---

       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, March 11, 2021, Vol. 22, No. 45

                           Headlines



A R G E N T I N A

ARGENTINA: Fitch Affirms 'CCC' LongTerm Issuer Default Ratings


B R A Z I L

CELESC: Moody's Withdraws Ba2 Corp. Family Rating
COSAN SA: Fitch Affirms 'BB' LongTerm Foreign Currency IDR
ENGIE BRASIL: Fitch Affirms 'BB' LongTerm Foreign Currency IDR


D O M I N I C A N   R E P U B L I C

DOMINICAN REPUBLIC: Labor Ministry's Project  to Enforce Labor Law
DOMINICAN REPUBLIC: Poverty, Unemployment Increase, ECLAC Says


M E X I C O

VERACRUZ STATE: Moody's Withdraws Ba1 Rating on MXN1BB Bank Loan


P A R A G U A Y

PARAGUAY: President Rejigs Cabinet, Protesters Demand Ouster


P U E R T O   R I C O

PUERTO RICO: Debt Restructuring Faces Several Obstacles


V E N E Z U E L A

VENEZUELA: Year-on-Year Inflation Increased to 4,311%

                           - - - - -


=================
A R G E N T I N A
=================

ARGENTINA: Fitch Affirms 'CCC' LongTerm Issuer Default Ratings
--------------------------------------------------------------
Fitch Ratings has affirmed Argentina's Long-Term Foreign and Local
Currency Issuer Default Ratings (IDRs) at 'CCC'.

KEY RATING DRIVERS

Argentina's 'CCC' rating reflects persisting weakness in debt
repayment capacity following its September 2020 bond
restructurings, and acute political uncertainty that clouds
prospects for an improvement. Sovereign foreign currency liquidity
constraints persist despite the relief in near-term commercial debt
service offered by the bond restructurings, as central bank (BCRA)
reserves have dwindled and market access has not been restored. The
current heterodox policy mix does not appear sustainable for long,
notwithstanding better terms of trade that could support its
viability in the near term ahead of October 2021 legislative
elections. Prospects for a durable policy shift that could support
a stronger and more stable medium-term growth path remain
uncertain, and could be conditioned by the election outcome.

Imminent debt payments due to the IMF and Paris Club and
negotiations to reschedule them highlight persisting debt repayment
risks. Argentina and IMF must agree to a new program to reschedule
USD46 billion debt from the defunct Stand-By Arrangement, of which
USD3.8 billion comes due later this year, before USD18.1 billion in
2022. But it is uncertain how strong of a policy program both
parties can agree to, as is the timing. A deal will entail policy
commitments the authorities may be reluctant to make before
elections, while better terms-of-trade could offer them some
flexibility to extend negotiations to avoid this scenario, and
possibly make the initial payments.

Argentina remains in a vulnerable macroeconomic position, as a
fiscal expansion funded by massive borrowing from the BCRA (8% of
GDP in 2020) to support households during the pandemic has fueled
pre-existing monetary imbalances. The authorities have mostly
resorted to heterodox price and capital controls to contain these
imbalances, but have yet to articulate proactive adjustment plans
to address the root causes. International reserves fell
considerably over the course of 2020 to USD39.4 billion from
USD44.8 billion in 2019, and "net" reserves (i.e. net of a China
swap, commercial bank reserves, and other FX liabilities) to USD4.6
billion from USD12.9 billion. The BCRA's weak external liquidity
position poses a key source of risk to exchange-rate dynamics (in
both the official and parallel markets) and thus the outlook for
inflation and broader macroeconomic stability.

The situation has improved in recent months following some policy
adjustments in October (moderate hikes in interest rates and
increased sterilization) and supported by positive external news.
The surge in soy prices should provide a significant FX boost
during the March/April harvest, and this have already reduced
depreciation expectations and resulting foreign-exchange pressures.
A possible global SDR issuance by the IMF could offer further
support for reserves. These factors offer greater near-term policy
flexibility to the authorities to maintain some policy impulse and
avoid a devaluation before the elections, but do not promise to be
a lasting solution to Argentina's macroeconomic imbalances.

Containing inflation could be a more difficult task. Inflation fell
to 36% by the end of 2020 from 54% in 2019, due to depressed demand
during the lockdown, price controls, and base effects, but monthly
prints grew to 50%-60% in annualized terms by the end of the year
and into 2021. Fitch expects inflation to rise to 47% by the end of
2020, above the official 29% forecast, and the second-highest among
rated sovereigns. The authorities have increased pressure on the
private sector to avoid price rises and are working to anchor wage
negotiations around official inflation expectations to contain
inertia.

The macroeconomic outlook will hinge largely on the evolution of
the fiscal deficit and its financing by the BCRA - the key source
of current macroeconomic strains. The federal primary deficit rose
to 6.5% of GDP in 2020 from 0.4% in 2019 driven by the hit to
revenues and sizeable social spending measures related to the
pandemic, and the total deficit to 8.5% from 3.8%. Fitch expects
the primary deficit will fall to 4.5% of GDP in 2021 (and the total
deficit to 5.9%), in line with the budget. High soy prices and
rising inflation could offer a sizeable revenue upside, but Fitch
currently expects this will be mainly allocated to pre-election
spending rather than budget outperformance, as evidenced by some
new fiscal plans such as a one-off pension bonus. The authorities
have yet to detail a plan for medium-term fiscal consolidation and
financing. This is likely to be the cornerstone of an IMF deal, but
it is unclear how ambitious an adjustment both parties can agree
to.

Financing constraints continue to undermine debt repayment
capacity, in Fitch's view. Weak foreign currency debt repayment
capacity is evidenced by still-pending loan renegotiations with
official-sector creditors (IMF, Paris Club). Even modest coupons on
the restructured bonds that will step up in the next several years
could exceed Argentina's capacity in the absence of a sustained
build-up in reserves or recovery of some form of hard-currency
financing access. The sovereign's peso financing flexibility is
better, given its access to the BCRA and recent success in
attracting funds in the local capital market (albeit aided by
capital controls that ensure a captive pool of local liquidity),
but it is not immune to risk. The local market is shallow and heavy
recourse to BCRA funding has adverse macroeconomic consequences,
posing some risk even to peso debt repayment capacity and financing
flexibility in the event of unforeseen shocks (as already seen in
2019-2020).

Debt sustainability risks remain high in Fitch's view. Federal
government debt rose to 104.6% of GDP in 2020 from 90.2% in 2019,
and general government debt (consolidating federal and provincial
debt with social security holdings) to an estimated 102.2% of GDP
from 88.5%, well above the current 'C'/'D' category median of 76%.
Fitch projects debt/GDP will fall slightly in 2021 on a GDP rebound
but resume an upward path thereafter. The 2020 bond restructurings
offered significant liquidity relief by reducing payments to low
levels until 2025, and some solvency relief by lowering effective
coupon rates over the life of the bonds (although the principal
haircut was negligible). However, ensuring debt sustainability and
capacity to repay the new bonds beginning in 2025 hinges on a
fiscal adjustment and economic recovery that remain highly
uncertain. Debt dynamics are subject to additional risk from shocks
to the exchange rate, inflation, or interest rates given a high
foreign currency debt share (80%) and growing inflation-indexed,
floating-rate, and dollar-linked peso issuance.

Fitch estimates real GDP fell 10.0% in 2020 due to a strict and
lengthy lockdown - one of the largest contractions in the region,
but better than initially expected due to a pick-up in activity
late in the year. Fitch projects real GDP will rebound 6.5% in 2021
on a large statistical carryover effect, and balancing some
pre-election policy impulse supported by better terms-of-trade with
policy uncertainties and real wage losses. A resurgence of the
pandemic into the coming winter months or bottlenecks in the
vaccination effort (off to a slow start) are a key risk to the
recovery.

The post-pandemic growth outlook appears weak. Given policy
uncertainty and a lack of reform plans, it could be difficult for
Argentina to break from its weak and erratic growth pattern,
characterized by stimulus-driven economic expansions in election
years followed by contractions. The authorities recently launched
an Economic and Social Council forge consensus between policymakers
and civil society actors around growth and social issues, but any
concrete plans to address competitiveness issues remain elusive.
Recent microeconomic interventions (telecom, agroindustry) and
pervasive controls could cast a further chill on investment
appetite.

ESG - Governance: Argentina has an ESG Relevance Score (RS) of '5'
for both Political Stability and Rights, and for the Rule of Law,
Institutional and Regulatory Quality, as is the case for all
sovereigns. Theses scores reflect the high weight that the World
Bank Governance Indicators (WBGI) have in Fitch's proprietary
Sovereign Rating Model. Argentina has a medium WBGI ranking at the
47th percentile, reflecting moderately high voice and
accountability; moderate control of corruption, government
effectiveness and political stability; and low rule of law and
regulatory quality.

RATING SENSITIVITIES

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

-- Macro: Greater confidence in a macroeconomic plan that could
    support a post-pandemic economic recovery and improve
    macroeconomic stability.

-- External Finances: A sustained build-up in central bank
    international reserves supported by credible policy
    adjustments.

-- Public Finances: A sustained reduction in the fiscal deficit
    that puts government debt/GDP on a downward path, and
    improvement in access to financing sources besides the central
    bank.

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

-- Public Finances: Signs of probable default to private
    creditors, including intensification of financing strains that
    increase risks of and incentives for the sovereign to miss,
    unilaterally reprofile, or renegotiate upcoming bond
    repayments.

SOVEREIGN RATING MODEL (SRM) AND QUALITATIVE OVERLAY (QO)

In accordance with the rating criteria for ratings in the 'CCC'
range and below, Fitch's sovereign rating committee has not used
the SRM and QO to explain the ratings, which are instead guided by
the rating definitions.

Fitch's SRM is the agency's proprietary multiple regression rating
model that employs 18 variables based on three-year centered
averages, including one year of forecasts, to produce a score
equivalent to a Long-Term Foreign Currency IDR. Fitch's QO is a
forward-looking qualitative framework designed to allow for
adjustment to the SRM output to assign the final rating, reflecting
factors within Fitch's criteria that are not fully quantifiable
and/or not fully reflected in the SRM.

BEST/WORST CASE RATING SCENARIO

International scale credit ratings of Sovereigns, Public Finance
and Infrastructure issuers have a best-case rating upgrade scenario
(defined as the 99th percentile of rating transitions, measured in
a positive direction) of three notches over a three-year rating
horizon; and a worst-case rating downgrade scenario (defined as the
99th percentile of rating transitions, measured in a negative
direction) of three notches over three years. The complete span of
best- and worst-case scenario credit ratings for all rating
categories ranges from 'AAA' to 'D'. Best- and worst-case scenario
credit ratings are based on historical performance.

KEY ASSUMPTIONS

Global economic growth and commodity prices perform in line with
the projections in Fitch's Global Economic Outlook (December
2020).

ESG CONSIDERATIONS

Argentina has an ESG Relevance Score of '5' for Political Stability
and Rights as World Bank Governance Indicators have the highest
weight in Fitch's Sovereign Rating Model (SRM) and is therefore
highly relevant to the rating and a key rating driver with a high
weight.

Argentina has an ESG Relevance Score of '5' for Rule of Law,
Institutional and Regulatory Quality and Control of Corruption as
World Bank Governance Indicators have the highest weight in the SRM
and are therefore highly relevant to the rating and a key rating
driver with a high weight.

Argentina has an ESG Relevance Score (RS) of '4' for Creditor
Rights as willingness to service and repay debt is highly relevant
to the rating and is a key rating driver with a high weight.
Argentina has defaulted on its commercial debt obligations
repeatedly in the past, most recently in 2020, and rescheduling of
debts owed to official-sector creditors remains pending.

Argentina has an ESG Relevance Score of '4' for Human Rights and
Political Freedoms as strong social stability and voice and
accountability are reflected in the World Bank Governance
Indicators that have the highest weight in the SRM. They are
relevant to the rating and a rating driver.

Except for the matters discussed above, 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).




===========
B R A Z I L
===========

CELESC: Moody's Withdraws Ba2 Corp. Family Rating
-------------------------------------------------
Moody's America Latina Ltda. has withdrawn all the ratings assigned
to Centrais Eletricas de Santa Catarina S.A. ("Celesc") and Celesc
Distribuicao S.A. ("Celesc D"). At the time of withdrawal, there
was no instrument rating outstanding.

The following ratings are affected by the action:

Ratings Withdrawn:

Issuer: Centrais Eletricas de Santa Catarina S.A.

Corporate Family Rating, Withdrawn , previously rated Ba2/Aa3.br

Issuer: Celesc Distribuicao S.A.

Issuer Rating, Withdrawn , previously rated Ba2/Aa3.br

Outlook Actions:

Issuer: Centrais Eletricas de Santa Catarina S.A.

Outlook, Changed to Rating Withdrawn from Stable

Issuer: Celesc Distribuicao S.A.

Outlook, Changed to Rating Withdrawn from Stable

RATINGS RATIONALE

In May of 2019, Celesc D redeemed its BRL300 million senior
unsecured debentures backed by Celesc.

Headquartered in Florianopolis, in the state of Santa Catarina,
Brazil, Celesc is a non-operating holding company controlled by the
state government of Santa Catarina, with equity interests in
companies operating in the electricity sector, gas distribution and
sanitation. Celesc's main subsidiaries are (i) Celesc D, an
electricity distribution company covering 286 municipalities in the
state of Santa Catarina; and (ii) Celesc Geracao S.A., a hydropower
generation company specialized in small hydro plants and
transmission assets. Celesc also holds minority interests in a gas
distribution company (SCGAS), a water and sewage company (CASAN)
and other small hydropower projects and transmission assets.


COSAN SA: Fitch Affirms 'BB' LongTerm Foreign Currency IDR
----------------------------------------------------------
Fitch Ratings has affirmed Cosan S.A.'s (Cosan) Long-Term Foreign
Currency (FC) Issuer Default Rating (IDR) at 'BB', Local Currency
(LC) IDR at 'BB+' and National Long-Term rating at 'AAA(bra)'. The
Rating Outlook is Negative for the FC IDR and Stable for the LC IDR
and National Scale Rating. Fitch has also affirmed the ratings on
all related cross border debts at 'BB', as they are unconditionally
and irrevocably guaranteed by Cosan.

In addition, Fitch has affirmed at 'BB' the ratings of the senior
unsecured notes due 2029 originally issued by Cosan Limited (Cosan
Limited, Long-Term LC IDR BB/Stable and Long-Term FC IDR
BB/Negative) that moved into Cosan. Fitch has also upgraded to
'AAA(bra)' from 'AA+(bra)' the National Scale Rating of the
unsecured debenture issuance of BRL1.7 billion, originally issued
by Cosan Logistica S.A (Cosan Log, AA+(bra)'/Stable) that also
moved into Cosan. At the same time Fitch has withdrawn the
corporate ratings of Cosan Limited and Cosan Log.

The rating actions follow the conclusion of the corporate
restructuring in which Cosan Limited and Cosan Log merged into
Cosan. While it expects Cosan's net debt to increase by BRL4.4
billion as the company incorporates the debts originally issued by
Cosan Limited and Cosan Log, Fitch estimates Cosan's credit metrics
to remain strong supported by higher inflow of dividends expected
for 2021. Fitch projects Cosan's net debt to EBITDA plus dividends
ratio increase to 3.5x in 2021 and decline to 1.6x by 2023 as
compared to 0.7x and 0.1x, respectively, forecasted by Fitch before
the restructuring.

The ratings incorporate the expectation that Raizen Energia S.A and
Raizen Combustíveis S.A (jointly referred here as Raizen) will
resume the payment of meaningful dividends in 2021 and that Comgas
will continue to upstreaming meaningful dividends to the company
over the next couple of years.

Fitch sees Cosan's direct stake at Rumo S.A (Rumo; BB/Negative,
BB+/Stable, AAA(bra)/Stable), Brazil's largest railroad operator,
that follows the restructuring as positive to its business profile
as it improves assets diversification and reduces group's cash flow
volatility derived from the S&E business. Cosan's robust portfolio
of assets will allow the company to maintain strong liquidity
profile and interest coverage ratios above 3.8x over the next two
years combined with extended debt maturity schedule. The company's
liquidity also benefits from an undrawn committed standby facility
of BRL250 million that Fitch expects to increase to BRL750 million
in the short-term..

Cosan's LC IDR is constrained by the structural subordination of
its debt to dividends received from Raizen Combustiveis S.A. (FC
and LC IDRs BBB/RWN and Long-Term National Scale Rating
AAA(bra)/Stable), Raizen Energia S.A. (LC and FC IDRs BBB/RWN and
Long-Term National Scale Rating AAA(bra)/Stable) and Companhia de
Gas de Sao Paulo (Comgas; FC IDR BB and LC IDR BBB-/Negative,
National Scale Rating AAA(bra)/Stable). The Negative Outlook for
Cosan's FC IDR reflects Brazil's BB-/Negative.

Fitch has withdrawn the ratings of Cosan Limited (Long-Term LC IDR
BB/Stable and Long-Term FC IDR BB/Negative) and Cosan Log
(AA+(bra)/Stable) following their mergers into Cosan.

KEY RATING DRIVERS

Robust Asset Portfolio: Cosan's four main assets and sources of
dividends are companies with robust credit quality. While Fitch
does not expect Rumo to distribute dividends before 2023, it
believes Cosan's business model will improve following the
company's now direct stake into Rumo, Brazil's largest railroad
operator. Rumo's ratings are supported by its solid business
position as one of the largest railroad operators in Brazil. The
company has competitive advantages over other transportation
options, with relatively high and stable operating profitability
and robust cash flow generation. The industry fundamentals are
strong and benefit from stable demand throughout the cycles, and
the rating incorporates Rumo's conservative capital structure, as
well as its sound liquidity position, with low debt concentration
during the strong capex period. The presence of Rumo contributes to
broader Cosan's business diversification and helps the group to
further lessen the cash flow volatility derived from the S&E
business.

While Raizen's ratings have been placed on Rating Watch Negative
following the acquisition of Biosev, Fitch does not expect the
acquisition, if concluded, to affect Raizen's capacity to pay
significant amounts of dividends to Cosan as from fiscal 2022.
Biosev is currently Brazil's third largest S&E player in the
country, running 32 million tons of crushing capacity spread over 9
mills. Following the acquisition, Raizen will have total sugar cane
crushing capacity of 105 million tons per year in Brazil, the
equivalent of 15% of total installed capacity in Brazil's Center
South. Raizen Combustiveis is second largest fuel distributor in
Brazil with a 20% market share in terms of volumes. Raizen's
investment grade ratings are based on the combined financial
strength of the two operational companies and their mutual
financial support and cross guarantees provided. Raizen is a joint
venture (JV) and represents an important investment for both its
shareholders, Cosan and Shell (AA-/Stable).

Comgas is Brazil's largest natural gas distribution company in
terms of volume billed that operates in a sector with low to
moderate business risk and high growth potential. Comgas's ratings
are sustained by the solid fundamentals of its natural gas
distribution business and historically robust financial profile
with reduced leverage, strong liquidity profile and significant
cash flow from operations (CFFO). Comgas's business profile
benefits from its operations in the state of Sao Paulo, the most
economically significant state in Brazil, and from the company's
long-term concession agreement, which includes clauses with
non-manageable cost pass-through that protect its cash flow
generation. The company has favorable growth prospects in the
medium and long term given the expectation of gas-distribution
network and customer base. Fitch believes the creation of Compass
strengthens Cosan's portfolio of assets by increasing Cosan's
presence in the Brazilian gas and energy markets, for which Fitch
believes there is high growth potential.

Temporary Leverage Increase: Fitch expects Cosan's net debt to
increase by BRL4.4 billion following the mergers of Cosan Limited
and Cosan Logistica and reach BRL6.8 billion by the end of 2021.
Fitch projects Cosan's net debt to EBITDA plus dividends received
ratio to increase to 3.5x in 2021 and to decline to 2.5x in 2022
and 1.6x in 2023, as the inflow of dividends increases to BRL2.1
billion and BRL2.5 billion in 2021 and 2022, respectively. As of
Dec. 31 2020, Cosan's net debt/EBITDA plus dividends received ratio
was 2.8x.

As of Dec. 31, 2020, Cosan's debt at the holding level of BRL4.2
billion consisted of intercompany loans of BRL6.3 billion, which
represent bond issuances by Cosan's fully owned subsidiaries, and
non-voting preferred shares of BRL387 million due 2022. Although
issued by Cosan Luxembourg S.A. and Cosan Overseas Ltd, the
associated debt at both entities is guaranteed by Cosan, which is
ultimately responsible for the payment. Fitch also incorporates net
FX derivative balances of BRL2.5 billion into Cosan's debt. Cosan
Limited's and Cosan Log's debt amounted to BRL 4.2 billion, net of
derivatives, and BRL1.7 billion, respectively, as of Dec. 31 2020.

Comfortable Interest Coverage: Fitch expects interest coverage to
recover in 2021, as Raizen resumes dividends payments. Fitch's base
case scenario incorporates dividends of BRL2.1 billion in 2021
being BRL1.2 billion from Raizen and BRL900 million from Comgas.
Fitch forecasts Cosan's EBITDA plus dividends/gross interest ratio
comfortable at 4.1x in 2021, from less than 2x in 2020. Fitch
estimates that the strong interest coverage from 2021 onwards will
allow the company to gradually reduce its gross debt by about
BRL1.3 billion by the end of 2023. Fitch's base case projections
also consider the expectation that investments at Compass Gas e
Energia (Compass) will not pressure Cosan's liquidity or impair its
ability to receive meaningful amounts of dividends from Comgas over
the next two years.

Cosan's access to its main investees is limited to dividends, as
the control of Raizen Combustiveis and Raizen Energia are jointly
controlled by Cosan and Shell. Comgas is a regulated concession,
and any intercompany loan to shareholders must be approved by
regulators. Cosan has a long track record of robust cash inflow
from dividends from its investees, and in 2019 the company also
benefited from a BRL1.5 billion capital reduction in Comgas.

DERIVATION SUMMARY

Cosan's ratings are supported by its strong and diversified asset
portfolio of investment grade companies, with activities in
distribution of natural gas, S&E, and the sale of fuels and
lubricants. It also benefits from the stable operating performance
and growth prospects of rail road operations represented by Rumo.
Cosan's ratings benefit from the robust credit quality of its
subsidiaries and their ability to pay robust dividend over the next
few years.

Cosans ratings compare unfavorably with Votorantim S.A's. (VSA, LT
FC/LC IDR BBB-/Negative and National Scale Rating AAA(bra)/Stable),
one of Latin America's largest industrial conglomerates. VSA has a
diversified business portfolio, strong market position in the
industries it participates in, and geographic diversification with
strong operations in the Americas, while Cosan Limited's assets are
primarily located in Brazil and with a representative share of its
cash flow generation capacity in the more volatile S&E business.

VSA has stronger liquidity than Cosan, but Cosan Limited is better
positioned in terms of cash flow generation compared to both VSA
and Grupo KUO, S.A.B. de C.V.'s (KUO, LT FC/LC IDR BB/Negative), a
Mexican Group with diversified business portfolio in the consumer,
automotive and chemical industries.

KEY ASSUMPTIONS

-- Dividends from Raizen and Comgas of BRL1.2 billion and BRL900
    million, respectively, in 2021. For the next years, average
    dividends from investees of about BRL2.6 billion per year. No
    dividends from Rumo before 2023.

-- The merger with Cosan Limited and Cosan increases Cosan's net
    debt by BRL4.4 billion .

-- Annual dividends paid to Cosan's shareholders of BRL500
    million over the next years.

-- New issuances at the holding level will only be used to
    refinance existing debt.

-- Absence of major new acquisitions and significant capital
    injections in subsidiaries.

RATING SENSITIVITIES

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

-- Upgrade is unlikely and will be linked to an improvement in
    the credit profile of Raizen Combustiveis, Raizen Energia
    Comgas and/or Rumo

-- The revision of the Outlook on Brazil's sovereign rating to
    Stable from Negative would trigger a revision of the Outlook
    for Cosan's FC IDR

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

-- Deterioration of the credit profiles of Raizen Combustiveis,
    Raizen Energia, Comgas and/or Rumo, and Cosan's interest
    coverage by dividends received falling below 2.0x on a
    sustainable basis.

-- A downgrade of the sovereign rating may also trigger a
    downgrade of Cosan's Foreign Currency IDR and ratings for the
    associated bond issuances

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

Strong Liquidity: In Fitch's opinion, Cosan will maintain robust
liquidity position over the next two years, benefiting from the
expected robust dividend flow, in addition to a well-laddered debt
maturity schedule. Fitch projects Cosan to report a cash position
of BRL2.6 billion as of Dec. 31, 2021 and short-term debt relating
only to accrued interest payments on bond issuances currently
outstanding. As of Dec. 31, 2020, the holding company reported cash
and marketable securities of BRL1.9 billion and short-term debt of
BRL137 million and Fitch expects Cosan Limited to contribute with
cash of BRL550 million following the merger.

There are no debt maturities scheduled for 2021, and Fitch
estimates payments of BRL387 million of preferred shares in 2022.
For 2023 Fitch estimates payments of BRL300 million net of
derivatives, under the 2023 bond notes, and BRL580 million relating
to the first installment of the unsecured debentures issued by
Cosan Log in 2020. Around 70% of its debt is due in five years and
beyond, and Cosan's liquidity is reinforced by an undrawn standby
credit facility of BRL250 million that Fitch expects to increase to
BRL750 million in the short term. The group's strong financial
flexibility relative to its access to the debt and capital markets,
in combination with dividends received from its investees ensures
adequate refinancing capacity for Cosan. Fitch expects dividends
received to provide Cosan with adequate repayment capacity for
upcoming interest payments while it increases its cash position and
supports its expected dividend payouts of BRL500 million per year.

SUMMARY OF FINANCIAL ADJUSTMENTS

-- Net derivative balances have been added to Cosan's adjusted
    debt figures.

-- Cosan's debt also includes the balance of BRL387 million in
    preferred shares, with final maturity in 2022.

-- EBITDA figures incorporate all cash dividends received from
    Cosan's investees.


ENGIE BRASIL: Fitch Affirms 'BB' LongTerm Foreign Currency IDR
--------------------------------------------------------------
Fitch Ratings has affirmed Engie Brasil Energia S.A.'s (Engie
Brasil) Foreign Currency (FC) and Local Currency (LC) Long-Term
Issuer Default Ratings (IDRs) at 'BB' and 'BBB-', respectively.
Fitch has also affirmed the Long-Term National Scale Rating at
'AAA(bra)' for Engie Brasil and its senior unsecured debenture
issuances. The Rating Outlook for the IDRs is Negative, while the
Rating Outlook for the National Scale Rating is Stable.

Engie Brasil's ratings reflect its prominent market position as the
largest private electric energy generation company in Brazil with a
sizable and diversified portfolio, operational efficiency and
robust operating cash flow generation derived from the existence of
long-term power purchase agreements with its clients. The company's
credit profile also benefits from a conservative financial profile
with historical low leverage and strong financial flexibility to
deal with financing needs resulting from investments in new
projects. The regulatory risk of the Brazilian power sector is
considered as low to moderate, while the hydrology risk is
currently above average.

Engie Brasil's FC IDR is constrained by Brazil's country ceiling of
'BB', as the company generates all of its revenues in local
currency (BRL), with no cash and committed credit facilities
abroad. The analysis does not incorporate any potential support
from the parent company, Engie S.A. (IDR 'A'/Negative) based on a
weak linkage between both companies, as per Fitch's Parent and
Subsidiary Rating Linkage (PSL) methodology. Fitch also considers
the three-notch difference between the company's LC IDR and the
sovereign rating as appropriate due to the regulated nature of the
power sector.

As a result, the Negative Outlook for the FC and LC IDRs follows
the same Outlook of Brazil's 'BB-' sovereign rating. Fitch expects
Engie Brasil will be able to sustain its solid consolidated credit
profile over the next few years despite a period of higher
investment levels, which supports the Stable Outlook for the
National Scale rating.

KEY RATING DRIVERS

Strong Business Profile: Engie Brasil's ratings benefit from its
strong business position in the electric power generation segment.
The company is the largest private energy generation company in
Brazil, with a total installed capacity of 8,711MW, to be further
increased by 795 MW to 9,506MW after the conclusion of its two
projects under development. The company presents a successful track
record in its commercial strategy and monthly allocation of its
energy capacity, and also benefiting from the dilution of
operational risks obtained through its diversified asset base. The
entrance into the transmission segment in 2017 provides further
diversification and improves predictability to the operational cash
flow. Engie Brasil has 2,800 km in transmission lines under
development with Permitted Annual Revenues (PAR) of BRL545 million
to be completed by the end of 2021.

Manageable Negative FCF: Fitch considers that Engie Brasil has
financial flexibility to deal with the expected negative FCF for
2021. The base case scenario presents average EBITDAs and cash flow
from operations (CFFO) of BRL5.5 billion and BRL4.4 billion in 2021
and 2022, respectively, with negative FCF of around BRL1.6 billion
in 2021 and positive of BRL250 million in 2022. EBITDA margin
should grow over the next years, with 60% in 2021, due to lower
energy trading activity and the start-up of transmission lines.
High capex of BRL4.9 billion during 2021-2022 period and strong
distribution of dividends corresponding to a dividend pay-out of
100% net income pressure the FCF, although Fitch considers that
there is enough flexibility in the dividend pay-out to maintain
strong credit metrics. Fitch assumed energy sales of 4.5 average GW
and 4.9 average GW in 2021 and 2022, with average tariffs of
BRL210/MWh and BRL213/MWh, excluding sales at the spot market and
quota regime for the latest.

Moderate Exposure to Hydrologic Risk: Fitch estimates that the
company's uncontracted energy level at 12% in 2021 and 14% in 2022
is sufficient to support the Generating Scaling Factor (GSF) in
these years, considered at 0.82 on average for this period. This
scenario mitigates the company's exposure to energy prices in the
spot market (PLD) of BRL178/MWh incorporated in the base case
scenario. Engie Brasil must be efficient in acquiring power
purchase contracts at prices compatible with those established in
the sales contracts or in maintaining uncontracted energy to cover
the reduction of its own generation. Engie Brasil has some
protection against hydrological risk in sales contracts within the
regulated market, which represents about 40% of the energy sold,
limiting the exposure to 7%.

Conservative Leverage to Remain: Fitch's base case estimates Engie
Brasil's net debt to adjusted EBITDA at 2.2x and 2.1x and net debt
to FFO at 2.4x and 2.3x, respectively, in 2021 and 2022. These
ratios are still conservative for the IDRs, although show some
increase compared with 1.9x and 2.0x on average, respectively, in
the last three years, due to new debt raised and cash outflows
related to acquisitions (mainly BRL3.8 billion in Transportadora
Associada de Gas S.A. [TAG] in 2019 and 2020 and BRL329 million in
the energy transmission company Novo Estado Energia S.A. [Novo
Estado] in 2020) and investments in greenfield projects. Novo
Estado is the issuer's largest project under development and
requires capex of BRL3.0 billion, being BRL1.2 billion already done
in 2020 and the remaining BRL1.8 billion in 2021.

Weak Linkage with Parent Company: Engie Brasil's ratings are based
on its individual credit risk profile, as overall legal,
operational and strategic linkage to its parent company Engie S.A.
is considered weak. Engie S.A. controls 68.71% of Engie Brasil, but
there are no guarantees or cross-default clauses. Despite of the
same core business, Fitch also views operational integration as
weak. Strategic linkage is moderate due to reputation risks related
to the use of a common name.

DERIVATION SUMMARY

Engie Brasil's FC IDR 'BB'/Stable is two to four notches below
peers in Latin America, such as Engie Chile ('BBB+'/Stable), the
fourth largest generator in Chile, Emgesa ('BBB'/Negative), the
second largest generation company in Colombia, and AES Gener
('BBB-'/Stable), the second largest generator in Chile and one of
the leaders in Colombia, primarily as a result of the Brazilian
country ceiling at 'BB'. Engie Chile, Emgesa and AES Gener benefit
from a better economic environment in investment-grade countries -
Chile and Colombia -, while Engie Brasil FC IDR is capped by the
Brazilian Country Ceiling.

Engie Brasil's 'BBB-'/Stable LC IDR is more comparable with these
'BBB' category rated peers. Engie Brasil is well positioned
relative to its Latin American generation peers in installed
capacity, asset diversification and contracted position. Engie
Brasil has an installed capacity of approximately 8.7GW, which
compares favorably with AES Gener's 5.3GW, Emgesa's 3.5GW and Enel
Generacion Chile's 2.2GW. Nevertheless. the energy mix of Engie
Chile and AES Gener differs from the related company in Brazil and
Emgesa. Engie Brasil and Emgesa are more exposed to hydrological
conditions, while AES Gener and Engie Chile need to deal with the
coal and natural gas prices volatility. All the companies have
predictable and robust cash flow generation since they have managed
business risks properly, but Engie Brasil has a stronger financial
profile. Fitch considers the three-notch difference between Engie
Brasil's LC IDR and the sovereign rating as appropriate due to the
regulated nature of the business.

KEY ASSUMPTIONS

-- Energy sales of 4.5 average GW in 2021 and 4.9 average GW in
    2022;

-- thermal and quotas capacity not included;

-- Energy purchase of 1.1 average GW in 2021 and 2022;

-- SG&A expenses adjusted by inflation;

-- GSF of 0.8 in 2021 and 0.83 in 2022;

-- Capital expenditures of BRL4.9 billion from 2021 to 2022;

-- Dividends pay-out of 100%;

-- Transmission projects Gralha Azul and Novo Estado fully
    operating by the end of 2021;

-- Conclusion of Santo Agostinho wind complex in 2023;

-- Acquisition of HPP Jirau not considered until 2023.

RATING SENSITIVITIES

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

-- An upgrade is unlikely in the near term because the Foreign
    Currency IDR is constrained by the country ceiling (BB) and
    the Local Currency IDR is limited to three notches above the
    sovereign rating (BB-).

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

-- Sizable investments or acquisitions currently out of Fitch's
    base case that could lead to net leverage consistently above
    3.5x;

-- FFO-adjusted net leverage above 4.0x on a sustainable basis;

-- Difficulties in financing the capex plan through project
    finance debts;

-- A downgrade of the sovereign rating would trigger a downgrade
    of Engie Brasil's IDRs.

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

High Financial Flexibility: Engie Brasil's consolidated liquidity
is robust with the debt maturity schedule without short-term
concentration. As of December 2020, cash and marketable securities
of BRL4.7 billion was significantly above the short-term debt of
BRL1.8 billion. The high cash balance will be partially used to
finance the negative FCF in 2021, when the group will still need to
raise new debt. Engie Brasil's ample access to debt and capital
markets benefits the group to raise alternatives funding with
structure adequate to project finance and maintaining a
well-balanced debt maturity profile. At the end of 2020 the company
had BRL3.1 billion of pending disbursement in long-term project
finance loans already contracted, which should be received in 2021
and fund part of the capex plan this year. As of December 2020,
Engie Brasil's total debt of BRL16.2 billion was mainly composed of
Banco Nacional de Desenvolvimento Economico e Social (BNDES)
(BRL5.9 billion) and debentures (BRL5.6 billion).

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.




===================================
D O M I N I C A N   R E P U B L I C
===================================

DOMINICAN REPUBLIC: Labor Ministry's Project  to Enforce Labor Law
------------------------------------------------------------------
Dominican Today reports that the Dominican Republic Ministry of
Labor (MT) will present a project with which it seeks to comply
with the percentages of national and foreign workers in
construction works and other sectors of the country, as established
in article 135 of the Labor Code.

This was stated by Julian Mateo, Vice Minister of Labor, who added
that it would be sought that in the construction sector, 80% of the
workers are nationals and 20% are foreign labor, which will comply
with the Dominicanization plan of the hand of work announced by
President Luis Abinader in his first rendering of accounts,
according to Dominican Today.

"This will not only be in the construction sector, but also in the
agricultural sector, especially in banana production. This is
important," he added.

He informed that in the Pedernales tourism development project, the
appropriate measures are already being taken to comply with article
135, the report notes.

Mateo pointed out that in the investigations they did for the
project, they found that some of the reasons why there is so much
Haitian labor in construction are low wages, but he assured that
the ministry aims to improve pay, the report relays.

                    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.

Fitch Ratings on Jan. 18, assigned a 'BB-' rating to Dominican
Republic's USD1.5 billion 5.3% notes due Jan. 21, 2041.
Concurrently, the Dominican Republic reopened its 2030 4.5% notes
for an additional USD1.0 billion, which Fitch rates 'BB-', raising
the total outstanding amount of the 2030 notes to USD2.0 billion.

Standard & Poor's, on December 4, 2020, affirmed its 'BB-'
long-term foreign and local currency sovereign credit ratings on
the Dominican Republic. The outlook remains negative. S&P also
affirmed its 'B' short-term sovereign credit ratings. The negative
outlook reflects S&P's view that it could lower the ratings on the
Dominican Republic over the next six to 18 months, given the severe
impact of the COVID-19 pandemic on the sovereign's already
vulnerable fiscal and external profiles, as well as the potential
for a weaker-than-expected economic recovery.

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: Poverty, Unemployment Increase, ECLAC Says
--------------------------------------------------------------
The Dominican Today relays that in the Dominican Republic, poverty
went from 20.3% to 21.8% in 2020, and employment has fallen by
8.8%, according to a report.

The coronavirus pandemic had increased poverty in the Dominican
Republic from 20.3% in 2019 to 21.8% of the population in 2020.
However, this increase is less than what would have occurred if the
Dominican Republic had not applied the Government's social
protection measures with the financial transfer programs "Stay at
Home" and "Phase," which prevented poverty from soaring 25.5% of
the population.

This was reported by the Executive Secretary of the Economic
Commission for Latin America and the Caribbean (ECLAC), Alicia
Barcena, who highlighted that the covid-19 had caused the fall of
the employed population by 8.8% in 2020, where women were highly
affected with a fall of 10.1%, (7.9% in men).  She stressed that
this drop is especially in sectors such as tourism, vital for the
economy.

According to ECLAC figures, of the total jobs lost during 2020,
73.9% belong to the informal sector.  Also, that by age group,
those aged 15-24 years lost 20.4% less, and those aged 40-59 years
lost 8.1%.

In another order, Barcena reported that social inequality also
increased from 0.43 in 2019 to 0.48 in 2020. She stressed that the
social protection programs applied in the country have been
critical and the measures to reactivate the economy.

She explained that the country launched a support plan for MSMEs
and allocated essential resources for companies to cushion the
burden of their operating costs and the enormous impact that these
companies are suffering.

She cited that this recovery plan consists of support for working
capital and a boost to associativity through cooperatives, which is
led by the Ministry of Industry, Commerce, and MiPymes (MICM).

"Supporting MSMEs is very important because it is the sector that
generates the most employment in the country," he explained when
answering questions from TODAY during the presentation of the
latest edition of the Social Panorama of Latin America 2020
report.

She valued support for the agricultural sector as necessary, which
is essential to generate markets. Interestingly, the country has
launched tourist insurance so that people who travel have health
coverage and programs for MSMEs associated with tourism.

At the regional level, ECLAC revealed that the region is facing a
strong economic recession with a drop in GDP of -7.7%; it is
estimated that in 2020 the extreme poverty rate stood at 12.5% ,
and the poverty rate reached 33.7% of the population.

The total number of poor people reached 209 million at the end of
2020, 22 million more than in 2019. Of that total, 78 million
people were in extreme poverty, 8 million more than in 2019.

CEPAL stated that the region is now ten years behind in economic
matters and 15 years behind poverty levels.

                         Unemployment

The regional unemployment rate stood at 10.7% in 2020, increasing
2.6 percentage points compared to 2019 (8.1%). The generalized fall
in employment and the departure of the labor force have affected
women, workers, informal workers, youth, and migrants with greater
intensity.

                    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.

Fitch Ratings on Jan. 18, assigned a 'BB-' rating to Dominican
Republic's USD1.5 billion 5.3% notes due Jan. 21, 2041.
Concurrently, the Dominican Republic reopened its 2030 4.5% notes
for an additional USD1.0 billion, which Fitch rates 'BB-', raising
the total outstanding amount of the 2030 notes to USD2.0 billion.

Standard & Poor's, on December 4, 2020, affirmed its 'BB-'
long-term foreign and local currency sovereign credit ratings on
the Dominican Republic. The outlook remains negative. S&P also
affirmed its 'B' short-term sovereign credit ratings. The negative
outlook reflects S&P's view that it could lower the ratings on the
Dominican Republic over the next six to 18 months, given the severe
impact of the COVID-19 pandemic on the sovereign's already
vulnerable fiscal and external profiles, as well as the potential
for a weaker-than-expected economic recovery.

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).




===========
M E X I C O
===========

VERACRUZ STATE: Moody's Withdraws Ba1 Rating on MXN1BB Bank Loan
----------------------------------------------------------------
Moody's de Mexico has withdrawn the Ba1 (Global Scale, Local
Currency) and A1.mx (Mexico National Scale Rating) ratings of the
State of Veracruz's MXN 1.1 billion FISE bank loan from Banobras
that matures in November 2024.

Moody's has decided to withdraw the ratings for its own business
reasons.

The methodologies used in these ratings were Regional and Local
Governments published in January 2018.




===============
P A R A G U A Y
===============

PARAGUAY: President Rejigs Cabinet, Protesters Demand Ouster
------------------------------------------------------------
EFE News reports that Paraguay's president announced a cabinet
reshuffle amid a political crisis sparked by protests over the
government's handling of the coronavirus pandemic.

Police again used force to disperse a group of people who had
gathered in front of the presidential residence to break through
the perimeter security barrier, according to EFE News.

The incident took place in an area where the United States embassy
is also located and amid protests demanding President Mario Abdo
Benitez to step down, the report notes.

Police fired rubber bullets and tear gas and made about a dozen
arrests, officers said, the report relays.

The group was demanding to meet with Interior Minister Arnaldo
Giuzzio, the report notes.

When he did not appear, they tried to cross the security barrier,
one of the protest leaders told the media, the report discloses.

According to police, protesters pelted stones and burst
firecrackers in the vicinity of the presidential palace and then
retreated after the security forces intervened, the report relays.

The report notes that the fresh protests came after Mario Abdo
Benitez announced a cabinet reshuffle to make new appointments to
the ministries of health, education, women's issues, and civil
affairs.

The report relays that in a recorded message, the president said
the changes to the cabinet were taken "for the sake of peace."

"I am a person of dialogue, not confrontation, and my commitment is
to listen to everyone, both those who approve of our government and
those who do not," he added.

The president pledged that the health ministry would "make every
effort to ensure timely supply of medicines to the population with
strict respect for existing administrative processes," the report
relays.

The cabinet changes will affect Education Minister Eduardo Petta,
heavily criticized by the teachers and students, and the Minister
of Women, Nilda Romero, the report discloses.

The other minister dismissed is the chief of staff, Juan Ernesto
Villamayor, who was questioned in Congress in January for a meeting
with emissaries of Juan Guaidó, Venezuela's opposition leader, the
report relays.

The meeting, which came into the spotlight after an American media
outlet reported it, addressed the reduction of Paraguay's oil debt
to Venezuela's state company, the report notes.

Villamayor said it did not materialize in the absence of guarantees
that the court in Paris arbitrating the case would validate the
agreement, the report relays.

Julio Borba was, announced as interim health minister in place of
Julio Mazzoleni, who resigned amid pressure from protests by
medical personnel against the lack of supplies.

Thousands of Paraguayans earlier returned to the streets of
Asunción for the second consecutive day, demanding the resignation
of Abdo Benítez's government, the report notes.

The protest began after medical personnel and relatives of patients
complained about the lack of medical supplies and equipment in
public hospitals, especially those impacted by the coronavirus, the
report relays.

Before the midnight clash, thousands of participants marched
peacefully through the heart of Paraguay's capital, Asunción, from
the Congress building to the headquarters of the Colorado Party via
the iconic National Pantheon of Heroes memorial, the report
discloses.

They marched to music, carrying national flags and protest banners,
the report adds.




=====================
P U E R T O   R I C O
=====================

PUERTO RICO: Debt Restructuring Faces Several Obstacles
-------------------------------------------------------
Robert Slavin at The Bond Buyer reports that the Puerto Rico
Oversight Board's proposed central government debt adjustment faces
several obstacles, most prominently bond insurers' possible
withdrawal of support and local government opposition.

Puerto Rico bankruptcy Judge Laura Taylor Swain gave the board
until March 8 to submit a plan of adjustment for bonds, pensions,
and unsecured debts, according to The Bond Buyer.

The report notes that the board reached an agreement with leading
bondholders and insurers in early February that will define some of
the plan of adjustment's terms.  The plan support agreement (PSA)
required the support of 70% each of the holders of general
obligation bonds, public building authority bonds, and holders of
both bonds, the report discloses.  The Feb. 23 agreement did not
get that level of support.

The plan garnered the needed additional support to reach the 70%
levels within 12 hours of being announced, according to Board
Executive Director Natalie Jaresko, and the board announced that on
Feb. 24, the report relates.

However, 15 percentage points of the support comes from bond
insurers Assured Guaranty and National Public Finance Guarantee.
While the insurers signed the PSA, the insurers can withdraw from
the agreement if they choose as late as April 1, the report
discloses.

Assured Guaranty Chief Executive Officer Dominic Frederico has made
it clear that if the board doesn't provide acceptable terms for
restructuring the Highways and Transportation Authority, Convention
Center District Authority, and perhaps other bonds, the insurer
will withdraw its support, the report says.

The report relays that Jaresko said on Feb. 16, she felt optimistic
that even if the insurers withdraw their support, there would be
enough PBA and GO holder support for the agreement to go forward.

The plan of adjustment will go far beyond covering the GO and
commonwealth-guaranteed PBA bonds. It is expected to also cover
Puerto Rico Infrastructure Finance Authority rum tax, HTA, CCDA,
Employees Retirement System, Metropolitan Bus Authority, and 2011
Series D/E/PIB commonwealth and 2012 Series commonwealth bonds, the
report relays.

Puerto Rico Fiscal Agency and Financial Advisory Authority
Executive Director Oscar Marrero said Monday that the central
government debt deals would reduce total claims by 79%. Since the
PSA dictates GO and PBA bonds excluding the planned contingent
value instrument would be paid about 68% to 79% of original value,
this implies the board is planning extremely steep haircuts for the
other bonds, the report says.

Voting on proposed reorganizations are done in claim classes, with
approval requiring two-thirds of the amount held and a majority of
the number of existing claims voting in favor, the report relates.
A judge can approve a bankruptcy as long as at least one class of
claims has "approved" the plan following these rules, the report
relays.

If approved despite non-consenting classes, there is said to be a
"cram down," the report relates.

The approved PSA, which only addresses the GO and guaranteed PBA
bonds, sets a higher bar for approval (70%) than the Puerto Rico
Oversight, Management, and Economic Stability Act (PROMESA)
requires in the plan of adjustment, the report notes.  By contrast,
it is clear the board plans to offer very small recoveries to a
wide swath of other bonds, the report discloses.

Swain has said she wants to see broad support for the plan, but she
can approve a plan with large amounts of opposition, the report
relays.

Puerto Rico Attorney John Mudd said the board would file a
disclosure statement as well as plan of adjustment Monday. After
this, "there will be a hearing to determine if the disclosure
statement gives sufficient information for an investor to make a
decision on the plan, the report notes.  There will be discovery
and written objections before the hearing," the report relays.

Then, the board will seek votes for the plan, he said.  Ultimately
there will be a several-day hearing on the plan, the report notes.
While the board said it hopes to approve the plan this fall, Mudd
expects it will take longer, the report relays.

The plan could be approved by summer, according to Municipal Market
Analytics Partner Matt Fabian, the report relays.  However, "it's
important not to think about this year as a do-or-die scenario," he
added.  "If this year the board and Puerto Rico gets closer to
agreement with creditors, that's a positive. If it doesn't work for
whatever reason, negotiations will simply continue next year, with
slightly different terms, maybe different players, the report
relays.

"One thing that could create a longer-term set back, that could
delay negotiations more deeply into the future, is if the next
major hurricane happens in 2021 instead of 2022 or 2023," Fabian
said, the report notes.

Adoption of the plan "hinges, almost entirely, on one, legislative
approval, and two, the high-yield market remaining intact," he
continued, the report relays.  "If demand for high-yield bonds
collapses, the plan will need to be renegotiated to give
bondholders more upfront cash."

The leaders of the Puerto Rico Senate and House of Representatives
and the governor all adamantly oppose any plan that includes a
public pension reduction, the report notes.

The approved PSA is contingent upon the Puerto Rico legislature and
governor enacting the required GO and contingent value instrument
legislation, the report relays.  The board's insistence on a
pension cut and the local government's opposition to could be a
sticking point, the report relates.

Puerto Rico Clearinghouse Principal Cate Long said plan of
adjustment approval hinges on legislative approval. Supporters of
the Puerto Rico Sales Tax Financing Corp. (COFINA) deal hired
lobbyists to gain legislative approval, the report discloses.  She
expects something similar here.

In past Puerto Rico bond plans of adjustment, "the board has
claimed that if the legislature did not approve the legislation, it
would seek approval from Swain via PROMESA [section] 305 but I am
not certain the judge [would] go for it," attorney Mudd said. "If
not, the Title III petition must be dismissed," the report adds.

The PSA lays out several other hurdles for consummation of the
plan, the report notes.  The agreement would be terminated if a
court finds the ERS bondholders have a claim against the
commonwealth, the report relays.  Mudd said this was logical,
because in that case the commonwealth would have to pay more, the
report relays.

The PSA is ended if the automatic stay on bond claims were to be
terminated, the report relays.  "That's a smart condition because
bondholders can seek full repayment at par if the stay is lifted,"
Clearinghouse's Long added.

Alternately, it would be ended if claw back claims asserted against
HTA, CCDA, and PRIFA bonds were given equal treatment with
guaranteed bond claims, the report notes.

The bondholders could also walk from the agreement if the plan
effective date isn't reached by Dec. 15. But, Long said, an
extension is possible, the report relays.

A major deterioration in Puerto Rico's economic situation could
squash the agreement, the report relays.  Long said, this could
give the board a way out.

The deal's "primary hurdles are the treatment of revenue bond
claims, the recovery for on-island bondholders, the treatment of
unsecured claims and the Puerto Rico government['s continued demand
for] no pension cuts," she added.

Other legal challenges could derail the plan, according to Mudd,
including Ambac Assurance's effort to get Swain to declare Title
III unconstitutional because it only applies to Puerto Rico, the
report relays.

"There will be objections to the plan of adjustment and any of them
could derail it," Mudd added.  "There will be many objections as to
the need for more or fewer classes and also section 314(c)(3)
requires that in a cram down the plan not ‘discriminate unfairly
and is fair and equitable, with respect to each class of claims or
interests that is impaired under, and has not accepted, the
plan.'"

"There will be much contention there," he added.

                    About Puerto Rico

Puerto Rico is a self-governing commonwealth in association with
the United States that's facing a massive bond debt of $70 billion,
a 68% debt-to-GDP ratio and negative economic growth in nine of the
last 10 years.

The Commonwealth of Puerto Rico has sought bankruptcy protection,
aiming to restructure its massive $74 billion debt-load and $49
billion in pension obligations.

The debt restructuring petition was filed by Puerto Rico's
financial oversight board in U.S. District Court in Puerto Rico
(Case No. 17-01578) on May 3, 2017, and was made under Title III of
2016's U.S. Congressional rescue law known as the Puerto Rico
Oversight, Management, and Economic Stability Act ('PROMESA').

The Financial Oversight and Management Board later commenced Title
III cases for the Puerto Rico Sales Tax Financing Corporation
(COFINA) on May 5, 2017, and the Employees Retirement System (ERS)
and the Puerto Rico Highways and Transportation Authority (HTA) on
May 21, 2017.  On July 2, 2017, a Title III case was commenced for
the Puerto Rico Electric Power Authority ("PREPA").

U.S. Chief Justice John Roberts has appointed U.S. District Judge
Laura Taylor Swain to oversee the Title III cases.  The Honorable
Judith Dein, a United States Magistrate Judge for the District of
Massachusetts, has been designated to preside over matters that may
be referred to her by Judge Swain, including discovery disputes,
and management of other pretrial proceedings.

Joint administration of the Title III cases, under Lead Case No.
17-3283, was granted on June 29, 2017.

The Oversight Board has hired as advisors, Proskauer Rose LLP and
O'Neill & Borges LLC as legal counsel, McKinsey & Co. as strategic
consultant, Citigroup Global Markets, as municipal investment
banker, and Ernst & Young, as financial advisor.

Martin J. Bienenstock, Esq., Scott K. Rutsky, Esq., and Philip M.
Abelson, Esq., of Proskauer Rose; and Hermann D. Bauer, Esq., at
O'Neill & Borges are on-board as attorneys.

McKinsey & Co. is the Board's strategic consultant, Ernst & Young
is the Board's financial advisor, and Citigroup Global Markets Inc.
is the Board's municipal investment banker.

Prime Clerk LLC is the claims and noticing agent. Prime Clerk
maintains a case web site at
https://cases.primeclerk.com/puertorico

Epiq Bankruptcy Solutions LLC is the service agent for ERS, HTA,
and PREPA.

O'Melveny & Myers LLP is counsel to the Commonwealth's Puerto Rico
Fiscal Agency and Financial Advisory Authority (AAFAF), the agency
responsible for negotiations with bondholders.

The Oversight Board named Professor Nancy B. Rapoport as fee
examiner and chair of a committee to review professionals' fees.




=================
V E N E Z U E L A
=================

VENEZUELA: Year-on-Year Inflation Increased to 4,311%
-----------------------------------------------------
The Latin American Herald reports that the Consumer Prices Index
(CPI) in Venezuela remained on the rise for another month in
February with hyperinflation likely extending, at least, until
February of next year, making it virtually impossible for citizens
to get the most essential items for survival as monthly wages of
less than a dollar become more useless with the rapid devaluation
of the bolivar currency.

The CPI registered a monthly increase of 50.9% in February, while
year-on-year inflation soared to 4,311% and year-to-date was
134.2%, putting considerable pressure on the US dollar to continue
its uptrend both in Venezuela's official and black market in the
short term, a report released by the Venezuelan Finance Observatory
(OVF for its acronym in Spanish) of the Legislature (aka National
Assembly or AN) showed, according to The Latin American Herald.

The OVF said that the sector reporting a major increase was
Services (356.8%), followed by telecommunications (165.2%), Leisure
(39.7%), Household Appliances (39.7%), and Healthcare (17.7%), the
report relays.

José Guerra, an opposition lawmaker and head of the OVF,
underscored that the year-on-year inflation figures clearly show an
acceleration in consumer prices since it was almost 1,000
percentage points higher than the year-on-year increase registered
during the same month in 2020 (3,400%), the report notes.

Also, there is a mismatch between inflation and the variation in
the foreign exchange rate with the bolivar only depreciating 2.3%
in February from the previous month and inflation being 24 times
higher than the variation in the rate, the report discloses.

The OVF data also showed that the basic food basket reached $282
last month, an increase of 14% from January, the report says.

"The national minimum monthly wage barely covers 0.47% of the food
basket," Guerra pointed out, 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.

S&P Global Ratings, in May 2019, removed its long- and short-term
local currency sovereign credit ratings on Venezuela from
CreditWatch with negative implications and affirmed them at
'CCC-/C'. The outlook on the long-term local currency rating is
negative. At the same time, S&P affirmed its 'SD/D' long- and
short-term foreign currency sovereign credit ratings on Venezuela.

Moody's credit rating (long term foreign and domestic issuer
ratings) for Venezuela was last set at C with stable outlook in
March 2018.  Meanwhile, Fitch's long term issuer default rating for
Venezuela was last in 2017 at RD and country ceiling was CC. Fitch,
on June 27, 2019, affirmed then withdrew the ratings due to the
imposition of U.S. sanctions on Venezuela.



                           *********


S U B S C R I P T I O N   I N F O R M A T I O N

Troubled Company Reporter-Latin America is a daily newsletter
co-published by Bankruptcy Creditors' Service, Inc., Fairless
Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C.,
USA, Marites O. Claro, Joy A. Agravante, Rousel Elaine T.
Fernandez, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A.
Chapman, Editors.

Copyright 2021.  All rights reserved.  ISSN 1529-2746.

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.

Information contained herein is obtained from sources believed to
be reliable, but is not guaranteed.

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


                  * * * End of Transmission * * *