/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/200513.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 Wednesday, May 13, 2020, Vol. 21, No. 96 Headlines B R A Z I L BRAZIL: Bolsonaro Ups Tension With Congress, Supreme Court EMBRAER SA: Egan-Jones Lowers Sr. Unsec. Debt Ratings to BB- EMBRAER SA: Hires Advisers to Help with Talks for Support PRUMO PARTICIPACOES: Fitch Affirms LT Rating at BB, Outlook Neg. [*] Fitch Alters 16 Brazilian FIs' LT IDR Outlooks to Negative D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: Economy Can't Be Rushed, Business Council Warns DOMINICAN REPUBLIC: Fitch Affirms BB- LT IDR, Alters Outlook to Neg DOMINICAN REPUBLIC: Gov't. Shouldn't Wage War v. Online Ventures P U E R T O R I C O CARLOS ROBLES: Has Until May 19 to File Amended Plan & Disclosures T R I N I D A D A N D T O B A G O TRINIDAD & TOBAGO: IMF Ready to Assist X X X X X X X X CARIBBEAN: IMF Predicts 6.2% Contraction of Economy - - - - - =========== B R A Z I L =========== BRAZIL: Bolsonaro Ups Tension With Congress, Supreme Court ---------------------------------------------------------- EFE News reports that Brazil's President Jair Bolsonaro exacerbated tensions with top institutions in the country by taking part in another protest against Congress and the Supreme Court, which recognized aggression against journalists in the midst of a political crisis opened by the serious accusations made by ex-minister Sergio Moro. The leader and Army Reserve captain once again showed his unconditional support for hundreds gathered in front of the Presidential Palace of Planalto, at a time when the political and institutional crises are joined by the health crisis: the curve of infections and deaths caused by the COVID-19 has soared in the country, according to EFE News. As reported in the Troubled Company Reporter-Latin America on May 8, 2020, Fitch Ratings has affirmed Brazil's Long-Term Foreign Currency Issuer Default Rating at 'BB-' and has revised the Rating Outlook to Negative. The Outlook revision to Negative reflects the deterioration of Brazil's economic and fiscal outlook, and downside risks to both given renewed political uncertainty, including tensions between the executive and congress, and uncertainty over the duration and intensity of the coronavirus pandemic. On April 10, 2020, the TCR-LA reported that S&P Global Ratings revised on April 6, 2020, its outlook on its long-term ratings on Brazil to stable from positive. At the same time, S&P affirmed its 'BB-/B' long- and short-term foreign and local currency sovereign credit ratings. S&P also affirmed its 'brAAA' national scale rating and its transfer and convertibility assessment of 'BB+'. The outlook on the national scale rating remains stable. EMBRAER SA: Egan-Jones Lowers Sr. Unsec. Debt Ratings to BB- ------------------------------------------------------------ Egan-Jones Ratings Company, on April 29, 2020, downgraded the foreign currency and local currency senior unsecured ratings on debt issued by Embraer SA to BB- from BB. Headquartered in Sao Jose dos Campos, State of Sao Paulo, Brazil, Embraer S.A. is a Brazilian aerospace conglomerate that produces commercial, military, executive and agricultural aircraft and provides aeronautical services. EMBRAER SA: Hires Advisers to Help with Talks for Support --------------------------------------------------------- Tatiana Bautzer and Carolina Mandl at Reuters report that at least two Brazilian airlines and planemaker Embraer SA have hired investment banks to help with talks with state development bank BNDES for government support, sources with knowledge of the matter said. Embraer has hired Itau BBA, the investment banking unit of Itau Unibanco Holding SA (ITUB4.SA), two sources said, according to Reuters. Embraer is seeking credit lines between $1 billion and $1.5 billion after a deal with Boeing Co (BA.N) fell through, the report relays. Brazilian newspaper O Estado de S. Paulo reported earlier that Embraer hired Itau BBA. Itau BBA is also advising airline Azul SA (AZUL.N) on negotiations with BNDES, two people with knowledge of the matter said. Azul confirmed the hiring of Itau BBA, saying it was suggested by BNDES, the report relays. Azul had previously hired restructuring specialists for talks with its creditors, including banks, suppliers and lessors of its planes, the report discloses. All payments were suspended. Restructuring boutique Galeazzi & Associados is leading the restructuring work at Azul, the report says. Santiago-based Latam Airlines Group SA (LTM.SN) has retained investment bank Banco BTG Pactual SA (BPAC3.SA) as adviser on talks with BNDES, two of the sources added, mainly focused on discussing on the convertible debt equation, the report relays. Latam Airlines confirmed the hiring of BTG Pactual. BNDES is expected to finish negotiations with airlines and Embraer this month for a rescue package that may reach $2.5 billion, the report notes. Most of it is likely to be provided by BNDES, as private lenders have been resisting extending loans to airlines, an industry in which their current exposure is small, two sources said, the report discloses. BNDES was initially considering extending loans to airlines equivalent to half of the amount they require, which is around $2 billion, with the remaining part provided by Brazil's largest lenders, such as Banco Bradesco SA, Itau Unibanco Holding SA and Banco Santander Brasil SA. Banks, however, rejected the plan and all parties are trying to reach an agreement, the report discloses. BNDES's support package to airlines will mix credit lines with convertible instruments that may give the bank a stake in the companies, the report adds. About Embraer SA Headquartered in Brazil, Empresa Brasileira de Aeronautica SA (Embraer) -- http://www.embraer.com-- is a company engaged in the manufacture of aircrafts for commercial aviation, executive jet and defense and government purposes. The Company has developed a line of executive jets based on one of its regional jet platforms and launched executive jets in the entry-level, light, ultra-large and mid-light/mid-size categories, the Phenom 100/300 family, the Lineage 1000 and the Legacy 450/500 family, respectively. The Company supplies defense aircraft for the Brazilian Air Force based on number of aircraft sold, and sells aircraft to military forces in Europe, Asia and Latin America. In July 2008, the Company acquired a 40% interest owned by Liebherr Aerospace SAS in ELEB?Equipamentos Ltda (ELEB). ELEB is an aerospace system and component manufacturer, and its products include landing gear systems, hydraulics and electro-mechanical sub-assemblies, such as actuators, valves, accumulators and pylons. * * * As reported in the Troubled Company Reporter-Latin America on May 6, 2020, Moody's Investors Service downgraded its ratings for Embraer S.A. and its subsidiaries (Embraer Overseas Limited and EmbraerNetherlands Finance BV; collectively "Embraer"), including the company's corporate family rating and senior unsecured debt ratings (each to Ba2 from Ba1). The ratings outlook is negative. On Feb. 2, 2010, the TCR-LA reported that Bloomberg News said Embraer expects its shareof the global market for regional jets seating as many as 120 passengers to fall to 40% from 54% within five years. According to a TCRLA report on Feb. 23, 2009, citing Bloomberg News, Embraer would lay off around 4,200 workers, which represents 20% of its 21,362 employees, and reduced its 2009 revenue forecast by 13% due to the global recession. PRUMO PARTICIPACOES: Fitch Affirms LT Rating at BB, Outlook Neg. ---------------------------------------------------------------- Fitch Ratings has revised the Rating Outlook on Prumo Participacoes e Investimentos S.A.'s USD350 million senior secured notes to Negative from Stable and affirmed the Long-Term Rating at 'BB'. RATING RATIONALE The Outlook revision follows the corresponding Outlook revision on Brazil's Long-Term Foreign-Currency Issuer Default Rating of 'BB-' to Negative from Stable. Brazil's Outlook revision to Negative reflects the deterioration of Brazil's economic and fiscal outlook, and downside risks to both given renewed political uncertainty, including tensions between the executive and congress, and uncertainty over the duration and intensity of the coronavirus pandemic. KEY RATING DRIVERS Prumopar's rating reflects its stable cash flow, derived from distributions from Ferroport Logistica Comercial Exportadora S.A. Ferroport benefits from a long-term, take-or-pay agreement with a creditworthy counterparty and is a strategic asset for Anglo American plc as the sole export terminal for the iron ore produced by its Brazilian subsidiary's mines in Minas Gerais state. Revenues as well as the debt service are linked to U.S. dollars, while operational expenses are linked to Brazilian reais, exposing the transaction to BRL appreciation. The notes have fixed rate and include a balloon payment for up to 51.6% of total debt at maturity in 2031. Refinancing risk is partially mitigated by cash sweep provisions, that reduce the balloon payment to 20.8% of total debt (USD 72.8 million), and an eight-year ToP tail in Fitch's Rating Case. The transaction has a minimum Project Life Coverage Ratio of 1.3x. Peak leverage, measured by net debt over cash flow available for debtsService, is 8.3x in 2020. Credit metrics are somewhat strong for the assigned rating level, according to Fitch's applicable criteria. The rating is constrained, however, by Brazil's country ceiling, Ferroport's short track record of operations without disruption, and by a residual exposure to foreign exchange risk. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Achievement of the target amortization schedule in a sustained basis; -- Favorable track record of operations without disruption; -- A Positive Rating Action on Brazil's Sovereign Rating. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Outstanding debt balance of USD321 million or higher by December 2021. -- Operational disruption negatively impacting the cash flows; -- A Negative Rating Action on Brazil's Sovereign Rating. BEST/WORST CASE RATING SCENARIO International scale credit 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. 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 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(ies), either due to their nature or to the way in which they are being managed by the entity(ies). [*] Fitch Alters 16 Brazilian FIs' LT IDR Outlooks to Negative -------------------------------------------------------------- Fitch Ratings has taken various rating actions on the following Brazilian financial institutions: -- Banco da Amazonia S.A. (BdA) -- Banco do Brasil S.A. (BdB) -- Banco do Nordeste do Brasil S.A. (BNB) -- Banco Nacional de Desenvolvimento Economico e Social (BNDES) -- Caixa Economica Federal (Caixa) -- Banco Bradesco S.A. (Bradesco) -- NCF Participacoes S.A. (NCF) -- Itau Unibanco Holding S.A. (IUH) -- Itau Unibanco S.A. (Itau Unibanco) -- Banco BOCOM BBM S.A. (BOCOM BBM) -- Banco ABC Brasil S.A. (ABC Brasil) -- Banco BTG Pactual S.A. (BTG Pactual) -- PPLA Investments LP (PPLA) -- BTG Pactual Holding S.A. (BTGH) -- Banco Pan S.A. (Pan) -- XP Investimentos S.A. (XPI) For the entities that have outstanding international-scale ratings, Fitch has revised the rating outlook on their Long-Term Issuer Default Ratings to Negative from Stable, while affirming these and all other ratings. National scale ratings of these entities have also been affirmed and the long-term Outlooks for these ratings remain stable, since Fitch believes that these entities are less likely to be affected by potential changing local relativities of creditworthiness within Brazil, either because of their stand-alone financial profile or external support considerations. KEY RATING DRIVERS The rating actions follow Fitch's recent revision of the Outlook for Brazil's sovereign ratings to Negative from Stable. Issuers reviewed can be categorized in three groups: 1) Issuers whose Issuer Default Ratings are driven by sovereign support (BNDES, Caixa, BdB, BNB and BdA) where the federal government is the shareholder and the source of expected support; 2) Issuers whose IDRs are driven by their Viability Ratings (VRs) or stand-alone credit profiles (Bradesco, IUH, BTG Pactual and XPI) and entities which ratings are linked to these issuers (NCF, Itau Unibanco, Pan, BTGH and PPLA); 3) Issuers whose IDRs are driven by issuers whose parents are rated above to the sovereign rating (BOCOM BBM and ABC Brasil). For the first group of issuers, their IDRs are equalized with the sovereign rating based on their strategic importance to the government as an economic policy tool (BdA, BNDES and BNB) and/or their systemic importance (BdB, Caixa and BNDES). As such, Fitch continues to align these ratings with the sovereign ratings, and revised their Outlooks to Negative from Stable, mirroring the Sovereign's rating long-term Outlook. Fitch recognizes the close relationship between these banks and the sovereign, and their ratings capture a high probability of support from the federal government in case of need, as reflected in the affirmation of their Support Ratings at '3' and Bank´s Support Rating Floors at 'BB-'. The second group includes domestic issuers with strong credit profiles (Bradesco, IUH, BTG Pactual and XPI), whose ratings are derived from their intrinsic creditworthiness as well as entities whose ratings derive from these parents (or from the main operational entities of its respective groups) such as NCF, Itau Unibanco, Pan, BTGH and PPLA. While the ultimate economic and financial market implications of the coronavirus pandemic are unclear, Fitch considers the already deteriorated and challenging operating environment to be clearly skewed to the downside, which has driven the revision of the operating environment mid-point score's (currently at 'b+') Outlook to Negative from stable. Fitch's assessment of the operating environment has a direct influence and a high importance on these institutions' ratings. As such, Fitch revised their Outlooks to Negative from Stable. In Fitch's opinion, the spread of the coronavirus will test the resilience of these Brazilian banks' financial profiles, as they are likely to experience deteriorating asset quality and profitability. Fitch still believes that Bradesco and Itau Group's credit profiles meet the criteria to be rated above the sovereign ratings, given their diverse and stable funding, strong capitalization, diverse business mix, strong and well-matched funding, strong loan loss reserves and robust capital. In addition, Fitch recognizes their solid franchises, efficient management and strategy and conservative risk appetite along economic cycles. Nevertheless, few banks in Latin America remain rated above its respective sovereign. Due to the global scenario of quick economic deterioration, the potential rating impact on these entities will depend on the length and severity of measures to reduce the spread of the pandemic on their credit metrics. The IDRs of the banks in the third group (BOCOM BBM and ABC Brasil) are driven by the expected support from their respective shareholders. The revision of Brazil's Sovereign Outlook to Negative from Stable does not directly affect the ability or the propensity of these banks' respective shareholders to provide support. However, it affects the Outlook of their Long-Term Foreign Currency IDRs − that are at the country ceiling − and the Outlook of its Long-Term Local Currency IDRs - that are two notches above of the Local Currency IDR of the sovereign. These are the highest levels Fitch would normally rate a bank above the sovereign due to external support. Fitch revised the Outlooks on these two entities' Long-Term Foreign Currency and Local Currency IDRs to Negative from Stable, to reflect that these ratings would likely mirror a downgrade of Brazil's sovereign rating or country ceiling, in order to maintain the uplift above those ratings unchanged. RATING SENSITIVITIES Factors that could, individually or collectively, lead to negative rating action/downgrade: IDRs BdA, BdB, BNB, BNDES and Caixa's IDRs- reduced ability and / or propensity from the sovereign to support these entities, which is not currently under Fitch's expectations. They would be affected by further changes in the sovereign ratings or Outlooks and/or in the government's willingness to provide support; IUH, Bradesco, BTG Pactual 's IDRs are driven by their VRs and would be affected by further downward adjustments on Fitch's assessment of the operating environment faced by Brazilian banks (currently on Negative Outlook. BTGH: Changes in BTG Pactual's IDRs would affect BTGH's IDRs, too. An increase in the holding's double leverage ratio to more than 120% or the deterioration of its debt service indicators would affect BTGH's ratings negatively; PPLA: Changes in BTG Pactual's IDRs would affect the ratings of PPLA. PPLA's ratings may also be downgraded if Fitch has reason to believe either that BTGH's capacity or propensity for support has been reduced or if the agency sees a reduction in integration (managerial, operational and/or on balance sheet) between BTG Pactual and PPLA. In addition, a material deterioration of PPLA's financial profile, with sustained losses and/or a significant increase of its leverage levels, may hinder BTG Pactual's overall financial profile, leading to a rating downgrade; BOCOM BBM and ABC Brasil's Foreign Currency IDRs are at Brazil's Country Ceiling and their Local Currency IDRs are currently two notches above the sovereign ratings. Therefore, any further changes in the Country Ceiling or Sovereign ratings would directly affect these three banks' ratings. For this group, a significant weakening of the ability and/or propensity of parent banks to provide support (not expected by Fitch at present) could also result in downgrades of the subsidiaries' ratings; Banco Pan's IDRs will depend on Fitch's opinion on the ability and propensity of its main shareholders (Caixa and BTG) to provide support in case of need. In the case of lack/reduced of support, Fitch will review Pan on its VRs; National Scale Ratings Potential downgrades in National Scale Ratings for the banks in this portfolio review depend on the evolution of its local relativities within the challenging economic scenario. Support Ratings and SRFs: If Brazil's sovereign rating is downgraded to the Single-B category, the Support Rating for all the banks where this rating is driven by the ability and propensity of the sovereign to support them, would be downgraded to '4' from '3'. Their SRFs, where applicable, would also be lowered to a level that is not higher than the resulting sovereign rating; Reductions in SRs (in the cases of BOCOM BBM, ABC Brasil, Pan and PPLA) are subject to the downgrade of Brazil's sovereign or on the downgrade of the parent; Bradesco and IUH's SR and SRF are sensitive to changes in Fitch's assessment about the ability and / or propensity of the sovereign to provide timely support to the bank. Debt Ratings: Downgrades on debt ratings listed in this RAC will depend on downgrades of the VRs or IDRs of the entities, given that these are the ratings that serve as anchor ratings for issuances. VRs BdB´s VR: BdB's VR would be negatively affected if its FCC ratio falls below 9% and/or its regulatory capital ratios to approach the minimum requirements, due to a combination of asset quality deterioration, weakening of profitability or higher than expected growth. IUH's VR could be downgraded if the bank's loss absorption capacity diminishes, leading to a decline in its FCC ratio to below 11% or if there is a sustained decrease in its operating profits/risk weighted assets ratio to below 3.0%; Bradesco's VR may be adversely affected if its loss-absorbing capacity decreases, if there is a sustained reduction of the FCC to less than 11% and a decline in the provision for losses in relation to current levels. An operating profits/risk weighted assets ratio of below 3.0% may also lead to a downgrade of the bank's ratings; BTG PACTUAL´s VR may be downgraded in the event of a marked deterioration in its profitability indicators, such as Operating Profit/RWA below 1.5% and/or if the Fitch Core Capital Ratio falls to less than 13%. Factors that could, individually or collectively, lead to positive rating action/upgrade The revision of the Outlook of the Long-term IDRs of the banks covered in this commentary reflects the potential for them to be downgraded in case Brazil's sovereign ratings are downgraded and the Country Ceiling is lowered. Given the current Negative Outlook on most of the ratings and the high influence of the operating environment factor (with a current Negative Outlook) in its VRs, there are limited chances for possible upgrades for the entities subject of this review; Over the medium term, the ratings could benefit from stabilization and eventual improvement of Fitch's assessment of the operating environment for Brazilian banks. National Scale Ratings: For all group of banks (except for Itau Unibanco, IUH, Bradesco, BOCOM BBM and ABC Brasil, that are in the highest National Scale ratings), National Scale ratings upside depends on the improvement of its local relativities, which is limited now due the challenging economic scenario. Support Ratings and SRFs: Improvements in SRs (and also SRFs for banks with sovereign support) are dependent on the upgrade of Brazil's sovereign or on the upgrade of the parent (in the cases of BOCOM BBM and ABC Brasil); Bradesco and IUH's SR and SRF are sensitive to changes in Fitch's assessment about the ability and / or propensity of the sovereign to provide timely support to the ban; An upgrade of BTG Pactual Support Rating and Support Rating Floor is unlikely in the foreseeable future, as this would result from a material gain of systemic importance. Debt Ratings Upgrades on debt ratings listed in this RAC will depend on upgrades of the VRs or IDRs, given that these are the ratings that serve as anchor ratings for issuances. VRs BdB's VR would be reviewed in the case of a change in Fitch's assessment of the operating environment for Brazilian banks, but currently has a limited upside potential, as it captures operating environment constraints; BTG, Bradesco and IUH´s VRs have a limited upside potential, as they capture constraints by its operating environment. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Financial Institutions 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 four 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. 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 Banco BTG Pactual S.A.: 4.2; Management Strategy: 4, Group Structure: 4 Bdb has an environmental, social and governance Relevance Score of 4 for Governance Structure due to its state-owned nature that increases potential political interference risks, which in turn has a negative impact on the credit profile and is relevant to the ratings in conjunction with other factors. Banco do Brasil S.A.: 4; Governance Structure: 4 BTG has an environmental, social and governance Relevance Score of 4 for Group Structure due its relatively complex organization structure and 4 for Management and Strategy because execution lacked consistency with stated strategic objectives in the past. These scores have a negative impact on the credit profile and is relevant to the ratings in conjunction with other factors. Except for the matters discussed above, the highest level of ESG credit relevance, if present, is a score of 3 - ESG issues are credit neutral or have only a minimal credit impact on the entity(ies), either due to their nature or the way in which they are being managed by the entity(ies). Itau Unibanco Holding S.A. - LT IDR BB; Affirmed - ST IDR B; Affirmed - LC LT IDR BB; Affirmed - LC ST IDR B; Affirmed - Natl LT AAA(bra); Affirmed - Natl ST F1+(bra); Affirmed - Viability bb; Affirmed - Support 4; Affirmed - Support Floor B+; Affirmed - Subordinated; LT B+; Affirmed - Senior unsecured; LT BB; Affirmed - Subordinated; LT B; Affirmed Banco ABC Brasil S.A. - LT IDR BB; Affirmed - ST IDR B; Affirmed - LC LT IDR BB+; Affirmed - LC ST IDR B; Affirmed - Natl LT AAA(bra); Affirmed - Natl ST F1+(bra); Affirmed - Support 3; Affirmed Banco BTG Pactual S.A. - LT IDR BB-; Affirmed - ST IDR B; Affirmed - LC LT IDR BB-; Affirmed - LC ST IDR B; Affirmed - Natl LT AA(bra); Affirmed - Natl ST F1+(bra); Affirmed - Viability bb-; Affirmed - Support 5; Affirmed - Support Floor NF; Affirmed - Senior unsecured; LT BB-; Affirmed - Subordinated; LT B; Affirmed PPLA Investments LP - LT IDR B+; Affirmed - LC LT IDR B+; Affirmed - Support 4; Affirmed Banco da Amazonia S.A. - LT IDR BB-; Affirmed - ST IDR B; Affirmed - LC LT IDR BB-; Affirmed - LC ST IDR B; Affirmed - Natl LT AA(bra); Affirmed - Natl ST F1+(bra); Affirmed - Support 3; Affirmed - Support Floor BB-; Affirmed Banco do Nordeste do Brasil S.A. - LT IDR BB-; Affirmed - ST IDR B; Affirmed - LC LT IDR BB-; Affirmed - LC ST IDR B; Affirmed - Natl LT AA(bra); Affirmed - Natl ST F1+(bra); Affirmed - Support 3; Affirmed - Support Floor BB-; Affirmed Banco BOCOM BBM S.A. - LT IDR BB; Affirmed - ST IDR B; Affirmed - LC LT IDR BB+; Affirmed - LC ST IDR B; Affirmed - Natl LT AAA(bra); Affirmed - Natl ST F1+(bra); Affirmed - Support 3; Affirmed Banco Pan S.A. - LT IDR B+; Affirmed - ST IDR B; Affirmed - LC LT IDR B+; Affirmed - LC ST IDR B; Affirmed - Natl LT A(bra); Affirmed - Natl ST F1(bra); Affirmed - Support 4; Affirmed Banco do Brasil S.A. - LT IDR BB-; Affirmed - ST IDR B; Affirmed - LC LT IDR BB-; Affirmed - LC ST IDR B; Affirmed - Natl LT AA(bra); Affirmed - Natl ST F1+(bra); Affirmed - Viability bb-; Affirmed - Support 3; Affirmed - Support Floor BB-; Affirmed - Senior unsecured; LT BB-; Affirmed Banco Bradesco S.A. - LT IDR BB; Affirmed - ST IDR B; Affirmed - LC LT IDR BB; Affirmed - LC ST IDR B; Affirmed - Natl LT AAA(bra); Affirmed - Natl ST F1+(bra); Affirmed - Viability bb; Affirmed - Support 4; Affirmed - Support Floor B+; Affirmed - Subordinated; LT B+; Affirmed Caixa Economica Federal - LT IDR BB-; Affirmed - ST IDR B; Affirmed - LC LT IDR BB-; Affirmed - LC ST IDR B; Affirmed - Natl LT AA(bra); Affirmed - Natl ST F1+(bra); Affirmed - Support 3; Affirmed - Support Floor BB-; Affirmed - Senior unsecured; LT BB-; Affirmed Banco Nacional de Desenvolvimento Economico e Social (BNDES) - LT IDR BB-; Affirmed - ST IDR B; Affirmed - LC LT IDR BB-; Affirmed - LC ST IDR B; Affirmed - Natl LT AA(bra); Affirmed - Natl ST F1+(bra); Affirmed - Support 3; Affirmed - Support Floor BB-; Affirmed - Senior unsecured; LT BB-; Affirmed BTG Pactual Holding S.A. - LT IDR BB-; Affirmed - ST IDR B; Affirmed - LC LT IDR BB-; Affirmed - LC ST IDR B; Affirmed - Natl LT AA(bra); Affirmed - Natl ST F1+(bra); Affirmed - Support 5; Affirmed - Support Floor NF; Affirmed Itau Unibanco S.A. - LT IDR BB; Affirmed - ST IDR B; Affirmed - LC LT IDR BB; Affirmed - LC ST IDR B; Affirmed - Natl LT AAA(bra); Affirmed - Natl ST F1+(bra); Affirmed - Viability bb; Affirmed - Support 4; Affirmed - Support Floor B+; Affirmed NCF Participacoes S.A. - Natl LT AA+(bra); Affirmed - Natl ST F1+(bra); Affirmed - Senior unsecured; Natl LT AA+(bra); Affirmed XP Investimentos S.A. - Natl LT AA(bra); Affirmed - Natl ST F1+(bra); Affirmed - Senior unsecured; Natl LT AA(bra); Affirmed =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: Economy Can't Be Rushed, Business Council Warns ------------------------------------------------------------------- Dominican Today reports that National Business Council (Conep) president Pedro Brache, warned that "the economy cannot be rushed" and should be reopened when there is a sanitary protocol. He said despite the urgency, it must be understood that the population's health comes first, according to Dominican Today. Brache added that there should be a protocol that safeguards people's health, the report relays. "We believe that everything has to be done taking care of the health and well-being of Dominicans first, so nothing can be rushed," he added. 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 in April 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. On April 16, 2020, S&P Global Ratings revised its outlook on the long-term ratings on the Dominican Republic to negative from stable. At the same time, S&P affirmed its 'BB-/B' long- and short-term foreign and local currency sovereign credit ratings. The transfer and convertibility (T&C) assessment is unchanged at 'BB+'. 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: Fitch Affirms BB- LT IDR, Alters Outlook to Neg ------------------------------------------------------------------- Fitch Ratings has affirmed the Dominican Republic's Long-Term Foreign-Currency Issuer Default Rating at 'BB-' and revised the Outlook to Negative from Stable. KEY RATING DRIVERS The Coronavirus pandemic led to a sharp fall in economic activity and exerted balance of payments pressures on the Dominican Republic given its reliance on tourism and remittances. The fiscal and monetary response will exacerbate pre-existing public-finance and monetary-policy weaknesses and lead to a deterioration of the government balance sheet. Prospects for renewed fiscal consolidation and policy reforms are uncertain given the potential outcome of the 2020 congressional and presidential elections. Downside risks to the economy and its forecasts are considerable given the uncertainty about the pandemic. The main sources of current account external receipts will decline in 2020, leading the current account deficit to widen to USD3.7 billion (4.6% of GDP) in 2020 (from 1.3% of GDP in 2019), broadly in line with the projected current 2020 'BB' median (4.7% of GDP). Fitch expects large declines in tourism receipts (negative 50% change yoy) and remittances (negative 20% yoy), which represented 8.3% and 7.9% of GDP, respectively, and collectively 48% of CXR in 2019. However, lower demand together with lower oil prices will also lead to a steep fall in goods imports (negative 17% yoy) in 2020, which mitigates the deterioration in the current account. As a result of the sharp fall in key FX-producing sectors and the lockdown measures, Fitch expects the Dominican economy to contract by 3.5% in 2020, down sharply from the high 6.1% yoy average in the preceding five years. Fitch expects a 5.6% rebound in 2021. The forecast assumes the economy progressively emerges from lockdown during May and June and hotels open by August. To support the economy, the Central Bank of the Dominican Republic provided monetary stimulus of up 3.4% of GDP, and the government announced 0.7% of GDP in government transfers to vulnerable households and wage-support payments to business in March. The government also further promised in April an economic reactivation package to kick start business, but no specific measures or financing plans have been announced yet. In its projections, Fitch assumes fiscal stimulus measures worth 1% of GDP. Official sources will help the Dominican Republic meet higher external financing needs, but may still leave a financing gap that would be bridged from reserves. BCRD received a USD650 million Rapid Financing Instrument disbursement from the IMF in late April, available for either monetary or budgetary purposes. BCRD is in talks with two additional official institutions for external liquidity facilities of approximately USD450 million and USD1 billion-USD3 billion, respectively to address balance of payments pressures from the weaker current account, lower foreign investment inflows, and increased peso liquidity resulting from the monetary and fiscal stimuli. International reserves fell by 16% (USD1.7 billion) to USD8.7 billion at the end of April 2020 since the government's USD2.5 billion issuance in January, as BCRD made net FX sales. Monthly outflows averaged USD589 million during February-April 2020 versus positive average inflows of USD76 million during the same period in 2019. International reserves/M2 was 0.4x at the end of April, consistent with December 2019 and starting stronger than previous stress periods in 2013, 2009-2010, and 2003. The trajectory of reserves will depend on the level and timing of external financing inflows and potentially private capital outflows. The Dominican peso depreciated relative to the U.S. dollar, 8.0% yoy in April 2020, at the fastest rate since mid-2013, following the U.S. Taper Tantrum. A faster pace of central bank FX sales could pressure the managed exchange rate if external pressures intensify. The prominence of the DOP-USD exchange rate in public inflation expectations, the large share of FX-denominated government debt amid a partially dollarized economy (one-quarter of deposits are foreign currency [FC]-denominated) and the central bank's large negative equity position (market securities liabilities totaled 13.7% of GDP in April) constrain the effectiveness of monetary policy. Increased peso liquidity from the monetary stimulus absent external liquidity disbursements to (partially) sterilize could generate further depreciation pressure on the peso and trigger resident capital draining international reserves. Fitch estimates USD3.8 billion private and public external debt service in 2020, USD2.5 billion of which is nonfinancial public-sector that the government pre-financed in January. Additionally, nonresidents hold USD1.3 billion of local securities, mainly Treasury notes, which Fitch assumes remain stable. Gradual improvement in some of the Dominican Republic's external finance factors supports the baseline expectation in its rating affirmation that the Dominican Republic could weather the coronavirus shocks at the current rating level despite the downside risks. The country's current external receipts materially diversified over the past decade and are less concentrated than many tourism-dependent peers. The Dominican Republic's international liquidity ratio was adequate at 178% for 2019. External debt service/CXR of 12.3% was at the current 'BB' median in 2019 and the external NFPS debt-amortization profile is smooth, supported by active debt management. Fitch expects external debt service/CXR to rise toward roughly 16.5% of CXR in 2020. The Dominican Republic's net external debt was high at 119% of CXR in 2019, prior to the pandemic, although it is in line with the current 'BB' median. The Dominican banking system entered the coronavirus shock with supportive capitalization (11.6% tangible common equity to tangible assets, according to Fitch's financial institution analysis); firm profitability (15.9% return on average equity); low impaired loans (1.6% of gross loans), which were fully provisioned (176% coverage); and adequate liquidity as of December 2019. A larger stock of FC deposits than FC credits, and strengthened regulation and capital requirements since the 2003 banking crisis reduce its currency mismatch risks. In response to the coronavirus, BCRD cut its policy rate by 100bps to 3.5%, provided regulatory flexibility to the banks and provided financial institutions facilities for business support. Fitch continues to monitor the health of the financial system in view of the downside risks to the economy and asset quality. Fitch expects the general government deficit to rise to 7.1% of GDP in 2020 due to the drop in tax revenues and newly announced spending measures to combat the coronavirus pandemic and support economic recovery. The government budgeted a central government deficit of 2.5% of GDP for 2020. In addition to this, Fitch projects a 2% of GDP tax revenue decline -- domestic tax revenues fell 12.7% yoy in March 2020, exacerbating the constraint of low overall government revenues; they were 14.4% of GDP in 2019. On the spending side, there are government transfers during April and May totaling 0.7% of GDP, then business reactivation measures Fitch estimates at 1% of GDP, and the other small NFPS deficit that it consolidates. Fitch forecasts the general government deficit will decline to 3.1% of GDP in 2021 as tax revenues gradually normalize and coronavirus-related spending fades in 2H20. However, the rising interest bill will stymie further automatic reduction. Fitch estimates the interest/revenue ratio at 22.5% in 2020, more than double the projected current 'BB' median of 9.0%. General government debt/GDP is forecast to rise to 53.3% of GDP in 2020 -- slightly below the current 'BB' median of 58.4%, which is also rising -- up from 41.7% in 2019. The jump reflects the higher borrowing requirement (7.8% of GDP excluding amortizations) and assuming the pace of peso depreciation is sustained (12% forecast yoy, causing 3.7% of GDP debt increase). Government arrears payments (1.0% of GDP as budgeted) and recurrent electricity utility losses will further pressure debt dynamics. General government debt/GDP rose 3.6 percentage points (pp) in 2019, 1.3pp more than the general government deficit of 2.3% of GDP, as a result of supplier arrears payments, the government's absorption of USD250 million of FC-denominated public electricity utility debt in December 2019 and peso depreciation. Contingent liabilities from BCRD's large, rising market debt (12.8% of GDP at December 2019) remain structural concerns as quasi-fiscal losses increase future recapitalization needs. Consolidated public-sector debt of the NFPS and BCRD was 52.1% of GDP in 2019, according to MHCP and BCRD published data. This figure encompasses fewer institutions than its July 2019 estimate, which was partially based on unpublished data. The debt ratio is sensitive to currency movements, as two-thirds of government debt is denominated in U.S. dollars and other foreign currencies. Fitch estimates an external financing gap of USD2.03 billion for 2020 (2.6% of GDP) that Fitch expects will largely rely on multilateral financing. Absent the coronavirus shock, the USD2.5 billion January issuance would have covered the external market needs this year, including the government's external market debt service. The first, USD635 million round of fiscal stimulus was financed by USD261 million from the domestic labor risk fund, USD150 million from the World Bank and a USD224 million short-term facility from BCRD, permitted by its charter, that will have to be refinanced by YE. To finance the reactivation program and revenue shortfall, the government sought multilateral and bilateral credits. The government has a USD90 million credit pending for disbursement. In addition to potential access to bilateral credit, the Dominican Republic has a sizable borrowing envelope available from multilaterals, which Fitch expects would be sufficient to cover forecast external financing needs. Timing the mobilization of these resources is sensitive to the institutions' negotiation and approval processes amid a likely elevated volume of borrower requests. If a financing gap persists, Fitch expects the government would go to the capital market, likely after the presidential and congressional elections on July 5 (a second round, if necessary, would occur on July 26). The sovereign retains market access, although yields on the Dominican Republic's external USD bonds have risen substantially since January. Polls in February and April indicate that Luis Abinader, candidate of the Modern Revolutionary Party and allied parties who has a firm lead over the official Dominican Liberation Party nominee Gonzalo Castillo, is likely to win July's presidential elections in the first round (Economic Center of Cibao, April: Abinader 53.4% v Castillo 23.7%; Greenberg/Diario Libre, February: Abinader 52% v Castillo 24%). This is expectation was reinforced by the PRM's strong results in the March municipal elections. Current President Danilo Medina (2012-2020, PLD) did not seek a constitutional amendment to enable a third consecutive term in July 2019. Former President Fernandez alleged fraud in the PLD primary in October 2019, which split the party, and municipal polls were postponed to March from February due to electronic voting problems, pointing to potential governability risks surrounding July's vote, which was delayed from May as a social distancing measure. Fitch expects macro policy continuity. However, in Fitch's view, prospects for three key stalled reforms -- public finances, central bank recapitalization (although the executive submitted a proposal to congress), and electricity utility losses -- are uncertain depending on the extent to which the next president will need to balance interest groups in the likely more diversified congress. ESG - Governance: Dominican Republic has an ESG Relevance Score (RS) 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. The Dominican Republic has a medium WBGI ranking at the 42nd percentile, reflecting a recent track record of peaceful political transitions, a moderate level of rights for participation in the political process, moderate institutional capacity, established rule of law and a moderate level of corruption. SOVEREIGN RATING MODEL AND QUALITATIVE OVERLAY Fitch's proprietary SRM assigns the Dominican Republic a score equivalent to a rating of 'BB' on the Long-Term Foreign-Currency 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: -- Public finances: -1 notch, to reflect weaknesses in the fiscal structure owing to low revenues and rigidity of large current expenditures; and material contingent liabilities from ongoing financial losses of public utilities and the large market debt of the central bank. 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 negative rating action/downgrade: -- External financing constraints, such as limited external multilateral disbursements or loss of capital market access, or private capital outflows that contribute to international reserve drain; -- Weaker medium-term growth prospects; for example, a prolonged slump in tourism, remittance or manufactured export receipts that undermines CXR growth or weak business recovery that hampers economic performance in 2021-2022; -- Deterioration of the government debt dynamics; for example, as a result of increased post-crisis budget deficits, weaker growth or crystallization of contingent liabilities. Factors that could, individually or collectively, lead positive rating action/upgrade: -- Reduction of external liquidity pressures; for example, through timely external financing actions and abatement of coronavirus-related pressures on tourism, remittance and manufactured export receipts; -- Policy reforms that strengthen public and external finances; for example, government and electricity system reforms that reduce total and external borrowing needs and lead to stabilization or reduction of the government debt burden; -- Entrenchment of the central bank's inflation-targeting regime resulting in greater monetary policy credibility and effectiveness. BEST/WORST CASE RATING SCENARIO International scale credit 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 Fitch expects global economic trends and commodity prices to develop as outlined in Global Economic Outlook: Crisis Update Late April 2020 - Coronavirus Recession Unparalleled published April 22, 2020. 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 The Dominican Republic 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 highly relevant to the rating and a key rating driver with a high weight. The Dominican Republic has an ESG Relevance Score of '5' for Rule of Law, Institutional & Regulatory Quality and Control of Corruption, 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. The Dominican Republic has an ESG Relevance Score of '4' for Human Rights and Political Freedoms, as strong social stability, and voice and accountability are reflected in the World Bank Governance Indicators that have the highest weight in the SRM. They are relevant to the rating and a rating driver. The Dominican Republic has an ESG Relevance Score of '4' for Creditor Rights, as willingness to service and repay debt is relevant to the rating and is a rating driver for the U.S., as for all sovereigns. The Dominican Republic has an ESG Relevance Score of '4' for Energy Management, as the inefficiency of the fossil-fuel-intensive national electricity system is a rating driver affecting Dominican Republic's public financial performance. The Dominican Republic has an ESG Relevance Score of '4' for Human Development, Health and Education, as managing the impact of the coronavirus crisis is having an adverse impact on public finances, which is relevant to the rating and a rating driver. 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(ies), either due to their nature or to the way in which they are being managed by the entity(ies). DOMINICAN REPUBLIC: Gov't. Shouldn't Wage War v. Online Ventures ---------------------------------------------------------------- Dominican Today reports that instead of trying to wage a "holy war" against online ventures, wanting to block international platforms that some define as "monopolistic," the government should not go against something that is working and adding value to the Dominican public, said technological entrepreneur Arturo Lopez Valerio. Mr. Valerio proposed to the actors who make public policies that instead of attacking the "friendly wolves," measures be taken to simplify the processes of creating digital businesses, according to Dominican Today. He said the elements of innovation will always be ahead of any regulation, law, political or economic group, the report notes. That sense of counterweight, "you have to start building it in the communities and you can't hit it all at once," the report relays. The author of the book "#Emprende a guide for ordinary citizens," spoke on La 91.3 FM, where he added that the current market has two main actors: the "friendly wolves" and the "despicable sheep," the report discloses. 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 in April 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. On April 16, 2020, S&P Global Ratings revised its outlook on the long-term ratings on the Dominican Republic to negative from stable. At the same time, S&P affirmed its 'BB-/B' long- and short-term foreign and local currency sovereign credit ratings. The transfer and convertibility (T&C) assessment is unchanged at 'BB+'. 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). ===================== P U E R T O R I C O ===================== CARLOS ROBLES: Has Until May 19 to File Amended Plan & Disclosures ------------------------------------------------------------------ Judge Mildred Caban Flores has ordered debtor Carlos Robles Tile & Stone, Inc. to amend its Disclosure Statement and Plan within 28 days, in order to address creditor ACM CCSC OB VII (Cayman) Asset Company's objection to the Disclosure Statement. A full-text copy of the order dated April 21, 2020, is available at https://tinyurl.com/y97xjl32 from PacerMonitor at no charge. About Carlos Robles Tile & Stone Carlos Robles Tile & Stone, Inc., operates a store that sells tiles, stones and related materials. Its business and office are located at 383 Ave. Cesar Gonzalez, Urb. Eleanor Roosevelt, San Juan, Puerto Rico. Carlos Robles Tile & Stone previously sought bankruptcy protection on March 19, 2015 (Bankr. D.P.R. Case No. 15-02004). Carlos Robles Tile & Stone sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D.P.R. Case No. 18-05145) on Sept. 5, 2018. In the petition signed by Carlos Robles Marin, president, the Debtor disclosed $486,000 in assets and $3,517,613 in liabilities. Judge Mildred Caban Flores presides over the case. The Debtor tapped the Law Offices of Luis D. Flores Gonzalez as its legal counsel. ===================================== T R I N I D A D A N D T O B A G O ===================================== TRINIDAD & TOBAGO: IMF Ready to Assist -------------------------------------- Trinidad Express reports that caricom countries, including T&T, should brace for an economic downturn caused by Covid-19 and the International Monetary Fund (IMF) is on standby to assist. This sobering warning is coming from Maximo Torero Cullen, chief economist and assistant director general of the Food and Agriculture Organisation (FAO), which is a specialised agency of the United Nations, according to Trinidad Express. He was speaking during a webinar meeting, organized by the FAO and the Caricom Secretariat, on enabling agricultural investment in the Caribbean for an effective response and post-Covid-19 recovery, the report notes. Torero-Cullen said significant declines in growth in the major developed countries around the world plus public health restrictions as a result of Covid-19 will seriously impact growth in Caribbean countries, which depend on them for tourism, the report relays. T&T, Guyana and Suriname, which depend on the oil and gas sector, will not be spared either because of declining international prices in those commodities, he said, the report discloses. "There will be a significant problem for Caricom countries in terms of economic activity," the report notes. Torero-Cullen said the significant collapse in tourism will continue for a number of months, the report notes. Tourism can be re-activated if a vaccine for Covid-19 is found, he said, but added, "We know a vaccine will not be available for 12 to 18 months, the report discloses. "Let's assume we find the vaccine by December, the recession will still be there. "We're talking of a recession that will be more than the 12 months we initially talked about," he added. He said the IMF has projected a global drop in GDP to three per cent, which can lead to a drop in GDP growth in Caribbean countries of around 6.2 per cent in 2020, the report notes. He warned if there is a second wave of Covid-19 and GDP growth in Caribbean countries decline by ten per cent, the situation would be critical, the report relays. Data from the IMF indicate that the Washington DC-based institution lent 11 countries in the Western Hemisphere US$3.48 billion between April 14 and May 1, the report discloses. He said a decline in revenue, combined with increasing external debt will affect the Caribbean's capacity to import the food they do daily, the report says. Global undernourishment numbers can jump from 14 million to 18 million, he said, the report relays. Torero-Cullen said the IMF has mechanisms in place to assist countries economically impacted by Covid-19, including the Caribbean, the report notes. He said it was very important for Caricom countries to target their social assistance programs "because it could be very different to what they used to have," the report relays. Farmers also need to be assisted in planting food, he said. Other Caricom officials who spoke at the meeting called for ramped up regional integration, saying intra-regional trade can fill the void left by a lack of imports and exporting capabilities, the report notes. Caricom assistant secretary general, Joseph Cox said there is now renewed impetus for regional integration, the report discloses. Saboto Caesar, agriculture minister in St Vincent and the Grenadines, who is also on the Caricom Agriculture and Food Task Force, noted there are already programs in place to ramp up domestic production, the report relays. He said, however, there are a number of issues to be addressed to facilitate the movement of food intra-regionally, says the report. He strongly believed wealth can be created within the region through intra-regional trade but said marketing intelligence and easier shipping, among other things, need to be addressed, the report adds. =============== X X X X X X X X =============== CARIBBEAN: IMF Predicts 6.2% Contraction of Economy --------------------------------------------------- RJR News reports that the International Monetary Fund (IMF) said a sudden stop in tourism caused by border closures and lockdowns aimed at containing the coronavirus pandemic will cause a 6.2 percent contraction of the Caribbean economy in 2020. This is the deepest recession in over half a century, according to RJR News. In a blog post, the IMF warned that lost output from firms and the high costs associated with managing local outbreaks could worsen the pandemic's financial impact in the Caribbean, while the upcoming hurricane season posed additional risks, the report notes. It said the region has seen massive cancellations of hotel bookings and temporary resort closures, fueling unemployment, and the experience from previous crises suggested that the recovery could be delayed, the report relays. The IMF said a steep drop in commodity prices had lowered exports and fiscal revenues in commodity export countries such as Guyana, Suriname, and Trinidad and Tobago, while energy companies could scale back production plans in anticipation of a weaker demand as global manufacturing activity contracts, the report says. It added that remittances were expected to fall sharply since the United States, Britain and Canada were also in deep recession. Remittances average about 7 percent of the region's economic output, but exceed 15 percent of gross domestic product in Jamaica and Haiti, the report discloses. Meanwhile, the head of the Federal Reserve dashed lingering hopes for a fast rebound from the coronavirus pandemic, saying the U.S. economy could feel the weight of consumer fear and social distancing for a year or more in a prolonged climb from a deepening hole, the report relays. After a two-day policy meeting, Fed Chair Jerome Powell offered no optimistic words about how fast the country might return -- if ever -- to the near-record low unemployment and solid growth of just a few weeks ago, the report notes. In a matter of weeks, the U.S. economy has gone from historically low unemployment to seeing more than 26 million people file for unemployment benefits and the sharpest plunge in activity since the 2007-2009 Great Recession, as authorities across the country shut down large swaths of industry and commerce to slow the spread of the coronavirus, the report adds. ********* 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. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Peter A. Chapman at 215-945-7000. . * * * End of Transmission * * *