/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/190402.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 Tuesday, April 2, 2019, Vol. 20, No. 66 Headlines B O L I V I A ALIANZA SEGUROS: Moody's Withdraws B1 Rating for Business Reasons BANCO BISA: Moody's Withdraws Ba3 Long-Term Deposit Ratings BANCO DO BRASIL BOLIVIA: Moody's Withdraws Ba2 LT Deposit Rating BANCO GANADERO: Moody's Withdraws Ba3 Long-Term Deposit Ratings BANCO SOLIDARIO: Moody's Withdraws Ba3 Long-Term Deposit Rating BISA LEASING: Moody's Withdraws Ba3 Ratings for Business Reasons LA BOLIVIANA: Moody's Withdraws Ba3 Rating for Business Reasons B R A Z I L FINANCIADORA DE ESTUDOS: Fitch Corrects December 7 Ratings Release JBS SA: Swings to Profit in 4th Quarter but Misses Estimates RIO OIL: Fitch Affirms Series 2014-1 Notes at BB-, Outlook Stable C U B A CUBA: Urges Caribbean to Oppose Aggression Against Venezuela D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: Unions Walk; Won't Compromise Workers Benefits J A M A I C A CABLE & WIRELESS: Fitch Rates $180MM Add-on Sr. Notes 'BB-'/'RR4' CABLE & WIRELESS: Moody's Rates Proposed $180MM Add'l. Notes 'B2' FLY JAMAICA: Cuts Entire Staff Amid Cash Flow Problems M E X I C O MEXICO: Pres Calls Predecessor's School Reform a Foreign Imposition P U E R T O R I C O ARQUIDIOCESIS DE SAN JUAN: Court Dismisses Ch. 11 Bankruptcy Case T R I N I D A D A N D T O B A G O PETROLEUM CO: Khan Warns Opposition Over Petrotrin Sale/Lease V E N E Z U E L A VENEZUELA: Bars Guaido From Holding Public Office for 15 Years VENEZUELA: Electricity Woes Continue for a 7th Day - - - - - ============= B O L I V I A ============= ALIANZA SEGUROS: Moody's Withdraws B1 Rating for Business Reasons ----------------------------------------------------------------- Moody's Latin America Agente de Calificacion de Riesgo has withdrawn the B1 global local currency and Aa3.bo Bolivian national scale insurance financial strength ratings of Alianza Seguros y Reaseguros S.A. and Alianza Vida Seguros y Reaseguros S.A. At the time of the withdrawal, the outlook of the ratings was stable. RATINGS RATIONALE Moody's has decided to withdraw the ratings for its own business reasons. BANCO BISA: Moody's Withdraws Ba3 Long-Term Deposit Ratings ----------------------------------------------------------- Moody's Latin America Agente de Calificacion de Riesgo announced that it has withdrawn all of its ratings for Banco BISA S.A. for business reasons. The following ratings of Banco BISA S.A. were withdrawn: - Long-term global local currency deposit rating, previously rated Ba3 with stable outlook - Short-term global local currency deposit rating, previously rated Not Prime - Long-term global foreign currency deposit rating, previously rated B1 with stable outlook - Short-term foreign currency deposit rating, previously rated Not Prime - Bolivian long-term national scale local currency deposit rating, previously rated Aaa.bo with stable outlook - Bolivian long-term national scale foreign currency deposit rating, previously rated Aa3.bo with stable outlook - Global scale local currency subordinated debt rating, previously rated B1 - National scale local currency subordinated debt rating, previously rated Aa3.bo - Baseline credit assessment, previously rated ba3 - Adjusted baseline credit assessment, previously rated ba3 - Long-term counterparty risk assessment, previously rated Ba2(cr) - Short-term counterparty risk assessment, previously rated Not Prime(cr) Outlook, Changed To Rating Withdrawn From Stable RATINGS RATIONALE Moody's has decided to withdraw the ratings for its own business reasons. BANCO DO BRASIL BOLIVIA: Moody's Withdraws Ba2 LT Deposit Rating ---------------------------------------------------------------- Moody's Latin America Agente de Calificacion de Riesgo announced that it has withdrawn all of its ratings for Banco do Brasil S.A. (Bolivia) for business reasons. The following ratings of Banco do Brasil S.A. (Bolivia) were withdrawn: - Long-term local currency deposit rating, previously rated Ba2 with stable outlook - Short-term local currency deposit rating, previously rated Not Prime - Long-term foreign currency deposit rating, previously rated B1 with stable outlook - Short-term foreign currency deposit rating, previously rated Not Prime - Bolivia long-term national scale local currency deposit rating, previously rated Aaa.bo with stable outlook - Bolivia long-term national scale foreign currency deposit rating, previously rated Aa3.bo with stable outlook - Bolivia short-term national scale local currency deposit rating, previously rated BO-1 - Bolivia short-term national scale foreign currency deposit rating, previously rated BO-1 - Long-term counterparty risk assessment (CRA), previously rated Ba1(cr) - Short-term counterparty risk assessment, previously rated Not Prime(cr) Outlook, Changed To Rating Withdrawn From Stable RATINGS RATIONALE Moody's has decided to withdraw the ratings for its own business reasons. BANCO GANADERO: Moody's Withdraws Ba3 Long-Term Deposit Ratings --------------------------------------------------------------- Moody's Latin America Agente de Calificacion de Riesgo announced that it has withdrawn all of its ratings for Banco Ganadero S.A. for business reasons. The following ratings of Banco Ganadero S.A. were withdrawn: - Long-term global local currency deposit rating, previously rated Ba3 with stable outlook - Short-term global local currency deposit rating, previously rated Not Prime - Long-term global foreign currency deposit rating, previously rated B1 with stable outlook - Short-term foreign currency deposit rating, previously rated Not Prime - Bolivian long-term national scale local currency deposit rating, previously rated Aa1.bo with stable outlook - Bolivian long-term national scale foreign currency deposit rating, previously rated Aa3.bo with stable outlook - Global scale local currency subordinated debt rating, previously rated B2 - National scale local currency subordinated debt rating, previously rated Baa1.bo - Baseline credit assessment, previously rated b1 - Adjusted baseline credit assessment, previously rated b1 - Long-term counterparty risk assessment, previously rated Ba3(cr) - Short-term counterparty risk assessment, previously rated Not Prime(cr) Outlook, Changed To Rating Withdrawn From Stable RATINGS RATIONALE Moody's has decided to withdraw the ratings for its own business reasons. BANCO SOLIDARIO: Moody's Withdraws Ba3 Long-Term Deposit Rating --------------------------------------------------------------- Moody's Latin America Agente de Calificacion de Riesgo announced that it has withdrawn all of its ratings for Banco Solidario S.A. (Bolivia) for business reasons. The following ratings of Banco Solidatio S.A. (Bolivia) were withdrawn: - Long-term global local currency deposit rating, previously rated Ba3 with stable outlook - Short-term global local currency deposit rating, previously rated Not Prime - Long-term global foreign currency deposit rating, previously rated B1 with stable outlook - Short-term foreign currency deposit rating, previously rated Not Prime - Bolivian long-term national scale local currency deposit rating, previously rated Aa1.bo with stable outlook - Bolivian long-term national scale foreign currency deposit rating, previously rated Aa3.bo with stable outlook - Global scale local currency senior unsecured debt rating, previously rated Ba3 with stable outlook - Global scale local and foreign currency senior unsecured MTN rating, previously rated (P)Ba3 - Bolivian national scale local currency senior unsecured debt rating, previously rated Aa1.bo with stable outlook - Bolivian national scale local and foreign currency senior unsecured MTN rating, previously rated Aa1.bo - Global scale local currency subordinated debt rating, previously rated B2 - National scale local currency subordinated debt rating, previously rated Baa1.bo - Baseline credit assessment, previously rated b1 - Adjusted baseline credit assessment, previously rated b1 - Long-term counterparty risk assessment, previously rated Ba3(cr) - Short-term counterparty risk assessment, previously rated Not Prime(cr) Outlook, Changed To Rating Withdrawn From Stable RATINGS RATIONALE Moody's has decided to withdraw the ratings for its own business reasons. BISA LEASING: Moody's Withdraws Ba3 Ratings for Business Reasons ---------------------------------------------------------------- Moody's Latin America Agente de Calificacion de Riesgo announced that it has withdrawn all of its ratings for Bisa Leasing S.A. for business reasons. The following ratings of Bisa Leasing S.A. were withdrawn: - Long term local currency corporate family, long term local and foreign currency issuer, and local and foreign currency senior unsecured debt ratings, previously rated Ba3 with stable outlook. - Bolivian national scale local and foreign currency issuer, and local and foreign currency senior unsecured debt ratings, previously rated Aaa.bo with stable outlook. - Foreign currency senior unsecured debt program rating, previously rated (P)Ba3. - Bolivian national scale foreign currency senior unsecured debt program rating, previously rated Aaa.bo. - Local and foreign currency other short term ratings, previously rated NP. - Bolivian national scale local and foreign currency other short term ratings, previously rated BO-1. Outlook, Changed To Rating Withdrawn From Stable RATINGS RATIONALE Moody's has decided to withdraw the ratings for its own business reasons. LA BOLIVIANA: Moody's Withdraws Ba3 Rating for Business Reasons --------------------------------------------------------------- Moody's Latin America Agente de Calificacion de Riesgo, S.A. has withdrawn the Ba3 global local currency and Aaa.bo Bolivian national scale insurance financial strength ratings of La Boliviana Ciacruz Seguros y Reaseguros S.A. and La Boliviana Ciacruz Seguros Personales. At the time of the withdrawal the outlook of the ratings was stable. RATINGS RATIONALE Moody's has decided to withdraw the ratings for its own business reasons. =========== B R A Z I L =========== FINANCIADORA DE ESTUDOS: Fitch Corrects December 7 Ratings Release ------------------------------------------------------------------ Fitch corrects a release on Financiadora de Estudos e Projetos (FINEP) published December 7, 2018 to include Fitch's National Scale Ratings Criteria (Effective from Mar 7, 2017 to July 18, 2018), which was omitted from the original release. The revised release is as follows: Fitch Rating has affirmed the Brazilian public sector entity Financiadora de Estudos e Projetos (FINEP) at 'BB-'. The Rating Outlook is Stable. Fitch has also affirmed FINEP's National Long-Term Rating at 'AA+(bra)'/Outlook Stable. KEY RATING DRIVERS The affirmation of FINEP's ratings reflects the application of Fitch's recent "Government-Related Entities Rating Criteria" (GRE criteria). Fitch considers FINEP a GRE due to its public sector mandate in financing research and development on behalf of the Brazilian federal government. As of 2017, FINEP's debt is fully composed of federal government funds, directly and indirectly. Additionally, all external debt should count with the federal government's guarantee. Fitch's criteria assesses four key factors: Strength of Linkage includes (1) status, ownership and control, as well as (2) support track record and expectations. Incentive to Support covers (3) the socio-political implications of a GRE default and (4) the financial implications of a GRE's default. Status, Ownership and Control: Fitch assesses this as Very Strong. FINEP is a 100% federally owned company and is part of the Brazilian ministry of science, technology, innovation and communication, with the goal of promoting innovation in several areas including telecommunication, oil and gas, and healthcare. FINEP offers financing to Brazilian research institutes and companies engaged in research and development. Its activities are dictated by the Brazilian constitution. Support Track Record and Expectations: Fitch assesses this as Very Strong. Fitch expects support to come in the form of credit subsides (equalization). The equalization mechanism is the coverage of the difference between the costs arising from the funding and operating costs and the credit risk incurred by FINEP, and the costs accountable to the development of technological innovation projects. This instrument allows access to financing with lower interest rates, similar to those on the international market. Socio-Political Implications of Default: Fitch assesses this as Very Strong. In Fitch's opinion, FINEP holds a relevant and mandatory responsibility to the government and is the preferred government company aimed at fostering the whole chain of innovation. Fitch believes FINEP undertakes an ancillary responsibility as the government's research and development arm. Financial Implications of Default: Fitch assesses this as Moderate. Although FINEP is a federal financial arm of the ministry of science & technology focused on innovation, Fitch does not believe FINEP to be a proxy-funding vehicle for the government. In addition, although unlikely, given the longer term nature of FINEP's liabilities, Fitch believes any default by FINEP to have limited negative consequences for the creditworthiness of the federal government. As such, according to the notching guideline table under the Government-Related Entities Criteria, FINEP scores 45 points. Therefore, FINEP's ratings are equalized with Brazil's IDRs. RATING SENSITIVITIES Any rating action affecting the Federative Republic of Brazil (BB-/Stable) will result in corresponding action on FINEP. KEY ASSUMPTIONS The ratings and Outlooks are sensitive the following assumptions: -- Fitch assumes a high level of sovereign support for FINEP, even considering the Weak Institutional Framework, given FINEP's full ownership by the federal government as well as ongoing subsidized credit lines via other federal institutions and federal funds. FULL LIST OF RATING ACTIONS Fitch has affirmed the following ratings: Financiadora de Estudos e Projetos (FINEP) -- Foreign Currency Long-Term IDR at 'BB-'; Outlook Stable; -- Foreign Currency Short-Term at IDR 'B'; -- Local Currency Long-Term IDR at 'BB-'; Outlook Stable; -- Local Currency Short-Term IDR at 'B'; -- National Long-term rating at 'AA+(bra)'; Outlook Stable; -- National Short-term rating at 'F1+(bra)'. JBS SA: Swings to Profit in 4th Quarter but Misses Estimates ------------------------------------------------------------ Reuters reports that Brazil's JBS SA posted fourth-quarter results that missed analysts' estimates due to challenges at its U.S. chicken and pork businesses, according to a securities filing. The meat company, which has large operations in the United States aside from Brazil and Australia, reported a net profit of BRL563.2 million ($144.43 million), reversing a BRL451.7 million loss in the 2017 fourth quarter, according to Reuters. This was far below the Refinitiv IBES consensus estimate of a 1.767 billion real gain. A sharp drop in financial expenses helped prop up results, the company said, the report discloses. JBS said the price of pork in the United States, and more significantly the performance of its Pilgrim's Pride Co division, affected its operating performance and margins, the report relays. For the quarter, earnings before interest, tax, depreciation and amortization, a measure of operating income known as EBITDA, fell by 39.5 percent at JBS's U.S. pork division and by 37.1 percent at Pilgrim's Pride, which had already reported results, the report discloses. Across divisions, JBS posted strong EBITDA of BRL3.4 billion, a 6.1 percent rise from the year-ago quarter, partially due to strength in its beef business in Brazil and the United States, the report adds. As reported in the Troubled Company Reporter-Latin America on Oct. 22, 2018, Fitch Ratings has assigned an expected rating of 'BB-' to a proposed benchmark USD-denominated senior unsecured notes issued by JBS Investments II GmbH, a wholly-owned subsidiary of JBS S.A. (JBS). These notes will be unconditionally guaranteed by JBS S.A. The notes will rank pari-passu with JBS's other unsecured obligations. The proceeds are expected to be used to refinance existing indebtedness including JBS's 2020 notes pursuant to a cash tender offer. RIO OIL: Fitch Affirms Series 2014-1 Notes at BB-, Outlook Stable ----------------------------------------------------------------- Fitch Ratings has affirmed the ratings of the series 2014 notes and 2018-1 notes issued by Rio Oil Finance Trust. The Rating Outlook on the notes is Stable. The ratings are not directly linked to the originator's credit quality. The ratings are based on potential production and generation risk and are ultimately linked to Petrobras' Issuer Default Rating (IDR), as it is the main source of cash flow generation. The assigned ratings reflect the transaction's increased liquidity, mitigation of diversion risk and increased FCF given the subordination of FECAM payments. Fitch's ratings address timely payment of interest and timely payment of principal on a quarterly basis. The SPV initially issued USD2 billion in series 2014-1 notes, BRL2.4 billion of series 2014-2 special indebtedness interests and USD1.1 billion in series 2014-3 notes, and issued an additional USD600 million in series 2018-1 notes in April 2018. The current outstanding balance of the program adds up to approximately USD2.7 billion, out of a total program of USD5 billion. All series are pari passu, and future issuances out of the program will be subject to certain conditions. The issuances are backed by royalty flows and special participations owed by oil concessionaires, predominantly operated by Petroleo Brasileiro S.A. (Petrobras), to the government of the State of Rio de Janeiro (RJS). The State of Rio de Janeiro assigned 100% of these flows to RioPrevidencia (RP), the state's pension fund and RP sold these rights to Rio Oil Finance Trust, the issuer. KEY RATING DRIVERS Ratings Not Directly Linked to Originator's: RP is an autonomous government agency that is part of the Secretary of Treasury of RJS (C(bra)/C). Performance of the originator will not affect the collateral as the generation of the cash flow needed to meet timely debt service is not dependent on either RP or RJS. Impact of Oil Prices Fluctuations on Performance: The gradual recovery in oil prices, coupled with the structural changes incorporated in the sixth rescission waiver and amendment support the transaction's Annualized Average DSCRs (AADSCR). However, a downturn in oil price environment may limit royalty and special participation flows used to pay debt service affecting the transaction rating level. Future Production Risk: The transaction benefits from growth in production levels as it increases the total royalty flows. Depressed oil prices have led Petrobras to reduce production targets on multiple occasions. Therefore, sustained low oil prices could translate into further capital expenditure cuts by Petrobras. Cash Flows Support Rating: The current levels of AADSCRs of over 3x partially mitigate the exposure of the transaction to fluctuations in oil prices and production levels at the current rating level. Going forward, and considering Law 12,734 is implemented after 2019, Fitch expects AADSCRs to be over 3x for the life of the transaction. Ample Liquidity for Timely Payment: The transaction benefits from liquidity in the form of a Debt Service Reserve Account (DSRA) and a Liquidity Reserve Account. Funds in deposit in these two accounts shall at all times be sufficient cover three principal and interest (P&I) payments, which Fitch considers sufficient to keep debt service current on the notes under different stress scenarios Largest Obligor Rating Cap: Petrobras' rating is the ultimate cap for the proposed transaction, as it is the main source of cash flow generation. Petrobras carries local and foreign currency (LC/FC) Issuer Default Ratings (IDRs) of 'BB-'/'AA(bra)'/Stable. The company is majority controlled by the federal government of Brazil and has the rights to E&P of the vast majority of Brazil's oil fields Potential Exposure to Political Risk Partially Mitigated: The state's liquidity constraints, evidenced by various delays in commercial and other payments, have heightened the transactions political risk exposure. However, provisions included in the 6th rescission waiver and amendment, such as the rescission of the trapping of excess cash and of the early amortization period, will increase the cash flows returned to the state, and, in turn, decrease the transaction's exposure to potential political risk. Oil Revenues Dedicated Account Modification Mitigates Redirection Risk: Pursuant to the Oil Revenues Dedicated Account Modification Legislation, the RioPrevi Oil Revenues initially deposited to the RJS Oil Revenues Dedicated Account are no longer required by legislation to be deposited into a state-owned account. Oil revenues assigned to this transaction are instead deposited into an account under the name of the issuer. This change in the account mitigates potential redirection of flows to RJS. As Banco do Brasil (BdB) cannot be replaced as a collection bank, the transaction is directly linked to the credit quality of BdB. Legal Changes May Affect Collateral Stability: Although, to date, no amendments affecting the distribution of royalties for the existing concession regime have been implemented, provisions regarding the change in allocation percentages incorporated in Law 12,734 are currently under review. The transaction was analyzed assuming the law will change and DSCRs remain sufficiently robust and commensurate with the expected ratings. True Sale Valid under Brazilian Law: Collateral backing this transaction was transferred to RP by RJS through a state decree, making RP the legal owner of the royalties. This transfer gives RP the right to sell the collateral into the trust. Transfer and Convertibility Risk: Series 2014-1, 2014-3 and 2018-1 notes are exposed to transfer and convertibility risk as royalty flows are paid in an account in Brazil in reals. This exposure caps the rating of the transaction at the country ceiling of Brazil, which is currently 'BB'. To partially mitigate operational risk that may arise from transferring and converting flows on a daily basis to an off shore account, the transaction contemplates reserve funds that covers three principal and interest (P&I) payment. RATING SENSITIVITIES The ratings are capped by the credit quality of Petrobras, the main obligor generating cash flows to support the transaction, and to the sovereign rating and country ceiling assigned to Brazil. The transaction is exposed to oil price and production volume risks. Declines in prices or production levels significantly below expectations may trigger downgrades. Additionally, the ratings are sensitive to the rating of BdB as a direct counterparty to the transaction. USE OF THIRD-PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G-10 No third-party due diligence was provided or reviewed in relation to this rating action. Fitch has affirmed the following ratings: -- USD2 billion series 2014-1 notes affirmed at 'BB-'; Outlook Stable; -- BRL 2.4 billion series 2014-2 special indebtedness affirmed at 'AA-sf(bra)'; Outlook Stable; -- USD1.1 billion series 2014-3 notes affirmed at 'BB-', Outlook Stable; -- USD 600 million series 2018-1 notes affirmed at 'BB-', Outlook Stable. ======= C U B A ======= CUBA: Urges Caribbean to Oppose Aggression Against Venezuela ------------------------------------------------------------ EFE News reports that the president of Cuba urged the Caribbean nations to stand together in opposing any military aggression against crisis-ridden Venezuela. During a regional summit in the Nicaraguan capital of Managua, Miguel Diaz-Canel criticized the United States for saying its Monroe doctrine was as relevant today as the day it was written, according to EFE News. The Cuban president urged the Caribbean governments to rise above their political and ideological differences and defend peace and oppose escalation of coercive economic measures against Venezuela that would deeply hurt Venezuelans and put the regional stability at risk, the report notes. The Cuban president at the 8th Association of Caribbean States summit said the steps and actions taken by Washington against Venezuela defy the Proclamation of Latin America and the Caribbean as a zone of peace, which was signed in January 2014 in Havana, the report relays. The report discloses that he emphasized that they had declared their continued commitment to the peaceful resolution and put an end to the use and threat of force in the region, with strict observation of the obligation of no intervention in the internal matters of any other states either directly or indirectly. He criticized the US government for following the Monroe Doctrine written nearly 200 years ago as its regional foreign policy document, the report notes. The doctrine, named after President James Monroe, was written in 1823 and justifies US interference and influence in the western hemisphere, the report relays. Mr. Diaz-Canel said the Caribbean states needed to continue working together and it is their responsibility to protect peace and maintain the achieved aims, with the assurance that the present situation of confrontation and threats would be overcome, the report discloses. Mr. Morales said Cuba, in particular, has been subjected to irrational and perverse policies with the US-imposed blockade and the campaign of manipulations, lies and pretexts to sustain the practice of persecution and harassment which has been condemned internationally, the report notes. During his speech, Mr. Diaz-Canel thanked the countries who opposed the "irrational" policy against Cuba, the report relays. He further expressed his solidarity with the Nicaragua government in the face of "destabilization efforts," the report discloses. The Cuban president welcomed the process of negotiation between Nicaragua's Daniel Ortega government and the opposition to overcome the crisis that began in the country last year, the report relays. The report discloses that he emphasized that the Association of Caribbean States continued to be important in the unity of the Greater Caribbean, and called it as the only alternative in the face of the big challenges that these countries face. The association commemorated its 25th anniversary in Managua and called for unity and cooperation between the member states and associate members that make up the Greater Caribbean to cope with the consequences of climate change, the report relays. Nicaragua hosted a series of meetings that included apart from the 24th Ordinary Meeting of the ACS Ministerial Council, third ACS cooperation meet and the 8th Summit of the Heads of State The ACS comprises of Antigua and Barbuda, Bahamas, Barbados, Belize, Colombia, Costa Rica, Cuba, Dominica, El Salvador, Granada, Guatemala, Guyana, Haiti, Honduras, Jamaica, Mexico, Nicaragua, Panama, Dominican Republic, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Surinam, Trinidad and Tobago and Venezuela, adds the report. As reported in the Troubled Company Reporter-Latin America on Dec. 12, 2017, The credit profile of Cuba (Caa2 stable) reflects significant credit challenges due to diminished growth prospects as rapprochement with the United States (Aaa stable) stalls, Moody's Investors Service says in a report. Other credit weaknesses constraining Cuba's creditworthiness include limited access to external financing, a high dependence on imported goods and, most importantly, a lack of data transparency. Structural inefficiencies directly hinder economic growth. =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: Unions Walk; Won't Compromise Workers Benefits ------------------------------------------------------------------ Dominican Today reports that the leaders of the labor unions walked out of the talks with management that sought to amend the Dominican Labor Code, reiterating that "from the employer's side there is a clear intent to affect employees," by seeking to eliminate the severance pay. "It's an absurd pretense," said National Unions Federation (CNUS) president Rafael (Pepe) Abreu, according to Dominican Today. "What we have said is that if the severance pay is lost, it will never be recovered," Mr. Abreu warned, affirming that the employers grouped in Copardom as well as in the National Business Council (Conep) are behind that push, the report relays. He listed the three issues that the unions won't compromise; the right to unemployment, the contractual rights of workers and what refers to the workday, the report notes. "Since the business leaders and the Government are aware that these aspects are discarded from the discussion, they tried to introduce it through another bill submitted to Congress," he added. 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. ============= J A M A I C A ============= CABLE & WIRELESS: Fitch Rates $180MM Add-on Sr. Notes 'BB-'/'RR4' ----------------------------------------------------------------- Fitch Ratings has assigned a rating of 'BB-'/'RR4' to Cable & Wireless Senior Financing Designated Activity Company's (CWDAC) USD180 million add-on senior unsecured notes issuance due 2027. The proceeds of the issuance will be used to fund a proceeds loan to Sable International Finance Limited (SIFL), which is an indirect subsidiary of Cable & Wireless Communications Limited (CWC). This loan will be used to refinance an existing credit facility that was used to acquire United Telecommunication Services N.V. (UTS) and for distributions to CWC. On March 26, 2019, CWC parent Liberty Latin America Ltd (LLA) announced the acquisition of a 87.5% controlling stake in UTS for USD165 million. CWC's ratings reflect its leading market positions across well-diversified operating geographies and offerings, underpinned by solid network competitiveness. The long-term growth opportunities for data use and the concentrated nature of these markets -- often with only one major competitor -- provide additional support for the 'BB-' ratings. Further factored in CWC's ratings are the company's strong liquidity position and manageable debt amortization schedule. Pressured growth in its main mobile and fixed-voice segments due to unfavorable near-term industry trends, high leverage, and cash flow leakage remain credit concerns that constrain the rating at 'BB-'. KEY RATING DRIVERS Strong Diversified Operator: The company's operations are well diversified into mobile and fixed services, and it has the No. 1 or No. 2 market position in the majority of its markets. The company's revenue mix per service is well balanced, with mobile accounting for 29% of total sales during 2018, fixed-line at 24%, and business to business services (B2B) at 46% of revenues. The company's geographic diversification is also solid, with a substantial fixed and mobile presence in line operations in both Panama and Jamaica, which together account for approximately 77% of mobile and 49% of fixed subscribers. Finally, the company's B2B and subsea-networks across the Caribbean provide strong growth prospects. Favorable Market Structure: The market structure in the Caribbean is mostly a duopoly between CWC and Digicel Group Limited (Digicel). Due to Digicel's stressed capital structure, pricing is expected to remain rational in the near term and Fitch does not believe the risk of a sizable new entrant to be high, given the relatively small size of each market amid the increasing market maturity, especially for mobile services. Under this environment, Fitch expects the company's market positions to remain stable over the medium term. CWC's continued high investment for network upgrades should bode well for its network competitiveness in the coming years. High Leverage: Fitch expects that EBITDA leverage will likely remain above 4.0x in the medium term, as CWC employs a leveraged equity return model, where excess cash is upstreamed to parent company LLA. Fitch expects, leverage should remain below recent highs following an aggressive investment cycle during a period of stagnant cash flows. Fitch forecasts modest EBITDAR (subtracting for dividends paid to minority shareholders) growth and average capex of approximately USD350 million-USD400 million, which will result in improved FCF. Stagnant Cash Flow: Fitch believes that CWC's broadband and managed services segments will be the main growth drivers backed by its increasing subscriber base and relatively low service penetrations, and growing corporate/government clients' IT service demands. Fitch does not expect data ARPU improvements in the mobile segment to fully mitigate voice ARPU trends. Legacy fixed-voice revenue erosion is also unlikely to abate due to waning demand given cheap mobile voice or Voice-over-internet-protocol (VoIP) services. Potential Refinancing and Restructuring Activities: CWC intends to simplify its capital structure in the future in a manner that would lead to the creation of a new holding company. The CWDAC notes have been structured in a manner that would allow them to be moved to this new holding company. At that time, these notes would be both structurally and legally subordinated to CWC's Term Loan B-4 (TLB), Revolving Credit Facility (RCF) and operating company debt and would likely be downgraded to 'B+'/'RR5'. Capped Recovery Ratings: The ratings have been capped at 'RR4' due to Fitch's Country-Specific Treatment of Recovery Rating Criteria, which does not allow uplift for issuance of by companies that operate in countries where concerns exists about whether the law is supportive of creditor rights, and/or where there is significant volatility in the enforcement of the law and legal claims. DERIVATION SUMMARY CWC's leading market position and diversified operations and relatively stable EBITDA generation compare in line or favourably against other regional telecom operators in the 'BB' category. This strength is offset by its higher leverage than most peers in the 'BB' rating category, as well as LLA's financial strategy, which could limit any material deleveraging. The company's overall financial profile is stronger than its regional competitor, Digicel Group Limited (B/Stable), which recently restructured its debt. The company has a weaker financial profile and higher leverage than Millicom Group (BB+/Stable), which supports a multi-notch differential. No country ceiling, parent-subsidiary linkage, or operating environment aspects impact the ratings. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer -- Low single-digit revenue growth, primarily driven by B2B segment as residential revenue growth remains stagnant; -- EBITDA margin to remain stable at 35% in medium term; -- Capex to sales ratio of 15%-17% in the medium term. For the purposes of projecting recovery rates, Fitch makes estimates for maintenance capex, interest and rent payments. Stressed EBITDA from operating entities in Panama and the Bahamas have been excluded from the recovery analysis, based on CWC's minority ownership stake and expected treatment in a default scenario. Fitch uses a 5.5x multiple, based on historical precedent and the duopoly structure in CWC's main markets. RATING SENSITIVITIES Developments that May, Individually or Collectively, Lead to Positive Rating Action -- A positive rating action is not like to occur given management's history of maintaining higher levels of leverage within the rating category, which have been in excess of 4.0x. Developments that May, Individually or Collectively, Lead to Negative Rating Action -- Sustained EBITDAR-based adjusted net leverage ratios above 5.0x; -- An erosion of the company's strong business position or liquidity position. LIQUIDITY CWC's liquidity profile is sound, backed by its long-term debt maturities profile, relatively stable operational cash flow generation, as well as committed revolving credit facility. The company held cash and equivalents of USD416 million, of which USD11 million was readily available, against current portion of debt and capital leases of USD201 million. The company has an undrawn USD625 million revolving credit facility due 2023, which bolsters its financial flexibility. The company has good access to international capital markets, when in need of external financing. FULL LIST OF RATING ACTIONS Fitch has assigned the following rating: C&W Senior Financing Designated Activity Company -- USD180 million senior unsecured notes due 2027 'BB-'/'RR4'. CABLE & WIRELESS: Moody's Rates Proposed $180MM Add'l. Notes 'B2' ----------------------------------------------------------------- Moody's Investors Service has assigned a B2 rating to the proposed USD180 million 6.875% notes due 2027, offered as additional notes to the existing USD700 million 6.875% senior unsecured notes due 2027 issued by C&W Senior Financing Designated Activity Company (SPV Issuer), a trust-owned special purpose vehicle that Cable & Wireless Communications Limited (CWC) consolidates. The Ba3 corporate family rating (CFR) of CWC, and the other debt instrument ratings within the group, all remain unchanged. The outlook on all ratings is stable. The SPV Issuer will on-lend the USD180 million proceeds from the notes issuance to Sable International Finance Limited (SIFL), through a proceeds loan, as is the case with the existing USD700 million notes due 2027 and USD500 million notes due 2026 issued by the SPV Issuer. CWC will use the issuance proceeds to repay revolving credit facility (RCF) drawings made to fund an acquisition, pay issuance related fees, and for general corporate purposes. Assignment: Issuer: C&W Senior Financing Designated Activity Company - USD180 million Senior Unsecured Regular Bond/Debenture, Assigned B2 RATINGS RATIONALE On March 26, Liberty Latin America Ltd., CWC's parent company, announced the acquisition of 87.5% of United Telecommunication Services N.V. (UTS) for a consideration of around USD165 million on a cash- and debt-free basis. The acquired business, which will be merged with CWC's existing operations, will strengthen CWC's market position in Curacao, where it already offers video, fixed-line telephony and internet broadband services, and expand its presence to other islands of the Netherlands Antilles. The acquired company generates an EBITDA of about USD30 million, an amount which we expect to grow over time, supported by some operational synergies. The acquisition will be initially funded through drawings under CWC's RCF, to be repaid by the proceeds from the proposed USD180 million notes issuance. The acquisition and notes issuance have a limited effect on CWC's credit metrics, with pro forma leverage (i.e. gross debt/EBITDA, including Moody's adjustments) increasing by less than 0.1x. The B2 rating of the USD180 million additional notes and the existing USD700 million notes due 2027, issued by the SPV, reflect their positioning in the waterfall, ranking behind the USD1,875 million senior secured term loan and USD625 million senior secured RCF at Sable International Finance Limited, both rated Ba3. CWC's Ba3 corporate family rating continues to reflect its effective business model, strong profitability and leading market positions throughout the Caribbean and Panama. At the same time, the rating also takes into consideration the company's large exposure to emerging economies, high competitive pressures in most of its markets and its fairly high leverage for the Ba3 rating, at close to 4.5x. The stable outlook on CWC's rating reflects Moody's expectations that the company's revenue growth will be modest, with its EBITDA margin (including Moody's adjustments) maintained at around 40% and liquidity remaining adequate in the next 12-18 months. The outlook also incorporates slightly positive free cash flow for the next 12-18 months and a gradual decline in adjusted debt/EBITDA. A rating upgrade could be considered if more conservative financial policies lead to deleveraging to under 2.5x (adjusted debt/EBITDA) on a consolidated basis, while maintaining a stable adjusted EBITDA margin and generating strong positive free cash flow, all on a sustained basis. CWC's ratings could be downgraded if (1) the company's adjusted debt/EBITDA remains over 4.0x (on a consolidated basis) on a sustained basis; (2) its adjusted EBITDA margin declines toward 35% on a sustained basis; (3) the company's market shares decline or its liquidity position weakens; (4) it makes a large cash distribution to its parent company. The principal methodology used in this rating was Telecommunications Service Providers published in January 2017. CWC is an integrated telecommunications provider offering mobile, broadband, video, fixed-line, business and IT services in Panama, Jamaica, the Bahamas, Trinidad and Tobago, and Barbados in addition to 13 other markets in the Caribbean and Seychelles. In 2018, the company generated revenue of USD2.3 billion. CWC is a subsidiary of Liberty Latin America Ltd., which was split off from Liberty Global plc (Ba3 stable) on December 29, 2017, and is listed on the NASDAQ. FLY JAMAICA: Cuts Entire Staff Amid Cash Flow Problems ------------------------------------------------------ Loop News reports that the positions of all employees of the cash-strapped Fly Jamaica Airways was to be made redundant as of March 31. This has been confirmed in a letter sent to the workers by the airline's Chief Executive Officer, Paul Reece, according to Loop News. According to the letter, the lack of aircraft and the impact that it has had on the company's financial position, left the entity with no alternative but to cut the staff, the report notes. Mr. Reece told the employees that Fly Jamaica has been having difficulty securing financing, but said it intends to pay salaries that have been owed since November 2018, the report says. He also promised that if there is a turnaround in the financial situation of the company, and workers are still interested, they could apply for positions with the airline, the report discloses. Fly Jamaica is based in Jamaica with offices at 2 Holborn Road in Kingston. The majority of its more than 100 employees are Jamaicans, the report notes. The airline's problems escalated last November when its Boeing 757-200 aircraft overshot the runway at Guyana's main international airport, injuring several people, the report relays. An elderly woman who was a passenger on board the aircraft and reportedly sustained an injury, subsequently died, the report says. The report notes that the plane, which was on its way to Toronto, reported a hydraulic failure emergency shortly after taking off from the Cheddi Jagan International Airport, and returned after less than 20 minutes in the air. There were 120 passengers and crew aboard the plane, the report relays. When it landed, the crew was unable to stop the aircraft, which came to a halt at the northeastern takeoff end of the runway, badly damaging its right wing and engine, the report notes. Fly Jamaica operated scheduled flights from Guyana to Kingston, Jamaica; Toronto, Canada and New York, United States, the report relays. It owned one aircraft, and during busy periods, leased extra planes, the report discloses. The airline has been plagued with problems since it started flying in February 2013. Passengers have generally complained of delayed flights and customer service issues, the report adds. =========== M E X I C O =========== MEXICO: Pres Calls Predecessor's School Reform a Foreign Imposition ------------------------------------------------------------------- EFE News reports that Mexican President Andres Manuel Lopez Obrador said that the educational overhaul enacted by predecessor Enrique Pena Nieto was part of a package of policies imposed from abroad. "These are recipes applied abroad. The energy, tax, labor and educational reforms . . . it's an agenda imposed from abroad to be implemented by subordinated governments," the leftist head of state said during his daily morning press conference, according to EFE News. Lopez Obrador began the session by defending his government's proposed replacement for the education plan launched in 2013 by Pena Nieto, the report notes. Lawmakers have been forced repeatedly to postpone a session to debate Lopez Obrador's education bill as members of the militant CNTE teachers union have blocked the entrances to the chamber, the report says. The CNTE claims that the administration is offering only cosmetic changes instead of scrapping all of Pena Nieto's education policies, the report discloses. The report relays that renewing his pledge to overturn the Pena Nieto program, Lopez Obrador criticized unnamed union leaders for acting without consulting "the sentiments of the members." The president then called on Education Secretary Esteban Moctezuma to outline the distinctions between the educational reform of 2013 and the current repeal initiative, the report notes. "They are totally different approaches," Mr. Moctezuma said, citing the abandonment of the element of the 2013 reform that most angered teachers: rules that made hiring, continued employment and promotions contingent on performance in compulsory evaluations, the report notes. The report discloses that the new plan will discard "punitive" testing in favor of ongoing training for teachers, the secretary said, adding that the aim is to strengthen "public and comprehensive" education. "The previous government created a whole perverse system, with which it didn't even comply," Mr. Moctezuma said, the report relays. Pena Nieto presented the overhaul as a bid to improve the quality of education, Moctezuma said, "but there is no quality without equity," the report notes. Another provision of the 2013 reform eliminated the role of unions in filling teaching positions, a role the Pena Nieto administration said invited corruption, the report says. The new plan will foster complete transparency in the hiring and assignment process, with public disclosure of vacancies and candidates to those positions, Mr. Moctezuma said, the report discloses. The CNTE, whose members are concentrated in Mexico's poorest states, developed its confrontational tactics in opposition to Pena Nieto's educational overhaul, which teachers saw as an attempt to make them scapegoats for the shortcomings of chronically underfunded schools, the report adds. ===================== P U E R T O R I C O ===================== ARQUIDIOCESIS DE SAN JUAN: Court Dismisses Ch. 11 Bankruptcy Case ----------------------------------------------------------------- Bankruptcy Judge Edward A. Godoy granted the motion to dismiss the chapter 11 bankruptcy case of Debtor Arquidiocesis de San Juan de Puerto Rico filed by 184 current and former teachers and other employees of various Catholic schools in Puerto Rico (the "state court plaintiffs"). The state court plaintiffs seek dismissal of the bankruptcy case under section 1112(b)(4)(F), due to an "unexcused failure to satisfy timely any filing or reporting requirement established by [the Bankruptcy Code] or by any rule applicable to a case under [chapter 11]," and section 1112(b)(4)(E), for "failure to comply with an order of the court. Specifically, the movants argue that at the hearing held Sept. 7, 2018 in adversary proceeding 18-00099, the court made clear that the bankruptcy estate in this case is comprised of all the assets of the Roman Catholic Church of Puerto Rico, unless those assets are owned by fragments of the Church that are formally incorporated." The Dioceses of Mayaguez and Ponce are not separately incorporated entities, and thus cannot hold title to any property. Therefore, assets held by the Roman Catholic Church within those dioceses are property of the estate and must be disclosed. The debtor's failure to file the schedules, statement of financial affairs, monthly operating reports, and other required disclosures for the Dioceses of Ponce and Mayaguez, and as to any property transferred by the debtor to the Diocese of Arecibo after its incorporation, within the deadlines set by the court, they argue, constitutes cause for dismissal under section 1112(b)(4)(E) and (F). In its opposition, the debtor contends that the motion to dismiss should be denied as premature given that the decision of the Supreme Court of Puerto Rico this court relied on for its Sept. 7, 2018 order has been appealed to the Supreme Court of the United States. The writ of certiorari, filed Jan. 14, 2019, is still pending adjudication. The debtor also argues that dismissal is not in the best interests of the creditors. The debtor asserts that it will be proposing a plan of reorganization shortly. The debtor also suggests, as an alternative remedy, that the court enter an order lifting the automatic stay as to estate property found in the Dioceses of Ponce and Mayaguez. In this case, the bankruptcy petition was filed on August 29, 2018. The court granted the debtor's requests to extend the deadline to make the required disclosures, setting Oct. 30, 2018 as the deadline to file the first monthly operating report, and Oct. 31, 2018 as the deadline to file the schedules and other documents. The Archdiocese of San Juan and the Dioceses of Caguas and Fajardo-Humacao filed timely the requisite disclosures, which they have subsequently amended. The Dioceses of Ponce and Mayaguez did not do so. As to the Diocese of Arecibo, since it was incorporated six-days prior to the filing of the bankruptcy petition, the debtor's schedules would only need to contain all property "not legally transferred [by the debtor] to the newly incorporated diocese under the laws of Puerto Rico prior to the bankruptcy filing." At a hearing held December 21, 2018, the court addressed the continued failure of the debtor to provide the required disclosures as to the Dioceses of Ponce, Mayaguez, and Arecibo. The court granted the debtor a final extension to comply with the reporting requirements. The debtor responded on Jan. 10, 2019 that it had been unable to persuade those dioceses to take part in the bankruptcy process. Therefore, as it stands now, more than six months after the bankruptcy case was filed, the schedules, statement of financial affairs, monthly operating reports, creditor matrix, and petition do not include the information corresponding to the Dioceses of Ponce and Mayaguez, and are thus incomplete. The court finds that this constitutes "cause" for dismissal under section 1112(b)(4)(E)&(F). The problem, with debtor's proposed plan is that it only takes into consideration the assets, liabilities, and creditors of part of the debtor: the Archdiocese of San Juan and the Dioceses of Caguas and Fajardo-Humacao. The Bankruptcy Code requires complete disclosure, it does not allow for piece-meal bankruptcy. While the court sympathizes with the debtor's predicament, it cannot permit a debtor to make an endrun around the Bankruptcy Code, whether by allowing it to only partially comply with the disclosure requirements, or by lifting the automatic stay as to the assets of the non-complying dioceses, as the debtor proposed. For these reasons, the court grants the motion to dismiss filed by the state court plaintiffs. A copy of the Court's Order dated March 18, 2019 is available at: http://bankrupt.com/misc/prb18-04911-352.pdf About Arquidiocesis de San Juan de Puerto Rico Arquidiocesis de San Juan de Puerto Rico--http://www.arqsj.org/--is an unincorporated religious association in San Juan, Puerto Rico. Arquidiocesis de San Juan de Puerto Rico, a/k/a Iglesia Catolica Apostolica Y Romana, Arquidiocesis De San Juan De Puerto Rico, filed a petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D.P.R. Case No. 18-04911) on Aug. 29, 2018. In the petition signed by Father Alberto Arturo Figueroa Morales, vicar general, the Debtor estimated $10 million to $50 million in assets and liabilities. Carmen D. Conde Torres, Esq., at C. Conde & Assoc., is the Debtor's counsel. ===================================== T R I N I D A D A N D T O B A G O ===================================== PETROLEUM CO: Khan Warns Opposition Over Petrotrin Sale/Lease ------------------------------------------------------------- Ria Taitt at Trinidad Express reports that Energy Minister Franklin Khan warned, "Do not let what happened with the Sandals resort deal happen to the negotiations for the sale/lease of the Petroleum Co. of Trinidad & Tobago (Petrotrin) refinery." That was his response to a question from Opposition Senator Wade Mark. "These are sensitive commercial negotiations. It happened with Sandals. We cannot take in front and stymie the process because these are international players and the process, the transparency and the robustness of the process are very, very, very important and I want to warn the Opposition, do not go down that road because it is hurting Trinidad and Tobago," the report quoted Mr. Franklin as saying. The Troubled Company Reporter-Latin America reported last November 8, 2018, that Sandals Resorts International suspended construction on what was to be its fourth hotel in St. Lucia because of delays caused by a legal action over a land dispute. Sandals decided to end the employment of its 37-member Projects Management Team and sub-contractors who were already engaged on the site. As reported in the Troubled Company Reporter-Latin America on Sept. 28, 2018, Moody's Investors Service placed Petroleum Co. of Trinidad & Tobago's B1 corporate family rating and senior unsecured debt ratings on review for downgrade. This rating action was based on the lack of clarity regarding Petrotrin's new business profile and strategy as well as increasing liquidity risk related to the approaching maturity of the 2019 bonds. ================= V E N E Z U E L A ================= VENEZUELA: Bars Guaido From Holding Public Office for 15 Years -------------------------------------------------------------- Cristina Abellan Matamoros at Euro News reports that President Nicolas Maduro's government has barred Venezuelan opposition leader Juan Guaido from holding public office for 15 years, state comptroller Elvis Amoroso said. Mr. Guaido, the head of the opposition-controlled National Assembly and self-proclaimed interim president, was accused of corruption by the government, according to Euro News. The report notes that Mr. Amoroso cited alleged inconsistencies in Guaido's personal finance disclosures and a spending record higher than his salary. This comes a day after the opposition leader called on Venezuelans to protest the nationwide blackout, the report relays. In January, Guaido invoked the constitution to proclaim himself interim presidency arguing Maduro's 2018 re-election was illegitimate, the report notes. As reported in the Troubled Company Reporter-Latin America, S&P Global Ratings in May 2018 removed its long- and short-term local currency sovereign credit ratings on Venezuela from CreditWatch with negative implications and affirmed them at 'CCC-/C'. The outlook on the long-term local currency rating is negative. At the same time, S&P affirmed its 'SD/D' long- and short-term foreign currency sovereign credit ratings on Venezuela. S&P's transfer and convertibility assessment remains at 'CC'. VENEZUELA: Electricity Woes Continue for a 7th Day -------------------------------------------------- EFE News reported on March 31 that Venezuelans are dealing with a new blackout affecting several regions, marking the seventh straight day of power woes in this South American country. Officials, for their part, reported a fifth act of "sabotage" against the National Electric System (SEN), which has been dealing with power outages since March 7, according to EFE News. As reported in the Troubled Company Reporter-Latin America, S&P Global Ratings in May 2018 removed its long- and short-term local currency sovereign credit ratings on Venezuela from CreditWatch with negative implications and affirmed them at 'CCC-/C'. The outlook on the long-term local currency rating is negative. At the same time, S&P affirmed its 'SD/D' long- and short-term foreign currency sovereign credit ratings on Venezuela. S&P's transfer and convertibility assessment remains at 'CC'. ********* 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. 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