/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/200417.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 Friday, April 17, 2020, Vol. 21, No. 78 Headlines A N T I G U A A N D B A R B U D A LIAT: Offers Charters to Generate Business A R G E N T I N A RCI BANQUE: Moody's Cuts LC Issuer Rating to Caa1, Outlook Neg. B E R M U D A DIGICEL GROUP: Moody's Cuts Sr. Sec. Rating to Caa1, Outlook Neg. B R A Z I L BRAZIL MINERALS: Reports $2.08 Million Net Loss for 2019 JBS SA: US Government Deploys Tests to Hard-Hit JBS USA Beef Plant LOCALIZA RENT: Moody's Places Ba2 CFR on Review for Downgrade NEXA RESOURCES: Moody's Affirms Ba2 CFR, Alters Outlook to Neg. E C U A D O R ECUADOR SOCIAL: Fitch Affirms Class B Notes at 'CCsf' J A M A I C A JAMAICA: Fitch Affirms 'B+' LT IDR, Alters Outlook to Stable P U E R T O R I C O ASCENA RETAIL: Moody's Cuts CFR to Caa3, Outlook Negative V E N E Z U E L A VENEZUELA: Petrol Crisis Worsens as US Orders Supply Cuts - - - - - ===================================== A N T I G U A A N D B A R B U D A ===================================== LIAT: Offers Charters to Generate Business ------------------------------------------ St. Lucia News Online, citing Barbados TODAY, reports that Regional airline LIAT Ltd., formerly known as Leeward Islands Air Transport or LIA, is moving to rebound from heavy losses from the COVID-19 crisis by offering chartered services, the carrier said. After being forced to suspend its passenger service, the airline now stands to lose millions of dollars but remains hopeful that things will get back to normal by July, according to St. Lucia News Online. "The impact will be in the millions and the amount of the loss will depend on the length of the suspension as well as the recovery period," the company said in an email response to questions posed by Barbados TODAY, the report notes. LIAT has given the assurance that it would continue to operate charters and flights on requests while anticipating an improvement in coming weeks, the report relays. "We will also be expanding our cargo operation to provide a support role in the region," it said, the report discloses. "With several territories set to re-open their borders and lift their curfews by the end of April, we anticipate a gradual improvement in demand for passenger services by the end of June. This will allow the airline to revert to a relatively normal passenger service from July through to the end of 2020," it said, the report says. While LIAT originally kept a reduced schedule to maintain connectivity, as of March 31, ten destinations within LIAT's network had closed their borders and others imposed curfews as well as travel restrictions to contain the spread of COVID-19, the report notes. "Even with the few destinations technically open, the many restrictions mean that passenger traffic is limited given these measures. This has created dismal conditions for our ongoing operations," the airline told Barbados TODAY, the report relates. While maintaining a skeleton staff during the period of suspension, the airline has also implemented a temporary layoff of employees effective April 1, 2020, that affected staff across the network, the report discloses. LIAT's Chief Executive Officer Julie Reifer Jones announced the passenger services suspension starting April 4, for 14 days, and that the airline would only operate charters and cargo flights during that period, the report says. "The suspension will be reviewed after the first fourteen days," she said, the report notes. "Passengers booked during the period of suspension will automatically have their bookings cancelled and will receive a full credit. Passengers will be able to rebook as soon as the airline resumes passenger services," she added, the report relates. During the suspension period, however, the airline has been able to assist Barbados and Dominica and said it was on standby to assist other countries and territories in the region, the report discloses. The airline brought in 99 Cuban specialist nurses, a doctor and medicines from Havana through Antigua to Barbados to the fight against the pandemic, the report relates. "We are also working with several governments to assist in repatriating citizens. We are open to assisting entities who would need that charter services to move essential personnel or citizens," the airline said, the report notes. "We will also be expanding our cargo operation to provide a support role in the region for the movement of critical supplies including emergency and pharmaceutical supplies during the recovery," it promised, the report says. The airline has also been assisting in the repatriation of hundreds of European nationals from the region to Europe, by way of transporting individuals from Anguilla, Antigua and Barbuda, Dominica, St Lucia, Grenada and St Vincent and the Grenadines to Barbados so they can connect on a chartered Condor flight to Europe, the report relates. "We will continue to serve the Barbados market. We will have cargo services available for those Barbadians who need to import or export. A return to normalcy will depend on the ability to contain the pace of the virus and rebuild confidence in the travelling public," it added while lauding staff, customers and stakeholders "for their loyalty and understanding during this unprecedented period," 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. ================= A R G E N T I N A ================= RCI BANQUE: Moody's Cuts LC Issuer Rating to Caa1, Outlook Neg. --------------------------------------------------------------- Moody's Investors Service downgraded RCI Banque Sucursal Argentina's local currency long-term issuer rating to Caa1 from B2. The outlook was changed to negative from ratings under review. This action follows the downgrade of the Government of Argentina's local and foreign currency long-term issuer ratings to Ca from Caa2 on April 3, 2020 and the subsequent lowering of the country's local currency bond ceiling to Caa1 from B2. This action concludes the review opened on RCI Banque Sucursal Argentina's local currency rating on September 5, 2019. RATINGS RATIONALE RCI Banque Sucursal Argentina is a branch of RCI Banque (RCI, Baa1 senior unsecured and long-term deposit ratings, ratings under review, baa3 Adjusted Baseline Credit Assessment) located in Argentina. While RCI's long-term senior unsecured debt and deposit ratings are Baa1, the local currency issuer rating of RCI Banque Sucursal Argentina is constrained by the local currency bond ceiling of the Government of Argentina. The negative outlook reflects the negative outlook on the Government of Argentina's Ca rating. The ratings of RCI are unaffected by this rating action. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING Given the negative outlook on the Government of Argentina's ratings, the rating of RCI Banque Succursal Agentina is unlikely to be upgraded. RCI Banque Sucursal Argentina's issuer rating would be downgraded if the Government of Argentina's local currency bond ceiling were to be lowered as a result of a downgrade of the sovereign rating. PRINCIPAL METHODOLOGY The principal methodology used in this rating was Banks Methodology published in November 2019. ============= B E R M U D A ============= DIGICEL GROUP: Moody's Cuts Sr. Sec. Rating to Caa1, Outlook Neg. ----------------------------------------------------------------- Moody's Investors Service downgraded Digicel Group Limited's probability of default rating to Caa3-PD from Caa2-PD. At the same time, Moody's downgraded the senior secured rating of Digicel International Finance Limited to Caa1 from B3. All other ratings within the group remain unchanged. The outlook is negative. Downgrades: Issuer: Digicel Group Limited Probability of Default Rating, Downgraded to Caa3-PD from Caa2-PD Issuer: Digicel International Finance Limited Senior Secured Fist Lien Term Loan B, Downgraded to Caa1 from B3 Senior Secured Fist Lien Revolving Credit Facility, Downgraded to Caa1 from B3 Gtd Senior Secured Regular Bond/Debenture, Downgraded to Caa1 from B3 RATINGS RATIONALE The downgrade of Digicel's PDR to Caa3-PD recognizes the higher likelihood of another default by Digicel in the near term, either in the form of a distressed exchange or through the non-payment of interests after the grace-period end. On March 30, Digicel announced that it had deferred the payment of interests related to its Digicel Group One Limited and Digicel Group Two Limited (DGL2) notes, which were due on March 30 and April 1. If Digicel were to not pay these interests during the 30-day grace period, Moody's would consider this a default. On April 1, Digicel also announced the commencement of offers to exchange existing debt of Digicel Limited, DGL2 and DGL1 for various new securities. The offers aim to reduce Digicel's leverage and imply a discount on existing debt instruments. If completed as proposed, Moody's will consider the exchange offer as a distressed exchange, which is a default under Moody's definition. The downgrade of DIFL's ratings to Caa1 from B3 reflects the tight liquidity situation of Digicel and the increased risk that DIFL's debt is eventually dragged along in a restructuring transaction or default, even though DIFL's debt it is not currently among the debt instruments that the group has proposed to exchange. Digicel's Caa2 corporate family rating reflects the group's untenable capital structure and tight liquidity position. It also considers Digicel's presence in emerging markets with a history of instability and exposure to adverse weather events, as well as its exposure to the risk of currency depreciation against the US dollar, especially in its three largest markets (Jamaica, Haiti and Papua New Guinea). At the same time, Digicel's rating takes account of its product and geographic diversification, strong margins and market-leading positions. The negative outlook reflects the still uncertain outcome of Digicel's exchange offer and the risk that the company eventually goes through a restructuring process entailing higher losses for bondholders. Digicel's liquidity is tight with the company still generating negative free cash flow and a cash balance which amounted to USD126 million as of December 2019. Digicel faces upcoming large debt maturities, the next maturity being the USD1.3 billion DL notes due April 2021, which are part of the announced exchange. If the exchange is completed with full acceptance and under the terms announced, Digicel would be reducing its gross debt by USD1.7 billion (by about 25%) and its leverage (gross debt /EBITDA) would decline to about 6x (pro forma as of September 2019) from a level of 7.7x. It would also extend its debt maturities, with no large maturity before 2024, and reduce cash interest expenses by USD125 million from a current annual amount of about USD500 million, which would help the company return to positive free cash flow generation and improve its liquidity position. At the end of the tender offer period, and once there is clarity on Digicel's final capital structure, Moody's will reassess Digicel's CFR and PDR, and the ratings of its debt instruments. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Digicel's ratings could be upgraded if the company materially strengthens its capital structure and liquidity position, returning also to positive and stable free cash flow generation. A further downgrade could happen in case of a restructuring process or default that results in higher than expected losses to creditors. The principal methodology used in these ratings was Telecommunications Service Providers published in January 2017. Incorporated in Hamilton, Bermuda, Digicel is the largest provider of wireless telecommunication services in the Caribbean. The company operates in 31 markets in the Caribbean and South Pacific regions. In addition, the company provides a comprehensive range of business solutions, cable TV and broadband and other related products and services. The company also operates a wireless network in Panama through its 45% ownership interest in affiliate, Digicel Holdings (Central America) Limited. Digicel generated revenue of $2.3 billion in the 12 months to December 2019. =========== B R A Z I L =========== BRAZIL MINERALS: Reports $2.08 Million Net Loss for 2019 -------------------------------------------------------- Brazil Minerals, Inc. filed with the Securities and Exchange Commission its Annual Report on Form 10-K reporting a net loss of $2.08 million on $15,393 of revenue for the year ended Dec. 31, 2019, compared to a net loss of $1.85 million on $19,716 of revenue for the year ended Dec. 31, 2018. As of Dec. 31, 2019, the Company had $1.03 million in total assets, $2.35 million in total liabilities, and a total stockholders' deficit of $1.32 million. BF Borgers CPA PC, in Lakewood, Colorado, the Company's auditor since 2015, issued a "going concern" qualification in its report dated April 14, 2020 citing that the Company has suffered recurring losses from operations and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern. As of Dec. 31, 2019, the Company had total current assets of $193,777 compared to total current liabilities of $2,154,356 for a current ratio of 0.09 to one and a working capital deficit of $1,960,579. By comparison the Company had total current assets of $63,286 compared to current liabilities of $2,073,564 for a current ratio of 0.03 to one and a working capital deficit of $2,010,278 as of Dec. 31, 2018. The Company's principal sources of liquidity were from the sale of equity and issuance of debt for both the years ended Dec. 31, 2019 and 2018. Net cash used in operating activities totaled $791,072 for the year ended Dec. 31, 2019, compared to $511,313 for the year ended Dec. 31, 2018 representing an increase in cash used of $279,759 or 54.7%. Net cash used in investing activities totaled $677 for the year ended Dec. 31, 2019, compared to $1,976 for the year ended Dec. 31, 2018 representing a decrease of $1,299 or 65.7%. Net cash provided by financing activities totaled $941,852 for the year ended Dec. 31, 2019, as compared to $389,274 for the year ended Dec. 31, 2018 representing an increase of $552,578 or 142.0%. During the year ended Dec. 31, 2019, the Company's sources of liquidity were primarily derived from proceeds from debt issuance sales of equity by the Company and one of its subsidiaries. Brazil Minerals said, "Our ability to continue as a going concern is dependent upon our capability to generate cash flows from operations and successfully raise new capital through debt issuances and sales of our equity. We believe that we will be successful in the execution of our initiatives, but there can be no assurance. We have no plans for any significant cash acquisitions in the foreseeable future." A full-text copy of the Form 10-K is available for free at: https://is.gd/BJcv20 About Brazil Minerals Brazil Minerals, Inc. -- http://www.brazil-minerals.com/-- has two components to its business model: (1) growing a portfolio of mineral rights in a wide spectrum of strategic and sought-after minerals, from which equity holdings and/or royalty interests may develop, and (2) mining certain specific areas for gold, diamonds, and sand. The Company currently owns mineral rights in Brazil for lithium, rare earths, titanium, cobalt, iron, manganese, nickel, gold, diamonds, precious gems, and industrial sand. JBS SA: US Government Deploys Tests to Hard-Hit JBS USA Beef Plant ------------------------------------------------------------------ Jacob Bunge at marketscreener.com reports that Meatpacker JBS USA Holdings Inc. said it is coordinating with federal and state governments to get Covid-19 tests for employees of the company's Greeley, Colo., beef processing plant, a hotspot for virus cases. The Trump administration is developing a plan to deliver coronavirus tests and other solutions to U.S. food-processing plants like JBS's, The Wall Street Journal reported, according to marketscreener.com. JBS and other meat processors like Cargill Inc. and Tyson Foods Inc. have temporarily shut down plants after workers became ill, and fears of contracting the virus has kept many meat plant employees home, the report notes. JBS USA, owned by Brazilian meat conglomerate JBS SA, also maintains its corporate headquarters in Greeley and employs about 6,000 people in the county, the report relates. The company estimated that 36 employees have tested positive there, though local union officials have said the number is higher, the report notes. JBS said it has asked state elected officials for help getting tests at its Greeley beef plant and anticipates receiving several thousand, the report relays. The company planned to test employees over Easter weekend, while deep-cleaning its plant, the report adds. As reported in the Troubled Company Reporter-Latin America on Dec. 19, 2019, Moody's Investors Service upgraded JBS S.A.'s corporate family rating to Ba2 from Ba3 and the senior unsecured ratings of its wholly-owned subsidiaries JBS USA Lux S.A. and JBS Investments II GmbH to Ba2 from Ba3. The rating of the secured term loan under JBS USA Lux S.A. was upgraded to Ba1 from Ba2. The outlook for all ratings is stable. LOCALIZA RENT: Moody's Places Ba2 CFR on Review for Downgrade ------------------------------------------------------------- Moody's America Latina placed Localiza Rent a Car S.A.'s Ba2 global scale and Aa1.br national scale corporate family ratings and senior unsecured debt ratings on review for downgrade. Ratings placed under review for downgrade: Issuer: Localiza Rent a Car S.A. Corporate Family Rating, Placed on Review for Downgrade, currently Ba2/Aa1.br BRL500 mm senior unsecured debentures due 2021, Placed on Review for Downgrade, currently Ba2/Aa1.br Outlook, Changed to Rating Under Review from Stable RATINGS RATIONALE / FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The transportation sector is one of the sectors that will be significantly affected by the shock given its sensitivity to consumer demand and sentiment. As a result of the coronavirus impact on air travel and ground transportation, the entire car rental industry will have to contend with challenges that include: a rapid drop in rental car utilization rates; a resulting need to liquidate vehicles in order to right-size fleets; and, potentially large drops in vehicle residual values. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial credit implications of public health and safety. Moody's review will focus on Localiza' ability to moderate the degree of deterioration in its credit metrics and liquidity as a result of rapidly decline in demand. The review will also assess the pace at which the company can strengthen its cash position through the resumption of used-cars sales and reduce its cash burn through the adequacy of operating costs and new car purchases. Moody's will also monitor how Localiza balances liquidity and profitability in its used-cars sales business, thus preventing the risk of breaching financial covenants. The rating could be downgraded if Localiza's liquidity profile deteriorate due to weaker operations and inability to sell used-cars, or if its car rental utilization rate decline sustainably to below 60% for an extended period of time. Localiza's Ba2/Aa1.br rating is supported by the company's stable operating performance and cash flow generation, combined with a resilient, relatively flexible business model, especially in economic and auto market slowdowns. Localiza's leading market share position in both the car and fleet rental segments in Brazil (Ba2 stable) also supports the rating. The company is able to maintain robust profitability overtime as a result of low fleet maintenance requirements, high utilization rates, attractive discounts from automobile manufacturers and expertise in the used-car sales market. The rating also reflects the company's adequate corporate governance practices and strong liquidity. At the same time, the capital-intensive nature of the car rental business constrains Localiza's rating, as does the company's lack of a significant international footprint. The rating is further constrained by its expectations that credit metrics will deteriorate substantially in 2020 due to the coronavirus outbreak and its impact on both the car rental and used-car sales businesses. As such, the company's adjusted leverage ratio that was already high at 4.1x at the end of 2019 because of a fast growth strategy will remain strained until 2021. The coronavirus outbreak is impacting virtually all of Localiza's lines of business - with operations at airports, ride-sharing and daily and monthly rentals being the most affected - and is even preventing the company to sell used-cars because of lockdown requirements that are halting car licensing. Moody's revised Brazil's GDP growth expectations for 2020 to -1.6% from 2% prior to outbreak, but the duration and depth of the crisis are still unclear, and its long-term effect on the Brazilian economy will depend on how it affects unemployment and consumption levels. Moody's expects a material deterioration in the company's revenues, profitability and gross leverage in 2020, which can threaten covenants' compliance later in the year. But, for Localiza's credit quality, the main threat is for how long the company will not be able to deploy its used-car fleet, since this is a key source of liquidity during downturns. To avoid potential liquidity squeezes until its cash generation improves, Localiza conservatively raised BRL380 million in proceeds through the anticipation of credit card receivables and BRL595 million from two new credit lines. As such, the company's current cash position is close to BRL3.9 billion, which is sufficient to cover its non-discretionary cash outflows in 2020, including: (i) a nearly 2.4 billion supply obligation with OEMs; and (ii) BRL13 million in principal debt payments and about BRL350-400 million in net interest expenses. Its assessment of Localiza's liquidity profile assumes that the company will conservatively cut discretionary expenses, halt new cars purchases until market conditions improve, and resume its used-cars sales when existing lockdown requirements are suspended to reduce its cash burn. A larger than anticipated cash burn in the short term would put negative pressure on the company's rating. WHAT COULD CHANGE THE RATING UP / DOWN The ratings would be downgraded if Localiza's liquidity deteriorates because of weakness in operations and inability to sell used cars, or if its car rental utilization rate decline sustainably to below 60% for an extended period of time. A sustained deterioration in credit metrics, measured by gross debt/EBITDA exceeding 3.5x and EBITDA interest coverage falling below 3.0x without prospects of improvement could also lead to a downgrade. Finally, a downgrade of Brazil's sovereign rating would result in a downgrade of Localiza's ratings. An upgrade is unlikely in the medium term. In the long term, Localiza's ratings could be upgraded if the company is able to increase its market share, geographic diversification and revenue, while maintaining healthy credit metrics on a sustained basis. The implementation of financial policies that include maximum leverage and minimum cash amounts and an upgrade of Brazil's sovereign rating would also be required for an upgrade. Founded in 1973 and headquartered in Belo Horizonte, Minas Gerais, Brazil, Localiza operates car rental, fleet rental and used car businesses in Brazil. The company also franchises rental car operations throughout South America. As of December 2019, the company had a total fleet of 307,131 company-owned cars and 16,230 cars at franchisees in Brazil and five other countries. The company is the market leader in Brazil in terms of car rental, with the largest number of car rental locations and presence in all main Brazilian airports. In 2019, the company reported net revenue of BRL10.2 billion ($2.6 billion) and net income of BRL834 million. The principal methodology used in these ratings was Equipment and Transportation Rental Industry published in April 2017. NEXA RESOURCES: Moody's Affirms Ba2 CFR, Alters Outlook to Neg. --------------------------------------------------------------- Moody's Investors Service has affirmed Nexa Resources S.A.'s Ba2 corporate family rating and the rating on its $700 million senior unsecured notes due 2027. The outlook changed to negative from stable. The change in Nexa's outlook to negative reflects the exposure of the company to the breadth and severity of the credit shock caused by the spread of the coronavirus outbreak, primarily through lower zinc prices and a loss of revenue from the current state of emergency in Peru [1]. At the same time, the affirmation of Nexa's Ba2 ratings recognizes the company's strong liquidity profile, which places the company in a more resilient position to withstand challenges in this operating environment. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Rating Actions: Issuer: Nexa Resources S.A. LT Corporate Family Rating, affirmed at Ba2 $700 million gtd senior unsecured notes due 2027, affirmed at Ba2 Outlook Actions: Issuer: Nexa Resources S.A. Outlook, changed to negative from stable RATINGS RATIONALE In the current operating environment, Moody's will see a deterioration in Nexa's credit metrics in 2020, reflecting lower zinc prices, lower operating rates as a result of the restriction in Peru and higher leverage, since Nexa has raised new debt to enhance its liquidity position. Accordingly, Nexa raised about $350 million in new debt in March 2020, and in early April the company requested the full disbursement of its $300 million revolving credit facility due in October 2024. Total adjusted leverage, on a pro-forma basis considering 2019 EBITDA and the tender offer for the 2023 bonds ($214 million) announced in February 2020, would increase from 3.7x at the end of 2019 to 4.7x. At the same time, liquidity has strengthened, with pro-forma cash balances at around $1 billion. On a net debt basis (net debt to EBITDA), leverage remains stable at 2x. With the state of emergency in Peru, which started on March 15 and for now is extended until April 26, production in the mines located in Peru (Cerro Lindo, Atacocha and El Porvenir, which accounted for 68% of zinc-equivalent production in 2019) were suspended, with mining activities limited to critical activities with a minimum workforce to ensure appropriate maintenance, safety and security. The Cajamarquilla smelter is estimated to continue operating at approximately 50% of its nominal production capacity with a reduced workforce. Nexa Ba2 ratings remain supported by the company's strong presence in the global zinc market (fourth-largest producer of mined zinc globally) and its production profile, with the integration of mining operations with smelters, both in Brazil and Peru, which has translated into steady EBITDA margins over the last few years. The execution of planned greenfield projects in Brazil and Peru in the coming years is a positive development because it leads to lower cash cost on a consolidated base, reduces mine concentration and leads to product diversification overtime. Constraining the ratings is Nexa's exposure to commodity price volatility, given its high concentration in zinc (64% of total production in 2019) and in a single mine (Cerro Lindo is responsible for 44% of total mine output on a zinc equivalent basis). Nexa's relatively modest revenue size ($2.3 billion in 2019) compared with that of its global peers is a further constraint. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Nexa's ratings could be downgraded if its profitability and cash generation capacity materially deteriorate as a consequence of a decline in metal prices or significantly lower production volumes, with EBIT margins staying below 12.5% and negative free cash flow on a sustained basis; production costs increase significantly and falling to the third quartile of the industry cost curve; or leverage, measured by total adjusted debt to EBITDA, staying above 3.1x and interest coverage leverage ratios, measured by EBIT to interest expenses staying below 3.5x on a sustained basis. Higher dividend payout, jeopardizing the company's liquidity position and leading to cash flow from operations minus dividends/debt staying below 25% could also lead to a negative action. Nexa's credit profile could be further impacted by the rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, and asset price declines, which are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The mining sector has been affected by the shock given its sensitivity to industrial demand and sentiment. More specifically, Nexa's credit profile remains vulnerable to the outbreak continuing to spread given its high exposure to zinc prices and overall global economic growth. An upward rating or outlook movement would require the company to improve cost position, staying comfortably in the second quartile of the industry curve, and complete its planned expansions, further diversifying its metal revenue base and enhancing its production profile without an increase in leverage or a deterioration in interest coverage metrics. Additionally, the outlook or ratings could be positively affected if the company maintains a sound liquidity profile, leverage (total adjusted debt to EBITDA) trends towards 2.75x or lower and interest coverage (EBIT to interest expenses) stays above 4.0x. A cash flow from operations minus dividends to total debt ratio above 30% would also support a positive rating action. The principal methodology used in these ratings was Mining published in September 2018. Nexa Resources S.A. is a subsidiary of Votorantim S.A. (64.3%), with integrated operations (mines and smelters) in Brazil and Peru, mostly concentrated in zinc, but also with exposure to copper, silver, lead and gold. Nexa is the fourth-largest zinc concentrate producer in the world, with operations spread out in three mines in Peru (Cerro Lindo, Atacocha and El Porvenir) and two in Brazil (Vazante and Morro Agudo), and a zinc smelter in Peru (Cajamarquilla) and two zinc smelters in Brazil (Tres Marias and Juiz de Fora). In 2019, Nexa reported revenue of $2.3 billion. ============= E C U A D O R ============= ECUADOR SOCIAL: Fitch Affirms Class B Notes at 'CCsf' ----------------------------------------------------- Fitch Ratings has affirmed the ratings of the class A 144A/Reg S notes and class B 144A/Reg S notes issued by Ecuador Social Bond S.a.r.l. at 'AAAsf' and 'CCsf', respectively. The rating action follows Fitch's downgrade of Ecuador's ratings on April 9, 2020 to 'C' from 'CC' and affirmation of the sovereign bonds that were excluded from the consent solicitation at 'CC'. The Rating Outlook on class A notes remains Stable. Ecuador IDB Repack Class A (secured) XS2106052827; LT AAAsf; Affirmed Class B (secured) XS2106053635; LT CCsf; Affirmed TRANSACTION SUMMARY The Social Bond, issued by Ecuador and partially guaranteed by the Inter-American Development Bank (IDB; AAA/Stable), is the asset backing the class A and B notes (together the repack notes). The assigned ratings address timely payment of interest and principal on a semi-annual basis. On April 8, the government of Ecuador submitted a "commencement of consent solicitations" to holders of 10 global bonds, requesting deferral of scheduled interest payments totaling over USD800 million until Aug. 15. The authorities have made this request in order to achieve cash flow relief that could better enable them to attend to the health and economic crisis stemming from the coronavirus pandemic. They have also indicated that they intend to use this four-month standstill period to pursue a comprehensive debt restructuring to ensure debt sustainability. However, the Social Bond was not included in such list of bonds. KEY RATING DRIVERS Social Bond's Credit Profile: The Social Bond issued by the Republic of Ecuador is the asset backing the class A and B notes issued by Ecuador Social Bond S.a.r.l. The Social Bond shares all characteristics of other external indebtedness of Ecuador. The only difference is that its proceeds are for specific investment in Ecuador's social housing program and its debt service benefits from a partial credit guarantee by the Inter-American Development Bank. IDB's Partial Credit Guarantee: The partial credit guarantee between the IDB and ESB as initial purchaser of the Social Bond partially covers Ecuador's failure to meet its obligations on the Social Bond. After Ecuador's default on the Social Bond, all draws from the IDB guarantee will be exclusively applied by the Trustee to cover 100% of class A's debt service, covering a percentage of the underlying Social Bond. The IDB guarantee effectively covers 100% of the class A notes issued by ESB within the 23-day cure period. IDB's Strong Credit Quality: The rating assigned to the class A notes is commensurate with the Issuer Default Rating of the guarantee provider. Strength of the Partial Guarantee: IDB's obligations under the guarantee will constitute direct, unsecured obligations of IDB. The guarantee is comprehensive in scope, ensuring timely payment of debt service on the class A notes through the financing structure. Class B Notes Credit Quality: Given that all flows from the IDB guarantee will be applied to the class A notes to meet debt service according to the guarantee's schedule, a default by Ecuador under its obligations of the Social Housing Bond would lead to a default of ESB's obligations under the class B notes. On April 8, the government of Ecuador submitted a "commencement of consent solicitations" to holders of 10 global bonds, requesting deferral of scheduled interest payments totaling over USD800 million until Aug. 15. Fitch deems this formal request to be the initiation of a default-like process, consistent with a 'C' rating; therefore, it downgraded the ratings on Ecuador's senior unsecured foreign-currency bonds included in the "consent solicitation" to 'C' from 'CC'. Bonds that were not subject to the solicitation were affirmed at 'CC'. It is important to highlight that the Social Bond was excluded from this request. Hence, the credit quality of the class B notes reflects the rating on Ecuador's bonds excluded from the solicitation, currently 'CC'. RATING SENSITIVITIES The main factors that may, individually or collectively, lead to a negative rating action/downgrade are: -- The class A notes' ratings are linked to the Long-Term Foreign Currency IDR of the IDB, hence a downgrade of the IDB's IDR would trigger a downgrade of class A notes in the same proportion; -- Changes in Fitch's view regarding the strength of the IDB guarantee may negatively affect the ratings of class A notes; -- Class B Notes' credit quality reflects the rating on Ecuador's bonds excluded from the solicitation, hence Ecuador further consent solicitations of the sovereign, which include the Social Bond or other negative credit events affecting Fitch's view on the credit quality of class B notes could trigger a downgrade of its ratings. The main factors that may, individually or collectively, lead to positive rating action/upgrade are: -- The class A notes' ratings are linked to the Long-Term Foreign Currency IDR of the IDB, currently rated 'AAA'/Stable, which is the highest rating assigned by Fitch; -- Although an upgrade of the class B Notes ratings seems unlikely in the short-term, the ratings could be upgraded if Ecuador's IDR is upgraded above class B notes ratings. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Structured Finance transactions have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of seven notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of seven notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAAsf' to 'Dsf'. Best- and worst-case scenario credit ratings are based on historical performance. USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10 No third-party due diligence was provided to or reviewed by Fitch in relation to this rating action. REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING The principal sources of information used in the analysis are described in the Applicable Criteria. PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS The credit risk of class A notes is linked to the credit quality of the IDB (AAA/OS) as the only beneficiaries of the IDB guarantee. The credit risk of class B notes reflects the rating on Ecuador's bonds excluded from the solicitation, currently 'CC'. ============= J A M A I C A ============= JAMAICA: Fitch Affirms 'B+' LT IDR, Alters Outlook to Stable ------------------------------------------------------------ Fitch Ratings has revised Jamaica's Outlook to Stable from Positive. The Long-Term Foreign-Currency Issuer Default Rating is affirmed at B+. KEY RATING DRIVERS The Outlook change reflects the shock to Jamaica from the coronavirus pandemic, which is expected to lead to a sharp contraction in its main sources of foreign currency revenues: tourism, remittances and alumina exports. This will interrupt the prior strong downward trend in government debt/GDP, which is still above rating peers and vulnerable to changes in the exchange and interest rates. Mitigating factors include a balanced budget in FY2019/2020, liquid local sources of financing, a reasonable foreign reserve position, strong relations with International Financial Institutions and a benign debt amortization profile for the next couple of years. The economy is expected to contract by 4% in 2020 followed by a recovery of 2% in 2021. Fitch projects that tourism receipts will decline by 20% yoy in 2020, although this could well be steeper if an easing in the global pandemic does not materialize by the key northern hemisphere winter season. In 2018 tourism hard-currency revenues represented 20% of GDP. Remittances will be adversely affected by deteriorating labor markets in the US and UK, particularly affecting service-sector jobs given social distancing measures. Remittances were 16% of GDP in 2018 and are expected to fall by 10% yoy in 2020. Bauxite and alumina prices are facing downward pressures as manufacturing in China slowed down and demand weakens. Bauxite/alumina exports were 6% of GDP in 2018. Risks are to the downside as Fitch's base case projections assumes that most of the lockdown measures will be lifted by 2H20. The fall in oil prices will temper the economic contraction and adverse impact on the current account balance, as will a more general decline in imports. In 2018 Jamaica had net imports of oil worth 8% of GDP. Fitch expects that average oil prices in 2020 will be USD35/barrel which is a 45% fall yoy. Fitch forecasts the general government balance to deteriorate to -2.5% of GDP for FY2020/2021 from 0.2% in FY2019/2020, which would still be moderate in the context of the severe economic shock and compares favorably with rating peers. The government made a permanent reduction to the general consumption tax of 1.5pp to 15% with an estimated annual revenue loss of JMD14 billion or 0.7% of GDP. It also announced multiple conditional cash transfers programs to individuals and businesses at a cost of JMD10 billion or 0.5% of GDP. The total cost of the conditional cash transfers is based on the assumption that they will last three months (April, May and June). However, it is possible that they are extended beyond this period. Fitch expects that with the economic contraction in 2020 revenue-to-GDP will contract 1.5pp on top of the announced tax cut. A smaller primary surplus will make it very hard to achieve the Fiscal Responsibility Law debt-reduction goal. The government announced a reduction in the primary surplus target to 5.4% from 6.5%; to counterbalance this measure it also announced a debt-repayment acceleration of JMD73 billion (3.4% of GDP) coming from sold asset and deposits. Given the expected revenue contraction, Fitch estimates that the primary surplus will be 3.6% of GDP in FY2020/2021 and 5.3% in FY2021/2022. The FRL goal of bringing debt/GDP to 60% by the end of FY2025/2026 is very ambitious given the forecast deficit and rise in debt/GDP in 2020. According to Fitch's Debt Dynamics Model (assuming a gradual reduction of the primary surplus to 4% of GDP by FY2028/2029, long-term growth of 1.5% and JMD depreciation of 3% annually with respect to the US dollar, in line with the projected inflation differential between Jamaica and the US) debt will be at 79% of GDP by that date. Thanks to liability management operations last fiscal year the external amortization profile is fairly flat (USD311 million or 2% of GDP for FY2020/2021, almost all payable on bilateral and multilateral debt) until 2045. Large stocks of debt represent an inherent risk for the sovereign. Jamaica's debt burden is 92% of GDP which compares unfavorably with the 'B' median of 50%. Given that 60% of the debt is in foreign currency the debt level is sensitive to movements in the exchange rate and therefore to the external shock of the pandemic. Net external debt is 31.2% of GDP and the net international investment position is -153.1% of GDP which compare unfavorably with 'B' rated peers. Fitch estimates that the current account deficit will widen to 4.9% of GDP in 2020 from 1.9% in 2019. The fall in tourism receipts, remittances and bauxite/alumina exports will be tempered by the fall in oil prices; the high import content of the tourism industry plus a fall in domestic consumption should lower the import bill. Fitch also expects that net FDI will fall to 3.1% of GDP in 2020 from 4.5% in 2019. Unlike many Caribbean and Central American peers Jamaica has a floating exchange rate that should help stabilize the balance of payments. The Bank of Jamaica has 4.6 months of current external payments (USD3.6 billion) in international reserves which compares favorably to the 'B' median of 3.8 months. Jamaica's 'B+' rating is supported by World Bank Governance Indicators that are substantially stronger than the 'B' and 'BB' range medians, although violent crime hinders investment and growth. The rating is also supported by GDP per capita above the 'B' range median, a favorable business climate according to the World Bank Doing Business Survey, moderate inflation and moderate commodity dependence. The two main political parties have supported the reforms that have lowered debt-to-GDP to 92% at end-FY2019/2020 from 135% in FY2012/2013. ESG - Governance: Jamaica has an ESG Relevance Score of 5 for both Political Stability and Rights and for the Rule of Law, Institutional and Regulatory Quality and Control of Corruption, as is the case for all sovereigns. Theses scores reflect the high weight that the World Bank Governance Indicators (WBGI) have in its proprietary Sovereign Rating Model. Jamaica has a medium WBGI ranking at 60.3, reflecting its track record of peaceful political transitions, accountability of the government to civil society and regulatory quality. SOVEREIGN RATING MODEL (SRM) AND QUALITATIVE OVERLAY (QO) Fitch's proprietary SRM assigns Jamaica a score equivalent to a rating of 'BB-' on the Long-Term Foreign-Currency (LT FC) IDR scale. Fitch's sovereign rating committee adjusted the output from the SRM to arrive at the final LT FC IDR by applying its QO, relative to rated peers, as follows: - External Finances: -1 notch, to reflect high dependency on the US economy, exposure to shocks in remittances and tourism revenues, relatively high probability of a natural disaster and net external debt that is about twice that of 'B' rated peers. Fitch's SRM is the agency's proprietary multiple regression rating model that employs 18 variables based on three-year centered averages, including one year of forecasts, to produce a score equivalent to a LT FC IDR. Fitch's QO is a forward-looking qualitative framework designed to allow for adjustment to the SRM output to assign the final rating, reflecting factors within its criteria that are not fully quantifiable and/or not fully reflected in the SRM. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Resumption of a downward path in government debt/GDP over the medium-term; -- A strengthening of growth prospects without the emergence of macroeconomic or fiscal imbalances; -- Entrenchment of institutional improvements in monetary and fiscal policy frameworks that enhance confidence in medium-term economic and fiscal performance. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- A severe and sustained negative impact from the coronavirus pandemic on medium-term GDP growth or the external finances, for example, owing to prolonged global lockdown policies that lowers foreign currency revenues coming from remittances and tourism; -- An increase in government debt-to-GDP, for example owing to marked depreciation of the Jamaican dollar; -- An inability to access financing or evidence of distressed financing conditions. BEST/WORST CASE RATING SCENARIO Ratings of Public Finance issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of three notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. KEY ASSUMPTIONS Global economic trends and oil prices are expected to develop as outlined in Fitch's Global Economic Outlook. REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING The principal sources of information used in the analysis are described in the Applicable Criteria. ESG CONSIDERATIONS Jamaica has an ESG Relevance Score of 5 for Political Stability and Rights, as World Bank Governance Indicators have the highest weight in Fitch's SRM and are therefore highly relevant to the rating and are a key rating driver with a high weight. Jamaica has an ESG Relevance Score of 5 for Rule of Law, Institutional and Regulatory Quality and Control of Corruption, as World Bank Governance Indicators have the highest weight in the SRM and this is therefore highly relevant to the rating and a key rating driver with a high weight. Jamaica has an ESG Relevance Score of 4 for Human Rights and Political Freedoms, as the Voice and Accountability pillar of the World Bank Governance Indicators is relevant to the rating and a rating driver. Jamaica has an ESG Relevance Score of 4 for Creditors Rights as willingness to service and repay debt is relevant to the rating and a rating driver, as for all sovereigns. Jamaica restructured domestic debt in 2010 and 2013 but continued to service external debt. Except for the matters discussed, the highest level of ESG credit relevance, if present, 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. ===================== P U E R T O R I C O ===================== ASCENA RETAIL: Moody's Cuts CFR to Caa3, Outlook Negative --------------------------------------------------------- Moody's Investors Service downgraded Ascena Retail Group, Inc.'s corporate family rating to Caa3 from Caa2, probability of default rating to Caa3-PD from Caa2-PD, and senior secured term loan rating to Caa3 from Caa2. The speculative-grade liquidity rating was downgraded to SGL-3 from SGL-2 and the outlook remains negative. The CFR, PDR and term loan downgrades reflect Moody's view that Ascena faces a heightened probability of default, due to its high leverage and significant expected earnings declines driven by COVID-19-related temporary store closures, weak consumer spending and intense promotional activity. The SGL downgrade to SGL-3 from SGL-2 reflects Moody's projections that Ascena will have lower but nevertheless adequate liquidity over the next 12-18 months. The company had an estimated $604 million cash balance as of February 1, 2020 pro-forma for the $230 million borrowing on its asset-based revolver, which provides it with sufficient liquidity to operate through a limited period of store closures. Moody's took the following rating actions for Ascena Retail Group, Inc.: Corporate family rating, downgraded to Caa3 from Caa2 Probability of default rating, downgraded to Caa3-PD from Caa2-PD Speculative grade liquidity rating, downgraded to SGL-3 from SGL-2 $1.8 billion ($1.25 billion outstanding) senior secured first lien term loan B due 2022, downgraded to Caa3 (LGD3) from Caa2 (LGD3) Outlook, remains negative RATINGS RATIONALE The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The non-food retail sector has been one of the sectors most significantly affected by the shock given its sensitivity to consumer demand and sentiment. More specifically, the weaknesses in Ascena's credit profile, including its exposure to widespread store closures and US discretionary consumer spending have left it vulnerable to these unprecedented operating conditions, and Ascena remains vulnerable to the outbreak continuing to spread. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Its action reflects the impact on Ascena's of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. Ascena's Caa3 CFR is constrained by Moody's view that default risk is elevated as a result of the company's high leverage, 2022 debt maturities, and expectations for declining earnings over the next 12-18 months. Funded debt/EBITDA was 8.1 times as of February 1, 2010, pro-forma for the debt repurchase made in Q3 2019 and the subsequently announced ABL revolver borrowings. Moody's expects a significant increase in leverage over the next 12-18 months, as a result of steep initial EBITDA declines driven by COVID-19-related temporary store closures, as well as lower consumer spending and high promotional activity. The company's credit profile is further constrained by Ascena's operations in the women's apparel sector, which is characterized by high fashion risk, intense competition and margin pressure from e-commerce investments. The rating also reflects governance considerations, specifically the potential for additional debt repurchases at a significant discount over time, which Moody's could view as a distressed exchange. In addition, as a retailer, Ascena needs to make ongoing investments in its brand and infrastructure, as well as in social and environmental drivers including responsible sourcing, product and supply sustainability, privacy and data protection. At the same time, the rating reflects Moody's view that the company will have adequate liquidity over the next 12-18 months. The rating also incorporates Ascena's scale and portfolio of well-known women's apparel brands. The negative outlook reflects the elevated probability of default and the risk of greater than anticipated liquidity pressure as a result of extended store closures or a steeper than expected decline in demand once stores reopen. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be downgraded if the probability of default increases or recovery prospects weaken. The ratings could be upgraded if the company addresses its capital structure and maturities and improves its operating performance. Headquartered in Mahwah, New Jersey, Ascena Retail Group, Inc. (Ascena) operates close to 2,900 women's specialty retail stores throughout the United States, Canada and Puerto Rico under the brands LOFT, Ann Taylor, Justice, Lane Bryant, and Catherines. Revenue for LTM period ended February 1, 2020 was approximately $4.7 billion (pro-forma for the dress barn winddown). The principal methodology used in these ratings was Retail Industry published in May 2018. ================= V E N E Z U E L A ================= VENEZUELA: Petrol Crisis Worsens as US Orders Supply Cuts --------------------------------------------------------- Reuters, citing five people familiar with the situation, reports that Petrol shortages in Venezuela are worsening after United States officials told foreign firms to refrain from supplying fuel to the sanctioned South American nation and only provide diesel, five people familiar with the situation. Since late 2019, US officials have asked most of Venezuela's fuel suppliers to avoid sending petrol to the crisis-stricken nation, according to Reuters. In the latest round of calls in early March between US officials and oil firms, they repeated the ban, despite worsening humanitarian conditions in the country, one of the sources said, the report notes. The US Treasury Department sanctioned Venezuela's state-run Petroleos de Venezuela (PDVSA) more than a year ago as a measure to overthrow socialist President Nicolas Maduro, who US President Donald Trump's administration considers a dictator usurping power, the report relates. A handful of foreign companies -- including Russia's Rosneft, Spain's Repsol SA, Italy's Eni SpA and India's Reliance Industries -- continued to supply fuel to PDVSA under swap arrangements for Venezuelan crude oil, which was allowed by the US Treasury, the report relates. "They underlined the message of no petrol as part of oil swaps," said the source familiar with last month's calls, adding that his firm has only supplied diesel and gas oil since September, the report says. While the officials did not explain why they were distinguishing between the two fuels, diesel is mainly used for power generation and bulk transport of cargo including food, while petrol is mostly used for personal travel, the report discloses. With the coronavirus pandemic wreaking havoc across the world, Washington has come under pressure from the United Nations human rights chief and US legislators to relax sanctions on countries like Venezuela and Iran to facilitate the shipment of humanitarian goods, the report relates. A senior Trump administration official said Maduro alone was responsible for the humanitarian toll in Venezuela and the US would continue its campaign to cut his lifelines, the report notes. The restriction on crude oil-for-petrol swaps with Venezuela is being maintained as the country's own once-formidable refining industry collapses, with almost no petrol produced in recent months, leading to chronic shortages across the country, the report relays. To increase the pressure on Caracas, the US this year sanctioned PDVSA's main trade partners Rosneft Trading and TNK Trading International, both subsidiaries of Rosneft, the report notes. Rosneft stopped direct trade with PDVSA in March and weeks later announced it would transfer all its Venezuelan assets to an undisclosed entity controlled by the Russian government, the report says. "The swaps were working quite well," said Francisco Monaldi, an energy economist at Rice University, adding that the recent escalation in sanctions would spook suppliers, the report relays. "In these circumstances, it is unlikely that established companies will take the risk," the report relates. A US official acknowledged pressure has been exerted on some oil firms in line with efforts to get them to unwind their business in Venezuela or else face US secondary sanctions, the report notes. The official, speaking on condition of anonymity, said Washington was prepared to accept a limited level of diesel supplies but wants to see a curtailing of petrol shipments to Venezuela as part of Trump's "maximum pressure" campaign to overthrow Maduro, the report notes. US officials have said privately Trump is frustrated at the failure of his Venezuela policy to break Maduro's grip on power, the report relates. In statements, both Repsol and Eni said they send PDVSA diesel, not petrol, as part of their swaps, the report notes. In March, Eni delivered two diesel cargoes, while Repsol sent one and Rosneft did not send any, according to internal PDVSA documents seen by Reuters and Refinitiv Eikon data, the report relates. Reliance did not immediately reply to a request for comment. In March, the refiner shipped two gas oil cargoes to Venezuela according to exports data, which have not yet unloaded, the report discloses. The US State Department said US sanctions do not restrict humanitarian aid "like food, medicine, and other donations intended to relieve human suffering," the report says. PDVSA did not reply to requests for comment. Long-Standing Problems Fuel shortages began well before the sanctions because of plunging refining in Venezuela, which has a total capacity of 1.3 million barrels per day (bpd) of crude processing, the report relays. Of that, PDVSA only refined 101,000bpd of crude in March, according to an internal PDVSA document seen by Reuters, increasing the crisis-stricken nation's dependence on imports. The vast majority of that went to producing diesel and jet fuel. The refineries produced just 7,000bpd of 91-octane petrol in March and 28,000 bpd in the first three months of the year, the report discloses. The 310,000bpd Cardon and the 187,000bpd Puerto la Cruz refineries remained completely halted, the report says. Venezuela's government blames US sanctions for restricting imports of additives and spare parts needed to run the facilities and has pledged to restart fuel output at the 146,000bpd El Palito refinery, the report notes. The resulting shortages of motor fuel have disrupted shipments of food and prevented doctors from arriving at their hospital shifts, the report relates. Ana Veronica Herrero, a 32-year-old resident of the western city of Maracaibo, said she could not find petrol to transport her mother to the hospital after she had a heart attack, the report relays. "She died in my arms," Herrero said in a telephone interview, adding that she later had to spend $45 to buy petrol on the black market to bring her mother's body from the morgue to the cemetery, the report adds. Venezuela Venezuela, officially the Bolivarian Republic of Venezuela, is a country on the northern coast of South America, consisting of a continental landmass and a large number of small islands and islets in the Caribbean sea. The capital is the city of Caracas. Hugo Chavez was president to Venezuela from 1999 to 2013. The Chavez presidency was plagued with challenges, which included a 2002 coup d'etat, a 2002 national strike and a 2004 recall referendum. Nicolas Maduro was elected president in 2013 after the death of Chavez. Maduro won a second term at the May 2018 Venezuela elections, but this result has been challenged by countries including Argentina, Chile, Colombia, Brazil, Canada, Germany, France and the United States who deemed it fraudulent and moved to recognize Juan Guaido as president. The presidencies of Chavez and Maduro have challenged Venezuela with a socioeconomic and political crisis. It is marked by hyperinflation, climbing hunger, poverty, disease, crime and death rates, social unrest, corruption and emigration from the country. Standard and Poor's long- and short-term foreign currency Sovereign credit ratings for Venezuela stands at 'SD/D' (November 2017). S&P's local currency sovereign credit ratings on the other hand Are 'CCC-/C'. The May 2018 outlook on the long-term local currency sovereign credit rating is negative, reflecting S&P's view that the sovereign could miss a payment on its outstanding local currency debt obligations or advance a distressed debt exchange operation, equivalent to default. Moody's credit rating (long term foreign and domestic issuer ratings) for Venezuela was last set at C with stable outlook (March 2018). Fitch's long term issuer default rating for Venezuela was last set at RD (2017) and country ceiling was CC. Fitch, on June 27, 2019, affirmed then withdrew the ratings due to the imposition of U.S. sanctions on Venezuela. ********* 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 publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Latin America subscription rate is US$775 per half-year, delivered via e-mail. 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