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/raid1/www/Hosts/bankrupt/TCRLA_Public/190102.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, January 2, 2019, Vol. 01, No. 1 Headlines C H I L E ENJOY SA: S&P Affirms 'B' Issuer Credit Rating, Outlook Stable D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: Sets 2019 Target on Work Intensity * DOMINICAN REPUBLIC: 7% Growth in GDP, Central Bank Says E L S A L V A D O R BANCO AGRICOLA: S&P Affirms 'B-/B' ICRs, Outlook Stable EL SALVADOR: S&P Raises Sovereign Credit Ratings to 'B-/B' M E X I C O * MEXICO: Creates Free Zone on US Border to Win Investment P E R U CORPORATION AZUCARERA: Fitch Cuts LT IDR to B+, Outlook Stable P U E R T O R I C O MONITRONICS INTERNATIONAL: Terminates Existing Exchange Offers T R I N I D A D & T O B A G O TRINIDAD & TOBAGO: Growth Slackens in Third Quarter V E N E Z U E L A VENEZUELA: Objects to Caricom Position - - - - - ========= C H I L E ========= ENJOY SA: S&P Affirms 'B' Issuer Credit Rating, Outlook Stable -------------------------------------------------------------- S&P Global Ratings affirmed its 'B' issuer credit and debt ratings on Chile-based gaming company Enjoy S.A. S&P said, "The stable outlook reflects our expectation that Enjoy's increasing cash flows will lead to debt to EBITDA of 3.5x- 4.5x, funds from operations (FFO) to debt of 12%-16%, and EBITDA interest coverage of 2x-3x in the next few years. "The affirmation reflects our expectation of higher cash flows starting in 2019, compensating for the relatively weaker-than- expected 2018 results due to weak Uruguayan operations and one- time higher expenses related to the consultant firm Enjoy hired. The company is currently implementing measures to support revenue growth and improve operating efficiency, and we expect lower interest expenses due to its recent debt refinancing." =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: Sets 2019 Target on Work Intensity ------------------------------------------------------ Dominican Today reports that the administrative minister of the Presidency, Jose Ramon Peralta, affirmed that the primary purpose of the Dominican Republic government throughout 2019 will be to maintain the intensity of work to continue offering welfare to the population. Mr. Peralta said, Dominican Today relates, the most vulnerable sectors of Dominican society remain the center of attention of President Danilo Medina's administration. "And will be so through the next year and on for the duration of the administration," he added. He maintained that this dedication to work since August 16, 2012, is what has turned the Dominican Republic into the country with the highest economic growth in Latin America and the most attractive for foreign investments, to the point that this year they surpassed US$3.5 billion, the report relays. China and EU Relations Regarding the diplomatic and trade relations with the People's Republic of China and the United States, Peralta assured that they proceed correctly and respectfully, the report notes. He pointed out that in the case of the Chinese, much progress has been made since they formalized the first of May of this year and that with the Americans, they are at their best in history, the report says. Indications from China suggest that there will be essential demands of Dominican products such as mangoes, avocados, rums, and coffee, among others, "opening a potential market of about 1.3 billion consumers," the report relays. Another important aspect of relations with the People's Republic of China, he added, is that investments from that country are soon to be finalized and will soon be announced, the report notes. He informed that before the establishment of relations with that nation, the Government sought and obtained the consensus of the main political leaders and the Dominican business community, the report says. Exports The Administrative Minister of the Presidency also highlighted the creation of an export culture as one of the great achievements this year in the Dominican Republic, after highlighting the increase of that line by more than 9%, the report discloses. He said that undoubtedly, it was a transcendent step that the Dominican exports exceeded US$11 billion, about US$1 billion and almost 9% over those registered in 2017, the report says. Extension of Puerto Manzanillo Mr. Peralta revealed that the government has just received a study commissioned to carry out the expansion of the port of Manzanillo, in the province of Monte Cristy, the report notes. He said that there is interest in developing this project given the strategic importance for the perspective of economic development of the country, the report relays. He noted that in fact, investments from several countries have shown willingness to invest in the expansion and modernization of the Manzanillo port, the report adds. As reported in the Troubled Company Reporter-Latin America on Sept. 24, 2018, Fitch Ratings affirmed Dominican Republic's Long-Term, Foreign-Currency Issuer Default Rating (IDR) at 'BB-' with a Stable Outlook. * DOMINICAN REPUBLIC: 7% Growth in GDP, Central Bank Says --------------------------------------------------------- Dominican Today reports that the governor of the Central Bank, Hector Valdez Albizu, reported that the monthly indicator of economic activity (IMAE) reveals that the Dominican economy is closing this year 2018 with a 7% growth in the gross domestic product (GDP), according to preliminary figures. In a press conference at the Central Bank, Valdez Albizu said that the behavior of the economy shows that it is growing above potential. December is expected to close with a growth of 7.1% and inflation of 1.3%, well below the Central Bank's target range of 4.0% (+/- 1.0%), according to Dominican Today. The official stressed that the growth achieved in the country's economy is due to demand, the report relays. Because of the gains achieved in private sector activities, not because of indebtedness as some economists and businessmen have pointed out, and emphasized that this was demonstrated by the manufacturing behavior that the monthly index of manufacturing activity grew by 64.1%, a figure that corroborates this theory, the report discloses. He explained that December is expected to close with a growth of 7.1%, reflecting the continued regional leadership throughout Latin America and that the Dominican economy is probably the second fastest growing worldwide, by 7% or more, the report notes. He highlighted the expansion of the construction sector, which has a multiplier effect on the high demand and use of construction materials such as rods, cement, paints, metal structures, among others, the report says. Sectors that made most substantial gains were: communication, with an increase of 11%, construction 10.6%, free zone 9.1%, health 8.8%, trade 8.5%, financial services 7.9%, agriculture 6.5%, transport and storage 6.5%, local manufacturing 6%, energy and water 5.7%, hotels, bars and restaurants 5.6%, in terms of added value, were the sectors that sustained the growth of the economy in 2018, explained the governor of the BCRD, the report says. All these activities together represent 90.6% of GDP, the report notes. "This year has been virtuous, wonderful, in economic terms," said Governor Valdez Albizu, the report discloses. He further pointed out that on "Black Friday" Dominicans spent RD $ 4.8 billion with credit cards and now with Christmas and purchases on the Day of Kings, the trade will be activated more, which shows that the economy is showing the results of vibrant economic activity, "because spending stimulates an investment in employment and this generates growth," the report notes. And that's why he said that "boroneo" is important, which he has always pointed out for three years because when "it is 'boroed' downwards, the effect is much greater," he added. Regional Behavior At the local level, the projections are that Panama would grow in 2018 by 4.6%, Paraguay 4.4%, Bolivia 4.3%, Bolivia 4.1%, Chile 4%, Honduras 3.5%, Costa Rica 3.3%, Colombia 2.8, El Salvador 2.8, Mexico 2.5%, Uruguay 2.2%, Brazil 2.0%, Ecuador 1.4%, Argentina - 2.6%, and Nicaragua -4%, so the average growth in Latin America would be 1.2%, according to the International Monetary Fund and the Republic The Dominican Republic is closing with a preliminary increase of 7%, explained Valdez Albizu, the report notes. Indicators Performance in 2018 -- The monthly index of economic activity registered an increase of 7.2% in November and 7.1% in October-December, according to preliminary figures. -- The average growth of the Dominican economy is the highest in the Latin American region. -- End of the year Inflation would be around 1.3%, after 11 consecutive weeks of a decrease in the price of fuel. -- International reserves reach US $ 7.2 billion, equivalent to 4.1 months of imports. -- Currency entry would close the year around US $ 30 billion. Dollars Banca has $ 2,000 MM Valdez Albizu said that it is a myth -- an "urban legend" that there is a restriction in the supply of dollars in the economy, the report notes. A pivotal agent called the bank offering close to US$100 million and just for the month of December the arrival of 650,000 tourists is expected and those people come with dollars, the report adds. As reported in the Troubled Company Reporter-Latin America on Sept. 24, 2018, Fitch Ratings 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: S&P Affirms 'B-/B' ICRs, Outlook Stable ------------------------------------------------------- S&P Global Ratings affirmed its 'B-' long- and 'B' short-term ICRs on Banco Agricola S.A. The outlook on the bank is stable. At the same time, S&P revised Banco Agricola's SACP to 'bb-' from 'b+'. S&P said, "Despite the changes to El Salvador's BICRA, we're affirming our 'B-/B' ICR on Banco Agricola. Although the bank's SACP remains above the sovereign rating, we rarely rate financial institutions above the long-term sovereign rating because we believe that during sovereign stress, regulatory and supervisory powers may restrict the bank's financial flexibility. Additionally, Banco Agricola's ICR remains unchanged, despite the upward revision of the anchor for banks operating in El Salvador. We forecast that Banco Agricola's average risk-adjusted capital (RAC) ratio will be 6.9% for 2018-2019. The bank's RAC will remain moderate since Banco Agricola had higher-than-expected loan portfolio growth, which, in addition to a high dividend payout policy, offset the improvement in economic risk." The ratings on Banco Agricola are also supported by its sound business position as a leader in El Salvador's banking industry, where it's the largest bank with solid business lines and a consolidated market share. Banco Agricola's RAC ratio is still moderate -- S&P forecasts it to be around 6.9% on average during 2018-2019. The ratings also reflect the bank's healthy and stable asset quality metrics compared to its peers, as well as its growing and pulverized deposit base that constitutes its main source of funding, and its adequate liquidity. S&P said, "We revised our BICRA score on El Salvador (B-/Stable/B) to group '8 from '10', reflecting the Salvadoran government's expected ability and willingness to comply with future amortization on external debt, as indicated by the congressional approval of the refinancing of the $800 million Eurobond due in December 2019. The revision also reflects our view that the debt trajectory has stabilized after the lower fiscal deficits that we expect to remain over the next three years. We now perceive moderate vulnerability in terms of El Salvador's external debt position. This was reflected on an improvement on the economic risk to '9' from '10'. "On the other hand, we improved our industry risk score to '7' from '8'. This improvement reflects that the sovereign is no longer under financial distress, and therefore, we perceive less pressure for the banking system's funding. As a result of the stronger economic and industry risk scores, we revised the anchor for banks operating in the country to 'b+' from 'b'." EL SALVADOR: S&P Raises Sovereign Credit Ratings to 'B-/B' ---------------------------------------------------------- S&P Global Ratings, on Dec. 28, 2019, raised its long- and short- term sovereign credit ratings on the Republic of El Salvador to 'B-/B' from 'CCC+/C'. The outlook is stable. S&P's 'AAA' transfer and convertibility (T&C) assessment is unchanged. OUTLOOK S&P said, "The stable outlook reflects our expectation of consistently moderate fiscal deficits and stable debt levels, along with consistent, albeit moderate, economic growth in next three years. "Faster-than-expected economic growth and a stronger fiscal and external stance that ultimately reflects in declining debt levels could lead us to raise the ratings within the next 12 to 24 months. "In contrast, we could lower the ratings if its economic performance deteriorates significantly, so that its GDP per capita grows less than 1.5% annually, along with fiscal deficits consistently above 4% of GDP, and if the country faces additional challenges in accessing external financing in the next 12 to 24 months." RATIONALE The upgrade reflects the Congressional approval of new external debt to cover the $800 million eurobond coming due in December 2019. The approval was in tandem with the 2019 budget approval, which includes additional financing requirements to comply with other debt maturities and interest payments. S&P said, "The upgrade also reflects our view that the correction to the general government deficits and the stabilization of El Salvador's debt level over the last two years will continue through 2021. "El Salvador's limited monetary flexibility (fully dollarized economy) and its vulnerability as a small and open economy, highly dependent on external financing, are also incorporated in our ratings, as are the limited contingent liabilities arising from its stable banking system." Flexibility and performance profile: Lower fiscal and external deficits should keep financing requirements moderate over the next three years -- Ongoing fiscal correction will keep the change in general government debt below 3% of GDP and interest payments below 15% of general government revenues in 2019-2021, on average. -- S&P expects current account deficits (CADs) to remain moderate, keeping external financial requirements at current levels. -- Dollarization should continue to lead to low inflation rates in the coming years. The Fiscal Responsibility Law (FRL)--enacted in November 2016--and the approval of the pension reform last year enabled El Salvador to consolidate its fiscal correction. For this year, S&P is forecasting a general government deficit of 2.7%, down from 4.4% in 2013, which should remain below 3% of GDP, on average, up to 2021. S&P said, "We are assuming the rate of general government revenue growth will be similar to nominal GDP growth, as the government has ruled out tax increases ahead of the election cycle early next year. Moreover, we are assuming a moderate increase in expenditures as the government is committed to complying with the FRL that caps expenditures for wages and goods and services." Overall, El Salvador's fiscal flexibility will continue to be limited, which, along with the very restricted monetary flexibility, remains a fundamental limitation to its credit quality. Significant shortfalls in basic services and infrastructure constrain the government's ability to reduce its expenditures, while a large informal economy limits its ability to raise additional revenues. "Following moderate fiscal deficits, we forecast net general government debt to stay around 66% up to 2021--where it has been over the last two years. Unlike previous years, this implies a change in general government debt below 3% of GDP over the same period. The debt burden had risen in recent years, largely because of the need to fund obligations of the pension system, highlighting the importance of the pension reform approved last year. "As of September 2018, 30% of its debt -- excluding debt to pensions -- is with multilateral institutions while 51% is bond issuances. Most of it is external (74%), with internal debt consisting of short-term loans (LETES) and long-term special bonds (CIPs). LETES represented a moderate 5.8% of total debt. Interest payments increased to 13.6% of general government revenues in 2017, from 12.8% a year before. This increase partially reflects the liquidity pressures and default that the sovereign went through in 2017. S&P expects this ratio to stay broadly stable now that Congress has approved the rollover of its debt maturing in 2019." S&P said, "Externally, El Salvador's position has also improved. In 2018, we expect a CAD of 2.2% of GDP, balancing higher oil prices with remittances growth. This compares positively with the CAD of close to 4% of GDP, on average, over the previous five years. We expect relatively higher CADs in the next three years as a result of likely less dynamic remittances. Our forecast also incorporates U.S. growth of about 3% that would continue to benefit the country's exports. "Over the next three years, the CAD will be partly funded by foreign direct investment (FDI), which may remain around 1.2% of GDP. We expect that El Salvador's gross external financing needs will remain stable around 100% of current account receipts and usable reserves, while its narrow net external debt will stay around 82% of its current account receipts." Overall, the government's high debt burden continues to expose the sovereign to potentially adverse shifts in market sentiment, in particular given the importance of Eurobond maturing in 2019. Relatively low FDI has led to reliance on external debt to fund the country's persistent CAD. S&P said, "The country moved to full dollarization in 2001, and we believe this will continue in the coming years. This supports our 'AAA' T&C assessment, as well as our opinion that the sovereign would not restrict dollar outflows by private parties to make debt-service payments. While we expect that dollarization continues to lead to low inflation rates, the inflexible monetary regime has not helped to promote growth and investment. "We assess El Salvador's banking system in our Banking Industry Country Risk Assessment (BICRA) group '10'. (BICRAs are grouped on a scale from '1' to '10', ranging from what we view as the lowest- risk banking systems [group '1'] to the highest-risk [group '10'].) We believe that the banking system and the public-sector enterprises pose a limited contingent liability to the sovereign. El Salvador has a relatively small state-owned enterprise sector, thanks to privatization the sovereign implemented in previous years." Institutional and economic profile: Economic growth remains weak as political stalemate and crime hurt investment -- The historically polarized political environment could be changing with the emergence of new political figures. -- Uncertainty about the government's ability and willingness to comply with its financial obligations has eased. -- GDP per capita growth could reach close to 2% in the next two years. The ruling political party, Frente Farabundo Marti para la Liberacion Nacional (FMLN), has little common ground with El Salvador's other major party, the Alianza Republicana Nacionalista (ARENA), which has led to political gridlock and has damaged government effectiveness in the past. In April 2017, the sovereign defaulted following Congress denying to approve a budget reallocation to cover payments owed to the country's private pension funds (certificates for pension investments, or CIPs). However, this situation might be changing with the emergence of new political figures. A competitive presidential election in February 2019 could incentivize major political parties to cooperate with the next administration and among one another, especially in FMLN, whose candidate is doing poorly in the presidential polls and now has a weaker position in Congress. In the last Congressional election, in March 2018, ARENA strengthened its position by two seats to a total of 37 seats, while the FMLN lost eight seats to end with 23 seats. The FMLN also lost its veto power -- it needed to hold at least 28 seats (one-third of Congress) to maintain veto power. With Congress approving the refinancing of the $800 million eurobond due in December 2019, the sovereign is now allowed to access external financing next year, easing uncertainty about its ability and willingness to pay. The approval should also help increase investor confidence over the next few years. S&P said, "We expect GDP growth to hover around 2.3% this year, the same as in 2017. Resolution of the default last year mitigated, to a great extent, the effect on investors' confidence, as shown by increased FDI that continued growing this year. For the next three years, we are forecasting a slightly stronger economic performance. On a per capita basis, this would translate to growth of close to 1.9%, on average, up to 2021. El Salvador's GDP per capita would surpass $4,000 at the end of this year." Historically low GDP growth has been fueled by low investment, high emigration, weak competitiveness, and political gridlock. On the other hand, private consumption is underpinned by remittances growth that in 2017 accounted for 21% of GDP. As a small and open economy, El Salvador's performance is closely linked to the U.S. because close to 50% of its exports go to that country. Also, about one-third of its population has moved to the U.S. El Salvador continues to rank poorly on the Human Development Index, and over the last year, it has fallen to 121 from 117 (out of 188 countries). El Salvador falls under the "medium human development" category, signaling significant shortfalls in basic services and infrastructure. Raising potential growth in coming years will require reforms to foster competitiveness and investment, supported by measures to reduce crime. Job creation through more dynamic economic activity is essential to tackle the large informal sector, which represents about 70% of the working-age population, according to the International Monetary Fund. Relative to a year ago, termination of the Temporary Protected Status (TPS) and massive deportations is now less likely because a U.S. local court ruled against such termination. There are about 195,000 Salvadorians currently benefiting from TPS, accounting for around 16% of the Salvadorian migrant population in the U.S. S&P's seen progress made on tackling corruption in the country. The current attorney general imprisoned the former attorney general as well as El Salvador's former president Antonio Saca. Still, El Salvador is poorly ranked in the Corruption Perceptions Index from Transparency International. In 2017, its score worsened, and it's now ranked at 112, out of 180 countries. El Salvador's World Bank Ease of Doing Business ranking also worsened in 2018, to 85 from 73 a year earlier (out of 190). The main challenges are dealing with construction permits, protecting minority investors, starting a business, and enforcing contracts. In accordance with S&P's relevant policies and procedures, the Rating Committee was composed of analysts that are qualified to vote in the committee, with sufficient experience to convey the appropriate level of knowledge and understanding of the methodology applicable. At the onset of the committee, the chair confirmed that the information provided to the Rating Committee by the primary analyst had been distributed in a timely manner and was sufficient for Committee members to make an informed decision. After the primary analyst gave opening remarks and explained the recommendation, the Committee discussed key rating factors and critical issues in accordance with the relevant criteria. Qualitative and quantitative risk factors were considered and discussed, looking at track -- record and forecasts. The committee agreed that "external risk" had improved. All other key rating factors were unchanged. The chair ensured every voting member was given the opportunity to articulate his/her opinion. The chair or designee reviewed the draft report to ensure consistency with the Committee decision. RATINGS LIST Upgraded; Outlook Stable To From El Salvador Sovereign Credit Rating B-/Stable/B CCC+/Positive/C Senior Unsecured B- CCC+ Ratings Affirmed El Salvador Transfer & Convertibility Assessment AAA =========== M E X I C O =========== * MEXICO: Creates Free Zone on US Border to Win Investment ---------------------------------------------------------- EFE News reports that the government of Mexican President Andres Manuel Lopez Obrador decreed the creation of a free zone along the United States border as part of a project to win investment, create jobs and reduce migration. "It is a very important project for winning investment, creating jobs and taking advantage of the economic strength of the United States," Lopez Obrador said on his visit to Monterrey in the northern state of Nuevo Leon, according to EFE News. After signing the Tax Incentive Decree for the Northern Border Region, Lopez Obrador said that this free zone will begin to operate starting Jan. 1 on a strip of land 25 kilometers (15 miles) wide along 3,180 kilometers of the US border, the report notes. All through this strip, the government is reducing income taxes from 30 percent to 20 percent and cutting the value-added tax from 16 percent to 8 percent, while boosting the minimum wage by 100 percent to 176 pesos ($8.80) and is making fuel prices the same as in the United States, the report relays. "It's going to be the biggest free zone in the world," President Lopez Obrador said, adding that this project will inevitably reduce migration, the report says. He said the plan is to develop areas from south to north so Mexicans can stay in their native lands because they have no need to emigrate, the report discloses. "Migration should be a choice, not forced," he added. As part of this plan, the Mexican president noted that his government has begun to launch projects like planting a million hectares (2 million acres) of fruit trees and timberland, which will create some 400,000 jobs in the southeastern part of the country, the report relays. In that region, the Maya Train will be built with 1,500 kilometers of tracks, for the development of five southeastern states, which in turn implies a need for many more workers, the report notes. Also in the works will be construction of the Dos Bocas refinery in Tabasco state and the Isthmus of Tehuantepec railroad in the states of Oaxaca and Veracruz, which will connect the Pacific Coast with the Gulf of Mexico and give the country an alternative to the Panama Canal, the president said, the report adds. ======= P E R U ======= CORPORATION AZUCARERA: Fitch Cuts LT IDR to B+, Outlook Stable -------------------------------------------------------------- Fitch Ratings has downgraded the Long-Term Foreign Currency and Local Currency Issuer Default Ratings of Corporacion Azucarera del Peru S.A. to 'B+' from 'BB-'. The senior notes were also downgraded to 'B+'/'RR4' from 'BB-'. The Rating Outlook is Stable. The downgrade reflects the company's weak and volatile performance because of sugar price pressure and its continued reliance upon shareholders to bolsters its weak liquidity position. Fitch expects net debt/EBITDA to improve gradually after spiking in 2018. KEY RATING DRIVERS Weak EBITDA Margin: Fitch expects Coazucar's EBITDA margin to remain steady at about 15% in 2018 from 26% in 2016. The performance is affected by lower sugar prices and imported sugar. Production has been hurt by the drought affecting the north of Peru and "El Nino Costero," which made harvesting difficult due to the heavy rains in 2017. Coazucar divested its loss-making operations in Argentina for a total amount of about USD26 million (paid in seven years) in September 2018. Fitch expects a gradual improvement of the group's profitability in 2019 thanks to increased volumes, the ramp-up of sugar production from Agrolmos and operating efficiency measures. Fitch does not expect Coazucar to recover its historical EBITDA margins of around 40%. Weak Metrics: Fitch expects Coazucar's leverage to peak in 2018 at about 9.0x and then improve towards 4.5x in 2019. The increased leverage is due to weaker EBITDA, which results in negative FCF generation. Fitch expects credit metrics to improve in 2019 thanks to lower capex that should reach about PEN 155 million in 2018 compared to PEN244 million in 2017, decreases imports sugar and the ramp-up of the production at the Agrolmos mill. Support from Shareholders: Fitch factors into the ratings the financial support from Coazucar's shareholders, the Rodriguez family. Coazucar's shareholders have injected capital into the company to preserve its liquidity. In the first nine months 2018, the shareholders injected PEN95 million in cash. Fitch expects shareholders to continue to support the company financially due to its poor cash flow. Other investments of the Rodriguez family include Gloria S.A., the leading dairy company in Peru, and Yura S.A., the leading cement producer in southern Peru. Currency Risk: Coazucar is exposed to currency risk, and Fitch estimates that about 66% of its debt is still mostly dollar- denominated without any hedge against local currency depreciation. About 46%of revenues are in U.S. dollars due to the group's operation in Ecuador and contracts in U.S. dollar for exports and refined sugar. The balance of the revenues are generated in Peru. In this market, Coazucar's revenues follow the trend of the dollar-denominated international prices of sugar, while its costs are mainly in Peruvian Soles. Product and Geographically Concentrated: The ratings incorporate risks associated with product concentration in sugar, which represented 86% of Coazucar's revenue as of September 2018 (YTD). The remaining 14% is in alcohol and other by-products. The company can now easily shift production from raw to refined white sugar with the new plant. By nature, the sugar industry is volatile and exposed to fluctuations in commodity prices and external factors such as the El Nino phenomenon. Coazucar is geographically concentrated in Peru, with about 74% of its revenues generated in the country; it also has operations in Ecuador. EBITDA from Peruvian operations accounted for 89% of the total EBITDA in 2017. DERIVATION SUMMARY Coazucar's ratings reflect its dominant domestic position as the largest sugar producer in Peru, with about 50% market share. The company benefits from its proximity to owned sugarcane fields and low dependence on third-party producers. This position enables the company to price sugar in the domestic market at a high premium compared with international prices, which is not the case for other companies in the same sector rated by Fitch in Brazil. Coazucar also benefits from the strong support of the Rodriguez family. The rating is tempered by Coazucar's performance volatility and weak credit metrics compared with other rated companies in the sector, such as Jalles Machado S.A. (BB-/Stable). KEY ASSUMPTIONS Fitch's Key Assumptions Within its Rating Case for the Issuer - Double-digit revenue decline; - Capex to sales of about 12%; - Debt/ EBITDA towards 9x in 2018; - Equity injection from shareholders to support liquidity. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action - Net leverage below 3.5x on a sustainable basis that improves cash flow through the investment cycle; - Tangible support from the shareholder that improves liquidity. Developments That May, Individually or Collectively, Lead to Negative Rating Action - Deterioration of liquidity; - Net leverage above 4.5x on a sustained basis; - Lack of support from the group's shareholder; - Negative FCF. KEY RECOVERY RATING ASSUMPTIONS Fitch believes that a debt restructuring would likely occur under a stress economic conditions and external shocks such as climatic events or international commodity price pressure. Therefore, Fitch has performed a going concern recovery analysis for Coazucar that assumes that the company would be reorganized rather than liquidated. Key going-concern assumptions are: -- Coazucar would have a going-concern distressed EBITDA of about PEN187 million. This figure takes into consideration factors such as climatic events, production shutdown and low commodity prices; -- A distressed multiple of 6x due to the exposure to the agri- business sector and strong market share in Peru; -- A distressed EV of PEN1 billion (post 10% for administrative claims); -- Total debt of about PEN1.7 billion. -- The recovery performed under this scenario resulted in a recovery level of 'RR3' consistent with securities historically recovering 51%-70% of current principal and related interest. Because of Fitch's soft cap for Peru, which is outlined in its criteria, Coazucar RR has been capped at 'RR4' reflecting average recovery prospects. LIQUIDITY Weak Liquidity: Coazucar's liquidity is weak. As of Sept. 30, 2018, the company had PEN51 million in cash and equivalents versus short-term debt of PEN245 million. Fitch expects Coazucar's shareholders to continue to support the company's liquidity. Of total debt, 15% is short-term, as the USD243 million international bonds is due in 2022. FULL LIST OF RATING ACTIONS Fitch has downgraded the following ratings: Corporacion Azucarera del Peru S.A. -- Long-Term Foreign and Local Currency IDR to 'B+' from 'BB-'; -- Senior unsecured debt to 'B+'/'RR4' from 'BB-'. The Rating Outlook is Stable. ====================== P U E R T O R I C O ====================== MONITRONICS INTERNATIONAL: Terminates Existing Exchange Offers -------------------------------------------------------------- Monitronics International, Inc., has terminated each of (i) the offer previously announced on Nov. 5, 2018 to exchange Monitronics' 5.500%/6.500% Senior Secured Second Lien Cashpay/PIK Notes due 2023 for validly tendered (and not validly withdrawn) Monitronics' 9.125% Senior Notes due 2020 and (ii) the offer previously announced on Dec. 11, 2018, to exchange New Notes for Old Notes. In conjunction with the termination of the Terminated Exchange Offers, the related solicitations of consents by Monitronics to certain proposed amendments to the indenture governing the Old Notes have also been terminated. Monitronics has executed a supplemental indenture giving effect to the Proposed Amendments, but the Proposed Amendments therein will not become operative. Each of the Terminated Exchange Offers and Terminated Consent Solicitations was set to expire at 11:59 p.m., New York City time, on Jan. 10, 2019. As a result of the termination of the Terminated Exchange Offers, no Old Notes will be accepted for purchase and no consideration will be paid or become payable to holders of Old Notes who have tendered their Old Notes in either of the Terminated Exchange Offers. All Old Notes previously tendered and not withdrawn will be promptly returned or credited back to their respective holders. D.F. King & Co., Inc. acted as the Exchange Agent and Information Agent for the Terminated Exchange Offers and the Terminated Consent Solicitations. Holders of Old Notes with questions regarding the termination of the Terminated Offers and Terminated Consent Solicitations may direct such questions to D.F. King & Co., Inc. by e-mail to monitronics@dfking.com or by phone at (212) 269-5550 (for brokers and banks) or (877) 674-6273 (for all others). About Monitronics Farmers Branch, Texas-based Monitronics International, Inc. -- http://www.mymoni.com/-- provides residential customers and commercial client accounts with monitored home and business security systems, as well as interactive and home automation services. The Company is supported by a network of independent Authorized Dealers providing products and support to customers in the United States, Canada and Puerto Rico. Its wholly owned subsidiary, LiveWatch is a Do-It-Yourself home security firm, offering professionally monitored security services through a direct-to-consumer sales channel. Monitronics is a wholly-owned subsidiary of Ascent Capital Group, Inc. Monitroics was incorporated in the state of Texas on Aug. 31, 1994. At Dec. 31, 2017, the Company had more than 1,330 full-time employees and over 100 part-time employees, all of which are located in the United States. Monitronics reported net losses of $111.29 million in 2017, $76.30 million in 2016 and $72.44 million in 2015. As of Sept. 30, 2018, the Company had $1.70 billion in total assets, $1.90 billion in total liabilities and a total stockholders' deficit of $202.90 million. * * * In September 2018, S&P Global Ratings lowered its issuer credit rating on Monitronics to 'CC' from 'CCC'. The downgrade follows Monitronics' announcement on Aug. 30, 2018, of a proposed transaction to exchange its 9.125% senior unsecured notes due 2020 for a combination of new $585 million cash and paid-in-kind (PIK) (7.75% cash and 3.75% PIK) unsecured notes due 2023, up to $100 million of cash from parent company Ascent and warrants. Monitronics is also proposing amendments to eliminate the restrictive covenants governing the 2020 notes, including certain events of default. In July 2018, Moody's Investors Service, Inc., downgraded Monitronics International's Corporate Family Rating to 'Caa2', from 'B3'. The downgrade of Monitronics' CFR reflects strains on the company's liquidity and capital structure caused by impending maturities, as well as its continued lackluster operating performance. ================================ T R I N I D A D & T O B A G O ================================ TRINIDAD & TOBAGO: Growth Slackens in Third Quarter --------------------------------------------------- Trinidad Express reports that the central bank maintained the repo rate at 5 per cent as it noted that the T&T economy appeared to have slowed down in the third quarter to 2018, from July 1 to September 30, in an environment of low inflation. In its last Monetary Policy Announcement (MPA) for 2018, the Central Bank referred to the international environment in which the US central bank, the Federal Reserve, increased the Fed funds rate for the fourth time, according to Trinidad Express. The MPA also noted that several advanced and emerging economies reported slowing growth rates for the third quarter of 2018, following the International Monetary Fund lowering its forecast for global growth for both 2018 and 2019, the report notes. ================= V E N E Z U E L A ================= VENEZUELA: Objects to Caricom Position -------------------------------------- Aleem Khan at Trinidad Express reports that Venezuela'S Foreign Affairs Minister Jorge Arreaza, in a statement, objected to the position of the 15-member Caribbean Community's (Caricom) position on what he described as the "Guyana controversy". Caracas released the latitudinal and longitudinal coordinates to support its statement that the two boats working for ExxonMobil, intercepted by the National Bolivarian Coast Guard of Venezuela on December 22, were indubitably in Venezuelan waters, the part not in dispute, according to Trinidad Express. One of the boats engaged by ExxonMobil carried the Trinidad and Tobago flag while the other was flagged by The Bahamas, the report notes. *********** 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 2019. All rights reserved. ISSN 1529-2746. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Latin America subscription rate is US$775 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Peter A. Chapman at 215-945-7000. . * * * End of Transmission * * *