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       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, January 14, 2020, Vol. 21, No. 10

                           Headlines



A N T I G U A   A N D   B A R B U D A

LIAT: Discloses New Board, New Chairman to Discuss Sustainability


A R G E N T I N A

ARGENTINA: Buenos Aires Debt Talks Slam One of World's Best Bonds


B R A Z I L

BRAZIL: BC Seeks to Encourage Greater Competitiveness Among Banks
BRAZIL: Industrial Production Recovery Will Not Be Smooth
JSL SA: Fitch Affirms BB LT IDRs; Alters Outlook to Stable
NATURA COSMETICOS: Fitch Affirms BB LT FC IDR, Outlook Negative
PETROBRAS DISTRIBUIDORA: Moody's Assigns Ba1 CFR, Outlook Stable



D O M I N I C A N   R E P U B L I C

DOMINICAN REPUBLIC: Prices Rose 0.20% in Dec., Paced by Foods
DOMINICAN REPUBLIC: Rationed Dollars Push Staple Prices Upward


M E X I C O

PIER 1 IMPORTS: Moody's Lowers CFR to Ca & Alters Outlook to Neg.


X X X X X X X X

EASTERN CARIBBEAN: IMF Issues Concluding Statement for 2019 Talks

                           - - - - -


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A N T I G U A   A N D   B A R B U D A
=====================================

LIAT: Discloses New Board, New Chairman to Discuss Sustainability
-----------------------------------------------------------------
Trinidad News reports that former Barbados Prime Minister Owen
Arthur has been confirmed as head of the Board of Directors of
regional airline LIAT Ltd., formerly known as Leeward Islands Air
Transport or LIAT, and he has already been given the task of
examining the sustainability of the financially-troubled carrier.

In a statement issued January 9, days after Antigua and Barbuda's
Prime Minister Gaston Browne disclosed that Arthur would be the new
Chairman, replacing Dr Jean Holder who has retired after 16 years,
LIAT confirmed the former Prime Minister was nominated and elected
to the position, according to Trinidad News.

Arthur is currently a Professor of Practice at the University of
The West Indies, the report notes.  He has served the Caribbean in
various capacities, including his work presiding over the regional
process to revise the Treaty of Chaguaramas to establish the
Caribbean Single Market and Economy (CSME), the report relates.

"The new Chairman has been tasked by the new Board to undertake a
special assignment to meet with regional Prime Ministers to discuss
sustainability of the Airline. This assignment will be supported by
other directors and the Management Team of the airline," LIAT said
in its statement obtained by the news agency.

The other Directors, who LIAT said bring to the airline and
regional transportation sector over 100 years of combined aviation
experience, are: Michael Holder, Mark Maloney, Robert Riley, and
Juanita Thorington-Powlett of Barbados which is the largest
shareholder government; Carolyn Tonge, Lennox Weston and Sir Robin
Yearwood from Antigua and Barbuda; and St Vincent and the
Grenadines' Isaac Solomon, the report notes.

The nominations came from LIAT's shareholder governments. The other
shareholder is Dominica, the report relates.

"The Directors have demonstrated exceptional records of performance
and service to the industry and to the region," LIAT said, the
report notes.

"LIAT's Shareholders, Management and Staff welcome our Directors to
the LIAT and look forward to working together with the new Board to
foster and strengthen regional transportation and integration," the
report adds.

                               About LIAT

LIAT Ltd., formerly known as Leeward Islands Air Transport or LIAT,
is an airline headquartered on the grounds of V. C. Bird
International Airport in Antigua.  It operates high-frequency
inter-island scheduled services serving 15 destinations in the
Caribbean.  The airline's main base is VC Bird International
Airport, Antigua and Barbuda, with bases at Grantley Adams
International Airport, Barbados and Piarco International Airport,
Trinidad and Tobago.

The airline is owned by seven Caribbean governments, with three
being the major shareholders: Barbados, Antigua & Barbuda and St.
Vincent and the Grenadines along with Dominica(94.7 %); other
Caribbean governments, private shareholders and employees (5.3%).

In the last few years, LIAT has been challenged with financial
difficulties, often needing additional funding as the airline dealt
with the high cost of operations.  In November 2016, the Barbados
government defended LIAT's operations, even as opposition
legislators called for a cessation of the business.  In early 2015,
LIAT offered early retirement packages to employees in efforts to
downsize.  In 2014, LIAT knew it had to deal with unprofitable
routes to make operations viable.  In the third quarter of 2013,
the airline's top management was shaken, with news Chief Executive
Officer Captain Ian Brunton's sudden resignation.

LIAT's current chief executive officer is Julie Reifer-Jones,
chairman is Jean Holder, and chief financial officer is Rojer
Inglis.

Dr. Ralph Gonsalves, prime minister of St. Vincent & the
Grenadines, serves as chairman of LIAT shareholders.



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A R G E N T I N A
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ARGENTINA: Buenos Aires Debt Talks Slam One of World's Best Bonds
-----------------------------------------------------------------
Scott Squires and Srinivasan Sivabalan at Bloomberg News reports of
Buenos Aires's plan to seek talks with creditors ahead of a debt
payment due this month has torpedoed one of the world's best bond
rallies.

The province's $500 million of notes due in January 2021 tumbled
5.3 cents Jan. 8 to 64 cents on the dollar, their worst day in more
than four months, according to Bloomberg News.  The securities had
returned 54% from the end of August through Jan. 7, putting them
among the top performers in emerging markets, Bloomberg News says.

Bloomberg News notes that the bonds reversed course after
provincial officials disclosed that the economic crisis enveloping
the country had compelled them to seek restructuring talks with
creditors, Bloomberg News notes.  While a default of some sort had
been expected since the peso plunged in the aftermath of an August
election that indicated a left-wing government was likely to take
over from President Mauricio Macri, investors had bid up the debt
in the past few months on bets the $250 million payment due Jan. 26
would still come through, Bloomberg News relays.

"Part of the rally was following the rest of Argentina's bonds. But
another part, the largest gains, was due to the expectation that
investors would collect the bond's amortization on Jan. 26," said
Ezequiel Zambaglione, head of strategy at Buenos Aires-based
brokerage Balanz Capital, Bloomberg News notes.  The bond pays 33%
of the principal this month, Zambaglione added, Bloomberg News
says.

The province's finance ministry said it requires "temporary
financial relief" and would seek to reach a solution with creditors
that will allow it to fulfill "all of its commitments" including to
health, education and other social spending, Bloomberg News
relates.  A group of bondholders, led by Greylock Capital
Management, had already formed in anticipation of restructuring
talks, but some investors had been betting the federal government
would cover the January payment to avoid a hard default while
negotiations were ongoing, Bloomberg News discloses.

To be sure, the rally that turned the bonds into some of the
world's best performers came after an even bigger sell-off in
August, and investors who've held the securities for a year have
seen losses exceeding 20% over that period, Bloomberg News  relays.
The price hasn't topped 70 cents since the initial collapse, but
for those who bought at the trough, the returns were substantial,
Bloomberg News notes.

Bloomberg News relates that the notes could be the first gauge of
President Alberto Fernandez's debt plan since he took office in
December warning creditors that the country needed relief while
promising to seek a quick and fair restructuring.  The country
already unilaterally pushed back maturities on around $9.1 million
of dollar-denominated Treasury bills known as Letes in December,
the second such delay in payments in the past five months,
Bloomberg News notes.

Other Argentine securities had also been on a fairly steady march
higher since the sell-off that came in the immediate aftermath of
the August vote, Bloomberg News discloses.  Sovereign notes due in
2033 have surged 56%; bonds from the state-controlled oil company
YPF due in 2024 are up 43%; and province of Cordoba notes due 2024
have returned 50% since Aug. 30, Bloomberg News relates.

"After Macri's election setback in August, traders were pricing in
the end of the world," said Jan Dehn, head of research at Ashmore
Group Plc in London. "Sometime later, they realized the world
wasn't over and that they had overreacted," Bloomberg News notes.

While those bonds have seen significant gains, they still trade at
"significantly dislocated levels," Dehn added.  "I suspect
investors will see a lot of volatility in the bonds.," he added.

The Economy Minister for Argentina's Buenos Aires province, Pablo
Lopez, held a call with bondholders, according to people familiar
with the talks, Bloomberg News notes.  The province took note of
the points discussed and will continue working on the matter over
coming days, said its press office, Bloomberg News relays.

"Doubts persist over whether the province will negotiate that
payment within a broader restructuring, or not," said Alejo Costa,
chief strategist at BTG Pactual in Buenos Aires, Bloomberg News
notes.  "Bringing together the 2021 bondholders suggests they are
going to try to rollover the payment or negotiate it within a more
general agreement," he added.


                       About Argentina

Argentina is a country located mostly in the southern half of
South America.  It's capital is Buenos Aires. Alberto Angel
Fernandez is the President-elect of Argentina after winning the
October 2019 general election. He succeeded Mauricio Macri in the
position.

Argentina has the third largest economy in Latin America.  The
country's economy is an upper middle-income economy for fiscal
year 2019 according to the World Bank.  Historically, however, its
economic performance has been very uneven, with high economic
growth alternating with severe recessions, income maldistribution
and -- in the recent decades -- increasing poverty.

On Dec. 30, 2019, S&P Global Ratings raised its foreign currency
sovereign credit ratings on Argentina to 'CC/C' from 'SD/D'. The
outlook on the long-term sovereign credit ratings is negative. S&P
previously lowered the ratings to 'SD' (selective default) on Dec.
20 following the unilateral extension of U.S. dollar-denominated
short-term paper (Letes) held by private-sector market
participants
on Dec. 19, 2019.  

DBRS, Inc. (DBRS Morningstar) downgraded Argentina's Long-Term and
Short-Term Foreign Currency - Issuer Ratings to Selective Default
(SD), from CC and R-5, respectively.

On December 26, 2019, Fitch Ratings upgraded Argentina's Long-Term
Foreign-Currency Issuer Default Rating to 'CC' from 'RD', and its
Short-Term Foreign-Currency IDR to 'C' from 'RD'.

Moody's credit rating for Argentina was last set at Caa2 from B2
with under review outlook. Moody's rating was issued on Aug. 30,
2019.

Back in July 2014, Argentina defaulted on some of its debt, after
expiration of a 30-day grace period on a US$539 million interest
payment.  The country hasn't been able to access international
credit markets since its US$95 billion default 13 years ago.  On
March 30, 2016, Argentina's Congress passed a bill that will allow
the government to repay holders of debt that the South
American  country defaulted on in 2001, including a group of
litigating hedge  funds that won judgments in a New York court.
The bill passed by a vote of 54-16.



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B R A Z I L
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BRAZIL: BC Seeks to Encourage Greater Competitiveness Among Banks
-----------------------------------------------------------------
Richard Mann at Rio Times Online report that the Central Bank (BC)
seeks to encourage banking competitiveness in the country in order
to reduce interest charges and expand the population's access to
financial services.

The president of the institution, Roberto Campos Neto, said that
technological advances in the sector, such as open banking and the
instant payment system, will open the market and will be "a
milestone in the Brazilian financial industry," according to Rio
Times Online.

As reported in the Troubled Company Reporter-Latin America on Nov.
18, 2019, Fitch Ratings affirmed Brazil's Long-Term Foreign
Currency Issuer Default Rating at 'BB-'. The Rating Outlook is
Stable.

BRAZIL: Industrial Production Recovery Will Not Be Smooth
---------------------------------------------------------
Richard Mann at Rio Times Online report that November's industrial
production, released on January 9 by the Brazilian Institute of
Geography and Statistics (IBGE), was a real "bucket of cold water"
for those who expected a steady -- and relatively quiet -- recovery
of Brazilian economic activity in 2020.

Following three consecutive months of rebound, the industry halted
its upward trajectory and saw a 1.2 percent decline in November
compared to October, or a 1.7 percent drop in the annual
comparison, surprising in a rather negative way the expected 0.7
percent drop in the monthly basis, according to Rio Times Online.

However, the industry is expected to follow a gradual recovery
trajectory, says the report.

As reported in the Troubled Company Reporter-Latin America on Nov.
18, 2019, Fitch Ratings affirmed Brazil's Long-Term Foreign
Currency Issuer Default Rating at 'BB-'. The Rating Outlook is
Stable.

JSL SA: Fitch Affirms BB LT IDRs; Alters Outlook to Stable
----------------------------------------------------------
Fitch Ratings affirmed JSL S.A.'s Long-Term Foreign and Local
Currency Issuer Default Ratings at 'BB' and National scale ratings
at 'AA(bra)'. The Rating Outlook has been revised to Stable from
Negative.

The Outlook revision reflects the improvement of JSL's operating
cash flow generation, mainly from Vamos and Movida. Fitch believes
this trend should continue due to the upturn in Brazil's economy
after a sharp and prolonged downturn. By 2021, Fitch expects JSL's
consolidated total adjusted debt/EBITDAR ratio to move to around
3.5x.

JSL's ratings continue to reflect a strong business profile,
supported by a leading position in the Brazilian logistics
industry, a diversified service portfolio and resilient operating
performance in the last few years. The company's above average
ability, compared to other 'BB' issuers, to generate FCF through
capex postponement gives it financial flexibility, and is embedded
in the current ratings. Fitch expects JSL to continue to take
advantage of market opportunities to grow its business while
managing its capital structure. JSL's commitment to adequate
liquidity, in relation to its manageable debt maturity, is also a
key rating consideration.

KEY RATING DRIVERS

Diversified Portfolio: JSL's diversified portfolio enhances the
company's business risk profile and should allow it to better
capture the Brazilian economy's positive trends. Its key services
are supply chain management, passenger transportation and general
cargo transportation through the logistics segment. The company
also has a rent-a-car segment through Movida Participacoes S.A.
(AA-[bra]/Stable), the rental of heavy vehicles and equipment
through Vamos Locacao de Caminhoes, Maquinas e Equipamentos
S.A.(AA[bra]/Stable) and vehicle dealerships through Original
Concessionarias. JSL Logistica (100% stake) represents 25% of
consolidated EBITDA, Vamos (100% stake) 27%, Movida (55% stake)
33%, CS Brasil (100% stake) 13% and the dealerships (100% stake)
only 2%.

Robust Operating Cash Flow: JSL has delivered robust operating cash
flow and reasonable margins, while growing its rentals businesses,
Vamos and Movida. Fitch expects to see margin expansion as these
two businesses mature and as JSL Logistics becomes a larger part of
the group. Fitch forecasts JSL's consolidated EBITDA to grow to
BRL2.8 billion (23% margin) in 2021, from BRL1.6 billion (20%
margin) in 2018, and a projected level of BRL2 billion (20% margin)
in 2019.

Deleveraging Trend: JSL's consolidated leverage, measured by total
adjusted debt/EBITDAR, should be around 3.9x in 2019 and is
projected to fall to 3.7x in 2020 and 2021. These levels of debt
compare with 4.9x in 2017 and 4.3x in 2018. Future deleverging
should be a result of Movida's improved operating margins from 2Q19
onwards - mainly due to its seminovos business. In Fitch's view, a
more moderate grow strategy or a faster improvement in operating
cash flow generation in the logistics or heavy vehicle rental
business (Vamos) would be required in order for leverage to
approach 3.5x quicker.

Strong Market Position: JSL has a leading position in the Brazilian
logistics industry with a diversified portfolio of services and a
relevant presence in multiple sectors of the economy. The company's
strong market position, strategic and operational nature of the
service it provides, coupled with long-term contracts for most of
its logistic and heavy vehicle rental business, minimizes the
company's exposure to more volatile economic cycles. The company's
significant operating scale has made it an important purchaser of
light vehicles and trucks, giving it a significant amount of
bargaining power versus other competitors in the industry.

Capex Continues to Pressure FCF: FCF is expected to remain
negative, on average, at BRL1.4 billion in the next two years,
pressured by annual average growth capital expenditures of BRL1.9
billion. However, JSL has the flexibility to improve FCF by
reducing growth capex, which is related to new contracts or
business expansion by Movida and Vamos. Considering maintenance
capex only, JSL's operating cash flow generation (CFFO) would be
positive. Excluding growth capex, JSL generated, approximately, an
average of BRL350 million of positive FCF during 2016-2018.

DERIVATION SUMMARY

JSL's ratings reflect its leveraged capital structure and solid
business profile, supported by a leading position in the Brazilian
logistics industry and a diversified and resilient portfolio of
services. The company's large business scale provides important
bargaining power with automobile and equipment OEMs, and is a key
competitive advantage compared to peers in the local market.

Fitch believes that JSL's bargaining power and business position
tend to be relatively closer to the industry's benchmark, Localiza
Rent a Car S.A.(BB/Stable), and much stronger than Ouro Verde
Locacao e Servico S.A. (B/Positive). Compared to Localiza, JSL has
a weaker financial profile with higher leverage and higher
refinancing risks in the medium term. Compared to Ouro Verde, JSL
has higher leverage but much better liquidity position, business
profile and access to credit markets.

JSL's ratings compare well with other peers in the Brazilian
transportation segment. JSL and Rumo S.A. (BB/Stable) share similar
business risks, considering their respective business traits, but
JSL's leverage is higher. Compared to Hidrovias do Brasil S.A.
(BB/Stable), JSL's business position is stronger but its leverage
profile and refinancing risks in the medium term are weaker.

KEY ASSUMPTIONS

Fitch's key assumptions within its rating case for the issuer
include:

  -- Average consolidated annual revenue growth at 11% from 2020 to
2022;

  -- Consolidated EBITDA margin at 23% from 2020 to 2022;

  -- Consolidated Net capex at around BRL2 billion in the next two
years;

  -- Cash balance remains sound compared to short-term debt;

  -- Dividends at 25% net income;

  -- No large-scale M&A activity or equity sale.

RATING SENSITIVITIES

Developments That May, Individually or Collectively, Lead to
Positive Rating Action:

  -- Consolidated net adjusted debt/EBITDAR below 3.0x on a
sustainable basis;

  -- Expansion of JSL's business profile without jeopardizing
profitability levels;

  -- An upgrade of JSL's Foreign Currency IDR is unlikely in the
short to medium term, since it is limited by Brazil's 'BB' Country
Ceiling.

Developments That May, Individually or Collectively, Lead to
Negative Rating Action:

  -- Net adjusted debt/EBITDAR of above 3.75x in 2020 and the
expectation it is not going to fall to around 3.5x in the following
years;

  -- A reduced equity stake in either Movida and/or Vamos that
restricts the company's financial flexibility without materially
lowering leverage;

  -- Deterioration on the group's business profile or operating
environment;

  -- Deterioration of the group's liquidity profile.

LIQUIDITY AND DEBT STRUCTURE

Adequate Liquidity and Financial Flexibility: JSL adequate
liquidity position, relative its short-term debt, is a key credit
consideration, with cash covering short-term debt by an average of
1.0x during the last four years. JSL has a recurring need for debt
refinancing as its debt amortization schedule is historically
concentrated in the next three years. The company's expected
negative FCFs, a result of its growth strategy, will be financed by
debt in Fitch's rating scenario. As of Sep. 30. 2019, JSL had
BRL4.3 billion of cash and BRL12 billion of total adjusted debt,
BRL2.5 billion of which is due on the short-term debt (1.7x cash
coverage ratio). These figures exclude the BRL1.9 billion
credit-linked note.

Excluding Movida's cash and short-term debt, JSL's
cash-to-liquidity position is also adequate with BRL2.7 billion of
cash and BRL1.7 billion of short-term debt (1.6x cash coverage
ratio). The company's debt profile is mainly comprised of local
debentures, promissory notes and CRA issuances (59%), bond issuance
(22%) and FINAME and leasing operations (10%). Currently, about 11%
of JSL's debt is secured. Additionally, JSL financial flexibility
is supported by the group's ability to postpone growth capex to
adjust to the economic cycle and to the considerably number of the
group's unencumbered assets, with a book value of fleet over net
debt at 1.3x.

SUMMARY OF FINANCIAL ADJUSTMENTS

  -- Growth capex was moved from the CFO to the CFI;

  -- Fitch reverted the effects of IFRS16 and then capitalized
rental expense by applying a multiple of 5x ;

  -- OEM receivables related to vehicle acquisitions added to
capex;

  -- Total debt was adjusted by net derivatives, floor plan and
accounts payables referred to acquisitions;

  -- The CLN and NCE transactions were removed from cash and debt,
respectively.

ESG CONSIDERATIONS

Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of 3. ESG issues are credit neutral
or have only a minimal credit impact on the entity, either due to
their nature or the way in which they are being managed by the
entity.

NATURA COSMETICOS: Fitch Affirms BB LT FC IDR, Outlook Negative
---------------------------------------------------------------
Fitch Ratings affirmed Natura Cosmeticos S.A.'s Long-Term Foreign
Currency Issuer Default Rating, Local Currency IDR, and its
unsecured USD750 million notes due 2023 at 'BB' as well as its
Long-Term National Scale Rating at 'AA(bra)'. In conjunction with
these rating actions, Fitch has removed the Rating Watch Negative
that had been assigned to Natura following its announced
acquisition of Avon Products, Inc. (B+/Positive) and has assigned a
Negative Rating Outlook.

These rating actions follow an announcement on Jan. 3, 2019, that
the acquisition of Avon by Natura&Co Holding S.A was completed.
This transaction involved an all-share merger of Natura and Avon
into a new holding company, Natura& Co, which owns 100% of the
shares of both Avon and Natura. There was a cash disbursement of
USD91 million by Natura&Co as part of the transaction that related
to accrued dividends of the class C preferred share in Avon. Natura
and Avon remain separate legal entities that are wholly owned by
Natura&Co and there are no cross guarantees between their debt
obligations. Natura's former shareholders have 73% of the voting
shares in Natura&Co, while Avon's former shareholders have the
remaining 27%.

Natura's Negative Outlook and Avon's Positive Outlook reflect
Fitch's expectation that the credit quality of both entities will
migrate to around 'BB-' during the next 12 to 24 months, as debt at
both entities could likely be replaced by debt at the holding
company, Natura&Co, with upstream guarantees from both entities.

Natura, as part of Natura&Co, will benefit from being part of a
company with a larger product and geographic presences. Brazil will
continue to be the backbone of both Natura and Natura&Co,
accounting for around 55% of EBITDA of Natura and 45% of the EBITDA
of Natura&Co. Annual synergies from the combination of both
companies have been estimated by the company to be USD200
million-USD300 million. These consist of savings related to product
sourcing, manufacturing, administrative and overhead.

Execution risk remains a concern. Natura is still working on the
turnaround of The Body Shop (TBS), a EUR1 billion debt-funded
acquisition completed in late 2017. Like TBS, Avon is a very large
and complex global company with declining reps/volumes.

The backdrop faced by Natura and Avon remains challenging. Savings
from the synergies obtained will need to be reinvested to improve
the companies' competitive positions within the highly competitive
global beauty sector. Natura and Avon both have high exposure to
the decline in direct sales and are attempting to gravitate to an
omni-channel strategy.

Positively, the transaction is essentially equity financed and does
not impact Natura's leverage profile. Natura had a net adjusted
debt/EBITDA ratio of 4.0x for the LTM ended Sept. 30, 2019. This
ratio is similar to the pro forma leverage ratio of 3.9x for the
group of companies at the closing of this transaction.

KEY RATING DRIVERS

Ratings Migration: Natura and Avon are separate legal entities that
are both wholly owned by Natura&Co. The bonds of both companies
have been issued by different legal entities that are domiciled in
different countries. Fitch expects the debt of both entities to be
replaced by debt at the holding company, Natura&Co, within the next
couple of years that would likely include intra-group and
cross-guarantee structures. The ratings of both issuers would
likely migrate to the same level if this occurs.

Increased Scale: The acquisition significantly increases
Natura&Co's business scale (pro forma revenues around USD9
billion-fourth largest pure beauty company globally), enhances the
company's consultant base to 4.15 million reps (net overlapping)
and amplifies its product portfolio and market presence in Latin
America. The combined entity will benefit from up-sell
opportunities in terms of channel, and value proposition. The
company has announced around USD200 million to USD300 million of
potential synergies to be captured mainly in Brazil and Latin
America, as it leverages its manufacturing and distribution
capabilities.

Challenging Industry Dynamics: The CF&T industry is attractive due
to its resilience throughout economic cycles. Nevertheless, there
is a new business dynamic in the market, which is bringing more
volatility to results and altering traditional business models that
are being disrupted by new marketing and retail channels. With the
channel shifting toward e-commerce and specialty stores,
traditional consumer companies are facing intense competition from
multi-national beauty giants that have implemented omni-channel
strategies, as well as smaller, nimbler, fast-growing companies.

Elevated Execution Risks: To compete against this challenging
backdrop, Natura&Co will have to maintain a strong pipeline of
innovation to compete in the fast changing beauty trends and
digitalize to engage more directly with end consumers during the
integration of Natura and Avon. These challenges will be compounded
by the challenges of integrating Avon's global operations outside
of Latin America (61% of Avon's revenues), which have been
pressured by declining active representatives and sales volumes in
complex markets such as Russia. This transaction closely follows
Natura's acquisition of TBS. Unlike Avon and Natura, TBS primarily
operates through retail stores.

Margin Pressure: The challenging industry dynamics have pressured
the margins of Avon and TBS. Avon's EBITDA margin declined to 6.6%
in 2018 from an average of around 8.7% between 2015 and 2017.
Through the first nine months of 2019, its margins have exceeded
8%. Similar to Avon, TBS' margins have been in the 7% to 8% range.
In comparison, Natura had a 14.2% margin in 2018 and a 10.5% LTM
3Q19 margin compared to an average EBITDA margin of 16.9% between
2015 and 2017. Natura's high margins reflect its strong brand value
and recognition, large operating scale, extensive direct-sales
structure and in-house manufacturing capabilities.

Expanded Geographic Presence: The merger of Natura and Avon under a
new holding company, Natura&Co, will make Natura part of a larger
group with improved geographic diversification. Brazil represented
about 50% of Natura's sales in 2018. In contrast, during 2018,
Brazil accounted for 23% of Avon's revenues, while Mexico (10%),
Russia (7%), Argentina (5%), the Philippines (5%) and the UK (5%)
were its next most important markets. On a-pro forma basis, Avon
will represent approximately 60% of revenues of Natura&Co and 40%
of its EBITDA.

Manageable Refinancing: The combined entity, Natura&Co, will have
to seek long-term funding to avoid higher refinancing risks by
2021‒2023 as it has about USD2.2 billion of bonds coming due by
2023. Natura doesn't face major refinancing risk until 2023 when a
USD750 million unsecured bond comes matures. Avon has USD900
million of secured bonds that mature in 2022 and an approximately
USD500 million of unsecured debt due in 2023. Fitch expects
Natura&Co to be proactive in the medium term on this liability
management to avoid rating pressure due to increasing refinancing
risks.

DERIVATION SUMMARY

Natura's 'BB'/'AA(bra)'/Outlook Negative ratings an expected rating
gravitation that will reflect the combined credit quality of Avon
and Natura. On a standalone basis, Natura's 4.0x net leverage
ratio, is similar to the pro forma 3.9x ratio for the two entities.
Natura has a solid business position in the CF&T industry within
Brazil, underpinned by strong brand recognition, large scale,
competitive cost structure and a large direct-sales structure.
Natura has the challenge of adapting its business model to an
omni-channel strategy and to boost its digital platform, while
integrating TBS and becoming more integrated with its sister
company, Avon.

In terms of comparable companies, Fitch rates Anastasia
Intermediate Holdings, LLC (ABH) 'B'/Negative Outlook. ABH's
ratings considers the company's narrow product and brand profile,
and risk that continued beauty industry market share shifts could
further weaken the company's projected growth through the risk of
new entrants and brand extensions from existing large players. In
Brazil, Natura also faces strong competition from local player, O
Boticario, which presents a stronger financial profile and solid
business profile, supported mainly by its strong brand and
bricks-and-mortar franchise chain.

KEY ASSUMPTIONS

Fitch's Key Assumptions Within Its Rating Case for the Issuer

  -- Low single-digit growth in volumes;

  -- Consolidated EBITDA margins moving around 15%‒16%, excluding
Avon and around 10%‒12% with Avon;

  -- Dividend pay-outs at 30%;

  -- Natura to maintain its proactive approach on refinancing its
local debt avoiding refinancing risks.

RATING SENSITIVITIES

Developments That May, Individually or Collectively, Lead to
Positive Rating Action

  -- Consolidated EBITDA margins above 13% on consistent basis for
Natura as well as Natura&Co;

  -- Net adjusted debt/EBITDAR ratio below 3.0x on a consistent
basis for Natura as well as Natura&Co;

  -- Successful refinancing strategy with no major debt maturities
within two to three years for Natura and Natura&Co.

Developments That May, Individually or Collectively, Lead to
Negative Rating Action

  -- Increased legal linkage between the debt obligations of
Natura, Avon and Natura&Co;

  -- The refinancing of debt at Avon and Natura to the holding
company, Natura&Co;

  -- EBITDA margins declining to below 12% for Natura and 10%
Natura&Co on a recurrent basis;

  -- Net adjusted leverage above 4.0x by 2020 for Natura and
Natura&Co and/or diminished prospects of falling to 3.5x by 2021;

  -- Competitive pressures leading to severe loss in market-share
for either Natura or Avon; or a significant deterioration in its
Natura's brands reputation.

LIQUIDITY AND DEBT STRUCTURE

Adequate Liquidity: Natura has a track record of maintaining
adequate liquidity and solid access to the local credit market. The
company had BRL1.7 billion in cash and marketable securities
compared with BRL556 million of short-term debt, including forfait
operation, leading to a cash/short-term debt ratio of 3.0x, as of
Sept. 30, 2019. This compares with an average ratio of 1.4x from
2014 to 2018. On Sept. 30, 2019, the company had total debt of
around BRL7.2 billion, excluding long term on balance leasing
obligations (BRL2.5 billion). Natura's debt is mainly composed of
local debentures (50%) and cross-border bonds (27%).

Fitch expects Natura will remain disciplined with its liquidity
position and will maintain a proactive approach in liability
management to avoid exposure to refinancing risks. Natura faces
long-term debt amortization of BRL466 million until end of 2020,
BRL2.3 billion in 2021, BRL533 million in 2022 and BRL3.8 billion
from 2023 onwards that mostly relates to its USD750 million bonds.

ESG CONSIDERATIONS

Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of 3. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or to the way in which they are being
managed by the entity.

PETROBRAS DISTRIBUIDORA: Moody's Assigns Ba1 CFR, Outlook Stable
----------------------------------------------------------------
Moody's America Latina assigned a Ba1/Aaa.br Corporate Family
Rating to Petrobras Distribuidora S.A. The outlook is stable. This
is the first time Moody's rates BR.

Ratings assigned as follows:

Issuer: Petrobras Distribuidora S.A.

Corporate Family Rating Ba1/Aaa.br

The outlook for the ratings is stable.

RATINGS RATIONALE

BR ratings mainly reflect its market position as the largest fuel
distributor in Brazil in terms of volumes sold, gas stations
network and distribution logistics assets, along with its
well-known brand names and adequate credit metrics. The ratings
also incorporate the improvements in governance standards following
BR's privatization in July 2019, as well as the expected
profitability gains over the next few years in the context of a
recently launched and ambitious efficiency plan. Before its
privatization BR was a state-owned company controlled by Petrobras
(Petroleo Brasileiro S.A., Ba2 stable).

Constraining the ratings are BR's lower profitability relative to
local industry peers and the increasingly competitive fuel
distribution market in Brazil. Since 2018 foreign companies such as
Glencore, PetroChina, Vitol, and Total have entered the Brazilian
distribution business and are likely to compete for regional market
share and white flag station conversion. The ratings also consider
the execution risk related to its transformational efficiency plan
and the considerable rearrangement in governance. Thus far, BR
shareholders have elected a highly experienced board, and BR set-up
new KPIs and is disclosing the progression of its efficiency gains.
Moody's believes that BR efficiency plan will lead to improvement
in profitability in 2020 and 2021. This scenario also considers a
more competitive refining market in Brazil, with the entrance of
other players in refining to compete with Petrobras, which will
allow BR to get better pricing on fuel sourcing because of its
large scale, logistics and competitive positioning. Moody's expects
BR to maintain aggressive dividend payments, but these should not
restrain liquidity nor impede positive to neutral free cash flow
generation.

BR will benefit from the resumption of economic growth in Brazil,
including its expectation of a 2.6% increase in diesel volumes and
3.5% in combined gasoline and ethanol sales in 2020. The company
believes gains in EBITDA per cubic meter (m3) will come from
initiatives in pricing, sourcing, logistics, cost management,
people, marketing and relationship, portfolio management,
convenience stores, lubricants, and financial services/loyalty
program. In the last 12 months until September 2019 BR posted an
EBITDA/m3 of BRL69.7 and Moody's believes a successful execution
would drive EBITDA/m3 to around BRL95 by 2021. This includes a
BRL15/m3 gain from a Voluntary Severance Plan which will reduce
personnel expenses by BRL650 million per year, according to BR.

BR's Ba1 rating is currently one notch above Brazil's government
bond rating of Ba2. Granted only on an exceptional basis, the
notching represents a fundamental corporate profile that is
stronger than the sovereign's government bond rating, as explained
in Moody's methodology " Assessing the Impact of Sovereign Credit
Quality on Other Ratings", published in June 2019. Accordingly, BR
has a leadership position in a stable fuel distribution business,
with robust cash flow generation, adequate credit metrics and
financial flexibility.

As of September 2019, liquidity was of a BRL 3.9 billion cash
balance, compared with short-term debt of BRL 3.8 billion. Other
than a private debenture of BRL3.5 billion due in April of 2020,
which Moody's expects BR to extend before or at maturity, the
schedule is comfortable with bank debt of BRL125 million due in
2021 and BRL606 million due in 2022. Gross leverage was at 3.0x in
September 2019 considering last twelve months EBITDA and the
unfunded pension liability of a defined benefit plan. All figures
and ratios are calculated using Moody's estimates and standard
adjustments.

The stable outlook reflects Moody's view that BR will maintain its
leadership position in the fuel distribution segment and will
maintain prudent financial policies, including an adequate
liquidity profile and financial leverage. Moreover, while dividends
are expected to remain robust, they should not restrain liquidity
nor impede positive to neutral free cash flow generation.

An upgrade would be dependent on an upgrade of Brazil (Ba2
stable)'s bond rating and a successful execution of BR's efficiency
plan, with material improvements in its profitability, approaching
levels of its main industry peers. In addition, a positive rating
action would require sustained good liquidity profile and credit
metrics. Quantitatively, BR could be upgraded should leverage
measured by gross debt to EBITDA remains below 3.5x, interest
coverage ratio measured by EBIT to interest coverage above 4.0x and
retained cash flow to net debt above 25%.

BR's ratings could be downgraded in case of deterioration in its
operating performance or credit metrics, as well as negative
actions on Brazil's bond ratings. Also, a deterioration in
liquidity could prompt a downgrade and an increase in leverage to
above 4.0x or interest coverage below 2.5x, both on a sustained
basis.

All figures and ratios are calculated using Moody's estimates and
standard adjustments.

Headquartered in Rio de Janeiro, Petrobras Distribuidora S.A.
("BR") is the largest distributor of fuels and lubricants in Brazil
with market share of approximately 27% and high capillarity in the
Brazilian market, supplying more than 7,700 service stations and
approximately 1,344 convenience stores. BR has the largest
logistics structure for the sector, which includes 95 fuel storages
bases, 13 lubricant storage facilities and 99 filling stations in
airport strategically distributed across the country.

The principal methodology used in these ratings was Retail Industry
published in May 2018.



===================================
D O M I N I C A N   R E P U B L I C
===================================

DOMINICAN REPUBLIC: Prices Rose 0.20% in Dec., Paced by Foods
-------------------------------------------------------------
Dominican Today reports that the Dominican Republic Central Bank
said consumer prices rose 0.20% in December 2019 compared to
November of the same year.

"With this result, inflation for year 2019 closed at 3.66%, below
the central point of the target range established in the Monetary
Program of 4.0% (± 1.0%)," it said on its website, according to
Dominican Today.

It notes that the groups which most influenced inflation in 2019
were Food and Non-Alcoholic Beverages (7.13%) and Alcoholic
Beverages and Tobacco (7.26%), the report notes.

                    About Dominican Republic

The Dominican Republic is a Caribbean nation that shares the island
of Hispaniola with Haiti to the west. Capital city Santo Domingo
has Spanish landmarks like the Gothic Catedral Primada de America
dating back 5 centuries in its Zona Colonial district.

The Troubled Company Reporter-Latin America reported on April 4,
2019 that the Dominican Today related that Juan Del Rosario of the
UASD Economic Faculty cited a current economic slowdown for the
Dominican Republic and cautioned that if the trend continues,
growth would reach only 4% by 2023. Mr. Del Rosario said that if
that happens, "we'll face difficulties in meeting international
commitments."

An ongoing concern in the Dominican Republic is the inability of
participants in the electricity sector to establish financial
viability for the system.

Standard & Poor's credit rating for Dominican Republic stands at
BB- with stable outlook (2015). Moody's credit rating for
Dominican Republic was last set at Ba3 with stable outlook (2017).
Fitch's credit rating for Dominican Republic was last reported at
BB- with stable outlook (2016).

DOMINICAN REPUBLIC: Rationed Dollars Push Staple Prices Upward
--------------------------------------------------------------
Dominican Today reports that the rationing of dollars by local
banks is pushing staple prices upwards, the Economic Union
Merchants Federation (FCUE) told El Dia.

The banks continue to limit the sales at 2,000 dollars per
operation, although the Central Bank ensures that they are
available in the exchange market, according to Dominican Today.

For FCUE Julio president Cesar Lopez, acquiring dollars at a high
and unstable rate causes higher prices on basic household goods and
arrears with international suppliers, the report notes.

He said he was forced to buy dollars at 53.70 pesos to pay Chinese
bean suppliers, but have yet to pay suppliers of rice, meat and
other products from abroad, the report adds.

                    About Dominican Republic

The Dominican Republic is a Caribbean nation that shares the island
of Hispaniola with Haiti to the west. Capital city Santo Domingo
has Spanish landmarks like the Gothic Catedral Primada de America
dating back 5 centuries in its Zona Colonial district.

The Troubled Company Reporter-Latin America reported on April 4,
2019 that the Dominican Today related that Juan Del Rosario of the
UASD Economic Faculty cited a current economic slowdown for the
Dominican Republic and cautioned that if the trend continues,
growth would reach only 4% by 2023. Mr. Del Rosario said that if
that happens, "we'll face difficulties in meeting international
commitments."

An ongoing concern in the Dominican Republic is the inability of
participants in the electricity sector to establish financial
viability for the system.

Standard & Poor's credit rating for Dominican Republic stands at
BB- with stable outlook (2015). Moody's credit rating for
Dominican Republic was last set at Ba3 with stable outlook (2017).
Fitch's credit rating for Dominican Republic was last reported at
BB- with stable outlook (2016).



===========
M E X I C O
===========

PIER 1 IMPORTS: Moody's Lowers CFR to Ca & Alters Outlook to Neg.
-----------------------------------------------------------------
Moody's Investors Service downgraded Pier 1 Imports (U.S.), Inc.'s
corporate family rating to Ca from Caa3 and probability of default
rating to Ca-PD from Caa3-PD. Concurrently, Moody's downgraded the
company's senior secured term loan rating to C from Ca. The
speculative grade liquidity rating was downgraded to SGL-4 from
SGL-3. The outlook was changed to negative from stable.

The CFR and PDR downgrades reflect the high likelihood of near-term
default as a result of the company's approaching April 2021 term
loan maturity and ongoing EBITDA losses. The term loan downgrade
also reflects the erosion in its expected recovery, given the
higher than originally expected level of EBITDA losses, which
reached roughly $230 million for the last twelve months ending
November 30, 2019.

The SGL downgrade to SGL-4 from SGL-3 reflects the company's weak
liquidity given its upcoming maturities and expectations for
negative free cash flow.

The change in outlook to negative from stable reflects Moody's
expectations for near-term default.

"While the planned store closures and cost cuts will reduce the
company's cash burn, EBITDA losses will continue in the near term,"
said Raya Sokolyanska, Moody's vice president and lead analyst for
Pier 1. "A Chapter 11 bankruptcy would allow the company to both
reduce outstanding debt and exit or renegotiate leases, which may
help avoid liquidation."

Moody's took the following ratings actions for Pier 1 Imports
(U.S.), Inc.:

  Corporate family rating, downgraded to Ca from Caa3

  Probability of default rating, downgraded to Ca-PD from Caa3-PD

  Senior secured bank credit facility, downgraded to C (LGD5)
  from Ca (LGD4)

  Speculative grade liquidity rating, downgraded to SGL-4 from
  SGL-3

  Outlook, changed to negative from stable

RATINGS RATIONALE

Pier 1's Ca CFR incorporates Moody's expectations for near-term
default as a result of weak liquidity and ongoing earnings losses.
Given Pier 1's EBITDA loss of roughly $230 million, Moody's
believes the company will be unable to refinance its term loan due
April 2021 at par. As a result, Moody's believes a potential
default is imminent.

The ratings could be downgraded should Pier 1 file for bankruptcy,
fail to pay its principal or interest in a timely manner, or
restructure its debt in a manner that Moody's deems a distressed
exchange. The ratings could also be downgraded if Moody's recovery
rate estimates decline.

The ratings could be upgraded if the company addresses its capital
structure, including reducing its debt load and extending its debt
maturities, and materially improves its operating performance.

The principal methodology used in these ratings was Retail Industry
published in May 2018.

Headquartered in Fort Worth, TX, Pier 1 Imports (U.S.), Inc. is a
specialty retailer of imported decorative home furnishings and
gifts. The company operates through 942 stores throughout the U.S.
and Canada, its Pier1.com website, and licensing arrangements with
stores in Mexico and El Salvador. Revenue for the twelve months
ended November 30, 2019 was $1.4 billion.



===============
X X X X X X X X
===============

EASTERN CARIBBEAN: IMF Issues Concluding Statement for 2019 Talks
-----------------------------------------------------------------
The International Monetary Fund issued a release stating that
growth in the Eastern Caribbean has recovered strongly in 2018-19
but is set to moderate, with the outlook clouded by downside risks.
The Eastern Caribbean Central Bank (ECCB) and individual Eastern
Caribbean Currency Union (ECCU) countries have continued to advance
their reform agendas, but progress needs to be accelerated. While
robust national fiscal frameworks remain key to the region's policy
priorities, well-sequenced steps to regional integration can
catalyze capacity and resources. This would include (i) increasing
fiscal integration, (ii) enhancing financial integration, and (iii)
solidifying the monetary union by raising payment's efficiency
through -- but not limited to -- cautiously piloting a digital
currency.


1.  Growth rebounded in 2018 and has remained robust so far in
2019. ECCU's GDP growth accelerated to 3 3/4 percent in 2018,
reflecting buoyant tourism and sizable Citizenship-by-Investment
(CBI) inflows, which helped support Dominica's reconstruction-led
recovery from the 2017 hurricane. Growth momentum has remained
strong in 2019, while inflation has been muted. The region's fiscal
deficits have been edging upwards in 2018-19 despite continued
strength in CBI inflows, but with the deficits remaining moderate,
the public debt ratio declined in 2018 and is set to fall further
in 2019. While the region's external deficits are high, they are
amply financed by FDI flows. Bank credit to the private sector
remains weak despite substantial excess liquidity.

2.  Going forward, growth is set to moderate, and risks remain
mostly on the downside. GDP growth is expected to gradually ease to
2¼ percent, a long-term historical average for the region. CBI
inflows are also projected to moderate. In the near term, economic
activity would be supported by further post-hurricane
reconstruction, tourism investment, and some agribusiness projects.
Achieving the 60 percent of GDP debt target would remain
challenging for most countries. Global risks, such as adverse
confidence effects from rising protectionism and weaker US growth,
could weigh on the outlook. Region-specific risks include natural
disasters, increasing banks' foreign exposures, continuing exit of
global banks, and continued pressures on corresponding banking
relationships (CBRs) against the backdrop of elevated
non-performing assets. Positive surprises in CBI inflows, if
well-managed, constitute potential upside risks.

3.  Greater regional integration can substantially complement
robust national policies in improving the outlook and mitigating
risks. ECCU's challenges are compounded by large shocks and lack of
economies of scale. Robust national fiscal responsibility
frameworks that ensure public debt sustainability and buffers are
crucial for improving the ECCU growth potential. ECCB's advocacy
for achieving the 60 percent of GDP debt target by 2030 through
national fiscal responsibility frameworks and its efforts to
improve debt management have supported this process. In addition,
IMF staff analysis suggests that well-sequenced steps toward
regional integration can catalyze resources for better policy
responses, as elaborated below.

A. Increasing Fiscal Integration

4.  Regional coordination of selected revenue policies could create
fiscal space for ECCU's public investment. The ongoing "race to the
bottom" in competing for tax incentives and CBI program conditions
limits the potential to raise revenue that could be channeled to
productive spending, including resilience building. This highlights
scope for the ECCU countries to coordinate tax incentives and CBI
program conditions, while achieving the objective of making FDI
more attractive through better infrastructure. In this context, the
authorities' ongoing collaboration on CBI programs' financial
integrity to improve their transparency and governance could help
lower negative perceptions about the use of CBI programs. Such
collaboration could support region-wide sustainability of these
flows and financial stability.

5.  Over the longer term, a regional pooling of fiscal resources
can complement national fiscal buffers to build resilience against
natural disasters and other shocks at a lower cost. While
individual ECCU countries face similar risks, natural disasters put
them in different economic conditions at a given time. The regional
pooling of resources saved by limiting excessive growth of public
consumption in good times could support macroeconomic stabilization
and create scope for resilience building and other growth-enhancing
investment in bad times. Staff calculations suggest that the size
of a pooled fund would be about one-half of the sum of individual
countries' funds for the same stabilization effect. Such an
arrangement would require a strong governance framework and should
be financed by national budgets to protect ECCB's international
reserves and the credibility of its quasi-currency board
arrangement. This pooling of resources could complement national
insurance strategies against natural disasters, a key pillar of the
Disaster Resilience Strategies currently being piloted in Dominica
and Grenada.

B. Enhancing Financial Integration

6.  Accelerated progress on the ECCB's reform agenda will help
address financial system vulnerabilities. The ECCB in its capacity
of a region-wide bank supervisor and regulator has continued to
advance essential reforms, including strengthening its financial
system stability function with deepened interaction with regional
regulatory authorities, identifying regionally-systemic financial
institutions, and improvement to its Financial Stability Report.
The implementation of risk-based supervision, phase-in of Basel
II/III standards, technology upgrades for supervisory operations,
and enhanced AML/CFT frameworks continue to build supervisory
effectiveness. Additional reforms are currently being pursued, such
as establishing a shared services platform for indigenous banks;
developing a deposit insurance scheme; implementing an
e-conveyancing regime for collateral realization as part of the
initiative to modernize insolvency frameworks; harmonizing non-bank
financial laws; operationalizing a credit bureau; and preparing
guidelines for the treatment of impaired assets. Authorities are
also considering a macro-prudential framework for financial sector
stability including the Lender of Last Resort (LOLR) function; and
a framework for optimal regulation of the financial sector.

7.  The reform agenda needs to be prioritized with key short-term
actions. Despite improvements in Non-Performing Loans (NPLs) in
most jurisdictions, efforts to repair bank balance sheets should be
stepped up by (i) adopting effective plans for all banks to reduce
NPLs below the 5-percent benchmark by end-2023, including via sales
to the Eastern Caribbean Asset Management Company (ECAMC); (ii)
requiring banks' disposal of non-banking assets (including land);
and (iii) strictly enforcing exposure limits and market risk
management. ECCB's and deposit-taking institutions' governance
frameworks should be reviewed and passage of critical legislation,
including AML/CFT, should be expedited by remaining countries to
increase compliance and enforcement. Consolidated supervision of
financial groups should be advanced. Urgent measures are also
necessary to monitor and address operational risk, including due to
CBRs and cybersecurity. The new treatment of impaired assets
standard, now expected by January 2020, should be implemented
without delay.

8.  Provided the critical short-term priorities are addressed,
steps toward a fuller banking union could take place in the long
term. These would involve: (i) enhancing the financial safety net
with a robust deposit insurance scheme and (ii) establishing a
regional resolution and crisis management framework. Both these
steps require operationalizing credible fiscal backstopping as a
key precondition, based on minimum regional fiscal responsibility
commitments entrenched in national laws. Other reforms that should
be implemented include: (i) advancing the regulatory regime for
systemic institutions (including non-banks) to minimize regulatory
gaps and shock propagation; (ii) consolidation of regional non-bank
financial sector oversight to enhance coverage, address
sector-specific risks, reduce compliance costs, and mitigate
resource constraints; and (iii) progressing the establishment of a
macroprudential mandate and toolkit to address region-wide systemic
risk.

C. Solidifying the Currency Union by Raising Payment System's
Efficiency

9.  Building on the successful launch of the Electronic Funds
Transfer, the ECCB, national authorities, and financial
institutions should continue efforts to modernize the payment
system. Major banks have recently begun to offer various electronic
payment services. The authorities are also examining options to
integrate credit unions in the core payment systems. This would
help competition, but it should be considered in the context of
establishing an appropriate prudential oversight framework. The
ongoing review of the legal framework pertaining to the payment
system is also critical to allow emerging Fintech and nonbank
e-payment services to operate and innovate. Advancing e-government
initiatives would also help increase the volume of digital payments
to help address small-economy constraints and enhance the business
opportunities for the private sector. In this context, the Digital
Economy Project, which is currently in its preparatory phase, would
support digital transformation of key services provided by ECCU
Governments. Early introduction of a digital ID is needed to
support these initiatives.

10.  The digital currency pilot project, launched by the ECCB,
should proceed cautiously as planned. The authorities view the
digital currency as an option to reduce excessive reliance on cash
and cheques; improve the efficiency of the retail payment system;
and support economic development by reducing financial frictions.
To contain vulnerabilities, important safeguard measures are
embedded in the design of the digital currency, such as the limited
size of its holding and transaction values, no interest accrued;
and does not include foreign currency transactions. That said, the
digital currency could expose the ECCB and the financial system to
various risks, including those related to financial intermediation,
financial integrity, and cybersecurity. The pilot will provide the
opportunity to examine these risks, test the design of the digital
currency, and assess any policy gaps. After the pilot, the ECCB is
planning to thoroughly review its results, and more work may be
warranted, especially to further test the digital currency system,
strengthen cybersecurity and AML/CFT operations, and update legal
and regulatory frameworks.


                           *********


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 2020.  All rights reserved.  ISSN 1529-2746.

This material is copyrighted and any commercial use, resale or
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Information contained herein is obtained from sources believed to
be reliable, but is not guaranteed.

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delivered via e-mail.  Additional e-mail subscriptions for members
of the same firm for the term of the initial subscription or
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.


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