/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/120319.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 Monday, March 19, 2012, Vol. 13, No. 053 Headlines A R G E N T I N A * ARGENTINA: Moody's Releases New Equity Fund Assessments B E R M U D A BAR ONE: Court to Hear Wind-Up Petition on March 30 B R A Z I L CENTRAIS ELETRICAS: Bondholders Invited to Join Ad Hoc Group MARFRIG ALIMENTOS: Searches for Partners to Ease Debt Load MARFRIG ALIMENTOS: General Meeting Set for March 23 USINAS SIDERURGICAS: Moody's Reviews 'Ba1' Rating on Debentures C A Y M A N I S L A N D S ELROND INVESTMENTS: Shareholders' Final Meeting Set for March 30 FRONTIER XI: Shareholders' Final Meeting Set for March 30 FRONTIER XII: Shareholders' Final Meeting Set for March 30 FV INVESTMENT: Shareholders' Final Meeting Set for March 30 THADDEUS ASIA: Shareholder to Receive Wind-Up Report on March 26 THADDEUS ASIA I: Shareholder to Get Wind-Up Report on March 26 * JAMAICA: Investors Shy Away From Small Indebted Local Hotels M E X I C O CORPORACION GEO: Fitch Affirms Two Senior Notes Ratings at 'BB-' FINANCIERA INDEPENDENCIA: Fitch Affirms Rating on IDR at 'BB' GRUMA SAB: S&P Raises Corp. Credit Rating to 'BB'; Outlook Stable S T K I T T S & N E V I S * ST. KITTS & NEVIS: Debt Restructuring May Lead to Job Losses X X X X X X X X * BOND PRICING: For the Week March 12 to March 16, 2012 - - - - - ================= A R G E N T I N A ================= * ARGENTINA: Moody's Releases New Equity Fund Assessments --------------------------------------------------------- Moody's Investors Service on March 9 released its new assessments of equity funds in Argentina, based on its new methodology for analyzing equity funds investing in common stock, or in a combination of predominantly common stock and fixed-income securities. The new equity fund methodology, which was released on Feb. 23, 2012, has been applied to 13 equity and balanced funds assessed in Argentina. The new symbol set with assessment definitions in the form of EF-[n], is on a scale ranging from EF-1, the strongest score, to EF-5, the weakest, to differentiate from the rating agency's traditional credit ratings on long-term debt obligations. Below is a link to a list of the new assessments of the 13 Argentinean Equity and Balanced Funds : http://www.moodys.com/viewresearchdoc.aspx?docid=PBC_140536 The new equity fund methodology measures a fund's investment quality based on an assessment of a fund's intrinsic characteristics and its asset manager attributes, and each of these two components accounts for half the fund's overall score. For the assessment of a fund's intrinsic characteristics, the new methodology used three quantitative measures: (1) the Information Ratio, measuring a fund's excess return (alpha); (2) the Expense Ratio, measuring the percentage of annual fees over assets under management, and (3) the Maximum Drawdown, which measures a fund's largest monthly loss over a three year period. In addition, Moody's incorporates an assessment of a fund manager's quality and experience, which complements the performance assessment. This component of the analysis largely follows the guidelines outlined in "Moody's Approach to Investment Manager Quality (MQ) Assessments of Asset Managers", published in August 2011. To maximize utility for investors, Moody's equity and balanced fund assessments were compared to the fund's peer group, which includes funds that invest according to a similar strategy (e.g., Argentine equities), rather than benchmarked against an absolute standard. ============= B E R M U D A ============= BAR ONE: Court to Hear Wind-Up Petition on March 30 --------------------------------------------------- A petition to wind up the operations of Bar One Limited will be heard before the Supreme Court of Bermuda on March 30, 2012, at 9:30 a.m. Bristol Cellar Ltd filed the petition against the company on March 7, 2012. The company's liquidator is: Conyers Dill & Pearman Limited Clarendon House, 2 Church Street Hamilton, HM 11 Bermuda =========== B R A Z I L =========== CENTRAIS ELETRICAS: Bondholders Invited to Join Ad Hoc Group ------------------------------------------------------------ Holders of the US$250,000,000 10.50% Notes Due 2016 issued by Centrais Eletricas do Para S.A. (CELPA) have formed an Ad Hoc Group in response to CELPA's commencement of Brazilian judicial reorganization proceedings, notice of which was published on March 8, 2012. The Group's members hold a material portion of the Notes, and the members' objective is to assess, to advance, and to protect their creditors' rights. Interested holders of the Notes are invited to contact the Group quickly, through the Group's legal advisor Bingham McCutchen LLP. The group's legal advisor can be reached at: Tim DeSieno BINGHAM MCCUTCHEN LLP 399 Park Avenue New York NY 10022 Tel No.: +1 212 705 7426 E-mail: tim.desieno@bingham.com Bingham McCutchen LLP -- http://www.bingham.com/-- offers a broad range of market-leading practices focused on global financial services firms and Fortune 100 companies. The firm has more than 1,000 lawyers in 14 locations in the United States, Europe and Asia. CELPA, headquartered in Belem, owns a 30-year concession contract that expires in 2028 to distribute electricity to 143 cities in the state of Para. CELPA is controlled by Rede Energia S.A. (REDE), which has a direct and indirect participation of 61.4% of CELPA's total capital. * * * As reported in the Troubled Company Reporter on March 5, 2012, Moody's downgraded the Issuer ratings of Centrais Eletricas do Para (CELPA) to Ca from B3 on the global scale and to Ca.br from B1.br on the Brazilian national scale. At the same time, Moody's downgraded to Ca from B3 the rating of the senior unsecured 5- year US$250 million bonds issued by CELPA. Following this rating action, Moody's will withdraw both ratings given that CELPA filed for court protection under the Brazilian bankruptcy and reorganization law (Judicial Recovery). MARFRIG ALIMENTOS: Searches for Partners to Ease Debt Load ---------------------------------------------------------- MarketWatch News, citing magazine Exame, reports that Marfrig Alimentos SA's corporate reorganization was motivated by a search for partners to help it ease its debt load. Exame said that Marfrig Alimentos hired local investment bank Itau BBA to sell up to 40% of its newly created Seara Foods division to investment funds, according to MarketWatch News. The report relates that Exame said the company hopes to raise BRL2 billion (US$1.17 million) through the deal to reduce its BRL7.8 billion in net debt. MarketWatch News says that Exame reported Chief Executive Marcos Molina saying the company is in a "comfortable position" and doesn't "need to sell anything else" after recent asset sales. The company, MarketWatch News notes, said it plans to separate its Marfrig Beef division from its pork, poultry and processed- foods divisions, which will henceforth operate under Seara Foods. Company finance, administration and human resources will be globalized under an umbrella company dubbed Marfrig Group, the report relates. "For Molina and the bankers structuring the sale, Seara is undervalued," Exame said, noting that processed-foods companies in general are worth more than meat packers because their margins are higher, MarketWatch News discloses. "In the Itau BBA document, the estimated value of this business is near BRL5 billion, while Marfrig's as a whole is valued at BRL3.4 billion on the market," the report adds. About Marfrig Alimentos Marfrig Alimentos SA (formerly Marfrig Frigorificos e Com de Alimentos SA) is a Brazil-based company engaged in the processing and distribution of meat and poultry products. Its products include cooked beef, bacon, sausages, beef cubes, minced knuckles, steaks and other food items including pre-cooked and frozen potato, frozen vegetables, canned meat, fish and ready meals. The Company operates in 13 countries, and exports its products to more than 100 destinations worldwide. * * * As of March 3, 2012, the company continues to carry Moody's "B1" long-term rating and long-term family rating. The company also continues to carry Moody's long-term issuer credit ratings. MARFRIG ALIMENTOS: General Meeting Set for March 23 --------------------------------------------------- Marfrig Alimentos S.A.'s General Debenture Holders Meeting is scheduled to convene on March 23, 2012, at 2:00 p.m. in the case of Holders of 1st Series Debentures and at 2:30 p.m. in the case of Holders of 2nd Series Debentures, at the registered office of the Company, at Avenida Chedid Jafet 222, Block A, 5th floor, Suite 01, district of Vila Olimpia, Postal Code (CEP) 04551-065, such as provided in subsections 7.22(XXIII), 10.5 and 10.6 of the Private Deed of Third Issuance of Non-Convertible Unsubordinated Debentures of Marfrig Alimentos S.A. Secured by Certain Supporting Personal Guarantees and Collaterals dated Jan. 27, 2011, in order to CONSIDER granting authorization for the sale to The Martin-Brower Company L.L.C. of the business and operations related to logistics, goods' distribution and global transportation management of the subsidiaries Keystone Foods LLC and McKey Luxembourg S.a.r.l., as well as the assets and liabilities pertaining to such operations and businesses. In order to participate in the meeting, debenture holders attending the meeting in person or, as the case may be, their legal representatives or delegates are kindly requested to come bearing identification documents and proof of debenture ownership in the form of a statement issued by the registrar. Moreover, debenture holders that wish to appoint a delegate to attend the meeting on their behalf are advised that this should be accomplished giving regard to the requirements set forth in article 126 of Brazilian Corporate Law (Law No. 6.404/76, as amended). In addition, copies of the corporate documents evidencing a legal representative's capacity and authority or, as the case may be, of the power of attorney granted to a delegate designated to attend the meeting, are expected to be delivered (preferably no later than the second business day before the meeting) to the care of the Trustee, i.e., Pentagono S.A DTVM, at "Av. Americas 4200, Bloco 04, Sala 514, Rio de Janeiro, RJ, Brasil, CEP 22640-102." About Marfrig Alimentos Marfrig Alimentos SA (formerly Marfrig Frigorificos e Com de Alimentos SA) is a Brazil-based company engaged in the processing and distribution of meat and poultry products. Its products include cooked beef, bacon, sausages, beef cubes, minced knuckles, steaks and other food items including pre-cooked and frozen potato, frozen vegetables, canned meat, fish and ready meals. The Company operates in 13 countries, and exports its products to more than 100 destinations worldwide. * * * As of March 3, 2012, the company continues to carry Moody's "B1" long-term rating and long-term family rating. The company also continues to carry Moody's long-term issuer credit ratings. USINAS SIDERURGICAS: Moody's Reviews 'Ba1' Rating on Debentures --------------------------------------------------------------- Moody's Investors Service placed the ratings of Usinas Siderurgicas de Minas Gerais S.A. (Usiminas), including the Baa3 Issuer rating and the Aa1.br Brazilian national scale rating as well as the ratings of guaranteed subsidiaries under review for possible downgrade. The ratings placed under review are as follows: Issuer: Usinas Siderurgicas de Minas Gerais S.A. -- Senior Unsecured Issuer Rating: Baa3 (global scale); Aa1.br (Brazilian national scale) -- US$500 million Senior Unsecured Global MTN Program: (P)Baa3 Foreign Currency Rating -- BRL500 million local currency subordinated unsecured debentures due 2013: Ba1 (global scale); Aa2.br (Brazilian national scale). Issuer: Cosipa Commercial Ltd. -- US$200 million senior unsecured notes due 2016, guaranteed by Usiminas: Baa3 Foreign Currency Rating -- US$500 million Global MTN Program: (P)Baa3 Issuer: Usiminas Commercial Ltd. -- US$400 million senior unsecured notes due 2018, guaranteed by Usiminas: Baa3 Foreign Currency Rating -- US$500 million Global MTN Program: (P)Baa3 Ratings Rationale The review stems from the deterioration in Usiminas'operating results as a consequence of weakened fundamentals for the Brazilian steel markets, higher input costs and cost challenges going forward, and weak debt protection coverage ratios. Although Usiminas has taken initiatives to regain competitiveness and has concentrated its investments in iron ore expansion and energy self-sufficiency, the company's ongoing investments will only start to produce positive effects in the 2013-2014 time- frame. Consequently vulnerability to volatility in key input costs will remain over the near term. In addition, leverage has increased on the weaker earnings base. Moody's review will focus on the growth expectations for steel shipments in 2012, expected price realizations, and the actions that can be taken to control costs, and improve earnings and margins. The review will also focus planned capital expenditures and the ability of the company to fund these investments. Also covered in the review will be Usiminas' liquidity position and ability to meet covenant levels under its financing facilities. Moody's will also assess the ability of the new members of the controlling group to implement initiatives to restore profitability, regain competitiveness and maintain leverage and liquidity at adequate levels. Given the deterioration in key coverage ratios and the increased leverage position, the conclusion of the review could result in more than a one-notch downgrade. Headquartered in Belo Horizonte, Minas Gerais, Usinas Siderurgicas de Minas Gerais S.A. (Usiminas) is the largest integrated flat-steel manufacturer in Latin America, with production of 6.7 million tons of crude steel and consolidated net revenues of BRL 11.9 billion in the last twelve months ended Dec. 31, 2011. Usiminas also owns iron ore mining activities, steel distribution subsidiaries and operates downstream facilities in Brazil =========================== C A Y M A N I S L A N D S =========================== ELROND INVESTMENTS: Shareholders' Final Meeting Set for March 30 ---------------------------------------------------------------- The shareholders of Elrond Investments Limited will hold their final meeting on March 30, 2012, at 9:50 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Walkers SPV Limited Walker House, 87 Mary Street, George Town Grand Cayman KY1-9002 Cayman Islands c/o Jennifer Chailler Telephone: (345) 814 6847 FRONTIER XI: Shareholders' Final Meeting Set for March 30 --------------------------------------------------------- The shareholders of Frontier XI Limited will hold their final meeting on March 30, 2012, at 8:45 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Walkers SPV Limited Walker House, 87 Mary Street, George Town Grand Cayman KY1-9002 Cayman Islands c/o Jennifer Chailler Telephone: (345) 814 6847 FRONTIER XII: Shareholders' Final Meeting Set for March 30 ---------------------------------------------------------- The shareholders of Frontier XII Limited will hold their final meeting on March 30, 2012, at 9:00 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Walkers SPV Limited Walker House, 87 Mary Street, George Town Grand Cayman KY1-9002 Cayman Islands c/o Jennifer Chailler Telephone: (345) 814 6847 FV INVESTMENT: Shareholders' Final Meeting Set for March 30 ----------------------------------------------------------- The shareholders of FV Investment Alpha Four Limited will hold their final meeting on March 30, 2012, at 10:00 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Walkers Corporate Services Limited Walker House, 87 Mary Street, George Town Grand Cayman KY1-9002 Cayman Islands c/o Jennifer Chailler Telephone: (345) 814 6847 THADDEUS ASIA: Shareholder to Receive Wind-Up Report on March 26 ---------------------------------------------------------------- The shareholder of Thaddeus Asia Event Driven Fund will receive on March 26, 2012, the liquidator's report on the company's wind- up proceedings and property disposal. The company's liquidator is: Thaddeus Capital Limited c/o Charle Peza Ruttonjee Centre - Ruttonjee House, 5th Floor 11 Duddell Street, Central Hong Kong Telephone: 852 2214 8834 Facsimile: 852 2521 8020 THADDEUS ASIA I: Shareholder to Get Wind-Up Report on March 26 -------------------------------------------------------------- The shareholder of Thaddeus Asia Partners I, Limited will receive on March 26, 2012, the liquidator's report on the company's wind- up proceedings and property disposal. The company's liquidator is: Thaddeus Capital Limited c/o Charle Peza Ruttonjee Centre - Ruttonjee House, 5th Floor 11 Duddell Street, Central Hong Kong Telephone: 852 2214 8834 Facsimile: 852 2521 8020 * JAMAICA: Investors Shy Away From Small Indebted Local Hotels -------------------------------------------------------------- Caribbean360.com reports that the Development Bank of Jamaica has been finding it difficult to offload smaller indebted tourism properties as serious investors shy away due to a lack of economies of scale. This is in the opinion of DBJ Managing director Milverton Reynolds who recently revealed that the bank has been left holding three debt-ridden resort properties because investors apparently fear they may be too small to be made commercially viable, according to Caribbean360.com. "Larger properties allow purchasers to pursue economies of scale," Mr. Reynolds has been quoted as saying as he commented on why larger properties such as the 304-room Jamaica Pegasus in New Kingston and the former Hedonism III with 226 rooms have attracted competitive bids while small properties languish, the report relates. Caribbean360.com notes that several unsold small properties held by the DBJ are in receivership. The bank, the report discloses, recently put the 96-room 'N' resort in Trelawny, formerly FDR Pebbles, back on the market for US$10 million. The report relates that the bank has been trying to sell the property since 2010 to recover US$4.5 million borrowed by owners from the DBJ to construct and equip the hotel. The receiver of the hotel is Ken Tomllinson of Business Recovery Services Limited. Meanwhile, Caribbean360.com discloses that the DBJ is also still trying to recover JAM$34 million owed on the 34,000-square-foot, five-cottage Parottee Beach Resort in St. Elizabeth owned by Carl Miller's M&M Corporation. The property is listed for JAM$70 million on the Tomlinson website. The third hotel, Ocean Sands Resorts, located at James Avenue in Ocho Rios, St Ann, has 34 rooms and is priced at US$1.4 million, according to the Business Recovery Services website. * * * As of March 3, 2012, the country continues to carry Moody's "C" currency short-term debt ratings. =========== M E X I C O =========== CORPORACION GEO: Fitch Affirms Two Senior Notes Ratings at 'BB-' ---------------------------------------------------------------- Fitch Ratings has affirmed Corporacion Geo, S.A.B. de C.V.'s ratings as follows: -- Foreign Currency Issuer Default Rating (IDR) at 'BB-'; -- Local Currency IDR at 'BB-'; -- National Long-term rating at 'A-(Mex)'; -- US$250 million senior notes due 2014 at 'BB-'; -- US$250 million senior notes due 2020 at 'BB-'; -- MXN400 million Certificados Bursatiles due 2014 at 'A- (Mex)'. Fitch Ratings has also assigned an expected 'BB-(exp)' rating to GEO's proposed issuance of up to US$400 million in notes due in 2022. Proceeds from the issuance will be entirely used to refinance debt. The proposed transaction will provide the proceeds to fund GEO's recently announced tender offer and consent solicitation for any and all of its outstanding US$250 million senior notes due in 2014. The final rating for the proposed US$400 million senior notes is contingent upon the receipt of final documents conforming to information already received. The Rating Outlook is Stable. The ratings reflect GEO's solid market position in the Mexican homebuilding industry, consistent business strategy oriented to the affiliated low-income housing segment, geographic diversification and reasonable land reserve using different acquisition schemes, adequate liquidity, and moderate leverage. The ratings factor in GEO's solid market share position in the sector, being the largest homebuilder in Mexico with 57,865 units sold during 2011. The ratings are constrained by GEO's high working capital requirements related to its operations, and limited capacity to generate positive free cash flow (FCF) in the short to medium term. The Stable Outlook incorporates the view that the company will maintain a stable credit profile during 2012 reflected in adjusted gross leverage below 3.5 times (x), adequate liquidity, and negative FCF in the low single digits. A negative rating action could be triggered by a deterioration of the company's credit protection measures due to continued sizeable negative FCF. Expectations by Fitch of total adjusted debt to EBITDAR being consistently at or beyond 4x will likely result in a downgrade. Improvement in the company's working capital cycle resulting in FCF trending to neutral supporting the expectation that total adjusted debt to EBITDAR will strengthen toward 3x over time will reinforce the ratings. Main Credit Concern - High Negative FCF: The company's 2011 FCF generation was negative at MXN2.5 billion, representing 12%, 93%, and 18% of the company's LTM revenue, cash position, and total on-balance debt at the end of December 2011. The company's negative FCF trend in 2011 was driven by increasing working capital as changes in accounts receivable and inventories negatively affected the company cash flow generation by MXN1.8 billion and MXN5.1 billion, respectively. The company's 2011 FCF level reflects delays in collection from government agencies, as new programs and processes were implemented during the second half of 2011, and increasing inventory levels -- work in process -- to align the company's housing developments to subsidy programs expected to be available primarily during the first half of 2012. The ratings incorporate the view that the company will improve its working capital cycle during 2012 due to normalization in collection periods and lower inventory needs. Continued high negative FCF levels in 2012, similar to the 2011 level, resulting in higher leverage and weaker liquidity (reflected in lower cash position or higher short-term debt levels) would be seen as negative to credit quality. Adjusted Leverage Expected to Remain Below 3.5x: The company's 2011 leverage metrics are above expectations. The company's total debt increased by approximately 50% during 2011 over the prior year and reflects incremental debt required to cover the company's 2011 burning cash from operations. GEO's gross leverage was 2.9x by the end of December 2011 (2.4x by the end of December 2010). Considering rentals related to operating leases, the company's adjusted leverage, measured as total adjusted debt to EBITDAR, was 3.1x by the end of 2011, which negatively compares with 2.5x by the end of 2010. The company had approximately MXN15.7 billion in total adjusted debt at the end of December 2011. This debt consists primarily of MXN13.8 billion of on-balance-sheet debt and an estimated MXN1.8 billion of off-balance-sheet debt associated with lease obligations. The company's total rentals during 2011 were MXN263 million, which includes approximately MXN148 million in rentals related to the US$160 million Maquinaria Especializada MXO, S.A. de C.V. transaction. The ratings considers that GEO's adjusted gross leverage will remain stable and below 3.5x during the next 12 months ended December 2012 as the company is expected to have the capacity to better manage its working capital cycle during 2012, reducing needs for incremental debt. Proposed Transaction Positive to Credit Quality; Liquidity to Improve: The completion of the voluntary exchange offering is contingent upon the acceptance by more than 50% of the holders of GEO's US$250 million senior notes due in 2014. In connection with the exchange offer, the company is soliciting the elimination of substantially all of the restrictive covenants and certain events of default applicable to the existing notes. The final settlement date of the exchange offering is April 4, 2012. Fitch views the exchange offering, in connection with the proposed issuance of US$400 million senior notes, as positive to GEO's credit quality. The completion of the offering is expected to improve GEO's liquidity position by extending the company's debt payment profile, while GEO's gross adjusted leverage, on a pro forma basis, is not expected to increase, as the proceeds from the proposed issuance will be entirely used to prepay GEO's US$250 million senior notes due in 2014 and the remaining balance to reduce the company's short-term debt. Moderate Growth; 2012 Revenues Expected to Increase 6% in 2012; EBITDA Margins Stable at 22%: The company's 2011 revenue was MXN21.2 billion, an increase of 10.5% over 2010 reflecting increases of 3.2% and 8.2% in the company's units sold and average prices during the period, respectively. The company's average unit price increased from MXN333 thousand to MXN360 thousand (US$27 thousand), in 2011 from 2010. For 2012, the company's operations are forecasted to achieve more moderate growth with total revenues increasing approximately 6%. The company's 2012 total units sold is expected to increase by 6% to be around 61,500 (57,865 units sold in 2011). GEO's product mix by income segment should continue to be oriented to the low- income segment, with average home price expected to remain stable at levels similar to those reached in 2011. The company's 2012 EBITDA margin should remain stable at around 22%, and GEO's 2012 vertical housing mix is expected to reach 50% versus 35% in 2011. Business strategy with a focus on organic growth is expected to continue in 2012. The ratings consider that the company's business strategy will continue to focus operations on its own land reserves. Inorganic growth through acquisitions is not expected to occur in the short to medium term. Diversification, Scale of Operations, and Adequate Land Reserve Incorporated: The ratings also consider GEO's geographic diversification with a presence in 22 states in Mexico, which mitigates the inherent risks associated with operating in a specific region, reducing its dependency on specific local and municipal governments to secure land and permits. Further, the company benefits from large-scale and nationwide operations as the largest homebuilder in Mexico by volume of homes sold, which allows GEO to benefit from economies of scale, better negotiating position with suppliers, better access to credit markets, and enhanced relationships with land suppliers. The ratings incorporate GEO's significant and well-targeted land reserves. As of Dec. 31, 2011, the company had land reserves equivalent to approximately 365,221 homes, which represents around five years of production. GEO's strategy of obtaining land not only provides for growth, but it also improves the company's financial flexibility by reducing working capital requirements, allowing it to use cash flow for other purposes. GEO's land reserves have been built up using different financing alternatives. They include the company's cash flow, outsourcing, purchase options, and joint ventures, which represent by the end of Dec. 2011 approximately 52%, 3%, 6%, and 39%, respectively. FINANCIERA INDEPENDENCIA: Fitch Affirms Rating on IDR at 'BB' ------------------------------------------------------------- Fitch Ratings has affirmed Financiera Independencia's long-term Issuer Default Ratings (IDRs) at 'BB-'. Fitch has also downgraded FINDEP's long- and short-term national scale ratings and local debt issues. The Rating Outlook for all of FINDEP's long-term ratings is Stable. Fitch believes FINDEP's financial condition remains consistent with a 'BB-' IDR, given its robust franchise in the consumer finance sector, ample liquidity and adequate funding profile. However, rebuilding core capital following the 2011 acquisitions of Apoyo Economico Familiar (AEF) and Apoyo Financiero Incorporated (AFI) has been slower than Fitch expected. This resulted from lower profitability driven by higher average funding cost observed due to issuance of the senior unsecured global notes in 2010, as well as its loan impairment charges. The confluence of these factors underpins the one notch downgrade of the national scale long-term and short-term ratings to 'A- (mex)' from 'A(mex)' and to 'F2(mex)' from 'F1(mex)', respectively. FINDEP's IDRs and national-scale ratings could be negatively affected if the company fails to stabilize credit costs and asset quality metrics at levels that are closer to historical records and/or if the process of rebuilding core capital levels does not speed up in 2012. Negative rating actions could also occur if FINDEP's currently weak financial condition negatively affects its medium-term funding profile. Fitch considers that the upside potential for FINDEP's ratings is currently limited, but positive rating actions could arise in the medium term if the company materially improves its core capital position and profitability closer to the levels recorded before the recent acquisitions. Historically, FINDEP had reported strong capital levels that were consistent with its retail risk profile and rating level. However its adjusted capital ratios (excluding intangible assets, primarily goodwill in this case) declined from roughly 27% at end-2010 to 13.4% as of December 2011. This was exacerbated by the aforementioned acquisitions, given the proposed terms of the transactions (all cash) and the goodwill arising, as well as the lower profitability due to the increasing loan impairment charges and funding cost mentioned before. Fitch views favorably management's 2H'11 decision to suspend dividends in 2012 related to the 2011 period as a strategy to enhance capital accumulation. However, core capital ratios will only recover gradually and are expected to reach the twenties over the next three years, considering the relatively conservative earnings projections over that period. Fitch believes projected capital ratios remain consistent with FINDEP's risk profile, especially under a scenario of full earnings retention, but enhancing core profitability and stabilizing asset quality metrics are also crucial. While these factors negatively affected Fitch's expectation of a relatively rapid rebuild of its capital adequacy metrics, Fitch views positively FINDEP's sound liquidity and funding profile. This is a major strength for FINDEP that largely sustains its rating level. FINDEP and its subsidiaries have access to a relatively ample and increasing amount of bank facilities. Moreover, there is a positive maturity gap among assets and liabilities that is key mitigating factor regarding refinancing risk. In addition, FINDEP has accessed the local debt market, and it placed US$$200 million of five-year senior unsecured global notes in 2010. The company's cushion of liquid assets is reasonable, and the high turnover of its loan portfolio is another major source of liquidity, if needed. Nonetheless, FINDEP is challenged to roll over a significant amount of credit lines over the next 24 months at terms that prove positive for the company's earnings prospects. Common to other consumer finance entities, wide margins are the key driver of FINDEP's earnings. An ample business scale underpins reasonable efficiency metrics, allowing FINDEP to absorb consistently high credit costs and still delivering strong profitability metrics until 2010. However, a confluence of negative factors constrained earnings in 2011, as increasing credit losses (loan impairment charges to average gross loans from 18.4% in 2010 to 20.5% in 2011) and interest expenses increased 45.6% last year. In addition, certain non-recurring expenses occurred which were associated with technology, personnel and improving internal processes, largely driven by the recent acquisitions. However, Fitch expects a gradual recovery from these various factors during 2012 and 2013. Historically, the consolidated impairment ratio has been roughly 10%, but it climbed to roughly 12% during the recent economic downturn. Net charge-offs have also been high, roughly 17% of average loans in 2011, while its reserves coverage of impaired loans were still a moderate 76.4% (2010: 65.9%). Fitch has taken the following ratings actions: FINDEP: -- Long-term foreign and local currency IDRs affirmed at 'BB-'; -- Short-term foreign and local currency IDRs affirmed at 'B'; -- US$200 million senior unsecured notes due 2015 affirmed at 'BB-'; -- National-scale long-term rating downgraded to 'A-(mex)' from 'A(mex)'; -- National-scale short-term rating downgrade to 'F2(mex)' from 'F1(mex)'; -- National-scale long-term rating for local issues of senior unsecured debt downgraded to 'A-(mex)'at from 'A(mex)'. The Rating Outlook is Stable. GRUMA SAB: S&P Raises Corp. Credit Rating to 'BB'; Outlook Stable ----------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on Gruma S.A.B. de C.V., including raising the corporate credit rating to 'BB' from 'BB-'. "The recovery rating on Gruma's $300 million fixed-rate perpetual notes, indicating our expectation of a meaningful (50% to 70%) recovery in the event of a payment default, remains unchanged at '3'," S&P said. The outlook is stable. "The upgrade follows Gruma's ongoing commitment to a more prudent financial strategy, which has resulted in total debt to EBITDA of less than 3x and operating results in line with our expectations, despite higher raw material costs in 2011," said Standard & Poor's credit analyst Laura Martinez. "Gruma has been able to mitigate high corn price volatility through anticipated purchases, corn-hedging strategies, and price increases across most of its subsidiaries. Additionally, the company was able to fund its acquisitive expansion strategy and significant working capital requirements mainly with internal cash flow generation," S&P said. "Our ratings on Gruma reflect the company's 'significant' financial profile (as our criteria define the term) due to its still leveraged position and its exposure to volatile raw materials prices. The company's 'satisfactory' business profile reflects its leading position as a corn flour and tortilla producer, strong brand recognition, and geographically diverse cash flow, which mitigates financial risks. A continued track record of more moderate financial policies is a key factor supporting our ratings," S&P said. "The stable outlook reflects our assumption that Gruma's corporate governance and risk management will remain prudent and that the company's expansion strategy through acquisitions, working capital needs, and dividend payments will not require additional debt in the coming years," S&P said. ============================ S T K I T T S & N E V I S ============================ * ST. KITTS & NEVIS: Debt Restructuring May Lead to Job Losses -------------------------------------------------------------- Cariibean360.com reports that as the Nevis Island Administration (NIA) carries out the debt restructuring disclosed by Prime Minister of the Federation Dr. Denzil Douglas, the reorganization of government departments and statutory bodies will increase unemployment. Nevis Premier Joseph Parry acknowledge the disclosure, according to Cariibean360.com. The report notes that at the end of last month Dr. Douglas announced that St Kitts and Nevis would be undertaking a two- pronged debt relief strategy aimed at further stabilizing the economy. Further to the economic and debt restructuring program, which was commenced in late 2010, Prime Minister Douglas has announced that the state will now embark on a debt exchange program, along with debt relief provided by a number of government's creditors, plus ongoing economic reforms, to help place the country's public finances on a more sustainable footing, Cariibean360.com discloses. The report relates that Mr. Parry, who is also the Nevis Minister of Finance, said the reorganization would lead to workers being laid off, but said a pension scheme would be put in place to act as a safety net for non-establishment workers with more than 10 years service. "The debt restructuring is something that we have taken ourselves in this country," Cariibean360.com quoted Mr. Joseph as saying. "The International Monetary Fund (IMF) has approved the path which we wish to take, and we have the White Oak people who are helping us to restructure the debt. Basically part of the idea is that we would have to discipline ourselves and organize ourselves, and takes certain measures locally to cut down costs, to pull back on expenditure and also to stimulate growth," he added, the report relates. =============== X X X X X X X X =============== * BOND PRICING: For the Week March 12 to March 16, 2012 ------------------------------------------------------- Issuer Coupon Maturity Currency Price ------ ------ -------- -------- ----- ARGENTINA --------- ARGENT-$DIS 8.28 12/31/2033 USD 72.15 ARGENT-PAR 1.18 12/31/2038 ARS 46.92 ARGENT- DIS 7.82 12/31/2033 EUR 56 ARGENT- DIS 7.82 12/31/2033 EUR 65 ARGENT- DIS 7.82 12/31/2033 EUR 66 ARGENT- DIS 4.33 12/31/2033 JPY 42 ARGENT- PAR 0.45 12/31/2038 JPY 15 ARGENT- PAR&GDP 0.45 12/31/2038 JPY 8 ARGNT-BOCON PRE9 2 3/15/2014 ARS 73.5 EMP DISTRIB NORT 9.75 10/25/2022 USD 61 EMP DISTRIB NORT 9.75 10/25/2022 USD 62.88 PROV BUENOS AIRE 9.625 4/18/2028 USD 68.91 BRAZIL ------ REDE EMPRESAS 11.125 USD 42.5 REDE EMPRESAS 11.125 USD 38.02 REDE EMPRESAS 11.125 USD 42.63 CAYMAN ISLAND ------------- BANCO BPI (CI) 4.15 11/14/2035 EUR 46.38 BCP FINANCE BANK 5.01 3/31/2024 EUR 54.63 BCP FINANCE BANK 5.31 12/10/2023 EUR 56.75 BCP FINANCE CO 5.543 EUR 32.5 BCP FINANCE CO 4.239 EUR 33.25 BES FINANCE LTD 6.625 EUR 96.88 BES FINANCE LTD 5.58 EUR 44.33 BES FINANCE LTD 4.5 EUR 51 CAM GLOBAL FIN 6.08 12/22/2030 EUR 67.25 CHINA FORESTRY 10.25 11/17/2015 USD 60 CHINA FORESTRY 10.25 11/17/2015 USD 57.5 CHINA SUNERGY 4.75 6/15/2013 USD 46 EFG ORA FUNDING 1.7 10/29/2014 EUR 51.08 ESFG INTERNATION 5.753 EUR 34.5 JINKOSOLAR HOLD 4 5/15/2016 USD 55.97 LDK SOLAR CO LTD 4.75 4/15/2013 USD 48.01 LDK SOLAR CO LTD 4.75 4/15/2013 USD 48.01 LDK SOLAR CO LTD 4.75 4/15/2013 USD 85.32 LDK SOLAR CO LTD 10 2/28/2014 CNY 67 LUPATECH FINANCE 9.875 USD 72 PUBMASTER FIN 5.943 12/30/2024 GBP 73 PUNCH TAVERNS 4.767 6/30/2033 GBP 72.08 SOLARFUN POWER H 3.5 1/15/2018 USD 64.5 SOLARFUN POWER H 3.5 1/15/2018 USD 63.48 SUNTECH POWER 3 3/15/2013 USD 75.25 SUNTECH POWER 3 3/15/2013 USD 74.32 CHILE ----- AGUAS NUEVAS 3.4 5/15/2012 CLP 1.265 CGE DISTRIBUCION 3.25 12/1/2012 CLP 20.1 ESVAL S.A. 3.8 7/15/2012 CLP 12.6 MASISA 4.25 10/15/2012 CLP 20.42 QUINENCO SA 3.5 7/21/2013 CLP 25.54 PUERTO RICO ----------- BANCO SANTANDER 6.1 6/1/2032 USD 73.26 PUERTO RICO CONS 6 12/15/2034 USD 0.01 PUERTO RICO CONS 6.5 4/1/2016 USD 63.5 VENEZUELA --------- PETROLEOS DE VEN 5.5 4/12/2037 USD 62.11 PETROLEOS DE VEN 5.375 4/12/2027 USD 56 VENEZUELA 7 3/31/2038 USD 71.61 VENEZUELA 7 3/31/2038 USD 71.75 *********** 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. Agravante, Rousel Elaine T. Fernandez, Valerie U. Pascual, Ivy B. Magdadaro, Frauline S. Abangan, and Peter A. Chapman, Editors. Copyright 2012. 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 Peter Chapman at 240/629-3300. * * * End of Transmission * * *