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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

          Thursday, October 15, 2020, Vol. 21, No. 207

                           Headlines



B R A Z I L

PETROBRAS: Consortium in Talks for Gas Fields in Brazil


D O M I N I C A N   R E P U B L I C

DOMINICAN REPUBLIC: Capacity of Bank Branches to Increase to 88%


M E X I C O

MEXICO: Banker Warns Many Businesses Won't Recover


P A N A M A

PROMERICA FINANCIAL: Fitch Affirms 'B' LongTerm IDR, Outlook Neg.


T R I N I D A D   A N D   T O B A G O

TRINIDAD & TOBAGO: Dollar a Depreciating Asset

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B R A Z I L
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PETROBRAS: Consortium in Talks for Gas Fields in Brazil
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Gram Slattery and Carolina Mandl at Reuters report that a
consortium of Brazil's 3R Petroleum and Norway-linked DBO Energy is
in bilateral talks with Brazil's Petroleo Brasileiro S.A. or
Petrobras to purchase a cluster of offshore natural gas fields,
according to two sources with direct knowledge of the matter.

The Peroa cluster, located off the coast of Espirito Santo state,
would be among the first all-gas offshore fields sold by Petrobras
amid a larger push to break the company's near-monopoly in Brazil's
natural gas value chain, according to Reuters.

Petroleo Brasileiro SA PETR4.SA, as the state-controlled firm is
formally known, has long dominated most segments of the Brazilian
natural gas sector, the report relays.  But in recent years, it has
begun selling off pipelines and assets in transport and
distribution, in a move the company and the government hope will
spur competition, the report notes.

Several international firms already produce significant amounts of
natural gas in Brazil, as they operate oilfields where so-called
associated gas is removed during the production process, the report
relays.  Much of that gas is simply reinjected into the ground,
however, and few are producing at standalone gas fields, the report
discloses.

Petrobras and 3R did not respond to a request for comment. DBO
declined to comment.

In 2019, the Peroa cluster produced just short of 1 million cubic
meters of gas per day, though it produced several times that amount
in recent years, the report recalls.  The cluster also includes the
Malombe prospect, discovered in 2011, which studies indicate could
produce up to 2.5 million cubic meters daily if developed, the
report says.

Due in part to Peroa's mature profile, it is expected to be sold
for a relatively low price compared with other production assets
being offered by Petrobras in the area, said the sources, who
requested anonymity due to the confidentiality of the matter, the
report notes.

Rio de Janeiro-based DBO is composed of Brazilian and Norwegian
executives, and it lists RWE Supply & Trading, an arm of Germany's
RWE AG RWEG.DE, as an investor, the report discloses.

3R, founded in part by former Petrobras executives, is backed by
investment firm Starboard Restructuring Partners, the report
relates.  In early September, it filed for an initial public
offering to help pay for acquisitions it has made from Petrobras
and to pursue new ones.pet, the report adds.

                      About Petrobras

Petroleo Brasileiro S.A. or Petrobras (in English, Brazilian
Petroleum Corporation - Petrobras) is a semi-public Brazilian
multinational corporation in the petroleum industry headquartered
in Rio de Janeiro, Brazil.  Petrobras control significant oil and
energy assets in 16 countries in Africa, the Americas, Europe and
Asia.  But, Brazil represents majority of its production.

The Brazilian government directly owns 54% of Petrobras' common
shares with voting rights, while the Brazilian Development Bank and
Brazil's Sovereign Wealth Fund (Fundo Soberano) each control 5%,
bringing the State's direct and indirect ownership to 64%.

A corruption scandal was uncovered in 2014 that involved Petrobras.
The scandal related to money laundering that involved Petrobras
executives.  The executives were alleged to get received kickbacks
from overpriced contracts, to the tune of about $3 billion in
total.

As reported in the Troubled Company Reporter-Latin America on Feb.
25, 2019, S&P Global Ratings raised the stand-alone credit profile
(SACP) on Petrobras to 'bb' from 'bb-'. S&P also affirmed its
global scale ratings on the company at 'BB-' and its Brazilian
national scale rating at 'brAAA'.




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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: Capacity of Bank Branches to Increase to 88%
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Dominican Today reports that after the coronavirus pandemic, some
banks had to temporarily close offices and branches in the
Dominican Republic. After the economic reopening, some have
gradually opened. Currently, the availability of open branches is
80%, but on October 15, it will increase to 88%.

This information was offered to Listin Diario by the Association of
Commercial Banks of the Dominican Republic (ABA), which added that
the branches and offices of financial entities with high client
demand are working with a capacity of 90 and 100%, according to
Dominican Today.

"It is important to emphasize that the objective of these measures
has always been to guarantee the continuity of the services of
means of payments and financial, but watching over the security and
protection of collaborators and clients," assured the entity,
adding that this is the reason for the gradual openings and that
the banks leave a proportion of their personnel working remotely,
the report notes.

The Superintendent of Banks, Alejandro Fernandez W, said that at
this time, the most advisable thing is to encourage the use of
online banking, so a campaign is being developed to motivate it, in
response to the request of the Minister of Health, Plutarco Arias,
who called on the Superintendent of Banks (ABA) "for the fourth
time" not to allow crowds in banks by the threat that exists with
the coronavirus, the report adds.

                    About Dominican Republic

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

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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M E X I C O
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MEXICO: Banker Warns Many Businesses Won't Recover
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Mexico News Daily reports that a prediction by a former central
bank chief that government financial support amid the
coronavirus-induced economic downturn could send businesses into
bankruptcy doesn't apply to Mexico, according to President Lopez
Obrador.

Agustin Carstens, governor of the Bank of Mexico between 2010 and
2017 and now general manager of the Bank for International
Settlements (BIS), said that central banks around the world acted
in a timely manner to counter the economic impact of the pandemic,
according to Mexico News Daily.

But their actions created an excess of liquidity and many companies
took on debt they will be unable to repay, he said, the report
notes.

Speaking at his news conference, Lopez Obrador said the
bankruptcies Carstens predicted won't occur in Mexico because
fiscal support wasn't extended to companies and they didn't receive
large cash injections from the government, the report relays.

He asserted that the BIS chief was referring to countries where
companies were given extensions to meet their tax obligations
and/or bailed out by governments that increased their debt in the
process, the report discloses, the report relates.

"[In many countries] the formula of giving extensions in the
payment of taxes, bailing out companies and taking on debt was
applied and the truth is it hasn't worked.  They opted for that in
Europe and the United States," he said, adding that the government
support there hasn't resulted in a significant economic recovery,
the report notes.

"In our case, . . . . we didn't give money or fiscal stimulus to
businesses, none of that," he added.

The government's strategy has been criticized for not helping
businesses, thousands of which have closed before they could go
bankrupt, the report says.

The report discloses that an association representing small and
medium sized business estimated in September that 320,000 such
businesses closed their doors between April and August due to the
coronavirus pandemic.

The president of Alampyme said as many as half a million small
businesses were expected to shut down permanently by the end of the
year, putting 3 million people out of work, the report relays.

Lopez Obrador highlighted that his government has supported the
nation's neediest through welfare programs and loans for small
businesses, the report says.  He also said that remittances sent to
Mexico from abroad, which have reached record levels in 2020
despite the economic downturn, have provided significant support
for the economy, the report relates.

"[There are] good signs that we're picking ourselves up, we don't
have major problems, we have inflation under control, we have debt
under control," López Obrador said, the report notes.

The president noted that jobs recovery is underway and asserted
that the government's tax revenue is higher in nominal terms in
2020 than last year, the report relays.

"We have healthy finances, we don't have a deficit in [tax]
collection. . . . . What interests us is the recovery of jobs [and]
I saw the data for October. In August we recovered 92,000 [formal
sector] jobs, in September about 120,000 and . . . . up to October
6, we recovered 30,000. We're not losing [j0bs] anymore," the
report adds.




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P A N A M A
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PROMERICA FINANCIAL: Fitch Affirms 'B' LongTerm IDR, Outlook Neg.
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Fitch Ratings has affirmed Promerica Financial Corporation (PFC)'s
Long-Term Issuer Default Rating (IDR) at 'B'. The Rating Outlook is
Negative. Fitch also affirmed PFC Viability Rating (VR) at 'b' and
the senior secured debt rating at 'B'/'RR4'.

KEY RATING DRIVERS

PFC's VR driven IDR is based on the consolidated risk profile of
the bank holding company. The Negative Outlook reflects the
persistent downside risks from the disruptions caused by the global
reach of the coronavirus pandemic and its effects on PFC's
consolidated credit profile.

The VR largely reflects the diversified business profile of the
group, which comprises banking operations in nine countries in
Latin America, and the constraints of business and risk
diversification in low rated countries, as reflected by Fitch's
assessment of the group's operating environment at 'b-' with a
negative trend. Fitch's assessment of the operating environment
reflects the significant proportion of international operation in
countries with operating environments that are riskier than
Panama's.

The consolidated financial profile benefits from geographic
diversification, the strong franchises of the largest subsidiaries,
the deposit-based and stable funding profile and the relevance of
the group as a one of the largest card issuers in Latin America;
however, these benefits are partially limited by the higher
sovereign risk profiles and generally challenging operating
environments of most countries of operations. Among the group's
operations, Ecuador and Nicaragua stand out because of the strong
local franchises, while Guatemala, Costa Rica and El Salvador
maintain meaningful local franchises in consumer and credit card
segments, in spite of their smaller market shares by total assets.

The relatively weak capitalization at the consolidated level is
also a significant rating factor. In Fitch's view, a prolonged
effect by coronavirus crisis could pressure PFC's already tight
capital ratios. As of June 2020, the group's a CET1 ratio improved
slightly to 9.8%, although additional loss absorption capacity is
also provided by adequate loan loss reserves coverage. Regulatory
capitalization is adequate at the holding company (14.2% as of June
2020) and across all subsidiaries, most with reasonable buffers
above regulatory requirements. Common equity double leverage is
high at 187%. Fitch's common equity double leverage calculation
excludes the preferred shares reported as equity to the regulator.

PFC's VR also reflects the group's controlled delinquency rates and
low liquidity risk. Fitch expects the impact of the coronavirus
pandemic to pressure consolidated profitability and asset quality;
in the agency's view, these impacts may be delayed by the
regulatory measures taken in all countries of operation to mitigate
the pandemic's effect on debtors.

Lower loan growth has driven operating profits downward in 2019 and
2020. As of June 2020, operating profits to RWAs (1.21%) were below
regional peers due to high loan impairment charges and the loan
portfolio decrease, despite the comparable margins. By end June
2020, the banking operations in Honduras and Dominican Republic
reported losses under NIIF consolidation.

In Fitch's view, liquidity risk is low. At the holding company
level, liquidity management is considered prudent. As of June 2020,
the consolidated loans to deposits ratio was stable at around 88%
and similar to regional peers. For 2020, liquidity reserves at the
holding company level, in addition to dividend inflows, provide
sufficient coverage of its non-consolidated financial interest
expenses (i.e. global bonds and interbank liabilities). Fitch
estimates that dividend inflows in 2021 may experience a decrease
compared to previous years due to lower expected profitability on
its operating subsidiaries. Additionally, Fitch does not rule out
dividend payment restrictions being imposed on some operations;
however, the holding company dividend inflow is diversified among
several sources.

Support Rating and Support Rating Floor

PFC Support Rating (SR) of '5' and Support Rating Floor (SRF) of
'NF' reflect Fitch's view that external support for the bank,
though possible, cannot be relied upon given Panama's long-standing
dollarized economy and lack of a lender of last resort.

Senior Secured Debt

The rating assigned to PFC's senior notes is at the same level as
PFC's Long-Term IDR, as the likelihood of default on the notes is
the same as PFC's. Despite the notes being senior secured and
unsubordinated obligations, Fitch believes the collateral mechanism
would not have a significant impact on recovery rates. In
accordance with Fitch's rating criteria, recovery prospects for the
notes are average and are reflected in their Recovery Rating of
'RR4'.

RATING SENSITIVITIES

Factors that could, individually or collectively, lead to negative
rating action/downgrade:

The Rating Outlook is Negative. A rating downgrade could occur in a
weaker operating environment if there is a material deterioration
of the subsidiaries' financial performance, pressuring PFC's Fitch
Core Capital ratio or liquidity. Specifically, this could happen if
PFC's Fitch Core Capital-to-RWA ratio is consistently lower than 8%
and/or the subsidiaries' dividends upstream to PFC pressures its
debt servicing.

Factors that could, individually or collectively, lead to positive
rating action/upgrade:

The Rating Outlook could be revised to Stable if PFC is able to
sustain its current financial performance despite operating
environment challenges.

Support Rating and Support Rating Floor

As Panama is a dollarized country with no lender of last resort, a
change in PFC's SR or SRF is unlikely.

Senior Secured Debt

Senior secured debt rating would mirror any change to PFC's IDRs.

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF
RATING

The principal sources of information used in the analysis are
described in the Applicable Criteria.

ESG CONSIDERATIONS

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




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T R I N I D A D   A N D   T O B A G O
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TRINIDAD & TOBAGO: Dollar a Depreciating Asset
----------------------------------------------
Trinidad Express reports that executive chairman of professional
services network, EY Caribbean, Wade George, said that some
Trinidad and Tobago residents are preferring to hold their wealth
as they believe the TT dollar is likely to depreciate in value over
the next four years.

George first made the comment as a panellist at a T&T Chamber of
Commerce post-budget webinar.

He repeated the comment as a panellist at a similar post-budget
webinar hosted by the Trinidad and Tobago Manufacturers'
Association (TTMA) at the Hyatt Regency hotel in Port of Spain,
according to Trinidad Express.

The report notes that Imbert told the Spotlight on the Budget and
the Economy function that the Government's position remains "that
no useful purpose will be served by devaluation, especially at this
time when US dollar inflows are extremely low.  And the prices are
extremely low because of Covid-19 because it has depressed oil and
gas prices and production," the report relays.

Imbert argued that as a result of the reduced US dollar inflows,
the impact of a devaluation would lead to a minimal increase in
Government revenue, the report says.

Speaking on the same stage as Imbert, George conceded that there
were valid trade-offs against a decline in the value of the
domestic currency, including concerns about the cost of living and
inflation, the report notes.

He said: "But the other side of the argument is that when you have
a currency where there is an expectation in the marketplace that it
is overvalued and therefore a depreciating asset, you will have a
preponderance of market participants looking at other mechanisms as
a store of value, the report relays.

"Therefore, sometimes what you see - and we participated in a
survey in 2019 in which a majority of respondents suggested that in
their view the TT currency was going to depreciate over the next
five years - is that there is a predisposition, therefore, to hold
your assets in US dollars as a store of value," the report
discloses.

                  'Free Market is Best'

George further argued the intervention by Government in markets was
an "imperfect mechanism" that often leads to the misallocation of
resources, the report relays.

He was referring specifically to Imbert's announcement that the
Government intends to place a quota on the importation of both new
and foreign used cars from next year, in order to reduce the usage
of foreign exchange, the report discloses.

"The other part of this is that when you have to intervene in the
market to protect imports, then there are some imperfections in
that system.  For example, the quota system on new cars, or foreign
used cars, is a Government intervention, ostensibly, to ensure that
the TT dollar is protected. The quota system is an imperfect
mechanism and there are a number of issues that it raises, such as
who benefits, who suffers, how is it going to be expensed and is
there room for fairness?

"There is the invisible hand of the market versus the very visible
hand of the government," the report notes.

Asked in the question and answer segment of the TTMA function if he
was suggesting that exchange rate regime in T&T was encouraging
people to hoard US dollars to protect their wealth, George said: "I
was merely suggesting that every action—whether monetary, fiscal
or otherwise—has consequences, some of which may be intended and
some unintended," the report discloses.

Referring again to the 2019 survey of the opinions of
businesspeople, suggesting a majority expected the TT dollar to
depreciate by 2024, George said given this perception of the
exchange rate, "there would be pure economic rational behaviour
that would suggest that persons may have a lack of confidence in
the TT dollar. And they naturally see the US dollar, the reserve
currency of the world, as a potential store of value, the report
says.

"There is anecdotal evidence to suggest that that is occurring."

But he added that if Government combines the incentives outlined in
the 2021 budget with some business confidence, "there is a
likelihood that persons, instead of using a store of value in a
very low interest rate environment in the US, may well be minded to
reinvest that into T&T and build the economy,"  the report relays.



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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.,
USA, Marites O. Claro, Joy A. Agravante, Rousel Elaine T.
Fernandez, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A.
Chapman, Editors.

Copyright 2020.  All rights reserved.  ISSN 1529-2746.

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

The TCR Latin America subscription rate is US$775 per half-year,
delivered via e-mail.  Additional e-mail subscriptions for members
of the same firm for the term of the initial subscription or
balance thereof are US$25 each.  For subscription information,
contact Peter A. Chapman at 215-945-7000.
.


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