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/raid1/www/Hosts/bankrupt/TCRLA_Public/190603.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 Monday, June 3, 2019, Vol. 20, No. 110 Headlines B A R B A D O S BARBADOS: Clashes With Creditors in Talks to Cut Greece-Like Debt B R A Z I L ATVOS AGROINDUSTRIAL: Alvarez & Marsal Named as Administrator ULTRAPAR INT'L: Moody's Rates New $500MM Unsec. Notes 'Ba1' ULTRAPAR INT'L: S&P Rates New $500MM Unsec. Notes 'BB+' C H I L E CORPORACION DEL COBRE: Workers Vote to Authorize Strike C U B A CUBA: Should Respond to US Pressure by Opening Economy, EU Says D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: Fitch Rates 2026 Peso & 2049 USD Notes 'BB-' J A M A I C A JAMAICA: Signs GIDP Agreement With CHEC M E X I C O MEXICO: President Confident US Will Retreat on Tariff Threat P E R U FERREYCORP: Moody's Withdraws Ba1 CFR on Senior Notes Repayment P U E R T O R I C O EL CANO DEVELOPMENT: June 20 Hearing on Disclosure Statement V E N E Z U E L A PETROLEOS DE VENEUELA: Moody's Withdraws 'C' Sec. & Unsec. Rating X X X X X X X X [*] BOND PRICING: For the Week May 27 to May 31, 2019 - - - - - =============== B A R B A D O S =============== BARBADOS: Clashes With Creditors in Talks to Cut Greece-Like Debt ----------------------------------------------------------------- Ezra Fieser at Bloomberg News reports that Barbados' prime minister is butting heads with creditors over how to cut one of the world's largest sovereign debt loads, creating a sticking point in the year-long negotiations to restructure the Caribbean nation's defaulted dollar bonds. Talks with foreign creditors have dragged on since last June, when Prime Minister Mia Mottley said she would restructure the island's "unsustainably high" debt burden, according to Bloomberg News. While both sides said they are open to continued negotiation, they appear far from consensus, Bloomberg News cites. A committee of creditors, who hold 55% of outstanding dollar debt, said that they plan to unanimously reject a government proposal to exchange defaulted bonds for new debt unless the two sides negotiate together, Bloomberg News relays. "The committee strongly believes that the launch of a unilateral exchange offer by the government of Barbados without the support of the committee will be highly detrimental to the country's economic stability," they said in a statement obtained by the news agency. Both sides agree the country of 300,000 people needs to cut debt levels, the report notes. Yet talks have soured in recent weeks over how much of the burden should be borne by creditors in the form of deep haircuts or other terms, Bloomberg News discloses. For its part, the government said it isn't willing to negotiate targets established when it took a bailout from the International Monetary Fund last year, Bloomberg News says. No Compromise At that time, Bloomberg notes, the government estimated debt had ballooned to about 175% of gross domestic product, meaning it owed around $9 billion. That would have made it one of the world's most-indebted countries, trailing only a handful of others, including Greece, according to IMF figures, Bloomberg News relays. Mottley said she "will not compromise" on the goal of bringing that ratio down to 60% by 2033, Bloomberg News notes. "We leave it to creditors to decide whether this is achieved through a par deal with long tenors and low interest rates, or face value haircuts with shorter tenors and higher interest rates. But the targets must be met in full," she said in a written response to questions, Bloomberg News says. Bloomberg News relays that Mottley inherited a troubled $5 billion economy when she took office last May. The island known for its white sand beaches had been struggling for years amid competition from less-pricey Caribbean tourism destinations, crumbling infrastructure, and a currency that's pegged to the U.S. dollar, Bloomberg News notes. She quickly struck a $290 million deal with the IMF and restructured about $6 billion in local currency debt, Bloomberg News says. Bloomberg News notes that the government owes around $700 million in dollar bonds, plus bank loans and other foreign debts, according to a spreadsheet posted to a website for creditors in January. Bonds maturing in 2035 have rarely traded in recent months, according to data compiled by Bloomberg. Bloomberg News relays that the creditors committee said it put forth an offer "based on terms that aim to support the government's debt and reform objectives while creating restructured instruments with broad market acceptance." The committee said it is made up of long-term investors, regional central banks, individual bondholders and financial institutions and represented by advisers Newstate Partners and Washington-based law firm Arnold & Porter Kaye Scholer LLP, Bloomberg News notes. The creditors contend that their offer would have allowed the government to reach its debt target a year later than it wants, according to people familiar with the committee's negotiations, Bloomberg News says. The committee's position is that the government's estimates fail to take into account certain revenue variables and that it is trying force severe restructuring terms on creditors to meet its debt targets, said the people, who were not authorized to discuss the negotiations, Bloomberg News relays. White Oak Advisory, which is representing the government in negotiations, said the creditors' offer "fails to meet IMF test for debt sustainability, and by quite some margin," according to an email statement, Bloomberg News notes. "It is disappointing that Barbados continues to be faced with this kind of position after almost a year of negotiations," Bloomberg News adds. As reported in the Troubled Company Reporter-Latin America on Nov. 22, 2018, S&P Global Ratings raised its long- and short-term local currency sovereign credit ratings on Barbados to 'B-/B' from 'SD/SD' (selective default). At the same time, S&P Global Ratings assigned its 'B-' issue-level rating to Barbados' long- term debt issued in its debt exchange. S&P Global Ratings also affirmed its 'SD/SD' long- and short-term foreign currency credit ratings on the country, and its 'D' (default) ratings on Barbados' foreign-currency issues. Finally, S&P Global Ratings raised its transfer and convertibility assessment on the country to 'B-' from 'CC'. =========== B R A Z I L =========== ATVOS AGROINDUSTRIAL: Alvarez & Marsal Named as Administrator ------------------------------------------------------------- Carolina Mandl at Reuters reports that a Brazilian judge has named restructuring firm Alvarez & Marsal as judicial administrator of ethanol company Atvos' in-court restructuring, according to a document. Atvos, a unit of industrial conglomerate Odebrecht SA, filed for bankruptcy protection after creditor Lone Star Funds got a court decision blocking its cash position, according to Reuters. ULTRAPAR INT'L: Moody's Rates New $500MM Unsec. Notes 'Ba1' ----------------------------------------------------------- Moody's Investors Service assigned a Ba1 rating to the $500 million proposed senior unsecured notes due 2029 to be issued by Ultrapar International S.A., fully and unconditionally guaranteed by Ultrapar Participacoes S.A. ("Ultrapar", Ba1/Aaa.br) and Ipiranga Produtos de Petroleo S.A. ("Ipiranga", Ba1/Aaa.br). The outlook is stable. Proceeds from the proposed notes are part of Ultrapar's liability management strategy and will be used for the repurchase of up to $200 million of the outstanding 5.250% senior unsecured notes due 2026, other debt payments and general corporate purposes. The rating of the proposed notes assumes that the final transaction documents will not be materially different from draft legal documentation reviewed by Moody's to date and assume that these agreements are legally valid, binding and enforceable. Ratings assigned: Issuer: Ultrapar International S.A. - $500 million senior unsecured notes due 2029: Ba1 (global scale) The outlook is stable RATINGS RATIONALE Ultrapar's rating reflects the company's solid business model, low-risk profile, stable cash flow and leading positions in different segments such as fuel and liquefied petroleum gas distribution, specialty chemicals, storage of liquid bulk and retail drugstores. Over the past few years, the company has demonstrated its ability to continue to grow its sales and sustain cash generation despite adverse market conditions and a sizable capital spending plan. Nonetheless, in 2018, EBITDA and leverage metrics were considerably strained by the negative impact of a nationwide trucker's strike and losses on inventories following the introduction of fuel subsidies by the Brazilian government. Since the fourth quarter of 2018, fuel market volumes started to normalize and Moody's expects that this trend will continue in the following quarters, improving EBITDA generation and reducing leverage toward 3.6x in the next 12 to 18 months from 5.0x in March 2019. At the same time, Ultrapar Ba1 ratings are constrained by the company's high capital spending, acquisitive growth strategy and dependence on a few key suppliers for raw materials. The more cyclical nature of the company's specialty chemicals business is also credit negative, although to a lesser extent. Ratings are constrained by the Government of Brazil's Ba2 rating, and, currently, by the high gross leverage. Since most of the proceeds of proposed issuance will be channeled to debt reduction, Moody's expects gross debt pro-forma to increase by less than 0.1x. Liquidity is adequate with BRL 6.4 billion in cash and BRL 1.9 billion in short-term debt. The stable outlook reflects Moody's view that Ultrapar will maintain its leading position in its relevant business segments and will continue to maintain prudent financial policies, including the maintenance of an adequate liquidity profile and financial leverage. Moreover, while dividends are expected to remain robust, they should not prevent positive free cash flow generation. An upgrade of Ultrapar's rating could happen in case of an upgrade of Brazil's sovereign rating, and is dependent on the company maintaining strong credit metrics and liquidity. Negative actions on Brazil's sovereign rating could trigger a downgrade of Ultrapar's ratings. Quantitatively, negative pressure on the ratings could arise in case of a deterioration in the group's liquidity position, an increase in leverage to above 4.0x debt/EBITDA without prospects of deleveraging in the near term. A drop in interest coverage, as measured by EBIT/interest expense, to below 2.5x for a prolonged period and operating margins below 3.0%, could negatively pressure the rating. Ultrapar Participacoes S.A., headquartered in Sao Paulo, Brazil, is engaged in fuel (Ipiranga) and liquefied petroleum gas (Ultragaz) distribution, specialty chemicals production (Oxiteno), storage for liquid bulk (Ultracargo) and retail drugstore (Extrafarma). In the last twelve months ended March 31, 2019, Ultrapar reported consolidated net revenues of BRL 90.6 billion (about USD 24.0 billion). Ipiranga is the group's largest business segment, representing 82% of consolidated net revenues and 62% of EBITDA in the same period. ULTRAPAR INT'L: S&P Rates New $500MM Unsec. Notes 'BB+' ------------------------------------------------------- S&P Global Ratings assigned its 'BB+' issue-level rating and recovery rating of '3' to Ultrapar International S/A's proposed $500 million senior unsecured notes due 2029. The recovery rating of '3' indicates that bondholders can expect a meaningful (50%-70%) recovery in the event of a payment default. Ultrapar International S/A is a subsidiary of the Brazilian conglomerate, Ultrapar Participacoes S.A. (Ultrapar; BB+/Stable/--), which unconditionally and irrevocably guarantees the notes. The issuance won't change our exéctations for Ultrapar's net leverage, with net debt to EBITDA at around 2.0x-2.5x in 2019, because the company plans to use the proceeds for debt refinancing such as repurchasing the 5.250% notes due 2026 and other corporate debt. Ratings List New Rating Ultrapar International S/A Senior Unsecured US$0 mil nts BB+ Recovery Rating 3(55%) ========= C H I L E ========= CORPORACION DEL COBRE: Workers Vote to Authorize Strike ------------------------------------------------------- The Latin American Herald reports that workers at Chuquicamata, one of the largest mines operated by Chile's Corporacion del Cobre (Codelco), rejected the latest offer from management and voted to authorize a strike, union officials said. Representatives of the three unions at Chuquicamata and officials of the state-owned mining company said a strike can still be averted through mediation and further negotiations, according to The Latin American Herald. Some 86 percent of members rejected the latest proposal made on May 24 by Codelco, which offered CUP9.85 million (US$14,500) in compensation per worker, union leaders said, the report notes. Codelco made its latest proposal after the unions rejected a larger offer of CUP13.7 million ($19,680) per worker on a 36-month contract, the report discloses. The report relays that the mining company's new proposal calls for a 27-month collective bargaining agreement. Of the 2,929 members voting, 2,755 cast ballots in favor of authorizing a strike, while just 169 voted to accept Codelco's latest offer, union officials said, the report notes. The report discloses that with a strike now authorized, the two sides can turn to mediation by the Chilean Labor Board to try to reach a deal. Mediation takes place in five-day rounds, with additional five-day extensions, if the parties agree, the report relays. Codelco Chief Executive Officer Nelson Pizarro said there might still be some kind of "interruption" in production at the mine, but a lesser one since the two sides could still turn to mediation or hold additional negotiations, the report notes. "We believe that we have an excellent opportunity to reach an agreement," Pizarro said during the presentation of the company's first-quarter earnings release, the report says. Finance Minister Felipe Larrain said he was concerned about the situation and called on the two sides to avoid a strike, the report relays. "We always hope that strikes can be avoided and until the last minute, the last effort by both sides, there can be flexibility to avoid interrupting the negotiations," the report quoted Mr. Larrain as saying. Labor Minister Nicolas Monckeberg, for his part, said that while the government respected the right to strike, "we all know it's a last resort and all other options for dialogue must be exhausted before going on strike," the report notes. The unions said in a statement that members' vote to strike was a rejection of management's latest offer and, "in addition, reflected the failure of a human resources and labor relations policy that is dominated daily by threats and all types of pressure on the personnel," the report relays. Chuquicamata is in the process of being converted from an open pit mine to an underground mine at a cost of about $5.5 billion, making it one of Codelco's main investment projects, the report notes. Codelco is undertaking several structural projects aimed at extending the operating lives of its main mines by about 50 years at a cost of $18 billion, the report adds. ======= C U B A ======= CUBA: Should Respond to US Pressure by Opening Economy, EU Says --------------------------------------------------------------- EFE News reports that the Cuban government should turn a negative into a positive by liberalizing the economy in response to recent moves by the United States to tighten the embargo on the Communist-ruled island, the European Union's envoy to Cuba said. "Beyond looking toward the past and criticizing the Helms-Burton Act (US legislation targeting Cuba), there is also an opportunity here to improve the security of investments, to facilitate trade and investment. And on that, the European Union will be with you," Ambassador Alberto Navarro said, according to EFE News. =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: Fitch Rates 2026 Peso & 2049 USD Notes 'BB-' ---------------------------------------------------------------- Fitch Ratings has assigned a 'BB-' rating to Dominican Republic's DOP50.523 billion notes (equivalent to USD1 billion ), maturing 2026 and to the USD1.5 billion bonds maturing 2049. The DOP notes are denominated in Dominican pesos, pay principal and interest in U.S. dollars, and carry a coupon of 9.75%. The USD bonds carry a yield to maturity of 6.492%. Proceeds from the issuance will be used for general purposes of the government, including the partial financing of the 2019 budget. KEY RATING DRIVERS The bond ratings are in line with Dominican Republic's Long-Term Foreign Currency Issuer Default of 'BB-'. As per Fitch's Sovereign Criteria, a bond issued in local currency and payable in foreign currency is assigned an issue rating at the level of the Long-Term Foreign Currency IDR. RATING SENSITIVITIES The bonds aresensitive to any change in Dominican Republic's Long-Term Foreign Currency IDR. Fitch affirmed Dominican Republic's Long-Term Foreign Currency IDR at 'BB-' with a Stable Outlook on Sept. 20, 2018. ============= J A M A I C A ============= JAMAICA: Signs GIDP Agreement With CHEC --------------------------------------- RJR News reports that Jamaica signed a Memorandum of Understanding with the China Harbour Engineering Company (CHEC) for the Greater Infrastructure Development Program (GIDP). The MOU was signed by Senator Pearnel Charles Jr, Minister without Portfolio in the Ministry of Economic Growth and Job Creation, in Macao SAR, China, according to RJR News. Senator Charles Jr. said the GIDP is expected to bring unprecedented infrastructure development to Jamaica and is intended to succeed the soon to be concluded Major Infrastructure Development Program, the report notes. He said it will be a comprehensive infrastructure program which will include not just road works but water and sewerage development, as well as, multiple bypasses for several major towns including Kingston, the report relays. Senator Charles Jr. is attending the 5th China-LAC Infrastructure Forum and the 10th International Infrastructure Investment and Construction Forum in China, the report adds. =========== M E X I C O =========== MEXICO: President Confident US Will Retreat on Tariff Threat ------------------------------------------------------------ EFE News reports that Mexico's president said he is confident the United States will desist from its threat to impose tariffs on the Aztec nation. US President Donald Trump said the US will impose escalating tariffs on Mexico unless it takes aggressive steps to stop the flow of illegal migrants from Central America, according to EFE News. ======= P E R U ======= FERREYCORP: Moody's Withdraws Ba1 CFR on Senior Notes Repayment --------------------------------------------------------------- Moody's Investors Service has withdrawn Ferreycorp S.A.A.'s Ba1 corporate family rating and stable outlook. At the time of withdrawal, there was no instrument rating outstanding. RATINGS RATIONALE Moody's has withdrawn the ratings following the recent repayment of the company's senior secured global notes. Headquartered in the city of Lima, Peru, Ferreycorp S.A.A. (Ferreycorp) is Caterpillar Inc.'s sole distributor in Peru, Guatemala, El Salvador and Belize. The company also distributes products under Massey Ferguson, Kenworth, Iveco, DAF, Metso, Terex, Kepler Weber, Landini, Sullair, Good Year, Exxon Mobil and Zaccaria brand names, among others. ===================== P U E R T O R I C O ===================== EL CANO DEVELOPMENT: June 20 Hearing on Disclosure Statement ------------------------------------------------------------ A hearing on approval of disclosure statement of El Cano Development Inc. is scheduled for June 20, 2019 at 9:30 AM at the United States Bankruptcy Court, Southwestern Divisional Office, MCS Building, Second Floor, 880 Tito Castro Avenue, Ponce, Puerto Rico. Objections to the form and content of the disclosure statement should be filed and served not less than fourteen (14) days prior to the hearing. About El Cano Development El Cano Development Inc. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D.P.R. Case No. 16-08122) on October 11, 2016. The petition was signed by Adrian J. Hilera Vidal, president. At the time of the filing, the Debtor estimated assets of less than $1 million and liabilities of less than $500,000. Modesto Bigas Law Office is the Debtor's bankruptcy counsel. ================= V E N E Z U E L A ================= PETROLEOS DE VENEUELA: Moody's Withdraws 'C' Sec. & Unsec. Rating ----------------------------------------------------------------- Moody's Investors Service has withdrawn all the ratings of Petroleos de Venezuela, S.A. including the senior unsecured and senior secured ratings due to insufficient information. At the time of withdrawal, the ratings were C and the outlook was stable. RATINGS RATIONALE Moody's has decided to withdraw the ratings because it believes it has insufficient or otherwise inadequate information to support the maintenance of the ratings. =============== X X X X X X X X =============== [*] BOND PRICING: For the Week May 27 to May 31, 2019 ----------------------------------------------------- Issuer Name Cpn Price Maturity Country Curr ----------- --- ----- -------- ------- --- Odebrecht Finance Ltd 6.0 16.4 4/5/2023 KY USD Cia Latinoamericana de 9.5 73.9 7/20/2023 AR USD MIE Holdings Corp 7.5 56.2 4/25/2019 HK USD China Huiyuan Juice Gr 6.5 46.6 8/16/2020 CN USD Odebrecht Finance Ltd 7.0 17.0 4/21/2020 KY USD Yida China Holdings Lt 7.0 74.3 4/19/2020 CN USD Noble Holding Internat 5.3 60.5 3/15/2042 KY USD Noble Holding Internat 6.2 62.2 8/1/2040 KY USD YPF SA 16.5 67.3 5/9/2022 AR ARS Banco Macro SA 17.5 65.2 5/8/2022 AR ARS KrisEnergy Ltd 4.0 40.4 6/9/2022 SG SGD Noble Holding Internat 6.1 62.0 3/1/2041 KY USD USJ Acucar e Alcool SA 9.9 74.0 11/9/2019 BR USD Avadel Finance Cayman 4.5 55.0 2/1/2023 US USD Argentine Republic Gov 6.9 75.2 1/11/2048 AR USD Polarcus Ltd 5.6 71.8 7/1/2022 AE USD Argentine Republic Gov 8.3 74.5 12/31/2033 AR USD MIE Holdings Corp 7.5 56.4 4/25/2019 HK USD Automotores Gildemeist 8.3 54.2 5/24/2021 CL USD YPF SA 16.5 67.3 5/9/2022 AR ARS Provincia del Chubut A 4.5 2208 3/30/2021 AR USD Argentine Republic Gov 4.3 70.0 12/31/2033 AR JPY Automotores Gildemeist 6.8 54.9 1/15/2023 CL USD Cia Latinoamericana de 9.5 74.3 7/20/2023 AR USD Enel Americas SA 5.8 32.7 6/15/2022 CL CLP Banco Macro SA 17.5 65.2 5/8/2022 AR ARS Provincia de Rio Negro 7.8 70.3 12/7/2025 AR USD Odebrecht Finance Ltd 6.0 16.4 4/5/2023 KY USD Province of Santa Fe 6.9 75.2 11/1/2027 AR USD Odebrecht Finance Ltd 7.0 16.5 4/21/2020 KY USD Province of Santa Fe 6.9 74.7 11/1/2027 AR USD Embotelladora Andina S 3.5 37.9 8/16/2020 CL CLP USJ Acucar e Alcool SA 9.9 74.0 11/9/2019 BR USD Argentine Republic Gov 8.3 72.9 12/31/2033 AR USD Empresa Provincial de 12.5 0.0 1/29/2020 AR USD Cia Energetica de Pern 6.2 1.1 1/15/2022 BR BRL Provincia de Buenos Ai 7.9 75.3 6/15/2027 AR USD AES Tiete Energia SA 6.8 1.2 4/15/2024 BR BRL Provincia de Rio Negro 7.8 70.4 12/7/2025 AR USD Argentine Republic Gov 0.5 27.6 12/31/2038 AR JPY Plaza SA 3.5 38.3 8/15/2020 CL CLP Banco Security SA 3.0 5.6 7/1/2019 CL CLP Argentina Bonar Bonds 5.8 75.2 4/18/2025 AR USD Corp Universidad de Co 5.9 64.2 11/10/2021 CL CLP City of Cordoba Argent 7.9 73.1 9/29/2024 AR USD Automotores Gildemeist 8.3 54.2 5/24/2021 CL USD Provincia de Cordoba 7.1 72.7 8/1/2027 AR USD Argentine Republic Gov 6.3 74.1 11/9/2047 AR EUR Provincia del Chaco Ar 4.0 0.0 12/4/2026 AR USD Fospar S/A 6.5 1.2 5/15/2026 BR BRL Empresa de Transporte 4.3 30.9 7/15/2020 CL CLP Argentina Bonar Bonds 7.6 74.4 4/18/2037 AR USD Automotores Gildemeist 6.8 54.9 1/15/2023 CL USD SACI Falabella 2.3 50.6 7/15/2020 CL CLP Sylph Ltd 2.4 65.1 9/25/2036 KY USD Banco Security SA 3.0 27.4 6/1/2021 CL CLP Empresa Electrica de l 2.5 63.8 5/15/2021 CL CLP Sociedad Austral de El 3.0 17.0 9/20/2019 CL CLP Provincia del Chaco Ar 9.4 74.8 8/18/2024 AR USD Argentine Republic Gov 7.1 75.7 6/28/2117 AR USD Provincia de Cordoba 7.1 74.7 8/1/2027 AR USD Metrogas SA/Chile 6.0 41.6 8/1/2024 CL CLP Esval SA 3.5 49.9 2/15/2026 CL CLP ********* 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 * * *