/raid1/www/Hosts/bankrupt/TCRLA_Public/200514.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Thursday, May 14, 2020, Vol. 21, No. 97
Headlines
A R G E N T I N A
ARGENTINA: Open to New Debt Offers From Creditors
BUENOS AIRES: S&P Lowers ICR to 'CCC+', Outlook Negative
B E L I Z E
BELIZE: Moody's Cuts Sr. Unsec. Debt Rating to Caa1, Outlook Neg.
B R A Z I L
BRAZIL LOAN I: Fitch Affirms Sr. Sec. Notes at BB-sf, Outlook Neg.
OI S.A.: S&P Lowers Global Scale Issuer Credit Rating to 'B-'
C A Y M A N I S L A N D S
BCP VII: Moody's Cuts CFR & $610MM Loan Rating to 'B3'
C H I L E
CHILE: Requests For Flexible Credit Line From IMF
C O L O M B I A
AVIANCA HOLDINGS: S&P Lowers ICR to 'D' on Chapter 11 Filing
CREDIVALORES: S&P Alters Outlook to Negative & Affirms 'B/B' ICR
D O M I N I C A N R E P U B L I C
DOMINICAN REPUBLIC: Industries Warn Against Reopening 'Chaos'
DOMINICAN REPUBLIC: Mining Law 'Must Attract Foreign Investors'
J A M A I C A
DIGICEL GROUP: Fitch Cuts IDR to 'RD' on Grace Period Expiry
JAMAICA: Coffee Exporters Request Government Assistance
JAMAICA: Removed From US Trade Representative Watch List
V E N E Z U E L A
VENEZUELA: Regime Says Foiled Attack Sought to Assassinate Madurp
X X X X X X X X
LATAM: IDB Says Gains in Tax Revenue Among Countries Under Threat
- - - - -
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A R G E N T I N A
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ARGENTINA: Open to New Debt Offers From Creditors
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Patrick Gillespie, Jorgelina Do Rosario, and Carolina Millan at
Bloomberg News report that Argentina's government said it's open to
new proposals from its creditors to restructure $65 billion in
debt, signaling a greater willingness to negotiate in talks to
avoid another chaotic default.
"We are willing to consider any combination of reduction of
interest, reduction of principal, extension and maturity of grace
period that respects the constraints that define what is
sustainable," Economy Minister Martin Guzman told Bloomberg News in
an interview, two days before a government's offer to bondholders
expires, according to Bloomberg News.
"We are flexible in terms of the combinations of parameters. The
essence is the sustainability," he said, Bloomberg News notes.
Heading into its third year of economic contraction, Argentina is
seeking to renegotiate its dollar and euro-denominated debt held
mostly by foreign bondholders and avoid what it would be its ninth
debt default, Bloomberg News says. Guzman, a 37-year-old,
Ivy-league-educated economist, is leading talks for the government,
which says it can no longer meet its liabilities without hurting
the country's future growth prospects, Bloomberg News discloses.
Large groups of creditors have already rejected Argentina's first
proposal, which includes a 5.4% reduction in principal, a 62% cut
on interest payments and a three-year period before any payments
would be due, Bloomberg News relays. If an agreement isn't reached
by May 22 when a grace period for coupon payments ends, and
Argentina fails to pay, the country will default, Bloomberg News
notes.
During the interview, Guzman disclosed that the government already
made a concession from its original stance on the grace period, the
time when Argentina wouldn't have to make payments to bondholders,
Bloomberg News relays.
"In the original terms that we have submitted, we included a
four-year grace period," Guzman said at his office in downtown
Buenos Aires. "But understanding how critical this was to our
creditors, we have reduced the grace period to three years," he
added.
No Extension
Guzman said that, as things stand, the government won't delay the
May 8 deadline unless there are "new elements" such as a written
proposal from creditors that would justify an extension, Bloomberg
News relates. So far it has only received one such proposal by
asset manager BlackRock Inc. on April 11, which was made public by
the government, Bloomberg News says.
"We are not planning to extend the deadline at this moment," Guzman
said, Bloomberg News relays.
Argentina's bonds due 2117, which have been trading at deeply
distressed levels since August, climbed to a two-week high amid
hope the government and creditors were ironing out possible
revisions to the debt offer, Bloomberg News says. The bonds
extended gains May 7, rising 0.3 cents to 25.67 cents on the
dollar, Bloomberg News says.
The minister also dismissed the notion of a standstill arrangement
whereby negotiations would be shelved until the uncertainty
surrounding the coronavirus pandemic clears, Bloomberg News notes.
"It is not our intention to delay the resolution of the problem,"
Guzman said. "We're in a very uncertain environment and doing
something that moves the problem away will not be effective in
reducing uncertainty," Bloomberg News relates.
Despite its current rejection from bondholders, Argentina's debt
proposal received the backing of Nobel Prize winner Joseph Stiglitz
and some of the world's top economists and academics. Thomas
Piketty, Kenneth Rogoff, Ricardo Hausmann and 135 other economists
wrote an open letter urging creditors to reach an agreement with
the South American nation, Bloomberg News notes.
The letter was led by Stiglitz, who mentored Guzman when he worked
at Columbia University, Bloomberg News relates.
Possible Sweetener
Among the options the government is willing to consider to boost
creditor participation is some kind of sweetener or "value recovery
instrument," as long as it's within the country's debt guidelines,
Guzman added. The government issued so-called GDP warrants during
its 2005 and 2010 restructurings, Bloomberg News notes. The
instruments, which trigger payouts when the economy expands by more
than 3% in a year, paid out in six of their first seven years,
Bloomberg News relays.
This time around, the government is "flexible" with the kind of
instruments that could be designed and included, Guzman said. While
officials initially floated the possibility, they didn't gain much
traction with creditors, which is why they weren't part of the
official plan, Bloomberg News discloses.
The national government isn't the only one with a looming debt
deadline, Bloomberg News relays. The province of Buenos Aires, the
country's most populous, is up against a May 14 deadline that has
the potential to set off a default, Bloomberg News the report
relates. The minister dismissed the possibility of a bailout from
the national government to avoid it, Bloomberg News notes.
"The national government isn't giving bailouts to pay unsustainable
debts," Guzman said. "Each province faces a different reality,
Bloomberg News relays. The ones that face problems of
unsustainable debt will lead their own processes to restore
sustainability," he added.
About Argentina
Argentina is a country located mostly in the southern half of
South America. It's capital is Buenos Aires. Alberto Angel
Fernandez is the current president of Argentina after winning
the October 2019 general election. He succeeded Mauricio Macri
in the position.
Argentina has the third largest economy in Latin America. The
country's economy is an upper middle-income economy for fiscal
year 2019 according to the World Bank. Historically, however,
its economic performance has been very uneven, with high economic
growth alternating with severe recessions, income maldistribution
and in the recent decades, increasing poverty.
As reported by the Troubled Company Reporter - Latin America on
April 14, 2020, Fitch Ratings upgraded Argentina's Long-Term
Foreign Currency Issuer Default Rating to 'CC' from 'RD' and
Short-Term Foreign Currency IDR to 'C' from 'RD'.
The TCR-LA reported on April 13, 2020, that S&P Global Ratings
also lowered its long- and short-term foreign currency sovereign
credit ratings on Argentina to 'SD/SD' from 'CCC-/C'. S&P also
affirmed the local currency sovereign credit ratings at 'SD/SD'.
There is no outlook on 'SD' ratings. On May 12, 2020, S&P Global
Ratings revised its transfer and convertibility (T&C)
assessment on Argentina to 'CCC+' from 'B-'.
The T&C assessment reflects S&P's view of the likelihood of the
sovereign restricting nonsovereign entities from accessing foreign
exchange needed to satisfy their debt service obligations.
On April 9, the TCR-LA reported that Moody's Investors Service
downgraded the Government of Argentina's foreign-currency and
local-currency long-term issuer and senior unsecured ratings to Ca
from Caa2.
BUENOS AIRES: S&P Lowers ICR to 'CCC+', Outlook Negative
---------------------------------------------------------
S&P Global Ratings lowered its foreign and local currency issuer
credit ratings on the city of Buenos Aires to 'CCC+' from 'B-'. S&P
also downgraded the provinces of Cordoba, Rio Negro, and Salta to
'CCC' from 'B-'. Finally, S&P lowered its ratings on the province
of Neuquen to 'CCC-' from 'B-'. The outlook on the five LRGs is
negative.
OUTLOOK
The negative outlook on these five Argentine LRGs reflects
potential further deterioration of overall credit conditions, given
Argentina's challenging economic dynamics. The ongoing sovereign
debt restructuring negotiations with international bondholders and
the COVID-19 pandemic continue to weigh on Argentina's economy and
local financial market conditions. The recession will result in
higher-than-expected deterioration in local governments' fiscal
performances and further erode their liquidity positions. In the
current context, S&P believes default risk has increased and some
LRGs are likely to consider distressed exchange offers or miss debt
service obligations in the next 12 months.
Downside scenario
S&P said, "We could lower the long-term ratings on the LRGs in the
next six to 12 months if we perceive an increasing likelihood of
default, including a distressed exchange. In light of the stressed
economic and financial conditions in Argentina and the LRGs, we
would likely classify a debt exchange of the LRGs as distressed and
tantamount to default.
"In addition, we could downgrade the LRGs if we were to revise
downward Argentina's T&C again."
Upside scenario
S&P said, "We could revise our outlook on the LRGs to stable in the
next 12 months if economic and financial conditions in Argentina
stabilize following clear policy signals and execution of policies
from the national government. In addition, we would need to see a
clear strategy from the local administrations to meet their
financing needs."
RATIONALE
S&P said, "The T&C assessment reflects our view of the likelihood
of the sovereign restricting non-sovereign entities from accessing
foreign exchange needed to satisfy their debt service obligations.
According to our criteria, the foreign currency global scale
ratings on LRGs are capped at the T&C level, which for Argentina is
now 'CCC+'.
"Given that we cap the ratings on the city of Buenos Aires at
Argentina's T&C, we downgraded the city to 'CCC+' from 'B-'.
"In addition to the T&C revision, the downgrade on the four
provinces reflects our view that rapid erosion of their fiscal and
liquidity profile could diminish their ability to service their
debt in full and in a timely manner in the next 12 months. The
COVID-19 outbreak and the associated lockdown measures have
exacerbated the recession in Argentina. We estimate a hit to GDP
growth of 7% in 2020 and only a moderate recovery afterwards,
considering the structural weakness of the Argentine economy. At
the same time, the sovereign's fragile fiscal position and its
ongoing debt restructuring process would likely result in delayed
limited support to subnational governments.
"We consider that the ability of local governments' administrations
to deal with rapidly worsening socioeconomic conditions, rising
fiscal pressure, and eroding revenues is different among the
entities we rate. This is also partly explained by the fact that
the provinces and the city are facing the current crisis from
different starting points in terms of previously accumulated cash,
flexibility in their capital expenditure (capex) levels, and
near-term debt service pressures. At the same time, willingness to
continue prioritizing debt service amid very stressful
circumstances varies across LRGs."
City of Buenos Aires:
S&P said, "We lowered our ratings on the city to 'CCC+' from 'B-',
reflecting our opinion that the city's capacity to meet its debt
service in time and in full is subject to Argentina's T&C
regulations. That said, the city's SACP remains 'b+' based on its
limited debt service obligations in 2020-2021, adequate access to
domestic debt market, and our expectation of fiscal recovery
starting in 2021, given the city's more favorable socioeconomic
profile compared to peers." The recession and consumption shock
will translate into severe stress on revenue collection and a
marked deterioration in its fiscal performance during 2020. To
finance liquidity mismatches, the city government has been able to
consistently tap domestic debt markets.
Province of Cordoba:
S&P said, "We lowered our ratings on Cordoba to 'CCC' from 'B-'.
There is no longer a differentiation between the rating and its
SACP. Cordoba's fiscal performance and liquidity position are
facing severe stress, despite its stronger starting point when
compared to other provinces. The administration is taking prudent
measures to partially contain fiscal slippage, such as using the
flexibility in its budget to suspend all capex. However, the severe
economic and financial shock has dented its cash position, and we
consider the administration will seek a debt exchange on its
international bonds in the next 12 months, especially ahead of a
sizeable capital amortization of $725 million in June 2021. We
would likely consider any debt renegotiation as a distressed debt
exchange, and tantamount to default, which supports our 'CCC'
rating."
Province of Salta:
S&P said, "We downgraded Salta to 'CCC' from 'B-'. There is no
longer a differentiation between the rating and its SACP. While the
province has maintained a balanced fiscal position until recently,
the current economic shock will erode results over the rest of 2020
and pressure the province's cash position. We estimate Salta's debt
service for the rest of the year at about ARS5.4 billion (5.5% of
estimated annual operating revenues). While debt service payments
are not substantial, we believe the province is likely to consider
a distressed exchange offer in the next 12 months, partly because
risks to meet financial commitments are higher in the upcoming
years. Debt service becomes more significant in 2022-2024, when its
$350 million bond starts amortizing. We would likely consider any
debt renegotiation as a distressed debt exchange, and tantamount to
default, which supports our 'CCC' rating."
Province of Rio Negro:
S&P said, "We downgraded Rio Negro to 'CCC' from 'B-'. There is no
longer a differentiation between the rating and its SACP. The
downgrade reflects rising liquidity pressures amid deterioration in
the fiscal profile and limited market access. We expect 2020's
operating deficit to rise to 8% of operating revenues, from 2% in
2019, because we think that measures to contain spending won't be
sufficient to balance the significant erosion in tax revenues and
royalties. Considering the limited amount of the province's debt
service next month (ARS6 billion or 7% of annual operating
revenues), we consider that Rio Negro could cover them by using
more short-term financing and its liquidity (estimated at $30
million). Nonetheless, we consider that the prolonged recession and
the province's likely inability to build sufficient cash could put
debt service after 2020 at risk, especially in 2023 when Rio Negro
starts amortizing its 2025 bond."
Province of Neuquen:
S&P said, "We lowered the ratings on Neuquen to 'CCC-' from 'B-'.
Despite a subsidized oil price in Argentina, lower oil production
in the province due to weaker demand will translate into lower
royalties and tax collection, significantly hurting Neuquen's
fiscal performance and liquidity position. Moreover, its foreign
currency debt service obligations are sizable in 2020 and 2021,
while access to domestic and international debt markets is limited.
As a result, we believe the risk of Neuquen missing a debt service
payment or its willingness to perform a distressed debt exchange
has increased significantly for the next six months, which explains
the 'CCC-' rating.
"With these rating actions, all Argentine LRGs that we rate are now
in the 'CCC' or 'CC' category. Provinces not included in this set
of rating actions are the province of Jujuy (CCC+/Negative/--),
province of Entre Rios (CCC/Negative/--), province of La Rioja
(CCC-/Negative/--), and province of Buenos Aires (CC/Negative/--)."
Ratings List
Downgraded
To From
Buenos Aires (City of)
Issuer Credit Rating CCC+/Negative/-- B-/Negative/--
Senior Unsecured CCC+ B-
Cordoba (Province of)
Issuer Credit Rating CCC/Negative/-- B-/Negative/--
Senior Unsecured CCC B-
Neuquen (Province of)
Issuer Credit Rating CCC-/Negative/-- B-/Negative/--
Senior Secured CCC- B-
Senior Unsecured CCC- B-
Province of Rio Negro
Issuer Credit Rating CCC/Negative/-- B-/Negative/--
Senior Unsecured CCC B-
Salta (Province of)
Issuer Credit Rating CCC/Negative/-- B-/Negative/--
Senior Unsecured CCC B-
Senior Secured CCC B
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B E L I Z E
===========
BELIZE: Moody's Cuts Sr. Unsec. Debt Rating to Caa1, Outlook Neg.
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Moody's Investors Service has downgraded the long-term
foreign-currency and local-currency issuer and senior unsecured
debt ratings of the Government of Belize to Caa1 from B3 and
changed the outlook to negative from stable.
Moody's decision to downgrade Belize's rating reflects the
increased and now very high probability of a deferral on interest
payments or distressed exchange on Belize's market debt as a result
of the severe economic shock the country is experiencing due to the
coronavirus outbreak that has collapsed the country's tourism
receipts. The rating agency believes that the sovereign's liquidity
and funding position will deteriorate to such an extent that the
government is likely to request interest payment deferrals that
will lead to moderate losses for investors.
The negative outlook on the Caa1 rating reflects the downside risk
that losses could exceed levels consistent with a Caa1 rating,
which typically captures losses of up to 10%, in the event of more
significant relief on interest payments, or if interest payments
are not deferred and the risk of a more extensive restructuring of
Belize's market debt rises and ultimately leads to increased
losses.
Belize's long-term foreign-currency bond ceiling was changed to B2
from B1 and the foreign-currency deposit ceiling changed to Caa2
from Caa1. The short-term foreign-currency bond ceiling and the
short-term foreign-currency bank deposit ceilings remain unchanged
at Not Prime. The local-currency bond and deposit ceilings were
changed to B2 from B1.
RATINGS RATIONALE
RATIONALE FOR THE DOWNGRADE TO Caa1
The unprecedented deterioration in the global economic outlook
resulting from the rapid and widening spread of the coronavirus
outbreak, which Moody's considers a social factor under its ESG
framework, has resulted in a severe shock to tourism arrivals and
the overall Belizean economy. Tourism directly accounts for 14% of
gross value added, while its indirect contribution has been
measured as high as 40%. Tourism receipts make up 42% of total
exports of goods and services, highlighting the economy's increased
reliance on what has been a key growth sector that has sustained
overall activity. As such, the closure of borders has halted the
flow of visitors to Belize, damaging economic activity and export
receipts. Moreover, the government has imposed other lockdown
measures, including shuttering businesses and schools, restricting
domestic transportation, and placing the western-side of the
country into a highly restrictive quarantine. Although these
measures have so far been successful in containing the spread of
the virus, the effect on economic activity has been severe.
Moody's estimates that Belize's real GDP could contract by as much
as 15% in 2020, depending on the duration of the outbreak and on
global financial conditions. By mid-April, the authorities report
that 72,000 applications for unemployment benefits were received,
accounting for over 28% of the entire country's labor force. This
would be the first time the economy would record a full-year
contraction since at least 1995. Although Moody's expects a more
favorable performance in 2021 with real GDP expanding by 8.1%, the
rebound in economic activity will be driven entirely by a favorable
base effect.
The economic shock is putting substantial pressure on government
finances. The fiscal year 2020-21 (April-March) budget, which was
published prior to the pandemic, targets a primary surplus of
around 1% of GDP, but Moody's believes that the primary balance
will likely fall into a deficit of around 10% of GDP. This is
likely to push public debt ratios above 130% of GDP in 2020 rather
than to stabilize at 98% of GDP as previously estimated. As a
result, the government has petitioned multilateral development
banks and official international institutions for financial
support. Despite the possibility of fresh official financing, the
deterioration of Belize's economic and fiscal strength has been
severe, and its financing needs are likely to increase
substantially as a result of a widening fiscal deficit.
Based on the severe shock and the substantial tightening of the
government's liquidity position, Moody's believes that before the
next $13 million interest payment on the sovereign's sole external
bond comes due in mid-August, the authorities will likely ask for
interest payment deferrals rather than a deeper debt restructuring
given that no principal is due on the bond until 2030. A potential
deferral of interest payments, depending of the modalities, would
lead to some but still relatively contained losses to investors
that is likely to be commensurate with a Caa1 rating, according to
the rating agency.
RATIONALE FOR THE NEGATIVE OUTLOOK
The negative outlook on the Caa1 rating reflects the downside risk
that losses could exceed levels consistent with a Caa1 rating,
which typically captures losses of up to 10%, in the event of more
significant relief on interest payments, or if interest payments
are not deferred and the risk of a more extensive restructuring of
Belize's marketable bond rises and ultimately leads to increased
losses.
ENVIRONMENTAL SOCIAL AND GOVERNANCE CONSIDERATIONS
Environmental considerations are a key concern for Belize, as the
country's infrastructure gap, low lying areas near the coast, and
location make it vulnerable to climate events like hurricanes and
tropical storms that have had negative economic and fiscal
implications for Belize's credit profile.
Social considerations are somewhat of a concern for Belize. An
onerous pension scheme with a retirement age of 55 is weighing on
public finances. However, the dependency ratios are low and are
expected to remain low relative to other countries in Central
America and the Caribbean. Moody's also regards the coronavirus
outbreak to be a social risk under its ESG framework given the
substantial implications for public health and safety.
Moody's does not consider governance risks to be a material
constraint to Belize's credit profile. The country showcases a
stable political environment, underpinned by a general consensus
around key policy issues. The government's small size limits policy
implementation, as does the large size of the informal economy,
which Moody's has considered into its assessment of institutions
and governance strength.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Evidence of a substantial amount of multilateral financing flows at
highly affordable rates that fully cover the sovereign's funding
needs over the medium-term would decrease the likelihood of losses
to bondholders and be supportive of stabilizing the outlook. Upward
pressure on the rating could come over time from the adoption of
extensive structural reforms that enhance productivity, boost
competitiveness and attract sizable investment to significantly
increase potential growth and improve the sustainability of
external finances.
The rating could be downgraded if Moody's were to conclude that
losses to investors from a possible suspension of payments on debt
would not be consistent with a Caa1 rating. In the event that an
agreement is not reached with bondholders to defer interest
payments, a missed payment could prompt a restructuring process
that could result in further losses to investors and would result
in a lower rating.
GDP per capita (PPP basis, US$): 8,504 (2018 Actual) (also known as
Per Capita Income)
Real GDP growth (% change): 2.1% (2018 Actual) (also known as GDP
Growth)
Inflation Rate (CPI, % change Dec/Dec): -0.1% (2018 Actual)
Gen. Gov. Financial Balance/GDP: -1% (2018 Actual) (also known as
Fiscal Balance)
Current Account Balance/GDP: -8.3% (2018 Actual) (also known as
External Balance)
External debt/GDP: 71.9 (2018 Actual)
Economic resiliency: b2
Default history: At least one default event (on bonds and/or loans)
has been recorded since 1983.
On 07 May 2020, a rating committee was called to discuss the rating
of the Belize, Government of. The main points raised during the
discussion were: The issuer's economic fundamentals, including its
economic strength, have materially decreased. The issuer's fiscal
or financial strength, including its debt profile, has materially
decreased. The issuer has become increasingly susceptible to event
risks.
The principal methodology used in these ratings was Sovereign
Ratings Methodology published in November 2019.
The weighting of all rating factors is described in the methodology
used in this credit rating action, if applicable.
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B R A Z I L
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BRAZIL LOAN I: Fitch Affirms Sr. Sec. Notes at BB-sf, Outlook Neg.
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Fitch Ratings has affirmed the senior secured pass-through notes
issued by Brazil Loan Trust I at 'BB-sf' and revised the Rating
Outlook to Negative from Stable following Fitch's revision of
Brazil's Rating Outlook to Negative from Stable on May 5, 2020.
The Negative Outlook on the notes reflects Brazil's Negative
Outlook. Brazil's economic outlook has deteriorated sharply due to
rising external challenges including the global recession, China's
significant slowdown (a key trading partner), lower commodity
prices, and tightening external financing conditions. In addition,
the coronavirus pandemic and the containment measures will lead to
a sharp contraction in domestic economic activity and higher
unemployment rates.
Brazil Loan Trust I
- Senior Secured Pass Through Notes 105859AA0; LT BB-sf; Affirmed
- Senior Secured Pass Through Notes Reg S USU0952YAA83; LT BB-sf;
Affirmed
TRANSACTION SUMMARY
The transaction is a pass-through securitization of a 10-year
amortizing loan originated by Bank of America N.A. (AA-/Stable) to
the Brazilian State of Maranhao (BB-/Stable). The loan is
guaranteed on an unconditional and irrevocable basis by the
Federative Republic of Brazil (BB-/Negative).
Payments on the loan are made to a bank account of Wilmington Trust
N.A. (administrative agent; A/Negative). On the next day, funds are
transferred to an Issuer account at The Bank of New York Mellon
(indenture trustee; AA/Stable). Payments are made under the notes
immediately thereafter.
Fitch's rating addresses timely payment of interest and principal
on the scheduled payment date until legal final maturity.
KEY RATING DRIVERS
Brazil's Credit Quality: The affirmation of the notes reflects the
affirmation of Brazil's Credit Quality and the recent revision of
its Rating Outlook to Negative from Stable. The transaction
benefits from an unconditional an irrevocable guarantee from Brazil
as primary obligor on the underlying loan. Therefore, the rating of
senior secured pass-through notes is equivalent to Brazil's
sovereign Long-Term Issuer Default Ratings. Fitch affirmed Brazil's
FC IDR rating on May 5, 2020 at 'BB-' and revised its Outlook to
Negative from Stable.
Highly Rated Account Banks: Payments from the borrower and/or the
guarantor are made in a New York bank account at Wilmington Trust
N.A. (A/Negative) as administrative agent to the loan. On the
following day, funds are transferred to a Trust Loan Collection
Account at Bank of New York Mellon (AA-/Stable) as Indenture
Trustee. Payments are made under the notes immediately thereafter
mitigating the transaction's exposure to counterparty risk.
The notes' rating also considers the timely payments of interest
and principal due to date. All semi-annual payments due until
January 2020 were made directly by the State of Maranhao. The next
interest and principal payment date are July 2020.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- As the transaction is on Outlook Negative, Fitch does not
currently anticipate developments with a high likelihood of
triggering an upgrade. Nevertheless, the senior secured pass
through notes' ratings are linked to Brazil's Long-Term Foreign
Currency IDR; hence, an upgrade of Brazil's IDR would trigger an
upgrade of the notes in the same proportion.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- The senior secured pass through notes' ratings are linked to
Brazil's Long-Term Foreign Currency IDR; hence, a downgrade of
Brazil's IDR would trigger a downgrade of the rated notes in the
same proportion.
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
Form ABS Due Diligence-15E was not 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 notes' ratings are driven by Brazil's sovereign Long-Term
Foreign Currency IDR.
OI S.A.: S&P Lowers Global Scale Issuer Credit Rating to 'B-'
-------------------------------------------------------------
On May 11, 2020, S&P Global Ratings lowered its global scale issuer
credit and issue-level ratings on Rio de Janeiro-based telecom
operator Oi S.A. (Oi) to 'B-' from 'B' and lowered its national
scale rating to 'brBBB-' from 'brA-'.
S&P said, "We expect the COVID-19 pandemic to result in a
recession, with Brazil's GDP contracting by 4.6% in 2020. This
should affect Oi's top-line results, especially the pre-paid and
fixed line businesses, resulting in higher-than-expected RGUs
decline this year and pressure on average revenue per unit (ARPU).
We now forecast net revenues of R$19.3 billion in 2020 and 2021
compared to our previous forecast of R$21.5 billion and R$22.0
billion, respectively.
"Moreover, we expect high working capital needs during the year due
to collection constraints as unemployment rates rise and consumer
spending drops following the expected recession, which coupled with
the capital spending plan of R$7 billion, should result in a
materially negative free operating cash flow (FOCF) in the next 12
months. Consequently, we now expect FOCF of negative R$4.3 billion
in 2020 and negative R$3.7 billion in 2021, compared to our
previous forecast of negative R$2.5 billion and negative R$2.0
billion, respectively."
The negative FOCF, coupled with expected local currency
depreciation of over 20% in 2020, will result in debt-to-EBITDA
ratio above 8x and FFO-to-debt ratio below 10% in the next three
years, breaching our previous downgrade triggers published on Sept.
12, 2019. Although the company doesn't have any debt maturities in
the next 12 months and holds about US$220 million in cash as a
partial hedge, Oi's credit metrics will remain weaker than expected
because we forecast negative FOCF and don't predict a material
currency appreciation over the next several years.
During the first quarter of 2020, Oi was able to complete the sale
of its shares in Portuguese holding company PT Ventures SGPS S.A.
for about US$1 billion and one building for R$120 million. The sale
proceeds, coupled with the R$2.5 billion debenture issued in
January 2020, generated enough liquidity to support Oi's 2020 capex
plan. However, the company depends on more asset sales to continue
its plan beyond this year. S&P said, "We currently assume it will
be able to sell its towers and datacenter later in 2020 and some
real estate assets in 2021, but we highlight that the COVID-19
pandemic adds uncertainty to the amount of proceeds and timing of
the transactions."
===========================
C A Y M A N I S L A N D S
===========================
BCP VII: Moody's Cuts CFR & $610MM Loan Rating to 'B3'
------------------------------------------------------
Moody's Investors Service has downgraded BCP VII Jade Holdco
(Cayman) Ltd's corporate family rating to B3 from B2 and downgraded
the probability of default rating to B3-PD from B2-PD.
Concurrently, Moody's downgraded to B3 from B2 the equivalent $610
million of senior secured term loans B due 2023 (split in a $ and
EUR tranche) and the EUR65 million senior secured revolving credit
facility due 2022 raised by Jade Germany GmbH, a direct subsidiary
of Cerdia.
The outlook has been changed to stable from negative.
RATINGS RATIONALE
Its rating action takes into account Cerdia's very high adjusted
gross leverage for the B2 rating category at around 8.0x debt /
EBITDA, as a result of continuous high one-off cost for its
efficiency program, absent any meaningful recovery in filter tow
prices, which were falling since 2015. It also incorporates its
expectations that Cerdia's leverage remains elevated well above
7.0x throughout 2020 due to continuous efficiency measures needed
in order to offset cost inflation and pressure on its global
tobacco end market where cigarettes volumes decline by more than 2%
annually.
So far, the coronavirus crisis has no negative impact on Cerdia's
results in Q1 2020 (which were ahead of budget due to resilience of
cigarette demand that supported Q1 sales volumes), but the
uncertainty over the duration of the pandemic, its economic impact
of the restrictions related to logistics and end consumer demand
remain. Cerdia's management has confirmed its full-year 2020 budget
and is confident that the coronavirus will have no meaningful
impact on the resilient cigarette demand.
The B3 CFR reflects the company's (i) established position in the
global filter tow niche industry, which is consolidated and is
protected by high entry barriers; (ii) vertically integrated
business model, with in-house production of flakes required to
manufacture filter tows; (iii) highly predictable but declining end
user tobacco market, with good revenue visibility based on
multi-year customer contracts; and (iv) high company adjusted
EBITDA margins of around 25% in combination with low capex
requirements translating into solid free cash flows.
These positives are balanced by the company's (i) small size, with
2019 revenues of $483m, and very narrow product portfolio focused
on filter tow and acetate flakes, which supply an end market that
is in a structural decline (tobacco); (ii) high customer
concentration, with top 6 key accounts representing c.60% of
Cerdia's volumes; (iii) high operational concentration, given most
of filter tow is produced at the Freiburg site in Germany; and (iv)
exposure to fierce competition resulting in competitive price
pressure driven by the oligopolistic market structure in which
Cerdia is the smallest player.
LIQUIDITY
The liquidity of Cerdia is good. It is supported by $34 million
cash on balance sheet and $39.5 million availability under its
equivalent $73 million RCF due in May 2022 ($12 million used for
guarantees and $22.5 million drawn) by end of 2019. Moody's
forecasts Cerdia's net leverage according to the definition of its
springing covenant to remain at around its current level of 4.8x
-5.0x net debt / EBITDA throughout 2020 with an improvement
afterwards. The RCF has a springing net leverage financial
maintenance covenant of 5.8x, only tested if the facility is
utilized for more than 35% (excluding letter of credits). To
safeguard itself from a potential spillover of the Covid 19 crisis
into the banking sector, Cerdia has drawn the remaining $39.5
million available under its RCF at the end of Q1 2020 to strengthen
its cash on balance sheet. Moody's expects that the company will
use its cash on balance and its free cash flows to repay the RCF
throughout 2020.
Positive free cash flow is expected to cover all basic cash needs
in 2020 and 2021 due to moderate capex and working capital
requirements in combination with an only modest scheduled debt
amortization at 1% ($6.5 million) annually until May 2023 when the
term loan B matures. Moody's does not anticipate any dividends or
distribution to shareholders throughout its rating horizon.
RATING OUTLOOK
The outlook was changed to stable from negative as filter tow
prices have stabilized in 2019 and Moody's expects Cerdia to
deleverage moderately over the next 18 months. The expected
deleveraging is driven by cost savings measures which are likely to
exceed the filter tow volume decline. However, Moody's does not
expect any material recovery of price levels anytime soon and would
consider to further downgrade Cerdia's rating if leverage remains
above 7.0x, when approaching its maturities.
ESG CONSIDERATIONS
Moody's considers Cerdia's end market exposure to the tobacco
companies as a social risk, which could expose it to litigation
risks and reduce the number of investors willing to refinance its
maturities when coming due. Furthermore, Moody's sees limited
exposure of Cerdia's tobacco end market to the spread of
coronavirus, as demand is structurally declining but very resilient
through the cycle.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
While Cerdia displays good liquidity and positive underlying free
cash flow generation, it is highly leveraged and exposed to the
structural declining end market tobacco with very limited pricing
power. However, an upgrade could be considered if Cerdia: (i)
diversifies its product offering meaningfully; (ii) reduces
leverage to well below 6.0x adj. debt/EBITDA on a sustained basis;
and (iii) maintains good liquidity.
Downgrade pressure on the rating could arise if the cost saving
program fails to offset the decline in volumes and prices as
evidenced by (i) EBITDA margins declining below twenties (ii),
leverage not declining below 7.0x adj. debt / EBITDA over the next
12- 18 months, (iii) a weakening of the group's liquidity as
evidenced by negative free cash flows, a weakening under the
covenant headroom or unsuccessful refinancing the debt structure in
a timely manner ahead of maturities.
The principal methodology used in these ratings was Chemical
Industry published in March 2019.
COMPANY PROFILE
Cerdia is a leading supplier of cellulose acetate filter tow, a
critical component used by tobacco companies for cigarette filters,
with net sales of $483 million in 2018. Acetate filter tow
represented 90% of 2019 revenues, the rest being split between
acetate flakes mainly used for cigarette filters (2%) and sale from
other products and services (8%). The bulk of sales are in Europe
including CIS (around 51% of 2018 revenues) and Asia (around 24%).
Cerdia's main plants are located in Germany, France, Russia, Brazil
and the US. The company was spun-off rom Solvay SA (Baa2 negative),
who sold it to private equity fund Blackstone via an LBO deal
closed in May 2017.
=========
C H I L E
=========
CHILE: Requests For Flexible Credit Line From IMF
-------------------------------------------------
The International Monetary Fund (IMF) Executive Board met in an
informal session to discuss a request from the Chilean authorities
for a two-year arrangement under the Flexible Credit Line (FCL)
with the IMF in an amount equivalent to SDR 17.443 billion (about
US$23.8 billion or 1,000 percent of quota). The Chilean authorities
intend to treat the credit line as precautionary. This credit line
helps safeguard against external shocks by providing countries with
very strong policy frameworks and track records of economic
performance with large, upfront access to IMF resources with no
ex-post conditionalities.
On the basis of Chile's very strong economic fundamentals,
institutional policy frameworks, and track record, IMF Managing
Director Kristalina Georgieva intends to recommend approval of the
FCL arrangement for Chile when the IMF Executive Board meets again
to take a decision in the following weeks. The IMF stands ready to
continue to support Chile during these challenging times.
===============
C O L O M B I A
===============
AVIANCA HOLDINGS: S&P Lowers ICR to 'D' on Chapter 11 Filing
------------------------------------------------------------
On May 11, 2020, S&P Global Ratings lowered its issuer credit
rating on Latin American air transportation company Avianca
Holdings S.A. to 'D' from 'CCC-' and issue-level rating to 'D' from
'CCC-' on its 9.0% senior secured notes due 2023. S&P also lowered
its issue-level rating to 'D' from 'CC' on its 8.375% senior
unsecured notes due May 10, 2020.
On May 10, 2020, Avianca and some of its subsidiaries and
affiliates voluntarily filed for bankruptcy under Chapter 11 in New
York to preserve business structure amid severe impact from the
COVID-19 outbreak on the global air transportation industry. The
company aims to restructure its debt and lease liabilities by
entering into a restructuring support agreement with most of its
creditors to withstand the effects of current economic downturn.
This follows the company's missed $65.6 million principal payment
on its 8.375% unsecured notes due on May 10, 2020. Therefore, S&P
lowered its issuer credit and issue-level ratings on Avianca to
'D'.
Avianca grounded its entire passenger operating fleet on March 25,
2020, following a 22.7% drop in the number of passengers serviced
during the first quarter of 2020, compared with the first quarter
of 2019, pressuring its cash generation. S&P said, "We expect
further deterioration in Avianca's finances amid operational
disruptions stemming from the coronavirus and a steep downturn in
the air transportation industry. We believe Avianca will continue
seeking extraordinary support from the Colombian government, which
together with its current available cash, will support the business
during reorganization proceedings."
Avianca owns 70% of LifeMiles LTD, and Advent International (not
rated) owns the remaining 30%. As S&P reported in "Avianca
Downgraded To 'CCC' And On Watch Negative On Tightening Liquidity;
LifeMiles Downgraded To 'B-', Outlook Stable", published on March
20, 2020, it limits LifeMiles ratings at 'B-' given its status as
an insulated subsidiary of Avianca. Such a status reflects the
following factors:
-- LifeMiles won't engage in any bankruptcy proceedings that could
jeopardize its operating activities or compromise its assets
according to Avianca's Chapter 11 bankruptcy filing.
-- LifeMiles doesn't guarantee--directly or indirectly--any of
Avianca's financial obligations.
-- LifeMiles' financial performance and funding prospects are
separate from those of the parent, so that even if other core
entities of the latter encounter severe setbacks, LifeMiles'
relative strengths would remain nearly intact.
-- S&P believes that Avianca has a compelling economic incentive
to preserve LifeMiles' credit strength, because it's an important
source of passenger traffic for the airline.
Environmental, social, and governance (ESG) credit factors for this
rating change:
-- Health and safety
CREDIVALORES: S&P Alters Outlook to Negative & Affirms 'B/B' ICR
----------------------------------------------------------------
S&P Global Ratings revised its outlook on Credivalores -
Crediservicios SAS to negative from stable. S&P also affirmed its
'B' long-term and 'B' short-term issuer credit ratings on the firm.
At the same time, S&P affirmed its 'B' issue-level rating on the
firm's senior unsecured notes.
S&P said, "The outlook revision reflects our view that the pandemic
induced economic crisis will erode Credivalores' operating
performance. The firm's credit card portfolio is exposed to the
rapidly deteriorating economy, which could widen credit losses
beyond those of peers. We also expect pressures on the firm's
bottom-line results, and consequently, on our projected RAC ratio
for it, which will be around 5.5% for the next 12-24 months. These
factors could undermine Credivalores' business stability and spike
its delinquency levels, weakening its credit profile.
"Finally, the ratings on Credivalores continue to reflect our
business position assessment on it, which is supported by a
diversified business mix and leading position in Colombia's NBFI
segment. We also incorporate our view of the firm's improving but
still concentrated funding structure, primarily consisting of two
global issuances, and enough liquidity to meet its debt maturities
and support growth in the following 12 months."
===================================
D O M I N I C A N R E P U B L I C
===================================
DOMINICAN REPUBLIC: Industries Warn Against Reopening 'Chaos'
-------------------------------------------------------------
Dominican Today reports that Dominican Republic Industries
Association (AIRD) executive vice president Cirse Almanzar said
it's necessary to develop a plan to reactivate the economy and
warned that the situation that is occurring spontaneously may
become chaos and more expensive for all of society.
"If you do not have a clear signal in the population, this
uncertainty is generated," she said, according to Dominican Today.
She said the AIRD has insisted on the importance of establishing an
operation protocol with phases of different nature, but the
mechanisms in which it will operate must be defined, "how are we
going to live with the COVID-19," the report notes.
"I think this will not hold up . . . I believe that the Government
must already take a step, a sign of how we are going to
reactivate," 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: Mining Law 'Must Attract Foreign Investors'
---------------------------------------------------------------
The president of the Roundtable of the Commonwealth Countries in
the Dominican Republic, Fernando Gonzalez Nicolas, asked the
legislators that, before approving the bill to reform the mining
law, they make sure to reach a consensus to guarantee that it is an
instrument that effectively attracts foreign investors.
He said that the revision of the laws are extremely delicate
processes that, if not handled with due caution, are devastating to
attract resources for mining in the future, so he considered it
essential that this reform project be agreed with international
investors, that they are the ones that will finally decide the
operations of the companies of that branch.
"Mining is a long-term industry that requires considerable
resources for its development and the regulations established by
the countries are decisive in attracting these investments," said
Gonzalez Nicolas, the report relates.
He noted that "in the countries of the Commonwealth, such as
Canada, Great Britain, Australia, South Africa among others, are
the main mining companies in the world, which are characterized by
being responsible, since they are strictly regulated by
international financial organizations and protection of the
environment."
He added that "we at the Board of the Commonwealth warned about the
implications of the modernization processes of mining laws, and we
insisted on the need to reach consensus and take into account the
opinion of investors.
It is regrettable to affirm that the Dominican Republic has lowered
its index as an attractive destination for mining investment,
according to the report,. In March, the Fraiser Institute's annual
report significantly lowered the country's attractiveness index as
a destination. This institute is recognized by investment spheres
worldwide.
Finally, the President of the Board of the Commonwealth recalled
that mining is currently one of the main columns on which the
Dominican economy is sustained. "Being the main line of exports
that our country has to generate the foreign exchange that the
stability of the Dominican economy requires. For example, in the
first quarter of 2020, gold-only exports turned out to be 42.9% of
total Dominican exports."
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).
=============
J A M A I C A
=============
DIGICEL GROUP: Fitch Cuts IDR to 'RD' on Grace Period Expiry
------------------------------------------------------------
Fitch Ratings has downgraded the Issuer Default Ratings of Digicel
Group One Limited and Digicel Group Two Limited to 'RD' from 'C',
following the expiration of the 30-day grace period on interest
payments, which constitutes a restricted default under Fitch's
ratings definition.
On March 30, Digicel announced that it had deferred the interest
payments related to its DGL1 and DGL2 2022 notes. The 30-day grace
periods, ended on April 29 and May 1, respectively. On April 1,
Digicel launched an exchange offer for various instruments of DGL2,
DGL1 and Digicel Limited, which constitutes a distressed debt
exchange under Fitch's criteria. Fitch will take such actions as
are appropriate following the conclusion of the DDE, including
lowering DL to 'RD', and rating the new corporate structure.
KEY RATING DRIVERS
Expiration of Grace Period: Ratings of RD indicate an issuer that
in Fitch's opinion has experienced an uncured payment default or
DDE, but has not otherwise ceased operating. This includes the
uncured expiry of any applicable grace period following a payment
default on financial obligations.
DDE: The proposed restructuring qualifies as a DDE for DGL2, DGL1
and DL. The reduction in principal and the extension of maturities,
qualify as material reductions per Fitch's methodology. Fitch had
previously indicated that the company would likely restructure debt
at one or more levels to avoid insolvency, based on the group's
unsustainable capital structure and limited financial flexibility.
DERIVATION SUMMARY
Fitch will reevaluate Digicel's credit profile relative to peers
and criteria following the conclusion of the DDE.
ESG Commentary
Digicel Group Limited and its subsidiaries score a 4 on Exposure to
Environmental Impacts, due to their operations in a hurricane-prone
region. Digicel Group Limited and its subsidiaries score a 4 on
each of Governance Structure, Group Structure and Financial
Transparency. Fitch has concerns about board independence from the
controlling shareholder, the willingness and ability of the company
to potentially move assets, and the timing and quality of the
group's financial disclosure.
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).
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Following the completion of the debt exchange, Fitch will
apply its distressed debt criteria and re-rate the entire corporate
structure.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Following the completion of the DE, Fitch will apply its
distressed debt criteria and rate the entire corporate structure
again.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate
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.
LIQUIDITY AND DEBT STRUCTURE
Fitch will reevaluate Digicel's liquidity and debt structure
following the conclusion of the DDE.
SUMMARY OF FINANCIAL ADJUSTMENTS
NA
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.
JAMAICA: Coffee Exporters Request Government Assistance
-------------------------------------------------------
RJR News reports that local coffee exporters, who have been reeling
from the effects of COVID-19, have approached the Government for
assistance.
Norman Grant, President of the Jamaica Coffee Exporters
Association, says the exporters are seeking the government's
intervention by way of a price support of $170 million to $200
million, according to RJR News.
In a statement, Mr. Grant said this is to enable the use of
non-exportable High Mountain and Blue Mountain Coffee by the coffee
companies for the local market instead of imports, the report
relays.
He says the measure is critical to ensuring the survival of the
over 5,000 coffee farmers, who are now facing reductions in demand
and sales of their coffee, the report discloses.
Mr. Grant says the Coffee Exporters Association has commenced
discussions with the Jamaica Commodity Regulators Association and
the Ministry of Industry, Commerce and Agriculture, the report
adds.
As reported in the Troubled Company Reporter-Latin America on April
23, 2020, S&P Global Ratings said that on April 16, 2020, it
revised its outlook on Jamaica to negative from stable. At the same
time, S&P Global Ratings affirmed its 'B+' long-term foreign and
local currency sovereign credit ratings, its 'B' short-term foreign
and local currency sovereign credit ratings on the country, and its
'BB-' transfer and convertibility assessment.
On April 17, 2020, the TCR-LA reported that Fitch Ratings has
revised Jamaica's Outlook to Stable from
Positive. The Long-Term Foreign-Currency Issuer Default Rating is
affirmed at B+. 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.
JAMAICA: Removed From US Trade Representative Watch List
--------------------------------------------------------
RJR News reports that Jamaica has been removed after decades of
being on the United States Trade Representative watch list.
This follows the passage of the Patents and Designs Act in January,
according to RJR News.
It replaced the country's outdated patent and industrial designs
regime, the report notes.
A statement from the Industry Ministry said the new bill was
developed in an effort to modernise Jamaica's patent and industrial
designs regime and implement its international obligations, the
report adds.
As reported in the Troubled Company Reporter-Latin America on April
23, 2020, S&P Global Ratings said that on April 16, 2020, it
revised its outlook on Jamaica to negative from stable. At the same
time, S&P Global Ratings affirmed its 'B+' long-term foreign and
local currency sovereign credit ratings, its 'B' short-term foreign
and local currency sovereign credit ratings on the country, and its
'BB-' transfer and convertibility assessment.
On April 17, 2020, the TCR-LA reported that Fitch Ratings has
revised Jamaica's Outlook to Stable from
Positive. The Long-Term Foreign-Currency Issuer Default Rating is
affirmed at B+. 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.
=================
V E N E Z U E L A
=================
VENEZUELA: Regime Says Foiled Attack Sought to Assassinate Madurp
-----------------------------------------------------------------
The Latin American Herald reports that Venezuelan authorities
claimed that a "foiled sea invasion" at the weekend was part of a
plan to assassinate embattled incumbent Nicolas Maduro.
Ten people have been arrested and eight were killed, all linked to
the operation, according to the regime, according to The Latin
American Herald.
Among those arrested were two US citizens detained along with six
other people in an operation of 25,000 troops deployed to
"guarantee the search for possible threats," said the head of the
Strategic Command Operations of the Armed Forces (CEOFANB), Remigio
Ceballos, the report notes.
Two other people were detained, while another eight died at the
hands of the state security forces, described by Venezuelan regime
as "mercenaries," the report relays.
In his first public appearance after the incident, Maduro claimed
that the objective of the mission "was to kill the President of
Venezuela . . . to try to kill me," the report notes.
In his speech during a teleconference, Maduro claimed that the
governments of Colombia and the United States were behind the
attack, as other high regime officials said the previous day, and
assured there was evidence that the group trained on Colombian
soil, the report relays.
Maduro regretted that there was an attempted "terrorist attack"
against Venezuela while the country has been in quarantine for 50
days and the world is facing the effects of the COVID-19 pandemic,
the report notes.
Ceballos said that "every inch of our land must be free of
mercenaries, paramilitaries and any other threat," the report
discloses.
The report relays that is the mission of the 25,000 military
personnel deployed throughout the country, part of whom aborted the
alleged maritime invasion in the state of La Guaira, near Caracas,
which, according to the authorities, sought to end the Maduro
administration, in power since 2013.
"We are going to carry out scrutiny operations across the country,"
said the head of the CEOFANB, who explained that all the sections
of the Armed Forces will participate in this operation, which in
turn is part of a series of permanent exercises that Maduro ordered
weeks ago, the report says.
Soldiers will monitor the country by land, sea and air to prevent
invasion attempts or intrusions that threaten national sovereignty,
attacks for which the regime of Venezuela accuses the US and
Colombia, the report notes.
As evidence of American responsibility, authorities reported that
one of the detainees confessed to having worked for the US Drug
Enforcement Administration and was expelled from Venezuela in 2005,
the report discloses.
Added to this are two of those arrested, who the regime said are
"middlemen" who "work with the security advisory" of US President
Donald Trump, the report says.
The Venezuelan opposition, led by the head of parliament, Juan
Guaido, who is recognized by almost 60 countries as the interim
president, rejected being linked to the incident, and described it
as a "set up" and "false positive" orchestrated by the regime, the
report relays.
In addition, he stated that he has no relationship "with any
company in the security and defense branch," after the Venezuelan
authorities claimed that the US private security company SilverCorp
took part in the attack, 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.
===============
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LATAM: IDB Says Gains in Tax Revenue Among Countries Under Threat
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RJR News reports that the Inter-American Development Bank (IDB)
says while tax revenues in Latin America and the Caribbean (LAC)
increased to 23.1 per cent of gross domestic product on average in
2018, these gains are now under threat.
This is as a result of the region's deteriorating fiscal outlook,
which has been exacerbated by the COVID-19 pandemic and the global
economic crisis, according to RJR News.
According to the newly released edition of the "Revenue Statistics
in Latin America in the Caribbean", the increase of 0.4 percentage
points from their level in 2017 is the highest level of tax
revenues ever recorded in the region, the report notes.
However, the data reveals that LAC tax revenues remain far below
the Organization for Economic Cooperation and Development averaging
34.3 per cent in 2018, the report notes.
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