/raid1/www/Hosts/bankrupt/TCRLA_Public/081107.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Friday, November 7, 2008, Vol. 9, No. 222
Headlines
A R G E N T I N A
BANCO HIPOTECARIO: S&P Cuts Rating to 'B-' After Sovereign Action
BANCO PATAGONIA: S&P Cuts Rating to 'B-' After Sovereign Action
IANSA SA: Proofs of Claim Verification Deadline Is March 9
SUCESORES DE TOMAS: Proofs of Claim Verification Due on Feb. 11
* Argentine Cos.' Ratings Fall on Perception of Intervention Risk
* ARGENTINA: S&P Cuts Ratings to 'B-' on Economic Concerns
* ARGENTINA REPUBLIC: S&P Says Cut to Impact Corporate Ratings
* BUENOS AIRES CITY: S&P Cuts Rating to 'B' After Sovereign Action
* BUENOS AIRES PROVINCE: Cut to 'B-' by S&P After Sovereign Action
* CORDOBA PROVINCE: S&P Cuts Rating to 'B-' After Sovereign Action
* MENDOZA PROVINCE: S&P Cuts Rating to 'B-' After Sovereign Action
B E R M U D A
CLAYTON REINSURANCE: Final Members' Meeting Set for December 9
CONVERTER TRADING: Proofs of Claim Filing Deadline Is November 19
CONVERTER TRADING: Final Members' Meeting Set for December 9
MAN-AHLI CONVERTER: Proofs of Claim Filing Deadline Is November 19
MAN-AHLI CONVERTER: Final Members' Meeting Set for December 9
MAN COGEF: Proofs of Claim Filing Deadline Is November 19
MAN COGEF: Final Members' Meeting Set for December 9
XL CAPITAL: Posts US$1.62 Billion Loss in Third Quarter 2008
XL CAPITAL: Board Declares US$0.19 Per Share as Quarterly Dividend
B R A Z I L
SADIA S.A.: Releases Financial Results for Third Quarter 2008
SADIA S.A.: Looking for Answers on Failed Currency Bets
SADIA S.A.: Saxena White Files Securities Lawsuit in New York
C A Y M A N I S L A N D S
AIR ASIA: To Hold Shareholders' Meeting on November 27
AURIGA CDO: To Hold Shareholders' Meeting on November 28
C CUBED: To Hold Shareholders' Meeting on November 28
CORYDALIS LIMITED: To Hold Shareholders' Meeting on December 15
EFM CAPITAL: To Hold Shareholder's Meeting on November 28
EFM POWER: To Hold Shareholder's Meeting on November 28
EVEREST FUND: To Hold Shareholders' Meeting on November 28
HENSON INTERNATIONAL: To Hold Members' Meeting on November 26
HH SUPPLY: To Hold Shareholders' Meeting on December 15
KENWALL LTD: To Hold Members' Meeting on November 27
MELLON ALTERNATIVE: To Hold Shareholders' Meeting on November 28
MINSK INVESTMENT: To Hold Shareholders' Meeting on November 25
MOCA ASSET: To Hold Shareholders' Meeting on December 11
MONTREAL HOLDINGS: To Hold Shareholder's Meeting on November 27
NIPPON REAL: To Hold Members' Meeting on November 28
R.J. O'BRIEN: To Hold Shareholders' Meeting on November 28
REMUS EUROPE: To Hold Shareholders' Meeting on December 8
SAKURA CAPITAL: To Hold Members' Meeting on December 2
SAPIC II REFERENCE: To Hold Shareholders' Meeting on December 12
SECUREHOUSE LIMITED: To Hold Shareholders' Meeting on December 15
SPRINT NEXTEL: To Hold Shareholders' Meeting on November 26
WALKERS SPV: To Hold Shareholders' Meeting on November 28
YB INVESTMENTS: To Hold Shareholders' Meeting on December 4
C O S T A R I C A
* COSTA RICA: Inflation Soars to 16.30% in October
J A M A I C A
CLARENDON ALUMINA: Moody's Puts Sr. Notes Ba2 Rating Under Review
M E X I C O
GRUPO SENDA: S&P Keeps 'B+' Rating; Outlook Revised to Negative
VITRO SAB: S&P Cuts Ratings to 'B-' On Liquidity Concerns
P E R U
PERU ENHANCED: S&P Says 'BB+' Won't Be Affected by Merrill Deal
X X X X X X X
* S&P Says No Funding Agreement-backed Issuance in October 2008
* Upgrade Potential Falls To Four-Year Low, S&P Article Says
* Q2 Global Project Finance Ratings Remain Stable, S&P Says
* Consumer-Based Sectors Face a Frightening Environment, S&P Says
* S&P Says 786 Issuers Face Downgrade Risk, A Three-Year High
* S&P Sees High Recovery Prospects for Lenders in Oil Sector
* Financial Sector Dominates Global Defaults, S&P Finds
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A R G E N T I N A
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BANCO HIPOTECARIO: S&P Cuts Rating to 'B-' After Sovereign Action
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Standard & Poor's Ratings Services lowered its long-term corporate
credit ratings on Banco Hipotecario S.A. and Banco Patagonia S.A.
to 'B-' from 'B' following a similar rating action on the
sovereign credit rating on the Republic of Argentina. The outlook
on all affected ratings is stable.
"The rating actions reflect the close linkage between the credit
quality of the sovereign and that of the financial system in
Argentina," said Standard & Poor's credit analyst Sergio Garibian.
The Argentine financial system currently enjoys adequate liquidity
and has shown strong positive business and financial trends in the
past few years. However, increasing uncertainties about the
evolution of macroeconomic indicators amidst decelerating economic
activity and ongoing negotiations for a debt swap of the so-called
Guarantee Loans for bonds may worsen Argentine financial
institutions' credit fundamentals. S&P will closely monitor asset
quality and liquidity, which S&P believes are the key determinants
of banks' creditworthiness in the current environment.
The stable outlooks on Banco Hipotecario and Banco Patagonia
reflect the stable outlook on the Republic of Argentina.
BANCO PATAGONIA: S&P Cuts Rating to 'B-' After Sovereign Action
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its long-term corporate
credit ratings on Banco Hipotecario S.A. and Banco Patagonia S.A.
to 'B-' from 'B' following a similar rating action on the
sovereign credit rating on the Republic of Argentina. The outlook
on all affected ratings is stable.
"The rating actions reflect the close linkage between the credit
quality of the sovereign and that of the financial system in
Argentina," said Standard & Poor's credit analyst Sergio Garibian.
The Argentine financial system currently enjoys adequate liquidity
and has shown strong positive business and financial trends in the
past few years. However, increasing uncertainties about the
evolution of macroeconomic indicators amidst decelerating economic
activity and ongoing negotiations for a debt swap of the so-called
Guarantee Loans for bonds may worsen Argentine financial
institutions' credit fundamentals. S&P will closely monitor asset
quality and liquidity, which S&P believes are the key determinants
of banks' creditworthiness in the current environment.
The stable outlooks on Banco Hipotecario and Banco Patagonia
reflect the stable outlook on the Republic of Argentina.
IANSA SA: Proofs of Claim Verification Deadline Is March 9
-----------------------------------------------------------
Zulma Guiliano, the court-appointed trustee for Iansa SA's
bankruptcy proceeding, will be verifying creditors' proofs of
claim until March 9, 2008.
Mr. Guiliano will present the validated claims in court as
individual reports. The National Commercial Court of First
Instance No. 19 in Buenos Aires, with the assistance of Clerk
No. 37, will determine if the verified claims are admissible,
taking into account the trustee's opinion, and the objections and
challenges that will be raised by Iansa SA's and its creditors.
Inadmissible claims may be subject to appeal in a separate
proceeding known as an appeal for reversal.
A general report that contains an audit of Iansa SA's accounting
and banking records will be submitted in court.
Mr. Guiliano is also in charge of administering the company's
assets under court supervision and will take part in their
disposal to the extent established by law.
The debtor can be reached at:
Iansa SA
Avda. La Plata 525
Buenos Aires, Argentina
SUCESORES DE TOMAS: Proofs of Claim Verification Due on Feb. 11
---------------------------------------------------------------
The court-appointed trustee for Sucesores de Tomas Iglesias SRL's
bankruptcy proceeding, will be verifying creditors' proofs of
claim until February 11, 2009.
The trustee will present the validated claims in court as
individual reports. The National Commercial Court of First
Instance No. 7 in Buenos Aires, with the assistance of Clerk
No. 14, will determine if the verified claims are admissible,
taking into account the trustee's opinion, and the objections and
challenges that will be raised by the company and its creditors.
Inadmissible claims may be subject to appeal in a separate
proceeding known as an appeal for reversal.
A general report that contains an audit of the company's
accounting and banking records will be submitted in court.
The trustee is also in charge of administering the company's
assets under court supervision and will take part in their
disposal to the extent established by law.
The debtor can be reached at:
Sucesores de Tom=E1s Iglesias SRL
Maza 542
Buenos Aires, Argentina
* Argentine Cos.' Ratings Fall on Perception of Intervention Risk
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Standard & Poor's Ratings Services downgraded or placed on
CreditWatch Negative the foreign-currency ratings on several
Argentine entities and securitizations. The actions follow a
change in the transfer and convertibility (T&C) assessment for
Argentina to 'B-' from 'B+'.
S&P has also placed several local currency ratings on CreditWatch
Negative pending S&P's review of the impact of other country risk
factors.
The T&C assessment for Argentina is S&P's view of the probability
of the sovereign restricting access to foreign exchange needed by
Argentina-based nonsovereign issuers for debt service. S&P feels
this assessment is now similar to the rating level associated with
the likelihood of the sovereign defaulting on its foreign currency
obligations (i.e., S&P's foreign-currency rating on the Republic
of Argentina, which is 'B-').
This is a change from S&P's previous assessment, which provided
for a two-notch gap between the sovereign foreign-currency rating
and the T&C assessment. The change is due to S&P's perception
that the government is increasingly intervening in the foreign-
exchange market, which may affect nonsovereign entities' ability
to access foreign exchange that they need for debt service. The
action follows recent measures taken by the Argentine government
to help alleviate pressure on the currency (e.g., amending export
repatriation requirements, which had allowed 180 days to
repatriate export proceeds, to instead require repatriation in 10
days). Such actions suggest increased sovereign intervention
risk.
Although the T&C assessment does not constrain ratings per se, the
possibility of sovereign intervention restricting access to
foreign exchange to serve debt and foreign exchange obligations is
key to determining foreign-currency ratings.
An otherwise financially sound entity that generates enough local
currency to service all its debt may find its ability to service
foreign-currency debt limited by T&C controls. In fact, the
financial profile of most of the companies in the rated portfolio
-- including cash-flow protection measures, overall leverage and
cash position, and in some cases significant cash balances abroad
-- could be consistent with the median for ratings higher than the
current ones. However, ratings of private-sector entities in
Argentina are affected by S&P's perception of T&C and other
intervention risks.
Most of the foreign-currency ratings that were placed on
CreditWatch Negative remain above the T&C assessment while S&P
reviews the impact of mitigating factors such as sufficient
geographic diversification to repay foreign debt with cash flow
generated by offshore operations, foreign parent support, a
sufficiently strong export profile and moderate leverage, strong
free cash-flow generation, modest debt-maturity schedules, and
limited reliance on sales to domestic markets. These factors may
allow the ratings on some of these companies to remain above the
current T&C assessment for Argentina.
On the other hand, the revision of the T&C assessment does not
directly affect local-currency ratings. S&P's local currency
credit rating is a current opinion of an obligor's overall
capacity to generate sufficient local-currency resources to meet
all its financial obligations (both local and foreign currency),
absent the risk of direct sovereign intervention that may
constrain payment of foreign currency debt. However, as announced
last week, after the downgrade of the Republic of Argentina, S&P
believes that the corporate sector faces tougher challenges than
before and that overall credit quality has weakened. As a
consequence, S&P is placing most local-currency ratings on
CreditWatch Negative while it analyzes the impact of government
intervention, financial flexibility, parent support, cash-flow
stability, and overall leverage on the final ratings.
S&P is also reviewing related national scale ratings on these
entities. S&P expects to announce national scale rating changes
(if any) and to resolve the CreditWatch placements in coming
weeks.
Ratings Affected
To From
-- ----
Alto Palermo S.A.
Corporate Credit Rating
Foreign Currency B-/Stable/-- B+/Stable/--
Local Currency B+/Watch Neg/-- B+/Stable/--
Autopistas Del Sol S.A.
Corporate Credit Rating
Foreign Currency B-/Negative/-- B-/Stable/--
Alto Parana S.A.
Corporate Credit Rating BB/Watch Neg/-- BB/Stable/--
CLISA-Compania Latinoamericana de Infraestructura & Servicios S.A.
Corporate Credit Rating B-/Negative/-- B-/Stable/--
Compania de Transporte de Energia Electrica en Alta Tension
TRANSENER S.A.
Corporate Credit Rating
Foreign Currency B-/Stable/-- B/Stable/--
Local Currency B/Watch Neg/-- B/Stable/--
Electricidad Argentina S.A. (EASA)
Corporate Credit Rating B-/Watch Neg/-- B-/Stable/--
Empresa Distribuidora Y Comercializadora Norte S.A.
Hidroelectrica Piedra del Aguila S.A.
Corporate Credit Rating
Foreign Currency B-/Stable/-- B/Stable/--
Local Currency B/Watch Neg/-- B/Stable/--
Industrias Metalurgicas Pescarmona S.A.I.C.y.F.
Corporate Credit Rating B/Watch Neg/-- B/Stable/--
IRSA Inversiones y Representaciones S.A.
Corporate Credit Rating
Foreign Currency B-/Stable/-- B+/Stable/--
Local Currency B+/Watch Neg/-- B+/Stable/--
Loma Negra C.I.A.S.A.
Corporate Credit Rating
Foreign Currency B/Watch Neg/-- B+/Stable/--
Local Currency B+/Watch Neg/-- B+/Stable/--
Pan American Energy LLC
Corporate Credit Rating BB-/Watch Neg/-- BB-/Stable/--
Petrobras Energia S.A.
Corporate Credit Rating
Foreign Currency BB/Watch Neg/-- BB/Stable/--
Telecom Argentina S.A.
Telecom Personal S.A.
Corporate Credit Rating
Foreign Currency B/Watch Neg/-- B+/Stable/--
Local Currency B+/Watch Neg/-- B+/Stable/--
Telefonica de Argentina S.A.
Corporate Credit Rating
Foreign Currency B/Watch Neg/-- B+/Stable/--
Transportadora de Gas del Sur S.A. (TGS)
Corporate Credit Rating B+/Watch Neg/-- B+/Stable/--
YPF S.A.
Corporate Credit Rating
Foreign Currency BB/Watch Neg/-- BB/Stable/--
Local Currency BB/Watch Neg/-- BB+/Stable/--
Province of Neuquen, Series US$125 million secured AM
Class secured am
Global scale rating B- BB-
* ARGENTINA: S&P Cuts Ratings to 'B-' on Economic Concerns
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Standard & Poor's Ratings Services lowered its foreign and local
currency sovereign credit ratings on the Republic of Argentina to
'B-/C' from 'B/B'. The outlook remains stable.
Standard & Poor's also said that it lowered its transfer and
convertibility assessment on the sovereign to 'B+' from 'BB-'.
The recovery rating of '4' is unchanged.
"The downgrade reflects our heightened concerns about the
deteriorating economic and political environment in Argentina and
the resulting increased fiscal stress," noted Standard & Poor's
credit analyst David Beers. "We expect that Argentina's GDP
growth will decelerate sharply in 2009 from an estimated 6.0% in
2008 because of negative external and domestic shocks." The
weaker global economy will hurt the prices of agricultural
commodities, the export of which greatly supports the sovereign's
fiscal and external accounts.
Domestically, the executive's unexpected proposal to transfer the
private pension system back into government hands has shaken the
local financial markets and overall confidence. Moreover, the
introduction of the pension reform risks increasing political
polarization at a time of greater uncertainties and already
worsening expectations.
Over the next 18 months, the government's capacity to manage these
stresses will require a strong political commitment, especially
given the republic's lack of access to international markets and
an uncertain ability to issue debt domestically going forward.
The congressional elections -- slated for October -- might
complicate the government's ability to tighten fiscal policy.
Although government deposits (including funds at government
agencies) provide a cushion, over the next 12 months, government
debt amortizations (30% of which correspond to principal due on
guaranteed loans) will reach 4% of GDP (US$12 billion). The
government is engaged in ongoing negotiations for a voluntary debt
swap of these obligations into longer maturities, an operation
that, if successful, could provide additional room to maneuver
over the next two to three years. Also, although the reform
introduces other risks, it will likely provide the government with
1.3% of GDP in additional annual revenues, with modest associated
outflows over the medium term.
The stable outlook balances the greater risks the government will
face over the next 18-24 months to close its financing gap at the
time of decelerating economic activity and, potentially, growing
political pressures, with the financing cushion the government
retains. "Any significant fiscal slippage would complicate the
government's financing program, possibly leading to a downgrade,"
Mr. Beers added. "Conversely, measures aimed at restoring local
economic agents' confidence as well as voluntary liability
management operations that smooth out the government's
amortization profile over the next two to three year would enhance
Argentina's creditworthiness."
* ARGENTINA REPUBLIC: S&P Says Cut to Impact Corporate Ratings
--------------------------------------------------------------
Standard & Poor's Ratings Services said its downgrade of the
Republic of Argentina will not trigger automatic rating changes on
individual companies. We consider that corporate credit quality
in Argentina is more influenced by the economic and business
environment, which we refer to broadly as country risk.
In recent months, we have reassessed our perception of country
risk in Argentina.
"We believe that the corporate sector faces tougher challenges
than before and that overall credit quality has weakened," said
Standard & Poor's credit analyst Pablo Lutereau. "It is
consequently likely that the ratings or outlooks on companies will
be negatively affected. Still, given the specific characteristics
of each of the entities in Standard & Poor's rated portfolio, the
impact will not be uniform and will depend upon many factors,
including the likelihood of government intervention, financial
flexibility, parent support, cash flow stability, and overall
leverage."
We expect to complete our assessment on country risk repercussions
on each company we rate in the next few weeks.
Country risk includes and is intertwined with sovereign default
risk. But country risk is a wider concept that incorporates all
the factors that influence a company's ability to meet all of its
financial obligations in a timely manner. In addition to the
government's financial and economic health, country risk includes
the country's institutional environment, regulatory framework, the
health and depth of the country's financial system, availability
of capital, volatility of economic cycles, and the development of
financial markets. These items have a degree of influence on a
company's financial health, and their final weight varies
according to each company's specific circumstances. A country's
institutional, regulatory, and legal frameworks are core issues
within country risk because they intrinsically condition economic
long-term development.
"In Argentina, the chief variables shaping our analysis are the
country's weak institutional environment and changing regulatory
framework, increasing government intervention, inability to
forecast future business conditions, difficulty in domestic or
cross-border financing, and discredited economic statistics that
the government produces -- particularly price indexes," said Mr.
Lutereau.
A solid institutional framework provides a high degree of
predictability, with clear mechanisms to settle disputes without
arbitrary or unilateral solutions, and rules that are relatively
stable across different administrations. In Argentina, the
institutional framework remains weak and hinders the development
and funding of long-term investments, for instance. Given the
time required to establish a track record that provides evidence
of fundamentally strong institutions, this limitation will
continue in the medium term, constraining the ratings on companies
based in Argentina or on companies with operating assets located
in the country.
Argentina's regulatory framework also poses sizeable future
challenges and has a particular impact both on the economic
equation of public service companies and on their incentives to
develop large private infrastructure projects for which
predictable regulations are crucial. The stability of the
regulatory regimes is still in question; the renegotiation of
concession contracts for most of the country's utilities that were
breached during the economic crisis of 2002 remains pending. This
uncertainty undermines the ability of the companies that operate
in these sectors to generate and maintain stable cash flows.
Intrusive government intervention in various business sectors has
been increasing and is another drag on corporate credit quality.
The strong political motivations behind some of these
interventions introduce more complexity not only in sectors
oriented to the domestic market (especially services) but also in
the trade sector. The latter segment, which in most countries has
been historically less vulnerable to political swings, is
conditioned by political factors in Argentina. A clear example of
this are the restrictions and duties placed on some primary
exports -- dairy products, beef, agricultural products, among
others -- to increase the availability of these products
domestically and counter internal price hikes and their impact on
inflation.
All of the factors, including the difficulty of relying on current
data or forecasting certain economic parameters, such as the
evolution of domestic prices, and the volatility of the legal,
fiscal, and wage regimes render making medium- and long-term
projections very complex. These uncertainties prevent the
development of forward-looking business and investment plans.
Another key credit weakness for Argentine corporate entities is
their decreasing ability to access financing. This limitation
becomes particularly critical in volatile environments when
corporations need to supplement internal cash flow and obtain
alternative sources of cash to ensure the timely payment of
obligations and finance growth. Most Argentine companies have no
real possibility of accessing long-term peso-denominated financing
at competitive interest rates. This problem will only be
exacerbated by the government's recent announcement of its
intention to nationalize the private pension system. This action
will very likely eliminate one source of funding for the companies
we rate, particularly considering that bank lending to the
corporate sector is low compared with lending in other countries
in the region. Cross-border markets do not provide much relief
either. Access to international capital markets is limited and
sporadic, and highly reliant on market liquidity and appetite for
speculative-grade issuers (as occurred during the 2005-2007
period, but then ended dramatically in 2008). Even when possible,
international borrowing creates a currency mismatch. And this was
one of the main reasons behind the 2002 crisis in the Argentinean
corporate sector.
* BUENOS AIRES CITY: S&P Cuts Rating to 'B' After Sovereign Action
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Standard & Poor's Ratings Services lowered its long-term global
scale ratings on Province of Mendoza, Province of Cordoba, and
Province of Buenos Aires in the Republic of Argentina to 'B-' from
'B' and its long-term global scale ratings on the City of Buenos
Aires to 'B' from 'B+'.
Standard & Poor's also said that the outlook on all these entities
is stable.
"These rating actions follow the downgrade of Argentina earlier []
to 'B-' from 'B'," explained Standard & Poor's credit analyst
Delfina Cavanagh. "They reflect the close linkage between the
sovereign and the local governments in Argentina, both in terms of
transfers of current revenues as well as financing the sovereign
provides to local governments in Argentina."
In contrast with other Argentinean local governments, the rating
on the City of Buenos Aires remains one notch above the sovereign
credit rating. This reflects its privileged position in terms of
both its financial flexibility and low debt level.
The stable outlook on Cordoba, Mendoza, and PBA parallels the
outlook on the sovereign.
The stable outlook on the City of Buenos Aires incorporates the
expectation that low debt levels will continue to provide
additional fiscal flexibility during the next two to three years.
In addition, unlike the other governments, the city does not
depend on financing from the federal government. Therefore, S&P
expects the City of Buenos Aires to be able to deal with the
growing pressures on the expenditure side of the budget in a
manner consistent with a 'B' rating.
* BUENOS AIRES PROVINCE: Cut to 'B-' by S&P After Sovereign Action
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Standard & Poor's Ratings Services lowered its long-term global
scale ratings on Province of Mendoza, Province of Cordoba, and
Province of Buenos Aires in the Republic of Argentina to 'B-' from
'B' and its long-term global scale ratings on the City of Buenos
Aires to 'B' from 'B+'.
Standard & Poor's also said that the outlook on all these entities
is stable.
"These rating actions follow the downgrade of Argentina earlier []
to 'B-' from 'B'," explained Standard & Poor's credit analyst
Delfina Cavanagh. "They reflect the close linkage between the
sovereign and the local governments in Argentina, both in terms of
transfers of current revenues as well as financing the sovereign
provides to local governments in Argentina."
In contrast with other Argentinean local governments, the rating
on the City of Buenos Aires remains one notch above the sovereign
credit rating. This reflects its privileged position in terms of
both its financial flexibility and low debt level.
The stable outlook on Cordoba, Mendoza, and PBA parallels the
outlook on the sovereign.
The stable outlook on the City of Buenos Aires incorporates the
expectation that low debt levels will continue to provide
additional fiscal flexibility during the next two to three years.
In addition, unlike the other governments, the city does not
depend on financing from the federal government. Therefore, S&P
expects the City of Buenos Aires to be able to deal with the
growing pressures on the expenditure side of the budget in a
manner consistent with a 'B' rating.
* CORDOBA PROVINCE: S&P Cuts Rating to 'B-' After Sovereign Action
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Standard & Poor's Ratings Services lowered its long-term global
scale ratings on Province of Mendoza, Province of Cordoba, and
Province of Buenos Aires in the Republic of Argentina to 'B-' from
'B' and its long-term global scale ratings on the City of Buenos
Aires to 'B' from 'B+'.
Standard & Poor's also said that the outlook on all these entities
is stable.
"These rating actions follow the downgrade of Argentina earlier []
to 'B-' from 'B'," explained Standard & Poor's credit analyst
Delfina Cavanagh. "They reflect the close linkage between the
sovereign and the local governments in Argentina, both in terms of
transfers of current revenues as well as financing the sovereign
provides to local governments in Argentina."
In contrast with other Argentinean local governments, the rating
on the City of Buenos Aires remains one notch above the sovereign
credit rating. This reflects its privileged position in terms of
both its financial flexibility and low debt level.
The stable outlook on Cordoba, Mendoza, and PBA parallels the
outlook on the sovereign.
The stable outlook on the City of Buenos Aires incorporates the
expectation that low debt levels will continue to provide
additional fiscal flexibility during the next two to three years.
In addition, unlike the other governments, the city does not
depend on financing from the federal government. Therefore, S&P
expects the City of Buenos Aires to be able to deal with the
growing pressures on the expenditure side of the budget in a
manner consistent with a 'B' rating.
* MENDOZA PROVINCE: S&P Cuts Rating to 'B-' After Sovereign Action
------------------------------------------------------------------
Standard & Poor's Ratings Services lowered its long-term global
scale ratings on Province of Mendoza, Province of Cordoba, and
Province of Buenos Aires in the Republic of Argentina to 'B-' from
'B' and its long-term global scale ratings on the City of Buenos
Aires to 'B' from 'B+'.
Standard & Poor's also said that the outlook on all these entities
is stable.
"These rating actions follow the downgrade of Argentina earlier
to 'B-' from 'B'," explained Standard & Poor's credit analyst
Delfina Cavanagh. "They reflect the close linkage between the
sovereign and the local governments in Argentina, both in terms of
transfers of current revenues as well as financing the sovereign
provides to local governments in Argentina."
In contrast with other Argentinean local governments, the rating
on the City of Buenos Aires remains one notch above the sovereign
credit rating. This reflects its privileged position in terms of
both its financial flexibility and low debt level.
The stable outlook on Cordoba, Mendoza, and PBA parallels the
outlook on the sovereign.
The stable outlook on the City of Buenos Aires incorporates the
expectation that low debt levels will continue to provide
additional fiscal flexibility during the next two to three years.
In addition, unlike the other governments, the city does not
depend on financing from the federal government. Therefore, S&P
expects the City of Buenos Aires to be able to deal with the
growing pressures on the expenditure side of the budget in a
manner consistent with a 'B' rating.
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B E R M U D A
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CLAYTON REINSURANCE: Final Members' Meeting Set for December 9
--------------------------------------------------------------
Clayton Reinsurance Ltd. will hold its final members' meeting on
December 9, 2008, at 9:30 a.m., at the offices of Messrs. Conyers
Dill & Pearman, Clarendon House, Church Street, in Hamilton,
Bermuda.
These matters will be taken up during the meeting:
-- receiving an account showing the manner in which
the winding-up of the company has been conducted
and its property disposed of and hearing any
explanation that may be given by the liquidator;
-- determination by resolution the manner in
which the books, accounts and documents of the
company and of the liquidator shall be
disposed; and
-- passing of a resolution dissolving the
company.
The company's liquidator is:
Robin J. Mayor
Clarendon House, Church Street
Hamilton, Bermuda
CONVERTER TRADING: Proofs of Claim Filing Deadline Is November 19
-----------------------------------------------------------------
Converter Trading Limited's creditors are given until November 19,
2008, to prove their claims to Beverly Mathias, the company's
liquidator, or be excluded from receiving any distribution or
payment.
In their proofs of claim, creditors must indicate their full
names, addresses, the full particulars of their debts or claims,
and the names and addresses of their lawyers, if any.
The company's members agreed on October 27, 2008, to place the
company into voluntary liquidation under Bermuda's Companies Act
1981.
The liquidator can be reached at:
Beverly Mathias
c/o Argonaut Limited
Argonaut House, 5 Park Road
Hamilton HM O9, Bermuda
CONVERTER TRADING: Final Members' Meeting Set for December 9
------------------------------------------------------------
Converter Trading Limited will hold its final members' meeting on
December 9, 2008, at 9:30 a.m., at the offices of Argonaut
Limited, Argonaut House, 5 Park Road, in Hamilton HM O9, Bermuda.
These matters will be taken up during the meeting:
-- receiving an account showing the manner in which
the winding-up of the company has been conducted
and its property disposed of and hearing any
explanation that may be given by the liquidator;
-- determination by resolution the manner in
which the books, accounts and documents of the
company and of the liquidator shall be
disposed; and
-- passing of a resolution dissolving the
company.
The company's liquidator is:
Beverly Mathias
c/o Argonaut Limited
Argonaut House, 5 Park Road
Hamilton HM O9, Bermuda
MAN-AHLI CONVERTER: Proofs of Claim Filing Deadline Is November 19
------------------------------------------------------------------
Man-Ahli Converter Limited's creditors are given until Nov. 19,
2008, to prove their claims to Beverly Mathias, the company's
liquidator, or be excluded from receiving any distribution or
payment.
In their proofs of claim, creditors must indicate their full
names, addresses, the full particulars of their debts or claims,
and the names and addresses of their lawyers, if any.
The company's members agreed on October 27, 2008, to place the
company into voluntary liquidation under Bermuda's Companies Act
1981.
The liquidator can be reached at:
Beverly Mathias
c/o Argonaut Limited
Argonaut House, 5 Park Road
Hamilton HM O9, Bermuda
MAN-AHLI CONVERTER: Final Members' Meeting Set for December 9
-------------------------------------------------------------
Man-Ahli Converter Limited will hold its final members' meeting on
December 9, 2008, at 9:30 a.m., at the offices of Argonaut
Limited, Argonaut House, 5 Park Road, in Hamilton HM O9, Bermuda.
These matters will be taken up during the meeting:
-- receiving an account showing the manner in which
the winding-up of the company has been conducted
and its property disposed of and hearing any
explanation that may be given by the liquidator;
-- determination by resolution the manner in
which the books, accounts and documents of the
company and of the liquidator shall be
disposed; and
-- passing of a resolution dissolving the
company.
The company's liquidator is:
Beverly Mathias
c/o Argonaut Limited
Argonaut House, 5 Park Road
Hamilton HM O9, Bermuda
MAN COGEF: Proofs of Claim Filing Deadline Is November 19
---------------------------------------------------------
Man COGEF Multi-Strategy Guaranteed Series 1 Ltd's creditors are
given until Nov. 19, 2008, to prove their claims to Beverly
Mathias, the company's liquidator, or be excluded from receiving
any distribution or payment.
In their proofs of claim, creditors must indicate their full
names, addresses, the full particulars of their debts or claims,
and the names and addresses of their lawyers, if any.
The company's members agreed on October 27, 2008, to place the
company into voluntary liquidation under Bermuda's Companies Act
1981.
The liquidator can be reached at:
Beverly Mathias
c/o Argonaut Limited
Argonaut House, 5 Park Road
Hamilton HM O9, Bermuda
MAN COGEF: Final Members' Meeting Set for December 9
----------------------------------------------------
Man COGEF Multi-Strategy Guaranteed Series 1 Ltd will hold its
final members' meeting on December 9, 2008, at 9:30 a.m., at the
offices of Argonaut Limited, Argonaut House, 5 Park Road, in
Hamilton HM O9, Bermuda.
These matters will be taken up during the meeting:
-- receiving an account showing the manner in which
the winding-up of the company has been conducted
and its property disposed of and hearing any
explanation that may be given by the liquidator;
-- determination by resolution the manner in
which the books, accounts and documents of the
company and of the liquidator shall be
disposed; and
-- passing of a resolution dissolving the
company.
The company's liquidator is:
Beverly Mathias
c/o Argonaut Limited
Argonaut House, 5 Park Road
Hamilton HM O9, Bermuda
XL CAPITAL: Posts US$1.62 Billion Loss in Third Quarter 2008
------------------------------------------------------------
XL Capital Limited posted a US$1.62 billion loss in the third
quarter on a charge tied to bailing out of bond guarantor Syncora
Holdings Ltd, Bloomberg News reports.
The company, the report relates, sold more than US$2.8 billion in
stock in part to rescue the insurance operations of Syncora, who
faced a wave of claims after collateralised debt obligations it
insured declined in value.
According to Bloomberg, the book value per share fell by half in
the three months ended September 30 to US$21.65 after the insurer
sold stock and investment losses depleted capital. The net loss
compares with profit of US$371.6 million in the same period a year
earlier, the report says.
Chief Executive Officer Michael McGavick, the report notes, is
seeking to eliminate "big mistakes," like XL's entanglement with
Syncora, and focus on underwriting. The firm had US$292.9 million
in investment losses, and unrealised losses widened by US$825.3
million, Bloomberg News says.
In addition, the company estimated it lost US$221.8 million on
hurricanes Gustav and Ike, which struck the US Gulf Coast in
September, the report notes.
Bloomberg News adds that unrealised losses on the firm's holdings
of asset- and mortgage-backed securities rose 26% to
US$1.47 billion in the three months ended Sept. 30, while
unrealised losses on corporate debt widened 34% to US$1.68
billion.
About XL Capital
Headquartered in Bermuda, XL Capital Ltd. --
http://www.xlcapital.com/-- writes liability insurance and
reinsurance worldwide, specializing in low-frequency, high-
severity risks from riots to natural disasters. The company
writes policies through numerous subsidiaries, many of them
offshore, and also manages a Lloyd's of London syndicate. XL's
coverage includes general and executive liability, property, and
political risk insurance. Its reinsurance covers property,
aviation, energy, nuclear accident, and professional indemnity.
* * *
As reported in the Troubled Company Reporter-Latin America on
Aug. 8, 2008, A.M. Best Co. assigned a debt rating of "bb+"
to XL Capital Ltd's US$500 million series C preference shares
issued in connection with the company's exercise of the put
option under its Mangrove Bay Pass Through Trust contingent
capital facility. The rating is under review with negative
implications. Concurrently A.M. Best has withdrawn the debt
rating of "bb+" on Mangrove Bay's US$500 million 6.102% trust
preferred shares.
XL CAPITAL: Board Declares US$0.19 Per Share as Quarterly Dividend
------------------------------------------------------------------
XL Capital Limited's Board of Directors declared a quarterly
dividend on October 31, 2008, of US$0.19 per Ordinary Share
payable on the company's Ordinary Shares. The dividend will be
payable on December 30, 2008, to Ordinary Shareholders of record
as of December 9, 2008.
In addition, the Board of Directors resolved on October 31, 2008,
to pay a dividend of US$0.6822 per share on the company's Series C
Perpetual Non-Cumulative Preference Shares. The dividend will be
paid on January 15, 2009, to all shareholders of record as of
January 14, 2009, and covers the period from August 4, 2008, the
date the shares were issued, to January 15, 2009. The aggregate
amount of the dividends payable on the Series C Preference
Ordinary Shares is US$13,644,750.
Headquartered in Bermuda, XL Capital Ltd. --
http://www.xlcapital.com/-- writes liability insurance and
reinsurance worldwide, specializing in low-frequency, high-
severity risks from riots to natural disasters. The company
writes policies through numerous subsidiaries, many of them
offshore, and also manages a Lloyd's of London syndicate. XL's
coverage includes general and executive liability, property, and
political risk insurance. Its reinsurance covers property,
aviation, energy, nuclear accident, and professional indemnity.
* * *
As reported in the Troubled Company Reporter-Latin America on
Aug. 8, 2008, A.M. Best Co. assigned a debt rating of "bb+"
to XL Capital Ltd's US$500 million series C preference shares
issued in connection with the company's exercise of the put
option under its Mangrove Bay Pass Through Trust contingent
capital facility. The rating is under review with negative
implications. Concurrently A.M. Best has withdrawn the debt
rating of "bb+" on Mangrove Bay's US$500 million 6.102% trust
preferred shares.
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B R A Z I L
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SADIA S.A.: Releases Financial Results for Third Quarter 2008
-------------------------------------------------------------
Sadia S.A. disclosed its financial results for the third quarter
of 2008. Sadia posted losses of R$777.4 million in the quarter
and of R$442.6 million in the 9M08. In 2007, the company had a
quarterly profit of R$188.4 million and of R$393.9 million in the
nine months.
According to Chairman Luiz Fernando Furlan and CEO Gilberto
Tomazoni: "Sadia S.A had a satisfactory operating performance in
the third quarter of 2008. Gross operating revenue grew 28.3% and
the volume sold increased by 16.2% over the same period in 2007.
In view of the good results, the company decided to maintain the
EBITDA margin guidance of 11% to 12% for 2008, with revenues of
US$12.0 billion. Our projection for the volume performance in
both markets is a growth between 12% and 14%. The strengthened
cash, the heated demand in the domestic and international markets,
the stability of the price of grains and the operational startup
of four expansion projects and of two new units signal a promising
outlook for the company's performance for the end of this year and
for the beginning of 2009. Out of the total investments in 2008,
92% have already been invested. By December 2008, the company
will have invested R$1.6 trillion, the largest investment plan of
its history. When fully operational, these investments shall
generat e an additional income of approximately R$4 trillion per
year, as from 2010. Pursuant to good corporate governance
practices, the Company disclosed, on a timely basis, financial
losses resulting from the settlement of certain transactions with
foreign exchange derivatives which exceeded the limits established
by our internal policy. Eventually, due to the change
in the world scenario, the company will review carefully the
investments foreseen for the oncoming years. We continue to be
confident in our capacity to grow in a sustainable way, delivering
the best results and the best products to our consumers."
Gross operating income in the third quarter of 2008 reached
R$3.2 trillion, 28.3% higher than that reached in the same period
in 2007, and, for the nine months of 2008, it totaled R$8.7
trillion, 25.2% higher when compared with the same period in 2007.
The rise in prices charged by the company in all of its segments,
as well as the satisfactory performance of the poultry volume sold
in the international market and of the processed products in the
domestic market, was fundamental to achieve that result.
Net Operating Income
Sadia posted net income of R$2.8 trillion in the 3Q08 and of
R$7.7 trillion in the year-to-date total of 2008, 29.7%
and 26.4% higher than the same periods of 2007. This evolution
was favored by the higher volumes and the prices charged in the
domestic market, mainly in the segment of processed products, and
by the higher volumes and the prices charged in the international
market, mainly of poultry. The R$/USD foreign exchange rate
appreciated by approximately 14.8% in the 9M08/07 and 9.9% in the
3Q08/07.
Operating Income
The ratio of operating expenses =96 selling, general, administrative
and other expenses =96 to net income fell from 19.6% in the 3Q07 to
17.0% in the 3Q08 and from 18.9% in the 9M07 to 17.5% in the 9M08,
reflecting operating efficiencies in the periods under analysis.
In the 3Q08, expenses were R$474.9 billion and in the year-to-date
totaled R$1.3 trillion.
Selling expenses margins dropped significantly, from 17.2% in the
3Q07 to 15.9% in the 3Q08 (R$443.2 billion), reflecting a greater
dilution of fixed expenses and a good management of such expenses.
In the year-to-date total, the reduction was also significant,
from 17.1% to 15.7% in the 9M08 (R$1.2 trillion).
General and administrative expenses accounted for 1.7% of the
total net income of the 3Q08, an increase of 0.4 percentage point
in comparison with the same period of the prior year. In the
9M08, this margin represented 1.5%, while in 2007 it represented
1.2%. The percentage increases are directly related to the company
growth plans. This expense totaled R$48.4 billion in the quarter
and R$115.1 billion in the year-to-date total of 2008.
The company grants its employees a profit sharing plan, which
depends on attaining specific targets, established and agreed to
at the beginning of each year. This plan has been approved by
Board of Directors of the company and it has been registered by a
formal agreement with the unions. As of September 30, 2008 as a
result of the losses recorded by the Company, the provision in the
amount of R$44.9 billion, referring to employee profit haring, was
reversed.
The operating profit before financial expenses and equity pickup
(EBIT) grew 8.7% in relation to 2007, totaling R$189,4 billion in
the 3Q08, and the year-to-date total was R$494.1 billion, 8.1%
higher than that recorded in 2007.
Financial Result
At September 30, the company had derivative financial instruments
that were traded by the treasury department based on the
assumption of the appreciation and maintenance of the Real against
the US dollar. These instruments contained intrinsic risks,
assumed as a result of the stability and the low probability of
devaluation of the Real against the US dollar.
As disclosed in a material fact on September 25, 2008, the
treasury department exceeded the limits of the financial policy.
As soon as it became aware of this fact the Board of directors
determined that the necessary measures to reduce exposure were
taken. With the aim of reducing the exposure related to these
operations, the Board of Directors decided to settle part of these
operations, making a loss in the amount R$544.5 billion, recorded
under exchange variation on derivative instruments.
In September 2008, with the worsening of the international
financial crisis, a certain American financial institution, whose
risk was part of one of the structured note of the company's
investment portfolio, entered in default. As a result, the
company received securities of this institution in exchange for
the principal invested.
With the increase in the volatility of the financial assets on the
international market, the marking to market value of these
securities, as well as other assets of the fund, totaled a loss of
R$239.5 billion. In the same period, the company sold some credit
linked notes, which generated a loss in the amount of
R$108.7 billion. At September 30, 2008, the amount of
R$348.2 billion, resulting from the mark to market and the loss
made on the sale of assets, was recorded under financial results.
The results to be realized from over the counter operations on the
exchange future market are not recognized in the accounting.
The exchange futures contracts have monthly maturities of up to 12
months and establish a margin call or bank guarantee in case the
position is unfavorable to the company. At September 30, 2008,
the amounts deposited as margin and bank guarantee were
R$701.1 billion and R$269.0 billion, respectively.
On September 30, Sadia had a cash availability of about R$2.3
trillion to cover potential margin calls, as well as to
guarantee the operating cash flow. This amount is enough to
ensure all Sadia=B4s liabilities in the short and medium terms.
Additionally, the company initiated a project to optimize costs
and capital use.
At the end of September 2008, Sadia had a net debt of
R$4.0 trillion, an increase of 86.2% when compared to the
position at the end of June 2008. The weighted average interest
rate for loans under assets at September 30, 2008 was 9.44%
p.a.(6.06% p.a. at June 30, 2008). The net debt to EBITDA ratio
was 3.4 at the end of the 3Q08. This result was achieved due to
the company's investment plan and the financial resources provided
to bear the financial losses.
Investments made by Sadia up to September 2008 totaled
R$1.5 trillion. In the 3Q08, the company invested R$519 billion,
double of the amount invested in the 3Q07. During the 3Q08, most
of the resources were allocated to the poultry segment, which
received R$166.3 billion (32.1%), followed by the segment of
processed products, which received R$136.2 billion (26.3%). The
pork segment received R$88.0 billion, corresponding to 17.0%,
while the beef segment received R$0.6 billion, equivalent to 0.1%
of the total. The remaining balance of R$127.5 billion was used
in other areas.
Outlook
Sadia investments in Lucas do Rio Verde, State of Mato Grosso, for
the construction of slaughtering units with a capacity of 126
million birds/year and 1.25 million hogs/year, required an
investment of R$800 billion. The plant initiated its activities
last October 22. The inauguration of the plant in the State of
Pernambuco, in the municipality of Vitoria do Santo Antao, which
received an investment of R$250 billion, is scheduled for the
third quarter of 2009.
Furthermore, Sadia grew its capacity in processed products with
the completion of the investments in the plants of Toledo (PR),
Varzea Grande (MT), Uberl=E2ndia (MG) and Brasilia (DF).
These investments should translate into additional revenues of
R$4 trillion by 2010. These projects are part of the investments
of R$1.6 trillion scheduled for 2008, of which 92% has already
been completed.
Sadia reaffirms its growth forecast between 12% and 14% in total
volumes for 2008 in relation to 2007 and an EBITDA margin between
11% and 12%. Gross revenues expected for the year are
R$12.0 trillion.
Sao Paulo Stock Exchange
The company's preferred shares are part of the theoretical
portfolio of the Sao Paulo Stock Exchange (IBOVESPA). This
portfolio lists 64 papers. Sadia relative weight in this index
for the four-month period September-December/08, increased from
1.00% in the prior four-month period to 1.04%. Sadia preferred
shares (Sdia4) devalued 44.0% in the last 12 months (up to
09/30/08), while Ibovespa in the period devalued 18.1%.
About Sadia S.A.
Headquartered in Sao Paulo, Brazil, Sadia S.A. --
http://www.sadia.com-- operates in the agro industrial and food
processing sectors in Brazil and primarily produces a range of
processed products, poultry, and pork. The company distributes
around 1,000 different products through distribution and sales
centers located in Brazil, China, Japan and Italy. Sadia has a
25% share of the meat and meat product market in the Gulf area,
including Saudi Arabia, the United Arab Emirates, Kuwait, Qatar,
Oman and Bahrain.
* * *
As reported in the Troubled Company Reporter-Latin America on
Oct. 8, 2008, Standard & Poor's Ratings Services lowered its long-
term corporate credit rating on Sadia S.A. and the rating on
subsidiary Sadia Overseas Ltd.'s US$250 million in senior
unsecured notes to 'BB' from 'BB+'. At the same time, S&P removed
the ratings from CreditWatch, where they had been placed with
negative implications on Sept. 26, 2008. S&P said the outlook on
the ratings is negative.
The TCR-LA also reported on Sept. 30, 2008, that Moody's Ratings
Services downgraded all ratings related to Sadia S.A. to Ba3 from
Ba2 following the announcement of some BRL760 million in cash
losses from positions in currency forward contracts and
counterparty losses in its offshore investment portfolio.
SADIA S.A.: Looking for Answers on Failed Currency Bets
-------------------------------------------------------
Sadia SA, who lost at least 545 million reais (US$254 million) on
wrong-way currency bets, is investigating how the investments came
to exceed internal limits, Carlos Caminada of Bloomberg News
reports.
Chairman Luiz Fernando Furlan, the report relates, said the
company is looking for possible violations of policies following
an audit to assess derivatives losses. "There was possibly an
intentional flaw," he told Bloomberg.
According to the report, Sadia posted its first net loss in nine
years after a currency slump derailed bets that Brazil's real
would continue a four-year winning streak against the dollar.
Sadia posted a third-quarter net loss of 777.4 million reais,
after booking 1.21 billion reais in financial expenses, mostly
from bad bets on currencies and other wrong-way investments, from
a profit of 188.4 million reais in the year-earlier quarter,
Bloomberg says.
The report notes that Mr. Furlan said written statements from
former CFO Adriano Lima Ferreira and former finance manager Alvaro
Ballejo Fiuza de Castro, show that the company's other top
executives weren't aware that the company's derivatives positions
exceeded internal hedging limits.
About Sadia S.A.
Headquartered in Sao Paulo, Brazil, Sadia S.A. --
http://www.sadia.com-- operates in the agro industrial and food
processing sectors in Brazil and primarily produces a range of
processed products, poultry, and pork. The company distributes
around 1,000 different products through distribution and sales
centers located in Brazil, China, Japan and Italy. Sadia has a
25% share of the meat and meat product market in the Gulf area,
including Saudi Arabia, the United Arab Emirates, Kuwait, Qatar,
Oman and Bahrain.
* * *
As reported in the Troubled Company Reporter-Latin America on
Oct. 8, 2008, Standard & Poor's Ratings Services lowered its long-
term corporate credit rating on Sadia S.A. and the rating on
subsidiary Sadia Overseas Ltd.'s US$250 million in senior
unsecured notes to 'BB' from 'BB+'. At the same time, S&P removed
the ratings from CreditWatch, where they had been placed with
negative implications on Sept. 26, 2008. S&P said the outlook on
the ratings is negative.
The TCR-LA also reported on Sept. 30, 2008, that Moody's Ratings
Services downgraded all ratings related to Sadia S.A. to Ba3 from
Ba2 following the announcement of some BRL760 million in cash
losses from positions in currency forward contracts and
counterparty losses in its offshore investment portfolio.
SADIA S.A.: Saxena White Files Securities Lawsuit in New York
-------------------------------------------------------------
Saxena White P.A. has filed suit on behalf of shareholders of
Sadia S.A. in the United States District Courtfor the Southern
District of New York.
The complaint seeks damages for violations of federal securities
laws on behalf of all investors who purchased Sadia S.A. American
Depository Receipts (ADRs) and/or common stock between May 1, 2008
through September 26, 2008, inclusive. Sadia is a producer and
marketerof food products and exports their products throughout the
world.
During the Class Period, Sadia entered into undisclosed currency
derivative contracts to purportedly hedge against the Company's
U.S. dollar exposure. The company characterized the amounts of
these contracts as "nominal." However, these contracts violated
Company policy in that they were far larger than necessary to
hedge normal business operations and resulted in a loss of
US$365 million. As a result of Defendants' admission of violating
company policy regarding currency hedging, the American Depository
Receipts of Sadia S.A. closed at US$9.50 per share, down from the
Nov. 4's close of US$15.27, a decline of 38%.
About Saxena White
Saxena White P.A., which has offices in Boca Raton and Boston,
specializesin prosecuting securities fraud and complex class
actions on behalf of institutions and individuals. Currently
serving as lead counsel innumerous securities fraud class actions
nationwide, the firm has recovered millions of dollars on behalf
of injured investors and is active in major litigation pending in
federal and state courts throughout the United States.
About Sadia S.A.
Headquartered in Sao Paulo, Brazil, Sadia S.A. --
http://www.sadia.com-- operates in the agro industrial and food
processing sectors in Brazil and primarily produces a range of
processed products, poultry, and pork. The company distributes
around 1,000 different products through distribution and sales
centers located in Brazil, China, Japan and Italy. Sadia has a
25% share of the meat and meat product market in the Gulf area,
including Saudi Arabia, the United Arab Emirates, Kuwait, Qatar,
Oman and Bahrain.
* * *
As reported in the Troubled Company Reporter-Latin America on
Oct. 8, 2008, Standard & Poor's Ratings Services lowered its long-
term corporate credit rating on Sadia S.A. and the rating on
subsidiary Sadia Overseas Ltd.'s US$250 million in senior
unsecured notes to 'BB' from 'BB+'. At the same time, S&P removed
the ratings from CreditWatch, where they had been placed with
negative implications on Sept. 26, 2008. S&P said the outlook on
the ratings is negative.
The TCR-LA also reported on Sept. 30, 2008, that Moody's Ratings
Services downgraded all ratings related to Sadia S.A. to Ba3 from
Ba2 following the announcement of some BRL760 million in cash
losses from positions in currency forward contracts and
counterparty losses in its offshore investment portfolio.
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C A Y M A N I S L A N D S
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AIR ASIA: To Hold Shareholders' Meeting on November 27
------------------------------------------------------
Air Asia Aero Technology Limited will hold its final shareholders'
meeting on November 27, 2008, at 9:00 a.m., at the offices of
Kinetic Partners Cayman LLP located at the Harbour Center, 42
North Church Street, in Grand Cayman, Cayman Islands.
These matters will be taken up during the meeting:
1) accounting of the wind-up process, and
2) giving explanation thereof.
The company's liquidator is:
Geoffrey Varga
c/o Camele Burke
Kinetic Partners Cayman LLP
The Harbour Centre, 42 North Church Street
PO Box 10387, Grand Cayman KY1-1004
Cayman Islands
Telephone:(345) 623 9904
Facsimile:(345) 623 0007
AURIGA CDO: To Hold Shareholders' Meeting on November 28
--------------------------------------------------------
Auriga CDO Ltd. will hold its final shareholders' meeting on
November 28, 2008, at 11:45 a.m., at the registered office of the
company.
These matters will be taken up during the meeting:
1) accounting of the wind-up process, and
2) giving explanation thereof.
C CUBED: To Hold Shareholders' Meeting on November 28
-----------------------------------------------------
C Cubed Fund Limited will hold its final shareholders' meeting on
November 28, 2008, at 3:00 p.m., at the offices of dms Corporate
Services Ltd, dms House, 20 Genesis Close, in George Town, Grand
Cayman.
These matters will be taken up during the meeting:
1) accounting of the wind-up process, and
2) giving explanation thereof.
The company's liquidator is:
dms Corporate Services Ltd
c/o Bernadette Bailey-Lewis
Telephone: (345) 946 7665
Facsimile: (345) 946 7666
CORYDALIS LIMITED: To Hold Shareholders' Meeting on December 15
---------------------------------------------------------------
Corydalis Limited will hold its final shareholders' meeting on
December 15, 2008, at 10:00 a.m., at the registered office of the
company.
These matters will be taken up during the meeting:
1) accounting of the wind-up process, and
2) giving explanation thereof.
The company's liquidators are:
Probitas Limited
Equitas Limited
Clifton House, 75 Fort St
P.O. Box 1350, Grand Cayman KY1-1004
EFM CAPITAL: To Hold Shareholder's Meeting on November 28
---------------------------------------------------------
EFM Capital Partners Ltd will hold its final shareholders' meeting
on November 28, 2008, at 3:00 p.m., at the offices of dms
Corporate Services Ltd, dms House, 20 Genesis Close, in George
Town, Grand Cayman.
These matters will be taken up during the meeting:
1) accounting of the wind-up process, and
2) giving explanation thereof.
The company's liquidators are:
dms Corporate Services Ltd
c/o Bernadette Bailey-Lewis
Telephone: (345) 946 7665
Facsimile: (345) 946 7666
EFM POWER: To Hold Shareholder's Meeting on November 28
-------------------------------------------------------
EFM Power Fund, Ltd will hold its final shareholders' meeting on
November 28, 2008, at 3:00 p.m., at the offices of dms Corporate
Services Ltd, dms House, 20 Genesis Close, in George Town, Grand
Cayman.
These matters will be taken up during the meeting:
1) accounting of the wind-up process, and
2) giving explanation thereof.
The company's liquidators are:
dms Corporate Services Ltd
c/o Bernadette Bailey-Lewis
Telephone: (345) 946 7665
Facsimile: (345) 946 7666
EVEREST FUND: To Hold Shareholders' Meeting on November 28
----------------------------------------------------------
Everest Fund Ltd. will hold its final shareholders' meeting on
November 28, 2008, at 12:00 noon, at the registered office of the
company.
These matters will be taken up during the meeting:
1) accounting of the wind-up process, and
2) giving explanation thereof.
The company's liquidator is:
Walkers SPV Limited
Walker House, 87 Mary Street
George Town Grand Cayman KY1-9002
Cayman Islands
HENSON INTERNATIONAL: To Hold Members' Meeting on November 26
-------------------------------------------------------------
Henson International Finance Limited will hold its final members'
meeting on November 26, 2008, at the 76/Floor of Two International
Finance Centre, 8 Finance Street, in Central, Hong Kong.
These matters will be taken up during the meeting:
1) accounting of the wind-up process, and
2) giving explanation thereof.
The company's liquidators are:
Lee King Yue
Two International Finance Centre, 72-76/Floor
8 Finance Street
Central, Hong Kong
HH SUPPLY: To Hold Shareholders' Meeting on December 15
-------------------------------------------------------
HH Supply Inc. will hold its final shareholders' meeting on
December 15, 2008, at 9:00 a.m., at the registered office of the
company.
These matters will be taken up during the meeting:
1) accounting of the wind-up process, and
2) giving explanation thereof.
The company's liquidator is:
David M.L. Roberts
P.O. Box 1569, Grand Cayman KY1-1110
Cayman Islands
Telephone: 345 949 4018
Facsimile: 345 949 7891
KENWALL LTD: To Hold Members' Meeting on November 27
----------------------------------------------------
Kenwall Ltd. will hold its final shareholders' meeting on Nov. 27,
2008, at Citco Trustees (Cayman) Limited, Windward One, Regatta
Office Park, West Bay Road, in Grand Cayman, Cayman Islands.
These matters will be taken up during the meeting:
1) accounting of the wind-up process, and
2) giving explanation thereof.
The company's liquidator is:
CDL Company Ltd.
P.O. Box 31106, Grand Cayman KY1-1205
MELLON ALTERNATIVE: To Hold Shareholders' Meeting on November 28
----------------------------------------------------------------
Mellon Alternative Strategies Limited will hold its final
shareholders' meeting on November 28, 2008, at 12:15 p.m., at the
registered office of the company.
These matters will be taken up during the meeting:
1) accounting of the wind-up process, and
2) giving explanation thereof.
The company's liquidator is:
Walkers SPV Limited
Walker House, 87 Mary Street
George Town, Grand Cayman KY1-9002
Cayman Islands
MINSK INVESTMENT: To Hold Shareholders' Meeting on November 25
--------------------------------------------------------------
Minsk Investment Company Limited will hold its final shareholders'
meeting on November 25, 2008, at 9:45 a.m., at the offices of
Securehouse Limited, St. Markusgasse 19, P. Box 932, in Fl-9490
Vaduz, Liechtenstein.
These matters will be taken up during the meeting:
1) accounting of the wind-up process, and
2) giving explanation thereof.
The company's liquidator is:
Securehouse Limited
c/o P.O. Box 932, FL-9490 Vaduz
Liechtenstein
MOCA ASSET: To Hold Shareholders' Meeting on December 11
--------------------------------------------------------
Moca Asset Funding Corporation will hold its final shareholders'
meeting on December 11, 2008, at 10:45 a.m., at the offices of
HSBC Bank (Cayman) Limited, P.O. Box 1109, George Town, in Grand
Cayman, Cayman Islands.
These matters will be taken up during the meeting:
1) accounting of the wind-up process, and
2) giving explanation thereof.
The company's liquidators are:
Bronwynne R. Arch
Scott Aitken
P.O. Box 1109, Grand Cayman KY1-1102
Cayman Islands
Telephone: 949-7755
Facsimile: 949-7634
MONTREAL HOLDINGS: To Hold Shareholder's Meeting on November 27
---------------------------------------------------------------
Montreal Holdings Limited will hold its final shareholders'
meeting on November 27, 2008.
These matters will be taken up during the meeting:
1) accounting of the wind-up process, and
2) giving explanation thereof.
The company's liquidators are:
Sandra Perez
c/o Laura Henry
Telephone: 945-4777
Facsimile: 945-4799
NIPPON REAL: To Hold Members' Meeting on November 28
----------------------------------------------------
Nippon Real Estate Investment will hold its final members' meeting
on November 28, 2008, at 10:00 a.m., at Entsuji Gadelius Building,
2-39 Akasaka 5-chome, Minato-ku, in Tokyo, Japan.
These matters will be taken up during the meeting:
1) accounting of the wind-up process, and
2) giving explanation thereof.
The company's liquidator is:
John Huang
Tokyo Ginko Kyokai Building 14FI
1-3-1 Marunouchi, Chiyoda-ku
Tokyo 100-0005, Japan
R.J. O'BRIEN: To Hold Shareholders' Meeting on November 28
----------------------------------------------------------
R.J. O'Brien Managed Futures Fund (Offshore) Ltd. will hold its
final shareholders' meeting on November 28, 2008, at 10:00 a.m.,
at the offices of its liquidator -- Avalon Management Limited, 3rd
Floor of Zephyr House, 122 Mary Street, in George Town, Grand
Cayman.
These matters will be taken up during the meeting:
1) accounting of the wind-up process, and
2) giving explanation thereof.
REMUS EUROPE: To Hold Shareholders' Meeting on December 8
---------------------------------------------------------
Remus Europe Fund Limited will hold its final shareholders'
meeting on December 8, 2008, at 9:00 a.m., at the offices of Close
Brothers (Cayman) Limited, 4th Floor of Harbour Place, in George
Town, Grand Cayman.
These matters will be taken up during the meeting:
1) accounting of the wind-up process, and
2) giving explanation thereof.
The company's liquidator is:
John Sutlic
c/o Kim Charaman
Close Brothers (Cayman) Limited
Harbour Place, Fourth Floor
P.O. Box 1034, Grand Cayman, KYI-1102
Telephone:(345) 949 8455
Facsimile:(345) 949 8499
SAKURA CAPITAL: To Hold Members' Meeting on December 2
------------------------------------------------------
Sakura Capital Funding (Cayman) Limited will hold its final
members' meeting on December 2, 2008, at 1-2, Yurakucho 1-chome,
in Chiyoda-ku, Tokyo 100-0006 Japan.
These matters will be taken up during the meeting:
1) accounting of the wind-up process, and
2) giving explanation thereof.
The company's liquidator is:
Nobuaki Kurumatani
c/o Maples and Calder, Attorneys-at-law
P.O. Box 309, Ugland House
Grand Cayman KY1-1104, Cayman Islands
SAPIC II REFERENCE: To Hold Shareholders' Meeting on December 12
----------------------------------------------------------------
Sapic II Reference Fund (9) Limited will hold its final
shareholders' meeting on December 12, 2008, at 9:00 a.m., at the
offices of Rawlinson & Hunter Services Ltd., One Capital Place,
George Town, in Grand Cayman, Cayman Islands.
These matters will be taken up during the meeting:
1) accounting of the wind-up process, and
2) giving explanation thereof.
The company's liquidators are:
Peter D. Anderson
P. O. Box 897, One Capital Place
George Town, Grand
Telephone: (345) 949-7576
Facsimile: (345) 949-8295
SECUREHOUSE LIMITED: To Hold Shareholders' Meeting on December 15
-----------------------------------------------------------------
Securehouse Limited will hold its final shareholders' meeting on
December 15, 2008, at 9:00 a.m., at the registered office of the
company.
These matters will be taken up during the meeting:
1) accounting of the wind-up process, and
2) giving explanation thereof.
The company's liquidator is:
Securehouse Limited
c/o P.O. Box 932, FL-9490 Vaduz
Liechtenstein
SPRINT NEXTEL: To Hold Shareholders' Meeting on November 26
-----------------------------------------------------------
Sprint Nextel Middle East Limited will hold its final
shareholders' meeting on November 26, 2008, at 4:00 p.m., at the
offices of The Arab Palestinian Investment Company, 4th Floor of
Mecca Street Xpress Building (2), P.O. Box 941489, in Amman 11194,
Jordan.
These matters will be taken up during the meeting:
1) accounting of the wind-up process, and
2) giving explanation thereof.
The company's liquidator is:
Tareq Omar A Alaggad
c/o The Arab Palestinian Investment Company
Mecca Str. Xpress Building (2), 4th Floor
P.O. Box 941489, Amman 11194
Jordan
WALKERS SPV: To Hold Shareholders' Meeting on November 28
---------------------------------------------------------
Walkers SPV Limited will hold its final shareholders' meeting on
November 28, 2008, at 12:00 noon, at Walker House, 87 Mary Street,
in George Town Grand Cayman KY1-9002, Cayman Islands.
These matters will be taken up during the meeting:
1) accounting of the wind-up process, and
2) giving explanation thereof.
The company's liquidator is:
Walkers SPV Limited
Walker House, 87 Mary Street
George Town
Cayman Islands
YB INVESTMENTS: To Hold Shareholders' Meeting on December 4
-----------------------------------------------------------
YB Investments will hold its final shareholders' meeting on
December 4, 2008, at 9:00 a.m., at the offices of Close Brothers
(Cayman) Limited, 4th Floor of Harbour Place, in George Town,
Grand Cayman.
These matters will be taken up during the meeting:
1) accounting of the wind-up process, and
2) giving explanation thereof.
The company's liquidator is:
John Sutlic
c/o Kim Charaman
Close Brothers (Cayman) Limited
Harbour Place, Fourth Floor
P.O. Box 1034, Grand Cayman, KYI-1102
Telephone:(345) 949 8455
Facsimile:(345) 949 8499
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C O S T A R I C A
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* COSTA RICA: Inflation Soars to 16.30% in October
--------------------------------------------------
The Republic pf Costa Rica's inflation rate between November 2007
and October 2008 reached 16.30%, while consumer prices rose 1.04%
during the month, Inside Costa Rica News reports, citing a report
by Instituto Nacional de Estadistica y Censo (INEC).
According to the INEC, the report notes, the increase in inflation
was attributable to the water, taxi, and basic food items' prices.
INEC's report indicated that basic food products and non-alcoholic
beverages increased sharply and contributing to a rise in the
Consumer Price Index, which takes into account 292 items, the
report notes.
According to Costa Rica News, the Central Bank is predicting an
overall inflation rate of 14% for the year and with less than two
months left that prediction may not be met. Items like a rise in
rents and utilities also contributed in the rise in the cost of
living, as rents for housing have actually increased over the past
couple of months as demand for rental housing has increased, the
report adds.
The Republic of Costa Rica is a country in Central America,
bordered by Nicaragua to the north, Panama to the east and south,
the Pacific Ocean to the west and south and the Caribbean Sea to
the east. According to Moody's Investors Service, the country
continues to carry a Ba1 foreign and local currency rating with a
positive outlook.
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J A M A I C A
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CLARENDON ALUMINA: Moody's Puts Sr. Notes Ba2 Rating Under Review
-----------------------------------------------------------------
Moody's Investors Service placed the Ba2 rating of Clarendon
Alumina Production's (CAP) $200 million of senior unsecured notes
due 2021 under review for possible downgrade. This action follows
Moody's earlier announcement on November 4, 2008, that it had
placed Jamaica's Ba2 local currency bond rating under review for
possible downgrade.
The ratings of CAP reflect the application of Moody's rating
methodology for government-related issuers (GRIs). In accordance
with Moody's GRI rating methodology, CAP's Ba2 foreign currency
debt rating reflects the combination of the following inputs:
baseline credit assessment of 18 (mapping to a Caa2); the Ba2
local currency bond rating of the Government of Jamaica (GOJ)
which is under review for downgrade; high dependence; and high
government support. The high support factor considers the
guarantee provided by the GOJ and that the government in recent
years has provided funds to enable CAP to meet various
obligations. The high dependence factor reflects CAP's need for
funds from the government on an ongoing basis, and the challenges
it would face operating independently without that funding.
As part of the review of CAP's ratings, Moody's may consider
lowering the baseline credit assessment given the continued
operating and financial losses stemming, in part, from its
contracts with Glencore. It will be critical for the baseline
credit assessment that Moody's receives audited financial
statements and gains an understanding of how CAP intends to
address its ongoing operating challenges.
Headquartered in Kingston Jamaica, CAP is 100% owned by the
Government of Jamaica. CAP holds a 45% interest, as a co-tenant
in common, in the assets of Jamalco, a joint venture with Alcoa
World Alumina and Chemicals, which itself is 60% owned by Alcoa
Inc., and 40% by Alumina Limited of Australia.
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M E X I C O
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GRUPO SENDA: S&P Keeps 'B+' Rating; Outlook Revised to Negative
---------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on Mexico-
based Grupo Senda S.A. de C.V. (Senda) to negative from positive.
At the same time, S&P affirmed its 'B+' long-term corporate credit
rating on the company.
"The outlook revision reflects the increased competitive
environment in the bus transportation sector, which negatively
affected Senda's profitability during third-quarter 2008. The
tight liquidity that we expect to result from this and from more
stringent financial market conditions also influenced the outlook
revision," said Standard & Poor's credit analyst Enrique Gomez
Tagle, CFA.
The rating on Senda reflects the highly competitive bus
transportation market; Senda's high leverage resulting from its
acquisition of Transportes del Norte; and the company's low
organic growth and somewhat small size. These weaknesses are
balanced by Senda's strong position in Northeastern and Central
Mexico and its young fleet life, which provides flexibility to
defer investments and operational efficiencies.
Established in 1930, Senda is a bus transportation services
provider serving about 26 million passengers annually in a network
that covers 15 Mexican states and one in the U.S. (Texas) with
more than 1,300 buses. Senda also offers personnel transportation
services with an additional 1,100 buses. For the 12 months ended
September 2008, the company's revenues were about US$287 million.
Growth in the passenger transportation industry is relatively low.
During the past decade, the industry grew at the same rate as the
Mexican population (about 2.5% per year). For the next three to
five years, S&P expects the Mexican population to grow 2% per
year. Senda's growth beyond population growth will depend mostly
on the success of its new pricing strategy that started in June
2008 and will continue in 2009, and on its successfully opening
new routes. Growth will be limited by the reduction in capital
expenditures in 2009.
Senda's young fleet life has helped it sustain its EBITDA margin
in the past and provides a cushion for deferring capital
expenditures. As of September 2008, Senda's average fleet age was
approximately 5.7 years, which compares favorably with its peers
in Mexico and around the world. S&P expects Senda to take
advantage of its fleet life and reduce its investments in new
buses significantly in 2009. Nevertheless, S&P expects the
company to maintain the average life of its buses at less than
eight years.
The negative outlook reflects S&P's belief that Senda's
profitability will be lower during the next 12 months and its
liquidity will remain tight. S&P could lower the rating if the
company does not take actions to improve its liquidity; if its
profitability continues to decrease and its rolling 12-month funds
from operations-to-debt ratio is less than 10%; or if there are
further market disruptions leading to lower-than-expected profit
margins. S&P could change the outlook to stable if Senda is able
to increase its profit margin during 2009, improve its liquidity
position, and increase its funds from operations-to-EBITDA ratio
close to 15%.
VITRO SAB: S&P Cuts Ratings to 'B-' On Liquidity Concerns
---------------------------------------------------------
Standard & Poor's Ratings Services lowered its long-term corporate
credit and senior unsecured debt ratings on Vitro S.A.B. de C.V.
(Vitro) to 'B-' from 'B'. At the same time, the long-term local
scale rating on Vitro was lowered to 'mxBB+' from 'mxBBB-'. The
ratings remain on CreditWatch with negative implications, where
they were initially placed on Oct. 14, 2008, meaning that the
ratings could either be lowered or affirmed.
"The downgrade reflects our increased concerns regarding Vitro's
already constrained liquidity as a consequence of the margin calls
stemming from Vitro's derivative instrument positions and the
closing of those positions, mostly related to natural gas price
fixes," Standard & Poor's credit analyst Marcela Duenas said. "The
rating actions also reflect our continued concerns about the
effects of a more challenging economic environment on Vitro's key
financial indicators and cash flow generation."
As the economies of Mexico and the U.S. weaken during the rest of
2008 and into 2009, affecting the construction, automotive, and
consumer products (glass containers) industries, Standard & Poor's
expects Vitro to report lower sales and cash flow generation.
Furthermore, the company's high financial leverage, combined with
the company's important long-term debt maturities,
limited cash position, and exposure to commodity price volatility
(particularly natural gas), constrain its financial flexibility.
S&P expects to resolve the CreditWatch listing following the
conclusion of Vitro's negotiations with its derivative
counterparties.
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P E R U
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PERU ENHANCED: S&P Says 'BB+' Won't Be Affected by Merrill Deal
---------------------------------------------------------------
Standard & Poor's Ratings Services said it does not expect its
'BB+/Watch Dev' ratings on Peru Enhanced Pass Through Finance
Ltd.'s US$742 million class A-1 senior secured notes due 2018 and
US$455 million class A-2 senior secured notes due 2025 to be
adversely affected by Merrill Lynch & Co.'s (acting as the cash
management counterparty) announcement of an amendment to the
purchase agreement and the subsequent purchase of new certificados
de reconocimiento de derechos del pago anual por obras (CRPAOs).
The CRPAO purchaser, Merrill Lynch, and the concessionaries
amended the purchase agreement because the initial costs that were
determined by the concessionaries turned out to be higher than
expected. As a result, more CRPAOs were issued and the
receivables' expected timing was accelerated. To accommodate
these changes, the parties amended schedules II and V of the CRPAO
purchase agreement to allow the purchaser in both the CRPAO
purchase agreement and the issuer purchase agreement to change the
timing of the purchase of those CRPAOs that they were considering
to buy in subsequent phases.
Merrill Lynch, as the administrator of the cash management
agreement, will invest the amounts it receives in advance from the
issuance of new CRPAOs in zero coupon notes issued by the U.S.
government. If the zero coupon notes mature prior to the debt
service schedule payments, Merrill Lynch will deposit the funds
received into the revenue accounts and, according to the offering
memorandum, will invest the funds in 'A-1' rated short-term
investments. The original scheduled debt service payments to the
noteholders will remain unchanged.
The transaction's first debt service payment totaling
US$11,570,130 was made June 2, 2008. The next semiannual payment
is due Nov. 30, 2008.
The Interoceanica toll road project, which will connect Peru and
Brazil, is one of Peru's most important infrastructure projects.
It consists of a concession for the construction, rehabilitation,
maintenance, and operation of the Interoceanica Sur toll road of
more than 700km for 25 years to two concessionaries: Concesionaria
Interoceanica Sur-Tramo 2 S.A. and Concesionaria Interoceanica
Sur-Tramo 3 S.A.
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* S&P Says No Funding Agreement-backed Issuance in October 2008
---------------------------------------------------------------
Funding agreement-backed issuance has swung between the two
extremes this year. The first half and the second quarter each
had the highest issuance totals for those respective periods,
while the third quarter had the lowest quarterly issuance total
since 2002.
October ended without a single issuance, and we have seen nothing
to indicate that issuance will be picking up anytime soon.
Although we did expect a decrease in issuances in October, the
total lack of issuance is surprising.
Market participants have told us that the precipitous drop in
issuance could be because of several reasons:
-- First, and likely foremost, because of the dislocation in
the credit markets, there has been a lack of debt issuance
in other asset classes, which would leave an issuer of these
notes without a place to invest the proceeds it receives.
-- Funding agreement providers appear to be focused on
preserving capital. Issuance would increase the size of
their balance sheets, potentially making these companies
appear more leveraged, but it would also expose them to
credit risk on the assets purchased.
-- Rates that investors are looking for appear to have widened
more for insurance companies than they have for non
insurance-related obligations.
-- Market participants have told Standard & Poor's that some
insurance companies have been accessing the Federal Home
Loan Bank system as a source of capital for spread lending
because it currently has the lowest cost of funding.
This has been a challenging time for issuers of funding agreement-
backed notes. At this time, it is difficult to estimate when the
market for these investments will open up again, but issuers have
shown resiliency in previous downturns. We expect them to return
to the market eventually because over time, this has been a
profitable line of business for the issuers.
* Upgrade Potential Falls To Four-Year Low, S&P Article Says
------------------------------------------------------------
The number of issuers poised for upgrades fell to 245 this
October, 24 fewer than almost a month ago, said Standard & Poor's
in an article titled "Upgrade Potential Across Credit Grades And
Sectors (Premium)." The number of potential upgrades in October
was the lowest count since we started our report in September
2004. On the other hand, potential bond downgrades are at their
highest level in 38 months at 786 entities.
"The drop in upgrade potential is largely attributable to credit
deterioration across the globe," said Diane Vazza, head of
Standard & Poor's Global Fixed Income Research Group, "especially
in the U.S. and Europe, where adverse economic conditions and a
freeze on the credit markets have effectively reduced an upward
trajectory for even well-positioned issuers."
However, there are a few sectors, including metals, mining, and
steel, as well as telecommunications, that are poised to better
weather the current credit storm. Issuers in these sectors have a
positive bias -- defined as the number of entities listed with
either a positive outlook or ratings on CreditWatch with positive
implications -- that exceeds the historical average. This
highlights the likelihood that companies within these sectors have
greater upgrade potential relative to other sectors or at least a
stronger position of stability.
* Q2 Global Project Finance Ratings Remain Stable, S&P Says
-----------------------------------------------------------
Project finance around the world continues to show resilience in
the face of current market volatility, according to a report
published by Standard & Poor's Ratings Services on RatingsDirect
titled Industry Report Card: Global Project Finance Ratings Remain
Stable Despite Uncertain Credit Markets.
Of the 237 global project-financed issues Standard & Poor's rates,
69% were investment grade and 73% had stable outlooks. Of the
remaining projects, 35 have negative outlooks, 19 are on
CreditWatch Negative, and seven have positive outlooks,
"Rating actions that we took so far in 2008 on bond insurers that
provided credit enhancements to these entities resulted in an
increased number of project finance rating actions compared with
our last report card in June 2008," said Standard & Poor's credit
analyst Arthur Simonson. "Overall, most projects performed as we
expected and typically benefited from sound long-term contractual
arrangements with stable and predictable revenues," Mr. Simonson
continued. However, there were 17 rating downgrades due to
project-specific operational, financial or parental company
issues, and one due to the downgrade of its insurer. Two rating
upgrades resulted from improved project economics.
The outlook for the project finance market remains good, and we
expect the sector to see an increasingly diversified market
looking to fund infrastructure projects using nonrecourse debt.
* Consumer-Based Sectors Face a Frightening Environment, S&P Says
-----------------------------------------------------------------
The consumer products, media and entertainment, and retail/
restaurants sectors remained most susceptible to economic and
credit-market turbulence as of Oct. 30, 2008, said an article
published by Standard & Poor's.
These sectors consistently have the highest levels of risk among
our lists of distressed companies (defined as speculative-grade-
rated companies with securities trading in excess of 1,000 basis
points above U.S. Treasuries), weakest links (companies rated 'B-'
or lower with either a negative outlook or ratings on CreditWatch
with negative implications), and potential bond downgrades
(investment-grade or speculative-grade-rated companies that have
either a negative outlook or ratings on CreditWatch with negative
implications).
We identified 303 companies across these sectors on the basis of
the three criteria, according to the article, titled "Stress In
Corporate America: Frightening Environment For Consumer-Reliant
Sectors (Premium)."
In the month of October, the number of defaults continued to rise
as the aftermath of the September collapses continued to haunt the
stressed sectors. Consumer spending for discretionary purposes
remained inhibited in the wake of rising unemployment, combined
with businesses facing restricted access to funding in the credit
markets.
"Consumer spending accounts for 70% of U.S. GDP, and we expect
consumer spending to rise only 1% in 2008, compared with an
observed growth rate of 2.8% in 2007," said Diane Vazza, head of
Standard & Poor's Global Fixed Income Research Group. "Consumer
products companies have had to face cost pressures, particularly
rising energy and commodities prices in recent months, though they
should experience a reprieve if the current declines in commodity
prices continue."
Of the 303 companies in these three sectors, 14 companies are on
all three lists, while 58 are on more than one list. This
indicates the underlying vulnerability of these entities that
could be exposed in the coming quarters.
* S&P Says 786 Issuers Face Downgrade Risk, A Three-Year High
-------------------------------------------------------------
The number of potential downgrades reached 786 in October 2008,
the highest since September 2005, said an article by Standard &
Poor's. This is an increase of 28 issuers over last month's
count.
Potential downgrades are defined as entities that have either a
negative outlook or ratings on CreditWatch with negative
implications across rating categories 'AAA' to 'B-'.
By comparison, the number of potential downgrades in October is
136 more than what was reported in the same period a year ago and
118 more than the average of the past 38 months, according to the
article, titled "Downgrade Potential Across Credit Grades And
Sectors (Premium)." Further, the number of potential downgrades
is more than triple the number of those poised for potential
upgrades, a trend that has progressed for roughly 15 months.
"Despite materialized downgrades, the housing and financial
sectors continue to show the highest downgrade risk, indicative of
further rating actions if credit conditions continue to
deteriorate," said Diane Vazza, head of Standard & Poor's Global
Fixed Income Research Group.
Geographically, the U.S. continues to top the list of potential
bond downgrades, with roughly one-quarter of current ratings
showing downside risk.
By rating designation, 'B' rated companies have the greatest
potential for downgrades, with 148 companies (19% of the total).
Globally, of the 786 issuers at risk for downgrades, 81% are rated
speculative grade ('BB+' or below).
* S&P Sees High Recovery Prospects for Lenders in Oil Sector
------------------------------------------------------------
Corporate default rates have been rising steadily since mid-2007,
and debtholders are increasingly concerned about what their
recovery prospects might be if an issuer defaults. Standard &
Poor's Ratings Services began assigning recovery ratings to the
unsecured debt of speculative-grade issuers earlier this year to
help investors evaluate what their recovery prospects might be in
a default. Oil and gas companies, on average, provide higher
recovery prospects for unsecured creditors compared with other
industries, according to a recent commentary published by Standard
& Poor's.
The article, "Unsecured Lenders In The Oil And Gas Sector Have
Strong Recovery Prospects," published Oct. 28, 2008, on
RatingsDirect, examines the criteria -- including high hydrocarbon
prices -- that underpin the higher recovery ratings on
speculative-grade companies in the oil and gas sector.
"Another reason the oil and gas sector has exhibited comparatively
higher recovery is that speculative-grade oil and gas companies
tend to have more unsecured debt than secured debt in their
capital structure," said Standard & Poor's credit analyst Aniki
Saha-Yannopoulos. "With a limited amount of secured debt ahead of
the unsecured creditors, more value typically remains available to
satisfy unsecured creditors in the sector."
The report also discusses the differentiating factors for varying
recovery prospects between oil and gas subsectors. For example,
companies in the oilfield service sector generally offer better
recovery prospects versus exploration and companies due to lower
debt to capitalization ratios and secured facilities that are not
affected by borrowing bases.
* Financial Sector Dominates Global Defaults, S&P Finds
-------------------------------------------------------
Globally, 28 companies -- 24 public and 4 confidentially rated --
defaulted in the third quarter of 2008, said an article by
Standard & Poor's. This is the largest number of defaults since
the third quarter of 2003 and already five more than the total
number of defaults for all of 2007.
The volume of rated debt affected by third quarter's defaults was
a massive US$186.2 billion, dwarfing the US$8.15 billion recorded
in all of 2007 and making this the largest defaulting debt amount
in recent memory, according to the report, titled "Quarterly
Default Update And Rating Transitions (Premium)." The vast
majority of this amount stems from the collapse of both Lehman
Brothers Holdings Inc. and Washington Mutual Inc. (along with
their various subsidiaries).
Twenty-four of the defaults in the third quarter of 2008 were
domiciled in the U.S., two came from Europe, and one each was from
Canada and Hong Kong.
Globally, the corporate default rate for speculative-grade-rated
entities moved to 0.75% at the end of third-quarter 2008 from
0.20% during the same period in 2007.
"After hitting record lows in 2007, the pace of defaults has
picked up markedly," said Diane Vazza, head of Standard & Poor's
Global Fixed Income Research Group. "If the pace of defaults set
so far this year is maintained through the remainder of the year,
2008 would have the largest number of defaults, at 88, since
2003."
Of the 24 defaults in the third quarter, seven were financial
institutions:
-- four were from the consumer products sector,
-- three each from leisure time/media and the forest and
building products/homebuilders sectors,
-- two from both transportation and real estate, and
-- one each from insurance, health care/chemicals, and
aerospace/automotive/capital goods/metal.
***********
Monday's edition of the TCR-LA delivers a list of indicative
prices for bond issues that reportedly trade well below par.
Prices are obtained by TCR-LA editors from a variety of outside
sources during the prior week we think are reliable. Those
sources may not, however, be complete or accurate. The Monday
Bond Pricing table is compiled on the Friday prior to
publication. Prices reported are not intended to reflect actual
trades. Prices for actual trades are probably different. Our
objective is to share information, not make markets in publicly
traded securities. Nothing in the TCR-LA constitutes an offer
or solicitation to buy or sell any security of any kind. It is
likely that some entity affiliated with a TCR-LA editor holds
some position in the issuers' public debt and equity securities
about which we report.
Tuesday's edition of the TCR-LA features a list of companies
with insolvent balance sheets obtained by our editors based on
the latest balance sheets publicly available a day prior to
publication. At first glance, this list may look like the
definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical
cost net of depreciation may understate the true value of a
firm's assets. A company may establish reserves on its balance
sheet for liabilities that may never materialize. The prices at
which equity securities trade in public market are determined by
more than a balance sheet solvency test.
A list of Meetings, Conferences and Seminars appears in each
Thursday's edition of the TCR-LA. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com
***********
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-Asia Pacific is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Fairless
Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick,
Maryland, USA. Marites M. Claro, Rousel Elaine C. Tumanda,
Valerie C. Udtuhan, Marie Therese V. Profetana, Frauline S.
Abangan, and Peter A. Chapman, Editors.
Copyright 2008. 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$625 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 Christopher Beard at 240/629-3300.
* * * End of Transmission * * *