(Bloomberg)  Bondholders in Digicel Group Ltd. should expect the phone company to decide in the near future on how to address its $6.8 billion debt load amid an earnings slump, according to people with knowledge of the matter. Digicel’s notes rose.

Executives told investors on a call Thursday that the company is reviewing a number of options, including so-called liability management exercises at the Digicel parent company level, said the people, who asked not to be identified because the call was private. Chief Financial Officer Ray Leclercq said decisions may be made shortly. Borrowers can use liability management to refinance, repurchase or modify existing debt, often to either reduce or extend the obligations. A company spokesman declined to comment.

The carrier founded by Irish billionaire Denis O’Brien said Wednesday that Leclercq will leave in September after a year in the post. Digicel also reported a decline in first fiscal quarter earnings, according to a report reviewed by Bloomberg News.

O’Brien has used high-yield debt to turn his mobile-phone carrier into a global operation with customers spread from El Salvador to Vanuatu. Investors have grown increasingly concerned after the company shelved a planned share sale in New York that was in part designed to pay down debt more than two years ago.

Digicel bonds were among the biggest gainers in the U.S. high-yield market on Thursday afternoon in New York. Its $2 billion notes due September 2020 added 4.4 cents on the dollar to 71.25 cents, according to Trace bond trading data. The debt’s retreat before today had pushed their yield to more than 30 percent. The April 2022 notes advanced 5.35 cents to 62.85 cents.

(Bloomberg) -- Canada’s foreign minister expressed support for changes to Nafta’s rules for car content as talks resumed between the U.S. and its northern neighbor to update the trade accordd. 
“Rules of origin in cars is an incredibly complicated issue, but we had reached a high-level agreement with the U.S. in the spring, and we are encouraged by the progress they made with Mexico this summer,” Canadian Foreign Minister Chrystia Freeland told reporters Wednesday on her way into meetings with U.S. Trade Representative Robert Lighthizer. “Mexico has made some significant concessions which would be really good for Canadian workers,” she told reporters outside the USTR offices in Washington.

Talks to update the North American Free Trade Agreement resumed Wednesday in Washington with a focus on dairy as the U.S. pressures Canada to strike a deal by Friday, a U.S. official familiar with the negotiations said. The Trump administration plans to inform Congress by the end of the week that President Donald Trump intends to sign a trade deal with Mexico in 90 days to replace Nafta, and it’s urging Canada to join it. This week’s Nafta showdown has Canada under the gun to either strike a deal both can live with, cave to Trump’s pressure tactics or dig in and see what the U.S. will do.

(Bloomberg) Digicel Group Ltd.’s service revenue fell 7% to $546 million in 1Q, according to a release seen by Bloomberg. The company announced the departure of CFO Ray Leclercq in a
separate statement.

* Earnings Before Interest Tax Depreciation and Amortization (EBITDA) is down 2% to $249Mn
* The group's $100Mn revolver was fully drawn at the quarter ended June 30
* The company  is 6.75x leverage
* Cash on hand was $158Mn
* Operating cash flow was $209Mn, down 6% YoY
* Total revenue declined 6% to $565Mn, with service revenue declines offset by a 6% gain in handset/equipment revenue
* Digicel term loan down to 92.5/94.5 from 95.5/96.5, according to a person with knowledge of the trading
* A representative for Digicel declined to comment
* Company scheduled earnings conference call 10 a.m. EST Thursday

(Bank of Jamaica Press Release) Bank of Jamaica announces its decision to hold the policy interest rate (the rate offered on overnight placements with Bank of Jamaica) unchanged at 2.00 per cent. This decision reflects the Bank’s assessment that inflation, currently below target, will rise towards the lower end of the target of 4.0 per cent to 6.0 per cent by the March 2019 quarter and approach the middle of the target range thereafter.

The Bank’s outlook for inflation for the remainder of 2018 and the first part of 2019 is largely predicated on an expected normalization (increase) in agricultural prices, oil prices remaining elevated and higher domestic GDP growth, the latter driven in part by the accommodative monetary conditions induced by the central bank over the past year. In the medium term, the Bank’s inflation outlook continues to reflect a gradual acceleration in economic activity (growth in real GDP). However, the path for inflation continues to reflect some slack in the economy (ie, projected GDP growth is less than the Bank’s estimate of potential GDP growth) and therefore continued risk of inflation falling below the baseline projection.

The decision to maintain the policy rate, following downward adjustments of 100 basis points earlier this year, is in the context of the signs that have emerged of a pick-up in the rate of expansion in private sector credit. If this acceleration in private sector credit growth continues, the resulting increase in economic activity will support inflation returning to the target of 4.0 per cent to 6.0 per cent with greater certainty. However, Bank of Jamaica is closely monitoring these credit conditions and will make further cuts to the policy rate if required.

Macroeconomic indicators continue to be positive. Net international reserves are at healthy levels and the current account of the balance of payments, while projected to widen, will remain at sustainable levels. Market interest rates are also at record lows and employment continues to expand.  The next policy decision announcement date is 02 October 2018

(Bloomberg) -- Petrotrin, the state-owned oil company of Trinidad and Tobago, is closing its refining business to focus on crude exploration after amassing losses, debt and overdue taxes in past years.  The producer is cutting 1,700 refining jobs and will be left with about 800 workers in its exploration and production business following losses of about 8 billion Trinidad and Tobago dollars ($1.2 billion) over the past five years, Petroleum Co. of Trinidad and Tobago Ltd. said Tuesday. The company was no longer producing enough to efficiently run its 168,000-barrel-a- day refinery in Pointe-a-Pierre, Chairman Wilfred Espinet said in an emailed statement.   “With the termination of the refining operations and the redesign of exploration and production, Petrotrin will now be able to independently finance all of its debt and become a sustainable business,” Espinet said.

(Bloomberg) -- Trinidad and Tobago will continue to ship super-chilled natural gas all over the world, with a little help from Venezuela.

President Nicolas Maduro and Trinidad and Tobago Prime Minister Keith Rowley signed a deal Saturday where Trinidad will purchase gas from Venezuela’s prolific Dragon Field, a state-run energy company, Petroleos de Venezuela SA, said in a tweet.  Under the terms of the agreement, 150 million cubic feet of gas will be supplied every day.

The deal has long been in the making and will throw a lifeline to Trinidad, which has seen its gas output decline in recent years. It’s also good news for Royal Dutch Shell Plc and BP Plc, each of which has a stake in the state-owned Atlantic LNG.

Shell has had a presence in Trinidad and Tobago since 1913, which expanded after it bought BG Group in 2016. The Anglo-Dutch oil giant is the largest trader of liquefied natural gas worldwide, and along with BP, owns stakes in each of the trains of the Atlantic LNG facility. Trinidad is the world’s seventh- largest exporter of LNG, according to the BP Statistical Review. One of BP’s seven major project start-ups last year was in Trinidad and it’s the country’s largest hydrocarbon producer. Last year the British oil major made two large discoveries offshore, which could unlock an extra 2 trillion cubic feet of gas, roughly the annual consumption of Egypt, according to BP.

For the first quarter ended June 30 2018, JMMB Group posted net income of $956.6Mn (EPS; $0.57), up +56% when compared to the corresponding period in 2017.  Net operating revenues grew by 15% to $4.67Bn during the quarter, mainly from increases in interest income, FX trading gains, and fee and commission income. Net interest income grew by 8% or J$155.9 million to J$2.07 billion as there was strong growth in the loan and investment portfolios.  For Q1, the efficiency ratio was 72% compared to 74% in the prior period last year. Operating expenses for the reporting period amounted to J$3.34Bn which was 11% higher than the prior period. This was attributed primarily to costs associated with the build out of the integrated Group sales and support framework coupled with the continued build-out of commercial banking services in Jamaica.

JMMB’s focus for the year is to consolidate and grow its regional integrated financial services business model, while improving operational efficiency across the group.

JMMB currently trades at a $28.99 per share, representing an appreciation of  +20.9% year-to-date.  At its current price JMMB has a P/E of 12.23x which is below the financial sector average of 17.73x.

Jamaica Producers Group Limited (JPG) experienced a sharp (+67%) increase in net profit attributable to shareholders for the six months ending June 30, 2018.  The company’s performance was boosted by a 34% increase in revenues from its Food and Drink segment which benefitted from an improvement in its European juice business as well as its tropical food snack business. Meanwhile, the significant capital investment in the Logistics & Infrastructure division resulted in a 30% increase in profit before finance cost and taxes to $1.3Bn. 

Looking ahead, the Group’s management foresees that the Logistics and Infrastructure division will continue to benefit from capital investment and business development initiatives geared towards advancing Kingston Wharves as a leading regional multipurpose and multi-user terminal and a market-leading logistics service provider. The Food and Drink division is also undergoing structured continuous improvement initiatives that include new production lines, product and packaging innovation and improved sales and marketing activities 

JPG currently trades at a $17.30 per share, representing an appreciation of 3.5% year-to-date.  At its current price, JPG has a P/E of 23.52x which is above the conglomerate sector average of 16.36x.

(CNBC) A new round of U.S. tariffs on $16 billion worth of Chinese imports kicked in on Thursday, prompting Beijing to retaliate with its own levies on American goods worth the same amount. The latest trade escalation comes as officials from the world's two largest economies meet for tariff negotiations in Washington.

At 12.01 a.m. EDT on Thursday, the U.S. began collecting additional 25 percent duties on 279 Chinese import product categories identified by U.S. Trade Representative. Key products that will be hit by the duties include semiconductors, chemicals, plastics, motorbikes and electric scooters. 

Beijing retaliated with its own fresh tariffs on $16 billion worth of additional imports from the U.S. including fuel, steel products, autos and medical equipment. The levies took effect the same time that the U.S. tariffs were imposed on Thursday, state news agency Xinhua reported, citing an announcement from the Customs Tariff Commission of the State Council.

(CNBC) Brent oil prices rose to near $76 a barrel on Monday as a committee monitoring a deal on oil output between OPEC and non-OPEC producers saw production rising as planned. International Brent crude oil futures rose 16 cents to $75.98 per barrel by 10:34 a.m. ET (1434 GMT). U.S. West Texas Intermediate (WTI) crude futures were down 2 cents at $68.70 a barrel. Trading activity was limited due to a public holiday in Britain, traders said.

Members of an OPEC and non-OPEC monitoring committee found producers in a supply-reduction agreement cut their July output by 9 percent more than called for in their pact, two sources familiar with the matter said on Monday. The Organization of the Petroleum Exporting Countries and other producers led by Russia agreed in June to return to 100 percent compliance with oil output cuts that began in January 2017.  This follows months of underproduction by Venezuela and other producers which cut output by 160 percent of the agreed target.

The July findings compare with a compliance level of 120 percent for June and 147 percent for May, meaning participants have been steadily increasing production.