bloomberg News reports that the Venezuelan debt crisis could be on the verge of a new milestone as a $650 million bond matures with little hope it'll get paid. The notes from the state-run electric utility were always considered among the country's riskiest securities because the downsides to a default are relatively minor, according to Bloomberg News. They don't contain any cross-default rules that would affect sovereign debt or notes from the state oil company, and the utility doesn't have any overseas assets that investors could try to seize, Bloomberg News notes. A missed principal payment would mark a new low for Venezuelan investors who are already confronting $2 billion in late interest but haven't yet seen the government skip out on paying back maturing notes, Bloomberg News discloses. President Nicolas Maduro said in November that he wanted to restructure the nation's obligations amid a deep recession, currency crisis and tumbling oil production, but international sanctions have prevented any progress on that front, Bloomberg News says. "I just cannot see them scraping that kind of capital to be paid back at this point," said Ray Zucaro, the chief investment officer at RVX Asset Management, which holds Venezuelan debt, Bloomberg News relays. Bloomberg News notes that Electricidad de Caracas's notes trade at about 33 cents on the dollar, signaling that investors view them as the riskiest debt maturing this year in the world's riskiest nation. Fitch Ratings puts them one notch above default. Only some holders received an interest payment due in October and the trustee declared a default. Elecar said the payment was delayed due to "operational changes," which Finance Minister Simon Zerpa later said were resolved, Bloomberg News says. If the bond does get paid, investors who bought the notes now would make a quick 150 percent profit, Bloomberg News relays. It could also spur a rally in other Venezuelan debt, Bloomberg News notes. The last glimmer of hope money managers can cling to be unsubstantiated speculation that a group of wealthy Venezuelans with government connections holds a large chunk of the debt, and Maduro's administration wouldn't want to give them reason to be angry, Bloomberg News discloses. Officials at Elecar and Venezuela's Finance Ministry declined to comment on the payment or who holds the debt. Here's what investors and analysts had to say about the Elecar payment: Shamaila Khan, director of emerging markets at AllianceBernstein -- "From an operational perspective, they have had a hard time making coupon payments. So it is hard to imagine they can make the principal payment" Siobhan Morden, head of Latin America fixed-income strategy at Nomura -- "I don't think they have money to pay, but Venezuela always surprises" -- Expects default due to lack of money, payment chain issues and relatively minor consequences Francisco Ghersi, managing director at Knossos Asset Management -- "I think they are going to default -- 95% chance" -- "There's no incentive to pay. They're in default right now, so why they are going to pay?" As reported in the Troubled Company Reporter-Latin America on March 13, 2018, Moody's Investors Service has downgraded the Government of Venezuela's foreign currency and local currency issuer ratings, foreign and local currency senior unsecured ratings, and foreign currency senior secured rating to C from Caa3. Concurrently, the foreign currency senior unsecured medium term note program has also been downgraded to (P)C from (P)Caa3. The outlook has been changed to stable from negative. *********** 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 2018. 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. . * * * End of Transmission * * *