/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/100520.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 Thursday, May 20, 2010, Vol. 11, No. 098 Headlines A N T I G U A & B A R B U D A STANFORD INTERNATIONAL: Owner's Lawyers Appeal for his Release A R G E N T I N A AMERICARGAS SRL: Creditors' Proofs of Debt Due on July 1 CEREALERA LA: Creditors' Proofs of Debt Due on July 8 GUARDIA REAL: Creditors' Proofs of Debt Due on July 16 RETRIEVERS SA: Creditors' Proofs of Debt Due on July 5 YPF SA: Parent's Stock Offering May Raise US$3 Billion B E R M U D A CENTRAL EUROPEAN: TV Nova Ad Sales Up 3% to CZK1.03 Bil. in April ENVIRONMENTAL ENERGY: Contributories & Creditors to Meet on May 31 B R A Z I L BRASKEM SA: Names Carlos Fadigas CEO for New North American Unit TAM SA: Joins Star Alliance's Network TAM SA: Unit Signs New FFP Agreements With 16 Airlines C O L O M B I A ISAGEN SA: Sale Postponement Causes Peso Bonds to Fall * COLOMBIA: Bonds Sink Due to Delays in US$1.5 Billion Isagen Sale E C U A D O R * ECUADOR: Jan-March Crude Output 470,000 B/D, Down 6% On Year E C U A D O R PETROECUADOR: April Oil Exports Rise 128% in April to US$637 Mil. J A M A I C A CABLE & WIRLESS: Rebukes Digicel Group Over Legal Case DIGICEL GROUP: LIME Rebukes Firm Over Legal Case M E X I C O AXTEL SA: Fitch Cuts IDR & US$490MM Sr. Notes' Rating to BB- INDUSTRIAS UNIDAS: S&P Withdraws 'D' Long-Term Credit Rating V E N E Z U E L A CITGO PETROLEUM: Fitch Downgrades Issuer Default Rating to 'B+' PETROLEOS DE VENEZUELA: Keeps Plans Despite Gas Platform Collapse * Fitch: Amendment to Illicit FX Law Could Affect Growth Prospects X X X X X X X X * Upcoming Meetings, Conferences and Seminars - - - - - =============================== A N T I G U A & B A R B U D A =============================== STANFORD INTERNATIONAL: Owner's Lawyers Appeal for his Release -------------------------------------------------------------- Lawyers of Robert Allen Stanford, the billionaire accused of orchestrating a multi-billion Ponzi scheme, have appealed to a U.S. judge for his release from a Texas prison, describing their client as "a wreck of a man" whose imprisonment could be deemed unconstitutional, Andrew Clark at guardian.co.uk reports. According to the report, citing a motion lodged at a Houston court, the defense lawyers said that Mr. Stanford's condition had deteriorated alarmingly since he was beaten up by a fellow inmate in September -- a fight that landed him in the hospital. The report relates that the document said Mr. Stanford had lost all feeling in the right side of his face and had partially lost vision in his right eye. Mr. Stanford, the report notes, has also been treated for a heart condition, dangerous blood pressure, ulcers and severe depression. "Mr. Stanford, a man who is presumed to be innocent, is being, and has been, subjected to substantial and undeniable punishment long before the trial of his case has even begun," the report quoted defence counsel Robert Bennett as saying in the motion. "He has been physically assaulted, he has suffered significant medical injury and psychological debilitation; he was held in solitary confinement two separate times for a total of 40 days; he has been subjected to 335 days of pretrial incarceration as of May 18 2010; and before his scheduled trial concludes, he will predictably serve another nonspeculative 439 days," Mr. Bennett added, the report relates. The report discloses that a doctor treating Mr. Stanford diagnosed abnormal liver function. The report relates the doctor said that Mr. Stanford is malnourished, underweight, depressed, dishevelled, unable to sleep, unable to concentrate and struggling to concentrate on constructing a defense. About Stanford International Bank Domiciled in Antigua, Stanford International Bank Limited -- http://www.stanfordinternationalbank.com/-- is a member of Stanford Private Wealth Management, a global financial services network with US$51 billion in deposits and assets under management or advisement. Stanford Private Wealth Management serves more than 70,000 clients in 140 countries. On February 16, 2009, the United States District Court for the Northern District of Texas, Dallas Division, signed an order appointing Ralph Janvey as receiver for all the assets and records of Stanford International Bank, Ltd., Stanford Group Company, Stanford Capital Management, LLC, Robert Allen Stanford, James M. Davis and Laura Pendergest-Holt and of all entities they own or control. The February 16 order, as amended March 12, 2009, directs the Receiver to, among other things, take control and possession of and to operate the Receivership Estate, and to perform all acts necessary to conserve, hold, manage and preserve the value of the Receivership Estate. The U.S. Securities and Exchange Commission, on Feb. 17, 2009, charged before the U.S. District Court in Dallas, Texas, Mr. Stanford and three of his companies for orchestrating a fraudulent, multi-billion dollar investment scheme centering on an US$8 billion Certificate of Deposit program. A criminal case was pursued against him in June 2009 before the U.S. District Court in Houston, Texas. Mr. Stanford pleaded not guilty to 21 charges of multi-billion dollar fraud, money- laundering and obstruction of justice. Assistant Attorney General Lanny Breuer, as cited by Agence France-Presse News, said in a 57- page indictment that Mr. Stanford could face up to 250 years in prison if convicted on all charges. Mr. Stanford surrendered to U.S. authorities after a warrant was issued for his arrest on the criminal charges. The criminal case is U.S. v. Stanford, H-09-342, U.S. District Court, Southern District of Texas (Houston). The civil case is SEC v. Stanford International Bank, 3:09-cv-00298-N, U.S. District Court, Northern District of Texas (Dallas). ================= A R G E N T I N A ================= AMERICARGAS SRL: Creditors' Proofs of Debt Due on July 1 -------------------------------------------------------- The court-appointed trustee for Americargas S.R.L.'s bankruptcy proceedings, will be verifying creditors' proofs of claim until July 1, 2010. The trustee will present the validated claims in court as individual reports on August 30, 2010. The National Commercial Court of First Instance in Buenos Aires 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 on October 12, 2010. CEREALERA LA: Creditors' Proofs of Debt Due on July 8 ----------------------------------------------------- The court-appointed trustee for Cerealera La Juliana S.A.'s bankruptcy proceedings, will be verifying creditors' proofs of claim until July 8, 2010. GUARDIA REAL: Creditors' Proofs of Debt Due on July 16 ------------------------------------------------------ The court-appointed trustee for Guardia Real S.A.'s reorganization proceedings, will be verifying creditors' proofs of claim until July 16, 2010. The trustee will present the validated claims in court as individual reports on September 13, 2010. The National Commercial Court of First Instance in Buenos Aires 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 on October 26, 2010. Creditors will vote to ratify the completed settlement plan during the assembly on May 5, 2011. RETRIEVERS SA: Creditors' Proofs of Debt Due on July 5 ------------------------------------------------------- The court-appointed trustee for Retrievers S.A.'s bankruptcy proceedings, will be verifying creditors' proofs of claim until July 5, 2010. YPF SA: Parent's Stock Offering May Raise US$3 Billion ------------------------------------------------------ Repsol YPF SA may raise about US$3 billion as early as July from the sale of a 20% stake in its Argentine unit, YPF SA, through a stock offering in Buenos Aires and New York, Rodrigo Orihuela and Carlos Caminada at Bloomberg News report, citing YPF SA Chief Executive Officer Sebastian Eskenazi. Repsol YPF plans to sell 15% of YPF in the U.S. and 5% in Argentina should equity markets rebound, Mr. Eskenazi told the news agency in an interview. Repsol YPF currently owns 84% of YPF SA. According to the report, YPF SA's share sale would come after the biggest surge in stock-market volatility in two decades. At least 17 initial public offerings were postponed or withdrawn worldwide in May, while U.S. companies that completed deals were forced to cut their size by as much as 70%, Bloomberg data show. The report notes that YPF SA plans to drill offshore in the Argentine-controlled waters of the Falklands basin this year to compensate for mature onshore fields. The report relates that YPF SA plans to sell between US$400 million and US$500 million of bonds a year to grow in Argentina and international markets. Mr. Eskenazi, the report says, said that the company aims to spend between US$3 billion and US$3.5 billion annually to boost operations in countries including Brazil, Colombia, Mexico and Canada. Overseas sales will account for 50% of total revenue in 10 years, up from 30% now, he added. A TCR-LA report on July 3, 2009, citing Bloomberg News, related that Chief Executive Officer Antonio Brufau wants to cut Repsol's stake in YPF after Argentine restrictions on natural gas exports and price caps on crude reduced profitability. The report said that the company also needs to raise funds for production, including in the deepwater fields off Brazil where Brufau said in 2008 Repsol would spend at least US$1.5 billion developing deposits. Repsol, the report noted, delayed a public offering of a stake in YPF in November after paying US$15.5 billion for more than 80 percent of YPF in 1999. In 2008, Repsol sold a 15% stake in YPF SA for US$2.2 billion to Argentine investor Enrique Eskenazi, the report noted. About Repsol Repsol YPF, S.A. is an integrated oil and gas company engaged in all aspects of the petroleum business, including exploration, development and production of crude oil and natural gas, transportation of petroleum products, liquefied petroleum gas and natural gas, petroleum refining, petrochemical production and marketing of petroleum products, petroleum derivatives, petrochemicals and natural gas. The company operates in four segments: Exploration and Production, Refining and Marketing, Chemicals, and Gas and Electricity. About YPF SA Headquartered in Buenos Aires, Argentina, YPF S.A. is an integrated oil and gas company engaged in the exploration, development and production of oil and gas, natural gas and electricity-generation activities (upstream), the refining, marketing, transportation and distribution of oil and a range of petroleum products, petroleum derivatives, petrochemicals and liquid petroleum gas (downstream). The company is a subsidiary of Repsol YPF, S.A., a Spanish company engaged in oil exploration and refining, which holds 99.04% of its shares. Its international operations are conducted through its subsidiaries, YPF International S.A. and YPF Holdings Inc. * * * As reported in the Troubled Company Reporter-Latin America on June 9, 2009, Moody's Investors Service downgraded YPF S.A.'s global local currency rating to Ba1 from Baa2, concluding a review for possible downgrade announced in December 2008. (YPF's Ba2 foreign currency bond rating, also under review for downgrade, was withdrawn when the rated bond issue matured in February 2009.) The rating outlook is stable. ============= B E R M U D A ============= CENTRAL EUROPEAN: TV Nova Ad Sales Up 3% to CZK1.03 Bil. in April ----------------------------------------------------------------- TV Nova's gross advertising revenue increased 3% to CZK1.03 billion (US$49.3 million) in April from March, Leos Rousek at Dow Jones Newswires reports, citing data from advertising monitoring agencies Admosphere and ATO-Mediaresearch. TV Nova is owned by Central European Media Enterprises Ltd. According to the report, research agency Kantar Media (f/k/a TNS Media Intelligence) showed that TV Nova's spending rose 4% on the month to CZK1.03 billion in April, but was down 25% from CZK1.37 billion a year earlier. The report relates that Admosphere and ATO-Mediaresearch calculate TV Nova advertising spending on the basis of TV Nova's market share, while Kantar Media bases its calculations on air time spending on television commercials. Kantar Media measures advertising by minutes rather than by number of viewers using people meters, the report says. About Central European Media Headquartered in Bermuda, Central European Media Enterprises Ltd. -- http://www.cetv-net.com/-- invests in, develops and operates commercial television channels in Central and Eastern Europe. At present, the Company has operations in Bulgaria, Croatia, the Czech Republic, Romania, the Slovak Republic, Slovenia and Ukraine. The Company holds its assets through a series of Dutch and Netherlands Antilles holding companies. It has ownership interests in license companies and operating companies in each market in which it operates. Operations are conducted either by the license companies themselves or by separate operating companies. The Company generates revenues primarily through entering into agreements with advertisers, advertising agencies and sponsors to place advertising on air of the television channels that it operates. * * * As reported in the Troubled Company Reporter-Europe on March 4, 2010, Moody's Investors Service affirmed the B2 Corporate Family Rating and the B2 Probability of Default Rating of Central European Media Enterprises Ltd and revised the outlook on the ratings to stable from negative. At the same time, Moody's downgraded to B3 from B2 the rating of the company's EUR150 million senior notes due 2014. ENVIRONMENTAL ENERGY: Contributories & Creditors to Meet on May 31 ------------------------------------------------------------------ The contributories and creditors of Environmental Energy Corporation Ltd. will hold their first meetings on May 31, 2010, at 2:00 p.m. and 3:00 p.m. respectively. Mike Morrison and Charles Thresh are the company's joint provisional liquidators. =========== B R A Z I L =========== BRASKEM SA: Names Carlos Fadigas CEO for New North American Unit ---------------------------------------------------------------- Andrew Maykuth at The Philadelphia Inquirer reports that the Brazilian owners of Sunoco Chemicals, Inc., named a chief executive officer for their new North American subsidiary, based in Philadelphia. According to the report, Carlos Fadigas took the helm of Braskem America, a month after Braskem SA completed the purchase of Sunoco Chemicals. The report relates that Braskem SA will continue to operate the company out of Sunoco's headquarters at 1735 Market St. Mr. Fadigas was chief financial officer of Braskem SA and previously served as chief financial officer of Odebrecht Construction, a Brazilian conglomerate that is Braskem's controlling shareholder. The Inquirer says Bruce Rubin, the Sunoco Inc. chemicals vice president who managed the initial phase of the integration process, will remain at Braskem America as senior vice president of external affairs and business development. Braskem America's manufacturing facilities include plants in Marcus Hook, Delaware County; La Porte, Texas; and Neal, W.Va., and a technology and development center in Pittsburgh. As reported in the Troubled Company Reporter-Latin America on April 5, 2010, Braskem S.A. completed its acquisition of the polypropylene business of Sunoco Chemicals. With the acquisition, which was initially announced on February 1, Braskem invested US$350 million as part of its strategy to establish an industrial base in the United States, which will serve as an important platform for its future international expansion. The U.S. operations for Braskem now have the capacity to produce two billion pounds of polypropylene per year, which represents 13% of the country's installed PP production capacity. The acquisition of Sunoco Chemicals and the resulting synergies provide customers with a broader portfolio of products and services. About Braskem SA Braskem S.A. -- http://www.braskem.com.br/-- is a thermoplastic resins producer in Latin America, and is among the three largest Brazilian-owned private industrial companies. The company operates 13 manufacturing plants located throughout Brazil, and has an annual production capacity of 5.8 million tons of resins and other petrochemical products. The company reported consolidated net revenues of about US$9 billion in the trailing twelve months through Sept. 30, 2007. * * * As of March 8, 2010, the company continues to carry Moody's Ba1 rating. The company also continues to carry Fitch ratings' BB+ LT Issuer Default ratings and Senior Unsecured Debt rating TAM SA: Joins Star Alliance's Network ------------------------------------- TAM SA has joined the Star Alliance network, thereby putting the serving airline alliance firmly back on the South American continent. "Our integration into the world's leading global commercial aviation alliance will allow us to expand our services, offering our customers a smooth and integrated travel experience. There will always be a partner airline that will treat our customers as their own anywhere across the globe," said Libano Barroso, CEO of TAM Airlines. "Our brand is now global, and Star Alliance now has a strong presence in South America." TAM SA offers more than 40 destinations in Brazil and 10 airports across South America. Over the past years, the airline has expanded its intercontinental network to cover a variety of destinations in the USA and Europe, many of these being Star Alliance hubs. All in all, the Star Alliance network now counts 27 member carriers, offering more than 21,050 daily flights to 1,167 destinations in 181 countries. "With TAM Airlines we gain a carrier based in South America, an important aviation market and home to many growing economies. Combining TAM Airlines' network with that of our existing member carriers will allow Star Alliance to offer a very competitive product to, from and within this region," said Jaan Albrecht, CEO Star Alliance. "An intense information and experience exchange process resulted from the first contact," explained Paulo Castello Branco, Vice President, Commercial and Planning, TAM Airlines. "After the official announcement of our acceptance as a future Star Alliance member in October of 2008, we started to align our operating processes, which involved our functional team at all levels, as well as those of all of our partner carriers. This was a great learning experience and a fundamental step towards our global expansion." As a result, TAM SA has not only increased the Star Alliance network offer, but is now providing a wide range of customer benefits. About TAM SA Based in Sao Paulo, Brazil, TAM S.A. -- http://www.tam.com.br/-- has business agreements with the regional airlines Pantanal, Passaredo, Total and Trip. As of Jan. 14, the daily flight on the Corumba -- Campo Grande route in Mato Grosso do Sul began to be operated by a partnership with Trip. With the expansion of the agreement with NHT, TAM will now be serving 82 destinations in Brazil, 45 of which with its own flights. In addition, the company is strengthening its presence in Rio Grande do Sul and Santa Catarina. * * * As of May 20, 2010, the company continues to carry Standard and Poor's "B+" LT Issuer credit ratings. The company also continues to carry Fitch rating's "BB-" LT Issuer default ratings. TAM SA: Unit Signs New FFP Agreements With 16 Airlines ------------------------------------------------------ TAM Linhas Aereas will enter into 16 new FFP (Frequent Flyer Program) agreements, thus broadening the benefits already offered to its TAM Fidelidade program members. The partnerships include the following member carriers of the largest global aviation alliance: Adria Airways, Air China, Air New Zealand, ANA, Asiana Airlines, Blue1, Croatia Airlines, EGYPTAIR, LOT Polish Airlines, Scandinavian Airlines, Shangai Airlines, Singapore Airlines, South African Airways, Spanair, THAI e Turkish Airlines. TAM Linhas Aereas in a TAM S.A. subsidiary. With the new agreements in force, TAM Fidelidade members will be able to earn and redeem points in flights operated by any of the 16 new partnering airlines. The same benefit applies to members of frequent flyer programs of these airlines, who will be able to earn and redeem points or miles in TAM flights. "We were pioneers in adopting a frequent flyer program in Brazil and are now broadening even further the advantages for TAM customers and those of Star Alliance member carriers," states TAM's Vice-President, Commercial and Planning, Mr. Paulo Castello Branco. He explains that, as of May 13, TAM Fidelidade will be integrated with the FFPs of the 26 airlines which are members of the alliance. TAM already has FFP agreements with Lufthansa, United, TAP Portugal, US Airways, Air Canada, Brussels Airlines, Austrian, bmi, Continental Airlines and SWISS, all of which are Star Alliance members. TAM also has an FFP agreement with LAN, totaling 27 international partnerships. "Passengers enrolled in TAM's FFP - TAM Fidelidade - can now earn points in a variety of ways. If they take a shuttle flight, for instance, they can earn points that can be used to get tickets to China", explains Castello Branco. About TAM SA Based in Sao Paulo, Brazil, TAM S.A. -- http://www.tam.com.br/-- has business agreements with the regional airlines Pantanal, Passaredo, Total and Trip. As of Jan. 14, the daily flight on the Corumba -- Campo Grande route in Mato Grosso do Sul began to be operated by a partnership with Trip. With the expansion of the agreement with NHT, TAM will now be serving 82 destinations in Brazil, 45 of which with its own flights. In addition, the company is strengthening its presence in Rio Grande do Sul and Santa Catarina. * * * As of May 20, 2010, the company continues to carry Standard and Poor's "B+" LT Issuer credit ratings. The company also continues to carry Fitch rating's "BB-" LT Issuer default ratings. =============== C O L O M B I A =============== ISAGEN SA: Sale Postponement Causes Peso Bonds to Fall ------------------------------------------------------ Andrea Jaramillo at Bloomberg News reports that Colombia's peso bonds fell on May 18, 2010, sending benchmark yields to the highest level this month, after the government suspended an asset sale it expected would raise US$1.5 billion to help finance the biggest budget deficit since 1999. The report, citing Colombia's stock exchange, relates that the yield on Colombia's benchmark 11% bonds due July 2020 rose 11 basis points, or 0.11 percentage point, to 8.37%, the highest since April 28, at 5:55 p.m., New York time on May 18, 2010. The bonds' price fell 0.836 centavo to 117.496 centavos per peso. According to the report, the postponement of the sale of Isagen SA is fueling speculation the government will issue more local bonds, swelling the supply and depressing prices, to cover a consolidated budget gap forecast to reach an 11-year high of 3.7% of gross domestic product. "The local market will probably be pretty tense this week as investors speculate on what alternatives will be taken to substitute those funds," the report quoted Camilo Perez, head analyst at Banco de Bogota SA, as saying. Bloomberg notes Finance Minister Oscar Ivan Zuluaga said that the next government needs to decide "whether it continues with the process, issues more debt, reduces expenditures or finds other alternatives to finance" the deficit. The economy may grow faster than the government's forecast of 2.5% this year, he added. Mr. Perez, the report relates, estimates the next government will have to raise 700 billion pesos to cover its financing needs should it decide not to sell Isagen. Additional tax proceeds fueled by an economic recovery and bond payments delayed in a debt exchange in April will cover the rest of the money projected from the Isagen sale, Perez added. Mr. Perez, the report adds, said that the government may sell bonds abroad to not spark a surge in supply in the local debt market. About Isagen SA Isagen SA is a Colombia-based company primarily engaged in the energy sector. Its activities comprise the electric power generation and distribution, as well as the operation of coal, steam and gas distribution networks. The company has a total installed capacity of 2,131 megawatts and its facilities include four hydroelectric plants: Central San Carlos, Central Jaguas, Central Calderas and Central Miel I, and one combined-cycle thermal power station: Central Termocentro. The company is also involved in such expansion projects as Proyecto Guarino, Proyecto Manso, Proyecto Hidroelectrico del Rio Amoya and Proyecto Hidroelectrico Sogamoso. Additionally, the Company holds a minority interests in Gensa SA ESP and Electricaribe SA ESP. * * * As reported in the Troubled Company Reporter-Latin America on June 1, 2009, Fitch Ratings downgraded ISAGEN's local currency Issuer Default Rating to 'BB+' from 'BBB-' and affirmed the company's foreign currency IDR at 'BB+'. The Rating Outlook is Stable. * COLOMBIA: Bonds Sink Due to Delays in US$1.5 Billion Isagen Sale ------------------------------------------------------------------ Andrea Jaramillo at Bloomberg News reports that Colombia's peso bonds fell on May 18, 2010, sending benchmark yields to the highest level this month, after the government suspended an asset sale it expected would raise US$1.5 billion to help finance the biggest budget deficit since 1999. The report, citing Colombia's stock exchange, relates that the yield on Colombia's benchmark 11% bonds due July 2020 rose 11 basis points, or 0.11 percentage point, to 8.37%, the highest since April 28, at 5:55 p.m., New York time on May 18, 2010. The bonds' price fell 0.836 centavo to 117.496 centavos per peso. According to the report, the postponement of the sale of Isagen SA is fueling speculation the government will issue more local bonds, swelling the supply and depressing prices, to cover a consolidated budget gap forecast to reach an 11-year high of 3.7% of gross domestic product. "The local market will probably be pretty tense this week as investors speculate on what alternatives will be taken to substitute those funds," the report quoted Camilo Perez, head analyst at Banco de Bogota SA, as saying. Bloomberg notes Finance Minister Oscar Ivan Zuluaga said that the next government needs to decide "whether it continues with the process, issues more debt, reduces expenditures or finds other alternatives to finance" the deficit. The economy may grow faster than the government's forecast of 2.5% this year, he added. Mr. Perez, the report relates, estimates the next government will have to raise 700 billion pesos to cover its financing needs should it decide not to sell Isagen. Additional tax proceeds fueled by an economic recovery and bond payments delayed in a debt exchange in April will cover the rest of the money projected from the Isagen sale, Perez added. Mr. Perez, the report adds, said that the government may sell bonds abroad to not spark a surge in supply in the local debt market. * * * On June 20, 2008, Moody's raised Colombia's foreign-currency government bond rating to Ba1 from Ba2 on, citing important and likely sustainable structural changes to its economy and a significant improvement in debt ratios. The ratings outlook is stable. ============= E C U A D O R ============= * ECUADOR: Jan-March Crude Output 470,000 B/D, Down 6% On Year -------------------------------------------------------------- Ecuador's average oil output fell 6% to 470,000 barrels a day between January and March from 500,000 barrels a day in the same period last year, Dow Jones Newswires reports, citing the central bank. The report relates that Petroecuador averaged 277,867 barrels a day in the first three months of this year, while private companies' oil output was 192,133 barrels a day. According to the report, Petroecuador averaged 281,767 barrels a day in January and March 2009. Private oil companies averaged 218,233 barrels a day in the same period. The country's total oil production in the first three months of 2010 was 42.32 million barrels, the report says. Oil is Ecuador's main export and the government's main revenue earner. * * * As reported by the Troubled Company Reporter - Latin America on December 17, 2008, Fitch Ratings downgraded Ecuador's long- term foreign currency Issuer Default Rating (IDR) to 'RD' from 'CCC' following the expiration of the grace period for the coupon payment on the 2012 global bonds that was due on Nov. 15 and the government's announcement that it will selectively default on all global bonds. The short-term foreign currency rating was downgraded to 'D' from 'C'. The country ceiling remains at 'B-'. ============= E C U A D O R ============= PETROECUADOR: April Oil Exports Rise 128% in April to US$637 Mil. ----------------------------------------------------------------- Petroecuador reported oil export revenue increased 128% to US$637 million in April from the US$279 million in April 2009, Mercedes Alvaro at Dow Jones Newswires reports. The report relates that by volume, Petroecuador exported 9.2 million barrels of crude oil in April, an increase of 33% from the 6.9 million barrels registered in the same month of 2009. According to the report, the figures translate into exports of 298,266 barrels a day in April from 223,311 barrels a day registered in the same month of 2009. The report relates that exports of Oriente crude were 7.1 million barrels in April, while exports of Napo crude were 2.1 million barrels. Dow Jones Newswires says that Petroecuador reported oil export revenue of $597 million in March. About Petroecuador Headquartered in Quito, Ecuador, Petroecuador -- http://www.petroecuador.com.ec-- is an international oil company owned by the Ecuador government. It produces crude petroleum and natural gas. * * * As reported in the Troubled Company Reporter-Latin America on December 28, 2009, Dow Jones Newswires said that Ecuadorian President Rafael Correa authorized naval forces to extend its control of Petroecuador until March as more time was needed for an orderly handover of the company to a new management structure. The report recalled that Petroecuador was declared in a state of emergency two years ago, and the navy has been put in charge of its restructuring. In previous years, Petroecuador, according to published reports, was faced with cash-problems. The state-oil firm has no funds for maintenance, has no funds to repair pumps in diesel, gasoline and natural gas refineries, and has no capacity to pay suppliers and vendors. The government refused to give the much- needed cash alleging inefficiency and non-transparency in Petroecuador's dealings. In 2008, a new management team was appointed to turn around the company's operations. ============= J A M A I C A ============= CABLE & WIRLESS: Rebukes Digicel Group Over Legal Case ----------------------------------------------------- Cable & Wireless plc has given no indication that it will go easy on its main competitor Digicel Group in negotiations over legal costs regarding the recent court room battle, Cayman News Service reports. As reported in the Troubled Company Reporter-Latin America on May 11, 2010, Jamaica Observer said that Lime (formerly Cable & Wireless Jamaica) said that it expects to be "fully compensated" and "reimbursed" by Digicel in relation to a ruling by the UK High Court, Jamaica Observer reports. The report relates that the firm made the remarks in response to reports that Digicel would be seeking to reduce costs awarded against them in a suit it brought against Cable & Wireless. According to the report, The High Court had awarded costs against Digicel in its lawsuit against Cable & Wireless Communications and scolded the Irish-owned telecoms provider for its handling of the case. The report related that Digicel had brought suit against Cable & Wireless claiming that C&W had deliberately and intentionally delayed Digicel's entry into several markets in the Caribbean between 2002 and 2006. According to Cayman News Service, Cable & Wireless Executive Vice President Donald Austin said that the company was not surprised that Digicel wanted to negotiate on the costs as they lost the case comprehensively. "We estimate that they have spent about EUR10 million in legal costs already," the report quoted Mr. Austin as saying. But, Cable & Wireless had not ruled out negotiations, he added, report relates. "Any negotiated settlement with Digicel will be can only be in the context of our company being fully compensated and reimbursed for the enormous expense brought on by a totally unnecessary and time- wasting suit," the report quoted Mr. Austin as saying. About LIME Lime (formerly Cable & Wireless Jamaica) -- http://home.cwjamaica.com/-- provides national and international fixed line services. The company is owned 82% by Cable & Wireless plc. Cable & Wireless Jamaica also owns Jamaica Digiport International Limited, a company which provides high speed data and other telecommunications services exclusively to freezone and offshore companies. About Cable & Wireless Headquartered in London, England, Cable & Wireless plc -- http://www.cw.com/-- is an international telecommunications company. The Company offers mobile, broadband and domestic and international fixed line services to homes, small and medium-sized enterprises, corporate customers and governments. It operates in 39 countries through four major operations in the Caribbean, Panama, Macau and Monaco & Islands. It operates through two businesses: International and Europe, Asia & US. Its International business operates full service telecommunications companies through four major operations in the Caribbean, Panama, Macau and Monaco and Islands. Its Europe, Asia & US provides enterprise and carrier solutions to the largest users of telecom services across the United Kingdom, continental Europe, Asia and the United States. Its subsidiaries include Cable & Wireless UK, Cable & Wireless Jamaica Ltd, Cable & Wireless Panama, SA, Cable & Wireless (Barbados) Ltd and Monaco Telecom SAM. According to Bloomberg data, Cable & Wireless plc continues to carry Moody's "Ba3"long-term corporate family rating, "B1" senior unsecured debt rating and "Ba3"probability of default rating with a stable outlook. The company continues to Standard & Poor's "BB- "long-term foreign and local issuer credit ratings and "B" short- term foreign and local issuer credit ratings. About Digicel Group Digicel Group -- http://www.digicelgroup.com-- is renowned for competitive rates, unbeatable coverage, superior customer care, a wide variety of products and services and state-of-the-art handsets. By offering innovative wireless services and community support, Digicel has become a leading brand across its 31 markets worldwide. Digicel is incorporated in Bermuda and now has operations in 31 markets worldwide. Its Caribbean and Central American markets comprise Anguilla, Antigua & Barbuda, Aruba, Barbados, Bermuda, Bonaire, the British Virgin Islands, the Cayman Islands, Curacao, Dominica, El Salvador, French Guiana, Grenada, Guadeloupe, Guyana, Haiti, Honduras, Jamaica, Martinique, Panama, St Kitts & Nevis, St. Lucia, St. Vincent & the Grenadines, Suriname, Trinidad & Tobago and Turks & Caicos. The Caribbean company also has coverage in St. Martin and St. Barths. Digicel Pacific comprises Fiji, Papua New Guinea, Samoa, Tonga and Vanuatu. As of January 14, 2010, the company continues to carry these below investment grade ratings from Moody's: -- LT Corp Family Rating at B2 -- Senior Undecured Debt Rating at Caa1 -- probability of Default at B2 DIGICEL GROUP: LIME Rebukes Firm Over Legal Case ------------------------------------------------ Cable & Wireless plc has given no indication that it will go easy on its main competitor Digicel Group in negotiations over legal costs regarding the recent court room battle, Cayman News Service reports. As reported in the Troubled Company Reporter-Latin America on May 11, 2010, Jamaica Observer said that Lime (formerly Cable & Wireless Jamaica) said that it expects to be "fully compensated" and "reimbursed" by Digicel in relation to a ruling by the UK High Court, Jamaica Observer reports. The report relates that the firm made the remarks in response to reports that Digicel would be seeking to reduce costs awarded against them in a suit it brought against Cable & Wireless. According to the report, The High Court had awarded costs against Digicel in its lawsuit against Cable & Wireless Communications and scolded the Irish-owned telecoms provider for its handling of the case. The report related that Digicel had brought suit against Cable & Wireless claiming that C&W had deliberately and intentionally delayed Digicel's entry into several markets in the Caribbean between 2002 and 2006. According to Cayman News Service, Cable & Wireless Executive Vice President Donald Austin said that the company was not surprised that Digicel wanted to negotiate on the costs as they lost the case comprehensively. "We estimate that they have spent about EUR10 million in legal costs already," the report quoted Mr. Austin as saying. But, Cable & Wireless had not ruled out negotiations, he added, report relates. "Any negotiated settlement with Digicel will be can only be in the context of our company being fully compensated and reimbursed for the enormous expense brought on by a totally unnecessary and time- wasting suit," the report quoted Mr. Austin as saying. About LIME Lime (formerly Cable & Wireless Jamaica) -- http://home.cwjamaica.com/-- provides national and international fixed line services. The company is owned 82% by Cable & Wireless plc. Cable & Wireless Jamaica also owns Jamaica Digiport International Limited, a company which provides high speed data and other telecommunications services exclusively to freezone and offshore companies. About Cable & Wireless Headquartered in London, England, Cable & Wireless plc -- http://www.cw.com/-- is an international telecommunications company. The Company offers mobile, broadband and domestic and international fixed line services to homes, small and medium-sized enterprises, corporate customers and governments. It operates in 39 countries through four major operations in the Caribbean, Panama, Macau and Monaco & Islands. It operates through two businesses: International and Europe, Asia & US. Its International business operates full service telecommunications companies through four major operations in the Caribbean, Panama, Macau and Monaco and Islands. Its Europe, Asia & US provides enterprise and carrier solutions to the largest users of telecom services across the United Kingdom, continental Europe, Asia and the United States. Its subsidiaries include Cable & Wireless UK, Cable & Wireless Jamaica Ltd, Cable & Wireless Panama, SA, Cable & Wireless (Barbados) Ltd and Monaco Telecom SAM. According to Bloomberg data, Cable & Wireless plc continues to carry Moody's "Ba3"long-term corporate family rating, "B1" senior unsecured debt rating and "Ba3"probability of default rating with a stable outlook. The company continues to Standard & Poor's "BB- "long-term foreign and local issuer credit ratings and "B" short- term foreign and local issuer credit ratings. About Digicel Group Digicel Group -- http://www.digicelgroup.com-- is renowned for competitive rates, unbeatable coverage, superior customer care, a wide variety of products and services and state-of-the-art handsets. By offering innovative wireless services and community support, Digicel has become a leading brand across its 31 markets worldwide. Digicel is incorporated in Bermuda and now has operations in 31 markets worldwide. Its Caribbean and Central American markets comprise Anguilla, Antigua & Barbuda, Aruba, Barbados, Bermuda, Bonaire, the British Virgin Islands, the Cayman Islands, Curacao, Dominica, El Salvador, French Guiana, Grenada, Guadeloupe, Guyana, Haiti, Honduras, Jamaica, Martinique, Panama, St Kitts & Nevis, St. Lucia, St. Vincent & the Grenadines, Suriname, Trinidad & Tobago and Turks & Caicos. The Caribbean company also has coverage in St. Martin and St. Barths. Digicel Pacific comprises Fiji, Papua New Guinea, Samoa, Tonga and Vanuatu. As of January 14, 2010, the company continues to carry these below investment grade ratings from Moody's: -- LT Corp Family Rating at B2 -- Senior Undecured Debt Rating at Caa1 -- probability of Default at B2 =========== M E X I C O =========== AXTEL SA: Fitch Cuts IDR & US$490MM Sr. Notes' Rating to BB- ------------------------------------------------------------ Fitch Ratings has downgraded the following ratings for Axtel, S.A.B. de C.V. (Axtel): --Local currency Issuer Default Ratings (IDR) to 'BB-' from 'BB'; --Foreign currency IDR to 'BB-' from 'BB'; --US$490 million Senior Notes due 2019 to 'BB-' from 'BB'; --National scale rating to 'A-(mex)' from 'A+(mex)'. Fitch has also revised the Rating Outlook to Negative from Stable. The rating actions reflects Axtel's continued negative operating trends which in turn will pressure the company's leverage, measured by total debt to EBITDA, beyond Fitch's prior expectation of no more than 2.6 times (x) by year-end. The revision of the Rating Outlook to Negative reflects the challenges Axtel faces to revert and stabilize operating results in the near term. A further rating downgrade can occur if Axtel continues to post higher leverage due to continued weak results or increased indebtedness. Axtel ratings are supported by its business position as the largest competitive local exchange carrier (CLEC) in Mexico, moderate financial profile and adequate liquidity. The expectation of positive free cash flow in the next few years, is likely to moderate as competitive pressures withstand, resulting in neutral to negative free cash flow generation until the company is able to stabilize its operating trends and capital expenditures. The ratings are tempered by increased competition, particularly in the residential market, mobile substitution and modest regulatory risk. Axtel's first quarter operating performance deteriorated ahead of expectations in detriment to credit quality. Fitch views new management guidance of MXN3,700 million in EBITDA for 2010 to be challenging to achieve in the year, given the past few quarters trends in revenues and EBITDA as well as current management strategy to reduce costs. During the first quarter of 2010 revenues and EBITDA declined compared to the same quarter of 2009, 12% and 29% respectively. The declines were due to lower revenues from international long distance traffic and integrated service contracts that expired and were not renewed. Free cash flow (FCF) is now expected to be negative for 2010 and the previous expectation to turn positive in the future should depend on the company's ability to stabilize its operating performance and resume growth over the coming years. Liquidity remains acceptable with a manageable debt maturity profile and healthy cash balances. As of March 31, 2010, the company registered cash of MXN1,433 million compared to short-term maturities of MXN678 million and last 12 months funds from operations (FFO) of approximately MXN2,595 million. Total debt is composed of US$275 million in senior notes due 2017, US$490 million in senior notes due 2019 and US$94 million in other loans, capital leases and a possible liability related to a trial with Global Towers. Axtel has swapped to MXN the debt service of its 2017 and existing 2019 senior notes to a fixed rate in MXN; however, the principal amount remains exposed to the USD, adding currency risk. The ratings factor in that pay television or 3G projects should not alter credit quality. Fitch considers that a pay-tv offering will enhance Axtel's competitive position in the residential market. The company has mentioned that it is on the final stages in deciding whether to reach an agreement for leasing/subcontracting pay-tv infrastructure or deploying its own. Fitch believes it is economically more reasonable for Axtel to offer mobile services through Wimax than deploying a 3G network. The company has indicated that if it elects to participate in the 3G spectrum auctions, the necessary funds for this project should be financed with new equity without increasing leverage. Axtel's current fixed wireless Wimax service has the potential to develop mobility over the next few years and may eventually lead it to offer mobile services initially oriented towards data. INDUSTRIAS UNIDAS: S&P Withdraws 'D' Long-Term Credit Rating ------------------------------------------------------------- Standard & Poor's Ratings has withdrawn its 'SD' (selective default) global corporate credit rating on Industrias Unidas S.A. de C.V. (IUSA) and its 'D' long-term credit rating on the issuer's US$200 million 11.5% senior unsecured notes. The withdrawal reflects the lack of adequate information to maintain S&P's surveillance. ================= V E N E Z U E L A ================= CITGO PETROLEUM: Fitch Downgrades Issuer Default Rating to 'B+' --------------------------------------------------------------- Fitch Ratings has downgraded the Issuer Default Rating (IDR) of CITGO Petroleum Corporation (CITGO) to 'B+' from 'BB-' and its senior secured rating to 'BB+' from 'BBB-'. CITGO's current ratings are as follows: --Issuer Default Rating (IDR) 'B+'; --Senior Secured Credit Facility 'BB+'; --Secured Term Loan 'BB+'; and --Fixed-Rate Industrial Revenue Bonds (IRBs) 'BB+'. In addition, Fitch assigns 'BB+' ratings to up to US$1.5 billion of senior secured notes, US$700 million in secured revolver (2013) and US$300 million in secured term loan (2015). The Rating Outlook was revised to Stable from Negative. CITGO's ratings remain constrained by their ultimate linkage to parent Petroleos de Venezuela SA (PDVSA; IDR 'B+' with a Stable Outlook), as well as depressed conditions in the refining sector which are expected to persist in the near-to-medium term due to a significant oversupply of global refining capacity. Given this weakness in refining, CITGO's recent financial performance has significantly underperformed Fitch's base case expectations. For the LTM ending Dec. 31, 2009, CITGO lost US$201.4 million in net income versus a positive US$801.4 million in 2008 and US$1.586 billion the year prior. EBITDA as calculated by Fitch was just US$80 million in 2009 versus US$1.286 billion the year prior. Net income in the first quarter of 2010 was negative US$127.6 million. CITGO was approximately free cash flow neutral in 2009; however, netting out the amortization of PDVSA's obligations through working capital accounts, CITGO would have had pro forma FCF of - US$389 million. CITGO's total debt at year-end 2009 stood at US$2.2 billion, down slightly from the US$2.23 billion seen the year prior. Several credit-supportive developments undertaken at the company recently have led to the revision of the Outlook to Stable from Negative. These improvements include: enhanced liquidity, reduced covenant violation risk, and tangible progress in bringing the Corpus Christi, TX and Lemont, IL refineries toward the manufacture of ultra low sulfur diesel (ULSD). Fitch also anticipates the company will refinance its revolver (due November 2010) and a meaningful portion of its other existing debt outstanding in the near term. The three-notch difference between the IDR and secured facilities stems from the strength of the underlying security package, which was recently changed to include the Lemont refinery, in addition to CITGO's Lake Charles and Corpus Christi refineries, petroleum inventories, and select accounts receivables. Given the quality of CITGO's deep conversion refineries, Fitch believes recovery will be robust under a wide range of assumed US$/barrel refining multiples. On the liquidity front, CITGO has benefited from the partial repayment of the US$1 billion intercompany loan made by CITGO to PDVSA in 2007. As of the end of the first quarter 2010, US$616 million of that note had been repaid by PDVSA in the form of offsetting crude oil cargoes to CITGO, with the remainder expected to be paid before the end of the second quarter. This repayment should provide bridge liquidity in the current refining downturn and will also help fund CITGO's ULSD capacity expansions. As of the end of 2009, more than one third of ULSD project spending was complete, and both desulfurization units are expected to be producing ULSD by the end of 2010. The conclusion of ULSD spending in 2010 should help ease financial pressures on CITGO, as it marks the last major capex initiative due across CITGO's refineries in the near term (related hydrogen plants at Lemont and Corpus Christi refineries are being built and financed by third parties under long-term capital leases). CITGO has received covenant relief from its secured lending group in the form of amendment waivers. These include an increase in the debt-to-capitalization ratio to 60% from its previous 55%; a temporary waiver of interest coverage covenants, and the introduction of a minimum liquidity test. Note that for purposes of making distributions to its parent, CITGO will continue to be subject to the more restrictive 55% debt-to-cap test. The debt- to-capitalization requirement continues to be CITGO's most restrictive covenant, and came in just below covenant limits for the period ending Dec. 31, 2009, (54.9% actual vs. 55% limit). CITGO's total liquidity was reasonable at March 31, 2010, and included US$613 million in revolver availability and US$3 million in cash. There were no revolver borrowings; however, the company had US$537 million of LCs outstanding. Fitch expects CITGO will replace its current secured revolver due in November 2010, and refinance portions of its debt outstanding, which includes secured 'A' and 'B' term loans (both due November 2012 term loan 'A'- US$515 million; term loan 'B'- US$610.3 million) and variable-rate industrial tevenue bonds (IRBs). Note that the company's variable-rate IRBs require Letters of Credit (LC) support, so conversion into fixed-rate pari passu instruments (which do not require LC support) would increase revolver availability. Absent a refinancing, the maturity schedule for CITGO remains heavy, with US$206 million due 2011 and US$903 million due 2012. Fitch's current rating and Outlook assume the company is able to refinance its revolver and a meaningful portion of outstanding debt. Any inability to refinance could be a potential catalyst for a future negative rating action. Looking forward, Fitch anticipates that CITGO will be free cash flow (FCF) positive in 2010, and modestly FCF negative in 2011, due to gradually improving refining margins and in the case of 2010, the impact of the repayment of the remainder of the PDVSA loan through crude cargoes. Fitch does not expect the negative FCF in 2011 to result in additional borrowings. Credit concerns stem from weak year-to-date financial performance, and ongoing global oversupply in refining capacity, which may keep CITGO's credit metrics and cash generation weak for an extended period. U.S. unemployment - a key variable driving North American gasoline demand - remains elevated well above levels seen during the last downturn at 9.9%. The combination of high unemployment, the prospect of a jobless recovery in the U.S., and new refining capacity coming online threaten to keep industry fundamentals weak for an extended period. The ratings link to parent PDV America (a wholly owned subsidiary of PDVSA) also constrains CITGO's current rating, although Fitch notes that in the current environment the parent is providing meaningful support to its subsidiary. This strong linkage between the two manifests itself through the dividend policy to PDV America; CITGO's contract to take 250,000 bpd of Venezuelan crude at its refineries; and frequent management and board appointments at CITGO. CITGO's current rating also reflects the fact that it has lost significant cash flow diversification through its many asset sales (terminals, pipelines, equity stake in Lyondell refinery, two asphalt refineries). Other obligations are manageable. CITGO's pension was underfunded by US$197.8 million at year-end 2009, versus US$332.9 million the year prior. The improvement in funding status stemmed primarily from improved actual return on plan assets, and higher employer contributions. CITGO's asset retirement obligation (ARO) was US$23.6 million at year-end 2009, approximately unchanged from levels seen the year prior. Rental expense for operating leases was US$177 million in 2009 versus US$266 million in 2008, and included product storage facilities, office space, computer equipment, and vessels. PETROLEOS DE VENEZUELA: Keeps Plans Despite Gas Platform Collapse ----------------------------------------------------------------- Venezuela will continue with its plans regarding offshore gas production, which is scheduled to start in late 2012, despite the collapse of the Aban Pearl rig. "We reiterate that offshore gas production will start on November 25, 2012, as planned. We are going to bring those gas molecules to Venezuela for household and industry consumption, and for petrochemical use," the report quoted Eulogio Del Pino, PDVSA Vice President for Exploration and Production, as saying. According to the report, in an interview with TV station Venezolana de Television, Mr. Del Pino added that the Venezuelan oil industry has a six-month period to complete drilling operations. As reported in the Troubled Company Reporter-Latin America on May 17, 2010, Bloomberg News said that Petroleos de Venezuela SA and Aban Offshore Ltd. will try to "rescue" the Aban Pearl gas platform and 400,000 liters (105,540 gallons) of gasoil in the rig that sank off the country's coast. The report related Aban Pearlsank after its floatation system failed, causing the rig to tip over in waters between Venezuela and Trinidad and Tobago. PDVSA President Rafael Ramirez, the report noted, said that there's no environmental danger to the area off the South American country's northern coast after PDVSA sealed a gas well and evacuated the 95 workers. About PDVSA Petroleos de Venezuela -- http://www.pdvsa.com/-- is Venezuela's state oil company in charge of the development of the petroleum, petrochemical, and coal industry, as well as planning, coordinating, supervising, and controlling the operational activities of its divisions, both in Venezuela and abroad. * * * As of March 8, 2010, the company continues to carry Moody's "Ba1" LC Curr Issuer rating. The company also continues to carry Standard and Poor's "B+" LT Issuer credit ratings. According to the TCR-LA on January 18, 2010, Fitch Ratings downgraded Jamaica's long-term local currency rating to 'C' from 'CCC'. In addition, Fitch has affirmed Jamaica's long-term and short-term foreign currency ratings at 'CCC' and 'C' respectively, and affirmed the Country Ceiling at 'B-'. Jamaica's sovereign ratings Outlook remains Negative. * Fitch: Amendment to Illicit FX Law Could Affect Growth Prospects ------------------------------------------------------------------ Fitch Ratings said that the recently passed amendment to the Law Against Illicit FX Transactions could further increase macroeconomic distortions present in the Venezuelan economy, adversely affect growth prospects, increase inflationary pressures, and possibly undermine the external position of the sovereign as a net external creditor, which in turn could weigh on the Bolivarian Republic's credit quality. In an effort to control the volume of operations in the parallel market, the amendment places all operations in foreign currency and FX-denominated assets in Venezuela under the direct control of the Central Bank of Venezuela (BCV). Moreover, the BCV will have the power to determine which financial entities can participate in the FX market. The government's main objective is to stem the depreciation of the VEF in the parallel market. Nevertheless, in Fitch's view, the recently announced measures fail to address the structural factors behind the depreciating trend of the VEF in the parallel market. In general, the weaker parallel market exchange rate reflects an inconsistent macroeconomic framework, increased uncertainty about the direction of economic policy, high inflation expectations, and inorganic money creation through the yearly transfers of international reserves to the National Development Fund (FONDEN). More recently, the increased mismatch between the demand and supply of foreign exchange in the parallel market has added to the weakness of the unofficial exchange rate. As a result, the recently approved amendments, could further constrain the supply of USD to the private sector, which would do little to tame depreciating pressures on the currency. "In the absence of policy adjustments such as tighter fiscal and monetary policies that can increase the credibility, consistency and predictability of the macroeconomic framework, the parallel market rate will continue to face depreciating pressures, thus negatively impacting macroeconomic stability through higher inflation and real exchange rate volatility," said Erich Arispe, Director in Fitch's Sovereign Group. In addition, due to the high degree of indexation currently present in the economy, a depreciated unofficial exchange rate could also adversely affect consumption and investment as imports become more expensive, thus further aggravating inflationary pressures and recessionary forces in Venezuela. Low private investment and supply bottlenecks in the electricity sector have detracted from economic growth, while inflation has topped 30% on an annual basis. Since Fitch believes that the debt strategy of the public sector has been influenced by the dynamics of the VEF in the parallel market in recent years, the sovereign, as well as public entities such as PDVSA, could resume issuance of USD-denominated securities in the local market to relieve pressures on the unofficial exchange rate. "In the absence of a recovery in international reserve levels, increased issuance of USD instruments could turn the sovereign into a net external debtor in spite of its status as an oil exporter, which would erode a key strength of Venezuela's credit profile," added Erich Arispe. While a high degree of macroeconomic and financial volatility has been incorporated in Venezuela's 'B+' foreign and local currency Issuer Default Ratings, increased government intervention in the FX market could potentially worsen the fragile macroeconomic situation of the country. Fitch will continue to monitor the effects of the new legislation on the Venezuelan FX market and economy, since a disorderly adjustment from existing macroeconomic distortion could compromise the payment capacity of the sovereign. Moreover, greater than anticipated deterioration in Venezuela's external solvency and liquidity indicators could also put pressure on the sovereign creditworthiness. =============== X X X X X X X X =============== * Upcoming Meetings, Conferences and Seminars --------------------------------------------- June 17-20, 2010 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort and Spa, Traverse City, Michigan Contact: 1-703-739-0800; http://www.abiworld.org/ July 7-10, 2010 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Ocean Edge Resort, Brewster, Massachusetts Contact: 1-703-739-0800; http://www.abiworld.org/ July 14-17, 2010 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Conference The Ritz-Carlton Amelia Island, Amelia, Fla. Contact: http://www.abiworld.org/ Aug. 5-7, 2010 AMERICAN BANKRUPTCY INSTITUTE Mid-Atlantic Bankruptcy Workshop Hyatt Regency Chesapeake Bay, Cambridge, Maryland Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. 6-8, 2010 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention JW Marriott Grande Lakes, Orlando, Florida Contact: http://www.turnaround.org/ Dec. 2-4, 2010 AMERICAN BANKRUPTCY INSTITUTE 22nd Annual Winter Leadership Conference Camelback Inn, Scottsdale, Arizona Contact: 1-703-739-0800; http://www.abiworld.org/ Mar. 31-Apr. 3, 2011 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting Gaylord National Resort & Convention Center, Maryland Contact: 1-703-739-0800; http://www.abiworld.org/ June 9-12, 2011 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort and Spa Traverse City, Michigan Contact: http://www.abiworld.org/ October 25-27, 2011 TURNAROUND MANAGEMENT ASSOCIATION Hilton San Diego Bayfront, San Diego, CA Contact: http://www.turnaround.org/ Dec. 1-3, 2011 AMERICAN BANKRUPTCY INSTITUTE 23rd Annual Winter Leadership Conference La Quinta Resort & Spa, La Quinta, California Contact: 1-703-739-0800; http://www.abiworld.org/ *********** 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 - Latin America is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland USA, Marites O. Claro, Joy A. Agravente, Rousel Elaine C. Tumanda, Valerie C. Udtuhan, Frauline S. Abangan, and Peter A. Chapman, Editors. Copyright 2010. 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 * * *