/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/190411.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 Thursday, April 11, 2019, Vol. 20, No. 73 Headlines B A H A M A S BAHAMAS: To Regulate Digital Assets and Registered Exchanges B R A Z I L ENGIE BRASIL: Fitch Affirms 'BB' IDRs, Outlook Stable D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: IMF Walks Back Growth From 5.5% to 5.1% DOMINICAN REPUBLIC: March Prices Climb 0.65%, Paced by Transport J A M A I C A JAMAICA: Minister & JAMPRO Discuss Ways to Boost Investments [*] JAMAICA: Business & Consumer Confidence Levels Maintain Trend M E X I C O MEXICO: Says Distributors to Blame For Higher Gasoline Prices P U E R T O R I C O IGLESIA CASA DE ADORACION: Plan, Disclosures Hearing Set for May 8 LINDLEY FIRE: Seeks to Hire Force Ten as Investment Banker T R I N I D A D A N D T O B A G O TRINIDAD & TOBAGO: World Bank Says Economy Will Shrink This Year V E N E Z U E L A PETROLEOS DE VENEZUELA: Allows Parallel Board to Negotiate Debt - - - - - ============= B A H A M A S ============= BAHAMAS: To Regulate Digital Assets and Registered Exchanges ------------------------------------------------------------ Caribbean360.com reports that draft legislation has been put forward to give The Bahamas a clear competitive advantage with respect to digital asset solutions as financial technologies continue to drive growth in the financial services sector. The Digital Assets and Registered Exchanges Bill, 2019 (DARE), which was developed by the Securities Commission of The Bahamas (SCB), provides solutions for digital asset applications and creates a proper regulatory framework for The Bahamas' crypto market, according to Caribbean360.com. "Disruptions caused by the digitization of the economy are leading to a new wave of regulatory reform. As countries around the world innovate new ways to safeguard against the erosion of their tax base, these developments will undoubtedly affect us here in The Bahamas. With the DARE legislation, we are looking to the future, anticipating and preparing for the changes on the horizon, forming coalitions to influence the nature of change," said Deputy Prime Minister and Minister of Finance Peter Turnquest, the report discloses. "The whole issue of crypto currencies and assets is very dynamic. We have been deliberate in creating a regulatory environment that safeguards the country's economic interests and shores up our global competitiveness. These efforts will help to grow our reputation as an innovative and responsive financial centre," he added, the report says. The Bahamas has a budding crypto ecosystem, including: crypto start-ups, exchanges, and traditional financial institutions servicing crypto companies, the report notes. Requests continue to come to the Government from related businesses like crypto custodians, and companies conducting initial token offerings (ITOs) and security token offerings (STOs) that want to base their business in The Bahamas, the report relays. "New legislative initiatives will facilitate these growth opportunities and drive innovation and diversification in the industry. I look forward to presenting the Bill to Cabinet when the public consultation phase is complete," said the Finance Minister, the report says. The DARE Bill provides for the regulation of the issuance and sale of digital tokens, and for the regulation of the conduct of those issuing digital tokens and those providing intermediary services related to the issuance of digital tokens, the report discloses. It also provides clarity with respect to stable coins, the report adds. Specifically, the Bill creates a legislative structure by which persons who wish to participate in the digital token space are guided on the requirements for entry into and participation in the industry, the report notes. These requirements stipulate who may participate, the level of capital required, the rules for reporting and seeking the Commission's approval, and the penalties for failure to comply, the report relays. Additionally, the rules stipulate that participants must adhere to established anti-money laundering (AML) and counter-financing of terrorism (CFT) laws, must take data protection measures related to the personal information of clients, and must implement measures to prevent data breaches which would jeopardize the crypto assets of clients, the report says. Turnquest said the comprehensive Bill will provide participants in the digital token space with clear rules of entry and operation in The Bahamas' crypto market, the report adds. =========== B R A Z I L =========== ENGIE BRASIL: Fitch Affirms 'BB' IDRs, Outlook Stable ----------------------------------------------------- Fitch Ratings has affirmed Engie Brasil Energia S.A.'s Foreign Currency (FC) and Local Currency (LC) Issuer Default Ratings (IDRs) at 'BB' and 'BBB-', respectively, and its National Scale Rating at 'AAA(bra)'. The Rating Outlook is Stable. KEY RATING DRIVERS Fitch believes Engie Brasil's announced acquisition of 29.25% of Transportadora Associada de Gas S.A. (TAG) while meaningful does not change its robust credit fundamentals. The company will maintain a strong financial profile with net debt-to-EBITDA ratio below 3.0x, which is consistent with its IDRs, and presents proven financial flexibility to finance this acquisition. Fitch also expects the acquisition to strengthen Engie Brasil's business profile due to TAG's very predictable operations and long-term contracts with its sole client Petroleo Brasileiro S.A. (Petrobras; FC and LC IDRs 'BB-'/Stable). TAG is the largest natural gas transporter in Brazil with a pipeline infrastructure of approximately 4,500 km. It extends throughout the coastline of the Southeast and Northeast regions of the country and connects Urucu (petroleum fields in the Amazon) and the City of Manaus in the State of Amazonas. As of 2017, net revenues and EBITDA of BRL4.6 billion and BRL4.3 billion, respectively, represented an EBITDA margin of 93%. The mature stage of the assets and reduced variable costs of the natural gas transportation segment benefit the company's business profile. TAG's contracts are based in ship-or-pay agreements with Petrobras, without demand risk. On April 5, 2019, Engie Brasil, together with Engie S.A. (IDR 'A'/Stable), its final controlling shareholder, and Caisse de Depot et Placement du Quebec Canadian (CDPQ) were the winners through a consortium for the acquisition of a 90% stake in TAG with Petrobras retaining 10%. The acquisition will occur through Alianca Transportadora de Gas Participacoes S.A. (Alianca). Engie Brasil holds a direct participation of 32.5% in Alianca. The final binding offer represented an Enterprise Value of BRL35.1 billion (USD9.1 billion) to 100% of TAG, using the base date of Dec. 31, 2017. The transaction is expected to close in May 2019 after approval of the precedent conditions. This transaction will be 70% financed by project finance at Alianca (BRL22.1 billion), guaranteed by TAG's contracts with Petrobras. The remaining 30% will come from equity contribution from the three shareholders of Alianca. In the case of Engie Brasil, the equity contribution estimated at BRL3.5 billion will be financed through corporate debt. Fitch believes that Engie Brasil's proved financial flexibility and large access in the local market debt will enable timely raising of the transaction amount, including a bridge loan and the long-term final structure. On a pro forma basis, considering that Engie Brasil will neither consolidate Alianca nor guarantee its debt, its net debt-to-EBITDA ratio should increase to 2.4x in 2019 from Fitch's previous base case projection of 1.6x. At the end of 2018, Engie Brasil presented EBITDA of BRL4.3 billion and gross and net leverages of 2.2x and 1.6x, respectively. Engie Brasil's ratings reflect its prominent market position as the largest private electric energy generation company in Brazil with a sizeable and diversified portfolio, operational efficiency and robust operating cash flow generation benefited by the existence of long-term power purchase agreements with its clients. The company also benefits from a conservative financial profile with historical low leverage and strong financial flexibility to deal with new debt needs resulting from investments in its asset growing cycle. Engie Brasil's FC IDR is constrained by Brazil's country ceiling of 'BB', as the company generates all of its revenues in local currency (BRL), with no cash and committed credit facilities abroad. The analysis does not incorporate any potential support from the parent company. Fitch also considers the three-notch difference between the company's LC IDR and the sovereign rating as appropriate due to its regulated nature. The Stable Outlook for the FC and LC IDRs follows the same Outlook of Brazil's 'BB-' sovereign rating. Fitch also expects Engie Brasil will be able to sustain its solid consolidated credit profile over the next few years despite a period of higher investment levels, which also supports the Stable Outlook for the National Scale rating. DERIVATION SUMMARY Engie Brasil's FC IDR 'BB'/Stable is three notches below peers in Latin America, such as Emgesa (BBB/Stable), the second largest generation company in Colombia, and Engie Chile (BBB/Stable), the fourth largest generator in Chile, primarily as a result of the Brazilian country ceiling at 'BB'. Emgesa and Engie Chile benefit from a better economic environment in investment grade countries. Engie Brasil's 'BBB-'/Stable LC IDR is comparable to these 'BBB' rated peers. Fitch considers the three-notch difference between the company's LC IDR and the sovereign rating appropriate due to the regulated nature of the business. All three companies benefit from strong business profile, with Engie Brasil's installed capacity being the largest among them, although the energy mix of Engie Chile differs from the related company in Brazil and Emgesa. Engie Brasil and Emgesa are more exposed to hydrological conditions, while Engie Chile needs to deal with the coal and natural gas prices volatility. All the companies have predictable and robust cash flow generation since they have managed business risks properly, but Engie Brasil has a stronger financial profile. KEY ASSUMPTIONS The main assumptions of Fitch's base scenario for the issuer include: - GSF of 0.83 in 2019 and 0.85 in 2020; - Capital expenditures of BRL5.0 billion from 2019 to 2021; - Dividends Payout of 100%; - Absence of asset sale and further acquisitions. RATING SENSITIVITIES Future Developments That May, Individually or Collectively, Lead to Positive Rating Action: -- An upgrade is unlikely in the near term because the Foreign Currency IDR is constrained by the country ceiling (BB) and the Local Currency IDR is limited to three notches above the sovereign rating (BB-). Future Developments That May, Individually or Collectively, Lead to Negative Rating Action: -- Sizable investments or acquisitions currently out of Fitch's base case that could lead to net leverage consistently above 3.5x; -- Funds from operations (FFO) Adjusted Net Leverage above 4.0x on a sustainable basis; -- Difficulties in financing the capex plan through project finance debts; -- A downgrade of the sovereign rating would trigger another downgrade of Engie Brasil's IDRs. LIQUIDITY High Financial Flexibility: Engie Brasil's consolidated liquidity is robust with no concentration on the short-term debt maturities. As of Dec. 31, 2018, cash and marketable securities of BRL2.4 billion were significantly above the short-term debt of BRL662 million. The high cash balance will be partially used to finance the negative FCF for 2019 and 2020 period, when the group will still need to raise new debt. Engie Brasil's ample access to debt and capital markets benefits the group to raise alternatives funding with structure adequate to project finance and maintaining a well-balanced debt maturity profile. Engie Brasil's debt were mainly based on debentures (BRL3.4 billion) and BNDES (BRL2.9 billion), representing the main sources of financing (67%). FULL LIST OF RATING ACTIONS Fitch has affirmed the following ratings: Engie Brasil Energia S.A. -- Long-Term Local Currency IDR at 'BBB-'; -- Long-Term Foreign Currency IDR at 'BB'; -- Long-Term National Scale Rating at 'AAA (bra)'; -- 6th Debenture Issuance of BRL600 million at 'AAA(bra)'; -- 7th Debenture Issuance of BRL747 million at 'AAA(bra)'. The Rating Outlook for the issuer ratings is Stable. =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: IMF Walks Back Growth From 5.5% to 5.1% ----------------------------------------------------------- Dominican Today reports that the International Monetary Fund (IMF) estimates that the Dominican Republic will grow 5.1% this year and that consumer prices will climb 1.4% by yearend 2019, according to its latest report from the World Economic Outlook. As recent as March, the multilateral organization had predicted a growth of the local economy of 5.5%, according to Dominican Today. The IMF also reduced the outlook for economic growth of Latin America and the Caribbean to 1.4% during 2019, the report notes. The projection is a substantial reduction from the 2% it had forecast in January but exceeds the 1% growth in 2018, the report relays. "The second half of 2018 was weak and much of that is creeping to 2019," IMF chief economist Gita Gopinath told reporters, the report says. 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: March Prices Climb 0.65%, Paced by Transport ---------------------------------------------------------------- Dominican Today reports that the Dominican Republic Central Bank said consumer prices climbed 0.65% in March, while first quarter inflation stood at 0.86%. It said annualized inflation, from March 2018 to March 2019, was 1.47%, "below the lower limit of the target range of 4.0% ± 1.0% established in the Monetary Program of 2019," according to Dominican Today. "Annualized inflation at the end of March 2019 turns out to be significantly lower than the one registered in the same period in 2018 (3.91%) and 2017 (3.14%)," the Central Bank said in an emailed statement obtained by the news agency. It adds that transport, which climbed 1.79%, is the group that most influenced March prices, the report notes. 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 ============= JAMAICA: Minister & JAMPRO Discuss Ways to Boost Investments ------------------------------------------------------------ RJR News reports that Audley Shaw, Jaimacan Minister of Industry and Commerce, met with the Board of Directors, and executives at the Jamaica Promotions Corporation (JAMPRO) to discuss boosting investments. The minister and the executives discussed methods of strengthening the BPO sector through the Global Services Sector initiative, according to RJR News. They also explored potential initiatives that would support the agriculture sector to meet the demand for various products, including coffee, cocoa, sweet potatoes and other produce, the report notes. Increasing exports to CARICOM and the Jamaican diaspora were also priority areas for the new financial year, the report relays. JAMPRO has also pledged to work with international partners to increase the country's exports, as well as to encourage more business with Jamaica's regional neighbors, the report adds. As reported in the Troubled Company Reporter-Latin America on Sept. 27, 2018, S&P Global Ratings revised its outlook on Jamaica to positive from stable. At the same time, S&P Global Ratings affirmed its 'B' long- and short-term foreign and local currency sovereign credit ratings, and its 'B+' transfer and convertibility assessment on the country. [*] JAMAICA: Business & Consumer Confidence Levels Maintain Trend ----------------------------------------------------------------- RJR News reports that the latest survey of business confidence shows that companies in Jamaica remain bullish on their plans to invest. RJR News, citing data from the survey, notes that for the first quarter of 2019, companies willingness to invest in new plants and equipment was the highest in the history of the survey, soaring to 159 points. It surpassed the record set in the last quarter of 2018 of 151 points, the report relays. More than 70 per cent of all firms surveyed continued to agree that the time was right for expansion, the report discloses. More than 56 per cent of the firms surveyed indicated having solid plans to increase the level of capital investment in their firms over the next 12 months, the report says. In addition, expectations for economic growth increased marginally to 67 per cent compared to 65 per cent in the last quarter of 2018, the report adds. Businesses also reported that they expect the economy to improve in the next 12 months, the report relays. As reported in the Troubled Company Reporter-Latin America on Sept. 27, 2018, S&P Global Ratings revised its outlook on Jamaica to positive from stable. At the same time, S&P Global Ratings affirmed its 'B' long- and short-term foreign and local currency sovereign credit ratings, and its 'B+' transfer and convertibility assessment on the country. =========== M E X I C O =========== MEXICO: Says Distributors to Blame For Higher Gasoline Prices ------------------------------------------------------------- EFE News reports that the Mexican government blamed higher profit margins at fuel distributors for the increase in the price of gasoline and liquefied petroleum gas (LPG), but it said taxes would not be raised. "The conclusion is that (the government) is keeping (its commitment) to not raising the price of fuel. However, the increases are occurring because the profit margins of the fuel distributors have gone up," President Andres Manuel Lopez Obrador said during his daily press conference at the National Palace, according to EFE News. ===================== P U E R T O R I C O ===================== IGLESIA CASA DE ADORACION: Plan, Disclosures Hearing Set for May 8 ------------------------------------------------------------------ Bankruptcy Judge Mildred Caban Flores issued an amended order conditionally approving Iglesia Casa de Adoracion Jabes International, Inc.'s disclosure statement filed on March 28, 2019. Written acceptances or rejections of the Plan, and any objection to the final approval of the Disclosure Statement and/or the confirmation of the Plan must be filed on/or before 14 days prior to the date of the hearing on confirmation of the Plan. A hearing for the consideration of the final approval of the Disclosure Statement and the confirmation of the Plan will be held on May 8, 2019, at 9:00 AM, at the U.S. Bankruptcy Court, Jose V. Toledo U.S. Post Office and Courthouse Building, 300 Recinto Sur Street, Courtroom 3, Third Floor, San Juan, Puerto Rico. About Iglesia Casa de Adoracion Iglesia Casa de Adoracion Jabes International, Inc., is a religious organization based in Bayamon, Puerto Rico. Iglesia Casa sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D.P.R. Case No. 18-03374) on June 15, 2018. In the petition signed by Nixon Cruz Rivera, president, the Debtor estimated assets of $1 million to $10 million and liabilities of $1 million to $10 million. Judge Mildred Caban Flores presides over the case. LINDLEY FIRE: Seeks to Hire Force Ten as Investment Banker ---------------------------------------------------------- Lindley Fire Protection Co., Inc., seeks approval from the U.S. Bankruptcy Court for the Central District of California to hire an investment banker. The Debtor proposes to hire Force Ten Partners, LLC to assist in the sale of its assets and provide other investment banking services in connection with its Chapter 11 case. These services include the preparation of marketing materials and identifying potential buyers, negotiating with potential buyers, and assisting the Debtor's legal counsel in preparing documents necessary to consummate a transaction. Force 10 is entitled to a minimum fee of $35,000. If a sale of the Debtor, a business unit or a group of assets is consummated and approved by the bankruptcy court, the firm will get the greater of $50,000 plus direct out-of-pocket expenses or 10% of the gross purchase price. Brian Weiss, a partner at Force Ten, disclosed in a court filing that his firm is "disinterested" as defined in section 101(14) of the Bankruptcy Code. The firm can be reached through: Brian Weiss Force Ten Partners, LLC 20341 SW Birch, Suite 220 Newport Beach, CA 92660 Office: (949) 357-2368 / (949) 357-2360 Mobile: (949) 933-7011 Email: bweiss@force10partners.com About Lindley Fire Protection Co. Established in 1986 in Anaheim, California, Lindley Fire Protection Co., Inc. -- http://www.lindleyfire.com/-- provides fire protection services and contracts with large industrial warehouses and facilities. Lindley Fire Protection performs construction services worldwide and its personnel have performed work in various locations such as Western Somoa, Puerto Rico, Texas, Illinois, Nevada, Colorado, Utah, Montana, Idaho and Mexico. Lindley Fire Protection sought protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No. 17-10929) on March 12, 2017. The petition was signed by Leslie L. Lindley, II, president. At the time of the filing, the Debtor estimated its assets and debts at $1 million to $10 million. The case is assigned to Judge Catherine E. Bauer. Goe & Forsythe, LLP is the Debtor's bankruptcy counsel. On March 29, 2017, the Office of the U.S. Trustee appointed an official committee of unsecured creditors. The committee retained Marshack Hays LLP as its legal counsel. Accurate Business Consulting, Inc., serves as financial advisor to the Debtor and the committee. ===================================== T R I N I D A D A N D T O B A G O ===================================== TRINIDAD & TOBAGO: World Bank Says Economy Will Shrink This Year ---------------------------------------------------------------- Aleem Khan at Trinidad Express reports that noting that Trinidad and Tobago has the largest fiscal deficit in Central America and the Caribbean, a group of World Bank economists are forecasting the T&T economy will contract this year by -0.5 per cent. T&T is one of only four countries that the World Bank estimates this year will have weaker economies by the end of 2019, according to Trinidad Express. The other three are: Venezuela, Nicaragua and Argentina. The economists also found T&T has the highest fiscal deficit as a percentage of gross domestic product (GDP) in Central America and the Caribbean, the report says. ================= V E N E Z U E L A ================= PETROLEOS DE VENEZUELA: Allows Parallel Board to Negotiate Debt --------------------------------------------------------------- Luc Cohen and Mircely Guanipa at Reuters report that Venezuela's opposition-controlled National Assembly allowed a parallel board of directors of state-run oil company Petroleos de Venezuela, S.A. (PDVSA) to negotiate foreign debt ahead of a looming payment deadline that could put its crown jewel overseas asset, U.S. refiner Citgo, at risk. The ad hoc board, which the Assembly expanded to nine members from five, is part an effort by opposition leaders who have disavowed the government of President Nicolas Maduro to control PDVSA's overseas assets, according to Reuters. Maduro's ruling Socialist Party continues to control the company's day-to-day operations, the report relays. The report notes that the move will allow the board to decide whether or not to make a $71 million interest payment due April 27 on PDVSA's 2020 bond, which is backed by a 49 percent stake in Citgo, said opposition lawmaker Elias Matta, the head of the Assembly's energy commission. "They will evaluate if they are going to pay the bonds. That is now their decision," Mr. Matta said in a telephone interview, adding that the board would have to inform the Assembly should it decide to pay, the report notes. "We will do everything we have to do to protect the republic's assets," he added. Failure to pay the bond could allow bondholders to seize shares in Citgo as compensation. PDVSA has a 30-day grace period following the April 27 deadline to make the payment, the report says. The board's new head will be former PDVSA executive Luis Pacheco, Matta said, the report notes. National Assembly leader Juan Guaido, who invoked the country's constitution to assume an interim presidency in January, appointed the ad-hoc board in February to protect PDVSA's assets from "continued destruction" by Maduro, the report discloses. Guaido, who is recognized by most Western countries including the United States, as Venezuela's rightful leader, argues Maduro's May 2018 re-election was a sham, the report relays. The report notes that Maduro, who retains control of the military and basic operations of government, calls Guaido a puppet of the United States and accuses the opposition of trying to "steal" Citgo. Oil production is the lifeblood of Venezuela's economy, but its crude exports have tumbled sharply in recent years as the country suffers a hyperinflation collapse, the report relays. In the past month, that has been compounded by a wave of nationwide blackouts, which have led the main oil export terminal, Jose, and the country's four crucial crude upgraders to halt operations in March, the report discloses. Two of those upgraders -- which convert extra-heavy crude from the country's Orinoco Belt into exportable grades -- have restarted, according to a document seen by Reuters. The Petrocedeno upgrader, a joint venture between PDVSA, France's Total SA and Norway's Equinor ASA, and the Petropiar joint venture with U.S. Chevron Corp both restarted, the report says. The Petromonagas upgrader, a joint venture with Russia's Rosneft, along with PDVSA's Petrosanfelix upgrader, remained halted, the report relays. The upgraders, together with the Petrosinovensa mixing facility, were set to produce 298,000 barrels of upgraded crude. That was still below the 326,000 barrels that PDVSA expected them to produce, according to the document, the report notes. The document also shows that PDVSA has a deficit of 70,700 barrels of naphtha, a light oil product that it uses to dilute its extra-heavy crude into an exportable grade when the upgraders are out of service. Most of Venezuela's naphtha is imported, the report adds. As reported in the Troubled Company Reporter-Latin America on Aug. 24, 2018, S&P Global Ratings affirmed its 'SD' global scale issuer credit rating and 'D' issue-level ratings on Petroleos de Venezuela S.A. (PDVSA). ********* 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 * * *