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       T R O U B L E D   C O M P A N Y   R E P O R T E R

                 L A T I N   A M E R I C A

          Friday, July 17, 2020, Vol. 21, No. 143

                           Headlines



B R A Z I L

BRASKEM SA: Moody's Affirms Ba1 CFR; Alters Outlook to Negative
BRAZIL: Rio de Janeiro Export Revenue Down 15% in 2020


D O M I N I C A N   R E P U B L I C

DOMINICAN REPUBLIC: Central Banker Post Spurs Friction
DOMINICAN REPUBLIC: Wastes the Garbage Business


J A M A I C A

JAMAICA: Inflation Rate Rises Amid Higher Food, Electricity Prices
JAMAICA: JAS Suggests AG Probe Holland Estate


M E X I C O

GRUPO IDESA: S&P Upgrades ICR to CCC+ After Debt Exchange

                           - - - - -


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B R A Z I L
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BRASKEM SA: Moody's Affirms Ba1 CFR; Alters Outlook to Negative
---------------------------------------------------------------
Moody's Investors Service affirmed Braskem S.A.'s Ba1 corporate
family rating and the Ba1 ratings on the foreign and local currency
debt issuances of Braskem Finance Ltd and Braskem America Finance
Company, respectively, fully guaranteed by Braskem S.A. The outlook
for the ratings was changed to negative from stable.

Ratings Affirmed:

Issuer: Braskem S.A.

LT Corporate Family Rating, Affirmed Ba1

Issuer: Braskem America Finance Company

USD 750 mm GTD Global Senior Unsecured notes due 2041, Affirmed
Ba1

Issuer: Braskem Finance Ltd

USD 289 mm GTD Global Senior Unsecured notes due 2022, Affirmed
Ba1

USD 750 mm GTD Global Senior Unsecured notes due 2024, Affirmed
Ba1

USD 500 mm GTD Global Senior Unsecured notes (perpetual), Affirmed
Ba1

Outlook Actions:

Issuer: Braskem S.A:

Outlook, Changed to Negative from Stable

Issuer: Braskem America Finance Company:

Outlook, Changed to Negative from Stable

Issuer: Braskem Finance Ltd

Outlook, Changed to Negative from Stable

RATINGS RATIONALE

The change in Braskem's ratings outlook to negative follows the
company's announcement on July 9th of an additional BRL1.6 billion
($300 million) provision related to a geological event in Alagoas.
The new provision includes BRL850 million in possible assistance
measures for residents and BRL750 million in additional expenses to
fund the definitive shutdown of the salt mining activities in
Maceio, the operation management and the relocation of properties,
among others. The additional provision reduces the visibility over
potential future liabilities coming from the agreement Braskem
ratified with authorities on January 6th until a definitive
agreement covering all social and environmental aspects of the
incident is reached.

While Braskem's robust financial position provides a good cushion
against the financial impact of the new provision, the additional
call on the company's liquidity comes at a time of strained credit
metrics due to the petrochemical downcycle, supply issues in Mexico
and uncertainties surrounding the full impact of coronavirus on the
company's operations and on the industry's downcycle in 2020-21.
The new provision adds to the existing BRL3.4 billion, bringing
total liabilities related to this incident to BRL5 billion. The
provisions do not immediately jeopardize Braskem's sound liquidity
since the payments will likely be made in installments in the
coming years, but reduce the company's cushion to ride through the
downcycle. At the end of March 2020, Braskem had total cash of
BRL12.3 billion, plus a $1 billion (BRL5.2 billion) committed
credit facility that was fully drawn in April, and only BRL5.2
billion in debt coming due until the end of 2021, including
Mexico's debt.

Braskem's credit quality remains mainly supported by its large cash
position, lack of financial covenants that could threaten the
company's short-term liquidity amid a rising leverage, and track
record of positive free cash flow generation even under adverse
market conditions. Moreover, the company announced measures to
reduce costs and cash outflows during the pandemic -- namely a 10%
reduction in fixed costs, the reduction of capital spending to $600
million from $721 million and suspension of dividend payments for
2020. Still, with the resurgence of the uncertainties related to
the liabilities of Alagoas, continued supply issues in Mexico and
Pemex' rising delinquency on the liquidated damages payments
(currently at $40 million), Braskem's cushion to withstand the
industry's weakness in the next few years is diminishing. Low used
capacity levels in Mexico are preventing the formal physical and
financial completion of the project-finance and led to the issuance
of a letter of credit to cover an equity call of $200 million for
Braskem.

Braskem's adjusted gross leverage peaked at close to 9.0x at the
end of March 2020 (including Mexico's project finance debt) as a
consequence of the translation of Brazilian real's depreciation to
debt and weaker downcycle EBITDA. Gross debt will rise further
during 2020 with the withdrawal of Braskem's committed facility in
April 2020. But adjusted gross leverage will decline to around
5.0-6.0x by early-2021 as the company repays the facility, and
while EBITDA catches up with the depreciated currency and improves
with current petrochemical spreads, and additional volumes coming
from the new polypropylene plant in the US and the fast track
solution to increase capacity utilization in Mexico. Low oil prices
have flattened the industry's ethylene cost curve, supporting low
feedstock costs and higher spreads for Braskem's mostly
naphtha-based Brazilian operations in 2020 and helping offset lower
short-term demand. But long-term industry fundamentals still point
to an oversupply and downcycle that will strain prices for
polyethylene, polypropylene and basic chemicals. As such, if the
depth of the strain on global demand and prices for Braskem's key
products make current naphtha-based spreads less sustainable,
Braskem's leverage ratios would remain under stress without an
asset sale or another external liquidity event.

Moody's will assess the evolution of Braskem's current operating
environment, particularly the trend of oil prices, resin prices and
foreign exchange rate, and the company's ability to increase its
financial flexibility and generate positive free cash flow during
2020. A reversal in the current deleverage and positive free cash
flow generation trend would lead to additional negative rating
actions in the next few quarters.

Braskem's Ba1 rating continues to be supported by its size as the
largest petrochemical company in Brazil and in the Americas in
terms of production capacity of resins, with historically
above-industry-average operating margins because of high capacity
utilization rates, long-term client relationships and product
customization. The rating also reflects the company's dominant
market position in Brazil and its geographic diversification, with
operations in the US, Mexico and Europe. Finally, the company's
sizable cash position, track record of positive free cash flow
generation even under adverse market conditions and liability
management initiatives support its adequate liquidity and are
additional positive credit considerations.

The rating is constrained by the sharp deterioration in credit
metrics since late 2019, weak industry conditions globally stemming
from the coronavirus outbreak and global overcapacity as well as
the company's high exposure to the volatility of petrochemical
spreads. The rating also considers the dependence on Petroleo
Brasileiro S.A. - PETROBRAS (PETROBRAS, Ba2 stable) and Petroleos
Mexicanos (PEMEX, Ba2 negative) for the supply of naphtha and
ethane in Brazil and Mexico, respectively. Additional credit
concerns include the current supply issues with Pemex in Mexico,
potential additional liabilities related to Alagoas and Braskem's
shareholders intention to divest the business.

The negative outlook reflects the significant overhangs on
Braskem's credit quality coming from the incident in Alagoas and
the supply issues in Mexico at a time of weakened operations and
credit metrics. The outlook also reflects its expectations that
Braskem's credit metrics will remain weak for its rating category
in the next 12-18 months, but that the company will continue to
prudently manage liquidity to preserve its credit profile through
the downcycle.

FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS

The rating could be downgraded if Braskem's liquidity profile
deteriorates because of additional material liabilities from
litigations and class actions, weaker than anticipated sales
volumes or petrochemical spreads that results in higher leverage or
cash burn, or more aggressive financial policies, including
dividend payout consistently above the minimum level established by
the law. Furthermore, negative rating pressure could result from
weaker operating results on a sustained basis or persistently high
leverage through the cycle, with total adjusted debt/EBITDA of 3.5x
or above and retained cash flow/total debt lower than 15% (3.4% for
the 12 months ended March 2020) on a sustained basis.

An upgrade of Braskem's rating is unlikely in the short-term, but
the rating outlook could be stabilized if the company resolves the
current overhangs related to Alagoas and Mexico, while improving
its liquidity, financial flexibility and credit metrics. Longer
term, the rating could be upgraded if Braskem shows a continued
track record of a conservative financial policy, maintaining sound
liquidity and positive free cash flow generation. Quantitatively,
an upgrade would also require leverage (as measured by total
adjusted debt/EBITDA) sustained below 3.0x.

The principal methodology used in these ratings was Chemical
Industry published in March 2019.

Braskem is the largest producer of thermoplastic resins
(polyethylene, polypropylene and polyvinyl chloride) in the
Americas, with an annual production capacity of 8.9 million tons.
Braskem also has a production capacity of 10.5 million tons of
basic petrochemicals such as ethylene, propylene and gasoline,
among others; and about 500 thousand tons of caustic soda, EDC and
chlorine. For the 12 months ended March 2020, the company reported
consolidated net revenue of BRL52 billion ($12.6 billion), with
EBITDA margin of 11%.

BRAZIL: Rio de Janeiro Export Revenue Down 15% in 2020
------------------------------------------------------
Richard Mann at Rio Times Online reports that from January to May
of this year, the state of Rio de Janeiro recorded a 15 percent
drop in export revenues, with a negative balance of US$2.4 billion
(R$13 billion), according to the June issue of the FIRJAN's
(Industry Federation of the State of Rio de Janeiro) Rio Exporta
newsletter.

In the period, the state totaled US$10.3 billion in exports and
US$12.8 billion in imports, according to Rio Times Online.

The main reason for the result in exports was the seven percent
drop in oil sales, coupled with the impact of the Covid-19 pandemic
on economic activity, the report notes.

                         About Brazil

Brazil is the fifth largest country in the world and third largest
in the Americas.  Jair Bolsonaro is the current president, having
been sworn in on Jan. 1, 2019.

As reported in the Troubled Company Reporter-Latin America on May
8, 2020, Fitch Ratings 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.



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D O M I N I C A N   R E P U B L I C
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DOMINICAN REPUBLIC: Central Banker Post Spurs Friction
------------------------------------------------------
Dominican Today reports that alleged plans by Luis Abinader to
ratify current Central Banker, Hector Valdez Albizu, and other
officials, would have sparked disgust among the president-elect's
economic team.

Quoting a source, El Nuevo Diario reports that Abinader's intention
would be to leave Valdez Albizu at the helm of the Central Bank for
a while, starting on August 16, which would have caused a stir
among the close collaborators of the president-elect and reactions
of rejection and displeasure, in particular, among several of the
economic advisers, according to Dominican Today.

It was learned that in the electoral campaign, the economist Pedro
Silverio, one of the members of Abinader's economic team, had been
promised the post of central banker, the report notes.

But, according to the same source, Silverio has now been asked to
assume the role of deputy central banker, which he would have
flatly rejected, the report relays.  "He (Silverio) did not accept
and that has generated great disgust among the PRM economists, who
aspire to change the current authorities," 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.

Standard & Poor's credit rating for Dominican Republic stands at
BB- with negative outlook (April 2020). Moody's credit rating for
Dominican Republic was last set at Ba3 with stable outlook (July
2017). Fitch's credit rating for Dominican Republic was last
reported at BB- with negative outlook (May 8, 2020).

DOMINICAN REPUBLIC: Wastes the Garbage Business
-----------------------------------------------
Dominican Today reports that the Dominican Republic could be
throwing away a big deal.  The lack of a law that establishes
adequate procedures for waste management puts the generation of
jobs around recycling and the use of waste in open dumps at risk,
according to Dominican Today.

"Without regulation, the management of landfills lends itself to
the formation of a terrible mafia and the exploitation of divers
[collectors of recyclable materials]," said Maria Alicia Urbaneja,
executive director of the National Network of Business Support for
Environmental Protection, the report notes.

"The Ministry of Environment and Natural Resources (Mimarena) has
some regulations in force that concern the management of garbage,
but they are not rigorous enough for the correct disposal of waste
generated in homes and industry, so there is an urgent need for
integrated legislation on waste management," says Urbaneja, the
report relays.

It has been eight years since the National Congress studied the
"General Draft Law on Comprehensive Management and Coprocessing of
Waste in the Dominican Republic," which specifies the functions
that the municipalities, Mimarena, companies, and the population
must occupy to waste processing, the report notes.

In the middle of last May, the deputies made the most recent
revision of the regulations and it was put in the hands of the
senators, but they have not yet placed it on their agenda of
sessions, the report discloses.

"That law will create the basis to start working as it should,"
argues Urbaneja, who participated in the structuring of the bill,
the report relays.

                         Change of Model

If approved, the country must take very seriously the circular
economy and the recycling actions that this practice entails, since
Article 80 declares as mandatory that the waste generator
classifies and separates organic and inorganic materials, so that
the collectors can give you proper handling, the report says.

There are currently around 368 open-air dumps in operation
throughout the national territory. The incorrect processing of
waste in these spaces causes damage to both the environment and
health, the report notes.

Angel Cano, president of the National Energy Commission, says that
garbage processing is not being used for energy production, despite
the fact that Law 57-07 on incentives for renewable energy forces
the State to promote the use and management of solid waste, biomass
and derived liquids, the report relates.

"If the garbage becomes an important component to the generation of
electricity, then we will be contributing to the energy security of
the country," 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.

Standard & Poor's credit rating for Dominican Republic stands at
BB- with negative outlook (April 2020). Moody's credit rating for
Dominican Republic was last set at Ba3 with stable outlook (July
2017). Fitch's credit rating for Dominican Republic was last
reported at BB- with negative outlook (May 8, 2020).



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J A M A I C A
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JAMAICA: Inflation Rate Rises Amid Higher Food, Electricity Prices
------------------------------------------------------------------
RJR News reports that higher food and electricity prices pushed
Jamaica's inflation rate in May to 0.1 per cent.

During the month, electricity rates went up by 5.6 per cent,
according to RJR News.

The Statistical Institute of Jamaica (STATIN) says the increase was
tempered by a decline in tuition fees for the summer term and lower
gas prices, the report notes.

As reported in the Troubled Company Reporter-Latin America, S&P
Global Ratings revised on April 16, 2020 its outlook on Jamaica to
negative from stable. At the same time, S&P 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.

The TCR-LA also reported that Fitch Ratings, in April 2020, 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: JAS Suggests AG Probe Holland Estate
---------------------------------------------
RJR News reports that Lenworth Fulton, President of the Jamaica
Agricultural Society (JAS), said it might be necessary for the
Auditor General to probe the Holland Estate lease that has placed
J.C. Hutchinson, the minister without portfolio in the Ministry of
Agriculture, at the centre of the latest controversy to hit the
government.

Nigel Myrie, Chairman of RADA, has ordered an audit of the benefits
the authority has provided to the 184 farmers who have been
allotted lands on the property, according to RJR News.

Mr. Fulton said that audit should be completed quickly along with
one from the Auditor General, to ensure impartiality, the report
notes.

"It does not sound good and it needs a research into the whole
thing. I do think that we should put the whole land distribution
now on hold until we're certain where we're going," he admitted,
the report relays.  

While Mr. Fulton believes the matter should be investigated, he
does not think Mr. Hutchinson needs to step aside while the probe
is being conducted, the report discloses.

"The Prime Minister should put a team there, investigate it, and
see if there is something there that warrants further disciplinary
action," he suggested, the report notes.

But Mr. Fulton argued that it is time for reform of how lands, such
as Holland Estate, are distributed to prevent situations where
"both sides of the political fence (from) giving their people land
when they are in power," he added.

As reported in the Troubled Company Reporter-Latin America, S&P
Global Ratings revised on April 16, 2020 its outlook on Jamaica to
negative from stable. At the same time, S&P 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.

The TCR-LA also reported that Fitch Ratings, in April 2020, 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.



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M E X I C O
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GRUPO IDESA: S&P Upgrades ICR to CCC+ After Debt Exchange
---------------------------------------------------------
On July 15, 2020, S&P Global Ratings raised its issuer credit
rating on Grupo IDESA to 'CCC+' from 'CCC-', and removed the
ratings from CreditWatch with negative implications.

S&P said, "We assigned a 'CCC+' issue-level and '4' recovery
ratings on the company's new 9.375% senior secured notes due 2026.
The '4' recovery rating indicates our expectation of average
(30%-50%; rounded estimate 35%) recovery prospects in the event of
a payment default. At the same time, we withdrew at the issuer's
request our 'CCC-' issue-level and '4' recovery ratings on IDESA's
7.875% senior unsecured notes due 2020."

IDESA settled its exchange offer for about $274.9 million
(approximately 91.64%) of its $300 million 7.875% senior unsecured
notes due 2020 that were validly tendered for 9.375% new senior
secured notes due 2026. S&P believes that the transaction was not
tantamount to default because the new notes offered don't imply a
loss of value to investors. The new notes due 2026 rank higher in
terms of seniority, increased the coupon rate by 150 basis points,
and include a collateral package that we believe provides more
value to shareholders. The notes also include a cash sweep and a
payment-in-kind (PIK) interest payment mechanism for the first
three years, allowing the company to manage lower interest payments
for the first four coupons alleviating its liquidity levels.
Additionally, on May 25, 2020, IDESA achieved the amendment of its
$130 million term loan facility with Inbursa due June 20, 2020,
maintaining the same collateral package of the new senior notes due
2026, including the PIK interest structure.

S&P said, "We considered both IDESA's offering and amendment as
distressed, rather than opportunistic, given that the $130 million
term loan due on June 20, 2020, and the $300 million notes' due on
Dec. 18, 2020, were refinanced in a relatively short period of
time.

"Our 'CCC+' ratings on IDESA reflect our expectation that the
company will continue to have higher leverage metrics for the next
12 months, with debt to EBITDA ratios well above 5.0x and EBITDA
interest coverage below 1.0x, which in our view appears to be
unsustainable in the long term. We believe that the company does
not face important payments in the next 12 months, since it was
able to refinance the majority its debt to 2025 and 2026. In our
base-case scenario, we expect a decline in EBITDA generation
because of lower petrochemical sale prices derived from lower oil
prices. However, these effects are partially offset by expected
higher volumes sales because certain petrochemicals continue to be
demanded for basic necessity products such as personal hygiene and
cleaning amid the COVID-19 pandemic. Therefore, we view this
capital structure as unsustainable in the long term unless IDESA's
EBITDA generation improves, along with higher cash flows received
from its joint ventures (JV), which have been delayed in recent
years. The latter should help the company deleverage in the longer
term, and would also improve the company's interest coverage,
although we believe that the PIK interest payment options for its
coupon payments on financial debt may mitigate the potential risk
of cash shortfalls from IDESA's JVs and support unforeseen cash
flow pressures in the next few years."



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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.,
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Fernandez, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A.
Chapman, Editors.

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