/raid1/www/Hosts/bankrupt/TCRLA_Public/120907.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Friday, September 7, 2012, Vol. 13, No. 179
Headlines
A R G E N T I N A
AEROPUERTOS ARGENTINA: Moody's Cuts Corp. Family Rating to 'B2'
BANCO GALICIA: S&P Affirms 'B' Issuer Credit Rating; Outlook Neg
CAPOCHA SA: Applies for Reorganization Proceedings
EL BORNEO: Creditors' Proofs of Debt Due Oct. 5
FABRICACIONES TEXTILES: Creditors' Proofs of Debt Due Sept. 14
FIDEICOMISO FINANCIERO: Moody's Assigns 'B2' Rating to VRD Secs.
INDUSTRIA DEL FILTRO: Requests for Bankruptcy Proceedings
INTERNATIONAL EVENTS: Creditors' Proofs of Debt Due Oct. 5
B R A Z I L
GRUPO FARIAS: S&P Cuts Corp. Credit Rating to 'CCC'; Outlook Neg
MARFRIG ALIMENTOS: Moody's Corrects August 17 Rating Release
C A Y M A N I S L A N D S
BMH PARTNERS 1: Creditors' Proofs of Debt Due Sept. 27
BUNYAN 2 LIMITED: Creditors' Proofs of Debt Due Sept. 27
CARLYLE HIGH IV: Creditors' Proofs of Debt Due Sept. 27
CARLYLE HIGH 2008-1: Creditors' Proofs of Debt Due Sept. 27
CSERE ATP: Creditors' Proofs of Debt Due Sept. 27
GENERAL FINANCE: Creditors' Proofs of Debt Due Sept. 27
MARK CAPITAL: Creditors' Proofs of Debt Due Sept. 27
MAX INNOVATION: Creditors' Proofs of Debt Due Sept. 27
SONTERRA CAPITAL MASTER: Creditors' Proofs of Debt Due Sept. 27
SONTERRA CAPITAL OFFSHORE: Creditors' Proofs of Debt Due Sept. 27
J A M A I C A
CL FINC'L: Lascelles de Mercado Sale May Affect Workers
DIGICEL GROUP: Moody's Assigns 'Caa1' Rating to Sr. Unsec. Notes
* JAMAICA: Improves Competitive Ability
M E X I C O
INTERACCIONES: Moody's Assigns 'Ba2' Rating to MXN1.5-Bil. Loan
P U E R T O R I C O
COSTA DORADA: Has Until Sept. 15 to File Amended Plan Outline
- - - - -
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A R G E N T I N A
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AEROPUERTOS ARGENTINA: Moody's Cuts Corp. Family Rating to 'B2'
---------------------------------------------------------------
Moody's Latin America has downgraded Aeropuertos Argentina 2000
S.A. (AA2000)'s local currency Corporate Family Rating to B2 from
B1 and its national scale rating to Aa3.ar from Aa2.ar. At the
same time, Moody's downgraded AA2000's local currency Class "A"
and Class "B" senior unsecured notes' ratings to B2 from B1 and
its national scale rating to Aa3.ar from Aa2.ar. Additionally,
Moody's revised the outlook for AA2000's local currency debt to
stable from positive. Finally, Moody's affirmed AA2000's foreign
currency Class "C" and USD 300 million senior unsecured notes'
ratings at B2 and its national scale rating at Aa3.ar.
Ratings Rationale
A weaker sovereign has the potential to create a ratings drag, and
therefore it is appropriate to limit the extent to which these
issuers are rated higher than the sovereign.
Moody's believes, however, that there has been no deterioration in
the intrinsic fundamental credit quality of AA2000.
The downgrade on the ratings reflects Moody's view that AA2000
ultimately cannot be completely de-linked from the credit quality
of the Argentinean government (B3, stable), and thus its ratings
need to more closely reflect the risk that they share with the
sovereign.
"In order to be rated significantly above the sovereign, an issuer
needs not only to be fundamentally stronger than the sovereign
from a credit perspective, but also demonstrate a degree of
insulation from the domestic macroeconomic and financial
disruption, which generally accompanies a sovereign default," says
Veronica Amendola, a Moody's Vice President, Senior Analyst.
"We continue to take into account AA2000's superior fundamental
credit quality, evidenced by the company's dominant position in
its business and the structure and length of the 1998 concession
agreement under which the company operates. However, we believe
de-linking it further from the sovereign is not appropriate
because of the company's assets concentration in Argentina, with
material exposure to domestic business, banks and counterparties,"
Ms. Amendola adds.
The stable rating outlook reflects the bondholder protections
embedded in AA2000's debt structure and Moody's expectations for
low revenue volatility given the relative essentiality , monopoly
status, and size of the company's operations. Moody's believes
that the evolving global macroeconomic situation, leading to a
softening passenger growth rate, will not impact the company's
credit performance dramatically.
While unlikely at this juncture, the ratings could experience
upward pressure if Argentina's B3 government bond rating were to
be upgraded. In addition, an upgrade of the ratings could result
from sustained higher than projected passenger traffic, resulting
in higher than expected revenue collections. Additional sources of
upward pressure could result from expansion of AA2000's market
size or geographic diversification, as well as from an improving
business environment in Argentina that leads to growth of both
aeronautical and non-aeronautical revenues.
Possible developments that could have negative implications for
the rating include passenger traffic flows that are substantially
less than projected on a sustained basis, a prolonged inability to
adjust rates and tariffs as needed going forward, and/or
unfavorable changes to the terms of the Concession Agreement.
Moody's notes that any downward rating action at the sovereign
level would likely result in negative rating actions at AA2000, as
the current notching gap will likely be maintained in the absence
of a significant change in the fundamental credit quality at
AA2000.
BANCO GALICIA: S&P Affirms 'B' Issuer Credit Rating; Outlook Neg
----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B' ratings on
Banco Galicia y Buenos Aires S.A. The outlook remains negative.
"Standard & Poor's Ratings Services bases its ratings on Banco
Galicia on its 'adequate' business position, 'weak' capital and
earnings, 'adequate' risk position, 'average' funding, and
'adequate' liquidity," S&P said.
CAPOCHA SA: Applies for Reorganization Proceedings
--------------------------------------------------
Capocha SA, which is an advertising agency, applied for
reorganization proceedings. The company defaulted its payments
last July.
EL BORNEO: Creditors' Proofs of Debt Due Oct. 5
-----------------------------------------------
Beatriz del Carmen Muruaga, the court-appointed trustee for El
Borneo SRL's bankruptcy proceedings, will be verifying creditors'
proofs of claim until Oct. 5, 2012.
Ms. Muruaga will present the validated claims in court as
individual reports. The National Commercial Court of First
Instance No. 1 in Buenos Aires, with the assistance of Clerk
No. 2, 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.
The Trustee can be reached at:
Beatriz del Carmen Muruaga
Aguero 1290
Argentina
FABRICACIONES TEXTILES: Creditors' Proofs of Debt Due Sept. 14
--------------------------------------------------------------
Estudio Alvarez, Villani y Asociados, the court-appointed trustee
for Fabricaciones Textiles Argentinas SA's bankruptcy proceedings,
will be verifying creditors' proofs of claim until Sept. 14, 2012.
The Trustee will present the validated claims in court as
individual reports. The National Commercial Court of First
Instance No. 5 in Buenos Aires, with the assistance of Clerk
No. 10, 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.
The Trustee can be reached at:
Estudio Alvarez, Villani y Asociados
Alsina 1441
Argentina
FIDEICOMISO FINANCIERO: Moody's Assigns 'B2' Rating to VRD Secs.
----------------------------------------------------------------
Moody's Latin America rates the VRD securities of Fideicomiso
Financiero Aval Rural XVIII, which will be issued by Banco de
Valores acting solely in its capacity as issuer and trustee.
US$6,442,000 in VRD of Fideicomiso Financiero Aval Rural XVIII,
rated B2 (Global scale, local currency) and A1.ar (National Scale
Rating)
As of Sept. 5, the securities for this transaction have not yet
been placed in the market. If any assumption or factor Moody's
considers when assigning the ratings change before closing, the
ratings may also change.
Ratings Rationale
The rated securities will be backed by a pool of bills of exchange
signed by agricultural producers in Argentina. The bills of
exchange will be guaranteed by Aval Rural S.G.R., which is a
financial guarantor in Argentina. Aval Rural has a rating of A1.ar
(Argentine National Scale) and of B2 (Global Scale, Local
Currency).
The ratings assigned to this transaction are primarily based on
the rating of Aval Rural. Therefore, any future change in the
rating of the guarantor may lead to a change in the rating
assigned to this transaction.
Banco de Valores S.A. (Issuer and Trustee) will issue one class of
debt securities denominated in US dollars. The rated securities
will bear a 7% annual interest rate.
The rated securities will be repaid from cash flow arising from
the assets of the Trust, comprised among others, of a pool of
fixed rate bills of exchange denominated in US dollars, guaranteed
by Aval Rural S.G.R. The bills of exchange will bear the same
interest rate as the rated securities.
Although the rated securities (and the bills of exchange) are
denominated in US dollars, they are payable in Argentine pesos at
the exchange rate published by Banco de la Nacion Argentina as of
the day prior to the date that the funds are initially deposited
into the Trust account. As a result, the dollar is used as a
currency of reference and not as a mean of payment. For that
reason, the transaction is considered to be denominated in local
currency.
If, eight days before the final maturity date, the funds on
deposit in the trust account are not sufficient to make payments
to investors, the Trustee is obligated to request Aval Rural to
make payment under the bills of exchange. Aval Rural, in turn,
will have five days to make this payment into the trust account.
Under the terms of the transaction documents, the trustee has up
to two days to distribute interest and principal payments to
investors. Interest on the securities will accrue up to the date
on which the funds are initially deposited by either Aval Rural,
the exporter, or the individual producers into the Trust Account.
INDUSTRIA DEL FILTRO: Requests for Bankruptcy Proceedings
---------------------------------------------------------
Industria del Filtro SRL requested for the opening of bankruptcy
proceedings. The company defaulted its payments last July 31.
INTERNATIONAL EVENTS: Creditors' Proofs of Debt Due Oct. 5
----------------------------------------------------------
Pedro Mazzola, the court-appointed trustee for International
Events Company's SRL's bankruptcy proceedings, will be verifying
creditors' proofs of claim until Oct. 5, 2012.
Mr. Mazzola will present the validated claims in court as
individual reports. The National Commercial Court of First
Instance No. 1 in Buenos Aires, with the assistance of Clerk
No. 2, 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.
The Trustee can be reached at:
Pedro Mazzola
Cerrito 1136
Argentina
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B R A Z I L
===========
GRUPO FARIAS: S&P Cuts Corp. Credit Rating to 'CCC'; Outlook Neg
----------------------------------------------------------------
Standard & Poor's Rating Services lowered its corporate credit
rating on Administradora Baia Formosa S.A. (Grupo Farias) to 'CCC'
from 'B-'. "We do not have issue ratings on the company. The
outlook is negative," S&P said.
"The downgrade reflects increased concerns over Grupo Farias'
ability to honor its financial obligations given its very tight
liquidity. The company has not been able to issue new bonds and
extend its debt maturity as expected. In addition, its cash
generation is weaker than projected. The company reported short-
term debt of R$282 million as of July 31, 2012, and according to
our forecast, liquidity sources are expected to significantly
lower than uses for the next 12 months (less than 0.5x)," S&P
said.
MARFRIG ALIMENTOS: Moody's Corrects August 17 Rating Release
------------------------------------------------------------
Moody's Investors Service issued a correction to the August 17,
2012 rating release of Marfrig Alimentos S.A.
Moody's has downgraded the ratings of Marfrig Alimentos S.A. to B2
from B1. The outlook is stable.
The following ratings were downgraded:
Issuer: Marfrig Alimentos S.A.
- Corporate Family Rating: B2 (global scale)
Issuer: Marfrig Overseas Limited and guaranteed by Marfrig:
- USD 375 million 9.625% senior unsecured guaranteed notes due
2016: B2 (foreign currency)
- USD 500 million 9.500% senior unsecured guaranteed notes due
2020: B2 (foreign currency)
Issuer: Marfrig Holdings (Europe) B.V. and guaranteed by Marfrig:
- USD 750 million 8.375% senior unsecured guaranteed notes due
2018: B2 (foreign currency)
Ratings Rationale
"The downgrade reflects the company's continued elevated leverage
and the recent deterioration in its liquidity, mainly due to the
concentration of short term debt payments in the second and third
quarters of 2012", said Moody's analyst Marianna Waltz. Although
current cash position is still high, amounting to BRL 3 billion as
of June, and representing 98% of total short term debt, a large
proportion (BRL1.1 billion) is restricted though linked to long-
term export related debt obligation. Furthermore, as of June 2012,
the company's cash balance effectively decreased by about BRL1
billion as compared to March, if Moody's considers that the funds
related to the sale of Keystone assets were added in
May 2012. In addition, there are still about BRL1.5 billion in
debt maturing until the end of the year and another BRL2.7 billion
in 2013. In this sense, Moody's sees risk of the company reducing
its liquidity -- one of the main supporters for its ratings over
the last few years -- to cover at least part of the maturing debt.
Offsetting some of these liquidity concerns, the company holds,
through its subsidiary Keystone, a US$600 million secured
revolving long-term credit facility with 17 banks. Of this amount
about US$300 million is being used, with the balance still
available.
On the positive side, the rating is supported by the company's
diversified portfolio of products in five animal proteins (lamb,
pork, turkey, poultry and beef) and strong brands, as well as its
large geographic footprint and global distribution capabilities.
In addition, Moody's sees opportunities for the Seara brand in
Brazil related not only to the integration of assets exchanged
with Brasil Foods, but also to the suspension of certain Perdigaro
products by the Anti-trust commission (CADE) for a period of three
to five years. Moody's is assuming that Brasil Foods will recover
the most of Perdigao's market share using the Sadia brand, but in
Moody's view Seara could capture a portion of it as well.
In terms of operating performance, after the recovery from the
weak 2011 levels, Moody's does not expect further improvements
over the short term. Brazilian beef operations should be benefited
by the cattle herd expansion in the country, but higher grain
prices are likely to put pressure on the poultry and pork
segments' results in the second half of the year. The company's
cash flow generation will depend largely on its ability to control
working capital. In Moody's view, the integration of assets
combined with increased grain prices could lead to higher working
capital requirements.
The rating also considers the company's high adjusted leverage,
measured by gross debt/EBITDA, at 6.4x as of June 2012, which in
part is due to the effects of BRL depreciation, since 76% of
Marfrig's total debt is USD denominated.
The stable outlook reflects Moody's view that Marfrig will be able
to keep operating margins near current levels and avoid further
significant deterioration in its liquidity over the near term.
Marfrig's rating could be downgraded if liquidity were to
deteriorate in a way that unrestricted cash position would
represent less than 80% of short term debt. Quantitatively,
downward pressure on Marfrig's B2 rating or outlook is likely if
Total Debt / EBITDA is sustained above 6.0x, EBITA to gross
interest expense falls below 1.0x or if Retained Cash Flow to Net
Debt is below 10%. All credit metrics are according to Moody's
standard adjustments and definitions.
The ratings or outlook could be upgraded if Marfrig is able to
improve liquidity and keep operating margins at least near current
levels. In addition, it would require a CFO/ Net Debt approaching
15% and a Total Debt / EBITDA of near 4.5x.
The principal methodology used in rating Marfrig was the Global
Food - Protein and Agriculture Industry Methodology published in
September 2009.
Marfrig, headquartered in Sao Paulo, Brazil, is among the leading
protein companies globally, with reported net consolidated
revenues of BRL22.4 billion (US$11.2 billion) in the 12 months
ended in June, 2012. With two main divisions, which are Seara
Foods and Marfrig Beef, the company currently has 106 beef,
poultry, pork and lamb processing plants; 14 leather industrial
units and 30 distribution centers in 22 countries. The company
processes, packages and delivers fresh, chilled and processed
beef, chicken, pork and lamb products to customers in Brazil and
abroad, with approximately 35% of global sales derived from
exports. In the past few years Marfrig has focused on non-organic
growth and made 18 acquisitions, the most important ones being Moy
Park (2008), Seara (2009) and Keystone (2010).
===========================
C A Y M A N I S L A N D S
===========================
BMH PARTNERS 1: Creditors' Proofs of Debt Due Sept. 27
------------------------------------------------------
The creditors of BMH Partners 1 Limited are required to file their
proofs of debt by Sept. 27, 2012, to be included in the company's
dividend distribution.
The company commenced liquidation proceedings on Aug. 8, 2012.
The company's liquidator is:
Walkers SPV Limited
Walker House, 87 Mary Street, George Town
Grand Cayman KY1-9005
Cayman Islands
c/o Jennifer Chailler
Telephone: (345) 814 6847
BUNYAN 2 LIMITED: Creditors' Proofs of Debt Due Sept. 27
--------------------------------------------------------
The creditors of Bunyan 2 Limited Co. are required to file their
proofs of debt by Sept. 27, 2012, to be included in the company's
dividend distribution.
The company commenced liquidation proceedings on Aug. 8, 2012.
The company's liquidator is:
Shaikh Abdul Rahiman
Gulf Investment House K.S.C.
Dar Al-Awadi Towers, 29th to 30th Floors
Ahmad Al-Jaber Street, Sharq
PO Box 28808 Safat 13149
Kuwait
Telephone: (+965) 1844488 ext. 1402
CARLYLE HIGH IV: Creditors' Proofs of Debt Due Sept. 27
-------------------------------------------------------
The creditors of Carlyle High Yield Partners IV, Ltd. are required
to file their proofs of debt by Sept. 27, 2012, to be included in
the company's dividend distribution.
The company commenced liquidation proceedings on Aug. 7, 2012.
The company's liquidator is:
Walkers SPV Limited
Walker House, 87 Mary Street, George Town
Grand Cayman KY1-9005
Cayman Islands
c/o Jennifer Chailler
Telephone: (345) 814 6847
CARLYLE HIGH 2008-1: Creditors' Proofs of Debt Due Sept. 27
-----------------------------------------------------------
The creditors of Carlyle High Yield Partners 2008-1, Ltd. are
required to file their proofs of debt by Sept. 27, 2012, to be
included in the company's dividend distribution.
The company commenced liquidation proceedings on Aug. 7, 2012.
The company's liquidator is:
Walkers SPV Limited
Walker House, 87 Mary Street, George Town
Grand Cayman KY1-9005
Cayman Islands
c/o Jennifer Chailler
Telephone: (345) 814 6847
CSERE ATP: Creditors' Proofs of Debt Due Sept. 27
-------------------------------------------------
The creditors of CSERE ATP No.1 Limited are required to file their
proofs of debt by Sept. 27, 2012, to be included in the company's
dividend distribution.
The company commenced liquidation proceedings on Aug. 9, 2012.
The company's liquidator is:
Walkers SPV Limited
Walker House, 87 Mary Street, George Town
Grand Cayman KY1-9005
Cayman Islands
c/o Jennifer Chailler
Telephone: (345) 814 6847
GENERAL FINANCE: Creditors' Proofs of Debt Due Sept. 27
-------------------------------------------------------
The creditors of General Finance Bunyan 2 Company Ltd are required
to file their proofs of debt by Sept. 27, 2012, to be included in
the company's dividend distribution.
The company commenced liquidation proceedings on Aug. 8, 2012.
The company's liquidator is:
Shaikh Abdul Rahiman
Gulf Investment House K.S.C.
Dar Al-Awadi Towers, 29th to 30th Floors
Ahmad Al-Jaber Street, Sharq
PO Box 28808 Safat 13149
Kuwait
Telephone: (+965) 1844488 ext. 1402
MARK CAPITAL: Creditors' Proofs of Debt Due Sept. 27
----------------------------------------------------
The creditors of Mark Capital China Investment Company Ltd. are
required to file their proofs of debt by Sept. 27, 2012, to be
included in the company's dividend distribution.
The company commenced liquidation proceedings on Aug. 8, 2012.
The company's liquidator is:
Walkers Corporate Services Limited
Walker House, 87 Mary Street, George Town
Grand Cayman KY1-9005
Cayman Islands
c/o Jennifer Chailler
Telephone: (345) 814 6847
MAX INNOVATION: Creditors' Proofs of Debt Due Sept. 27
------------------------------------------------------
The creditors of Max Innovation Holdings Ltd. are required to file
their proofs of debt by Sept. 27, 2012, to be included in the
company's dividend distribution.
The company commenced liquidation proceedings on Aug. 7, 2012.
The company's liquidator is:
Michelle R. Bodden-Moxam
Portcullis TrustNet (Cayman) Ltd.
The Grand Pavilion Commercial Centre
Oleander Way, 802 West Bay Road
P.O. Box 32052 Grand Cayman KY1-1203
Cayman Islands
SONTERRA CAPITAL MASTER: Creditors' Proofs of Debt Due Sept. 27
---------------------------------------------------------------
The creditors of Sonterra Capital Master Fund, Ltd. are required
to file their proofs of debt by Sept. 27, 2012, to be included in
the company's dividend distribution.
The company commenced liquidation proceedings on July 13, 2012.
The company's liquidator is:
DMS Corporate Services Ltd.
c/o Bernadette Bailey-Lewis
Telephone: (345) 946 7665
Facsimile: (345) 946 7666
dms Corporate Services Ltd.
dms House, 2nd Floor
P.O. Box 1344 Grand Cayman KY1-1108
Cayman Islands
SONTERRA CAPITAL OFFSHORE: Creditors' Proofs of Debt Due Sept. 27
-----------------------------------------------------------------
The creditors of Sonterra Capital Offshore Fund, Ltd. are required
to file their proofs of debt by Sept. 27, 2012, to be included in
the company's dividend distribution.
The company commenced liquidation proceedings on July 13, 2012.
The company's liquidator is:
DMS Corporate Services Ltd.
c/o Bernadette Bailey-Lewis
Telephone: (345) 946 7665
Facsimile: (345) 946 7666
dms Corporate Services Ltd.
dms House, 2nd Floor
P.O. Box 1344 Grand Cayman KY1-1108
Cayman Islands
=============
J A M A I C A
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CL FINC'L: Lascelles de Mercado Sale May Affect Workers
-------------------------------------------------------
RJR News reports that at least one of the trade unions
representing workers at Lascelles de Mercado subsidiaries could
hear today how the takeover of the company by Italian firm Grupo
Campari will affect jobs.
The National Workers Union (NWU), which has bargaining rights for
employees at J. Wray and Nephew's New Yarmouth Estate has
requested a meeting on the topic, according to RJR New.
RJR New notes that workers protested at the entrance of the estate
demanding answers about their future with the company in light of
the impending change in ownership at Lascelles de Mercado.
As reported in the Troubled Company Reporter-Latin America on
Sept. 6, 2012, RJR News said that CL Financial Limited has
remained silent since agreeing to sell its 81% stake in Lascelles
de Mercado to Italian spirits company Grupo Campari. The former
PNM administration in Trinidad took control of CL Financial in
June 2009 following the collapse of its insurance subsidiary,
Colonial Life Insurance Company, the report recalled. RJR News
said that the Campari buyout excludes Lascelles' non-core assets
-- comprise insurance and transportation entities as well as
investments. Trinidad's Guardian newspaper said CL Financial is
looking to divest these assets separately, RJR News related.
DIGICEL GROUP: Moody's Assigns 'Caa1' Rating to Sr. Unsec. Notes
----------------------------------------------------------------
Moody's Investors Service has assigned a Caa1 rating to Digicel
Group Limited's proposed US$700 million senior unsecured notes due
2020. Net proceeds will be used to repurchase the entire tranche
of the DGL 9.125%/9.875% senior PIK toggle notes due 2015 (US$415
million outstanding) and a portion of the 8.875% senior notes due
2015 (US$1 billion outstanding) via tender offers. In addition,
Moody's affirmed Digicel's Corporate Family Rating (CFR) and
Probability of Default Rating (PDR), both at B2, and maintained
the stable rating outlook. In conjunction with the rating action,
Moody's affirmed the ratings on the existing DGL debt and on the
existing debt at Digicel Limited ("DL"), a wholly-owned subsidiary
of DGL. Digicel also maintains a US$912 million senior secured
credit facility (cannot be drawn down further and matures 2017) at
its Digicel International Finance Ltd. ("DIFL") subsidiary, which
Moody's does not rate.
Moody's views the transaction favorably due to the elimination of
the PIK notes from the capital structure and extension of the 2015
debt maturities, as well as the comparatively lower coupon on the
new notes, which will provide some modest interest expense
savings. Nonetheless, Moody's expects that consolidated leverage
at DGL following the debt refinancing will remain under 5.0x on a
Moody's adjusted basis. Moody's believes Digicel will manage its
adjusted leverage at between 4.5x and 5.0x over the next two
years, given EBITDA expansion related to continued success in
growing its markets, particularly in the South Pacific
territories, and increasing cash flow contributions from
operations in Haiti and Papua New Guinea. Overall deleveraging is
expected to be tempered by Moody's expectation that the company
will likely use debt funding to consolidate the remaining equity
of its affiliate, Digicel Holdings Central America ("DHCAL"), that
it does not already own, and for future acquisitions and rising
capital expenditures. In February 2012, DGL raised US$250 million
in a note offering at its DL subsidiary to finance acquisitions.
Ratings Rationale
Digicel's B2 CFR is supported by its leading position as the
largest wireless telecommunications carrier in the Caribbean, as
well as its successful track record at gaining significant market
share and producing solid operating results relatively quickly
after new markets are launched. The company's growing penetration
in markets outside of its long-standing Jamaica base has resulted
in quick deleveraging from roughly 10.0x levels following the
recapitalization of the company's balance sheet in early 2007, to
current leverage of below 5.0x on a Moody's adjusted basis.
However, Digicel's history of debt funded acquisitions and sizable
dividend payments, plus the likelihood that in the future DGL will
acquire the portion of DHCAL that it does not currently own weigh
down the rating. While the company continues to have strong
diversification, this is mitigated by its exposure to Jamaica (19%
of total revenue), which is struggling to revive its economy and
experiencing competitive telecom pricing following the imposition
of a new regulatory and tax scheme designed to increase government
receipts. Moody's expects the impact will reduce DGL's EBITDA by
roughly US$25 million per annum. A more than offsetting positive
is the strong GDP growth expected this year from Papua New Guinea
(16% of revenue) and Haiti (17% of revenue), in the range of 6% to
8%.
Digicel's very good liquidity supports the rating. Moody's expects
that the company will end FY13 (ending March 31, 2013) with about
US$550 million in balance sheet cash. In March 2011, Digicel
announced that America Movil ("AMX") will acquire its El Salvador
and Honduras businesses, while in return Digicel will receive
America Movil's entire Jamaica operations along with $355 million
in cash. The companies closed the first stage of the swap of
Jamaica and Honduras assets in November 2011, while continuing the
final negotiations with El Salvador regulators. DGL expects a
formal response from the regulatory authorities sometime in the
second half of 2012. Upon receiving approval, DGL will close the
sale of its El Salvador businesses and receive the remaining $305
million in cash it is owed as part of the AMX assets swap.
Cash flow from operations on a Moody's adjusted basis continue to
demonstrate strong improvement rising to US$533 million for the
LTM period ended June 2012 compared to US$457 million in FY11.
However, Digicel produced negative free cash flow of US$342
million during this LTM period, mainly due to high capital
expenditures (for Voila Haiti network integration and 4G
rollouts), a US$115 million dividend payment in FY12 and a US$300
million special dividend paid in June 2012. Moody's expects DGL to
generate solid free cash flow of about US$100 million (before
special dividends) in FY13, as Papua New Guinea and Haiti
contribute healthy cash flows.
Rating Outlook
Given the incremental debt taken on by Digicel earlier this year,
the stable outlook reflects Moody's opinion that despite
continuing subscriber and cash flow growth, DGL is unlikely to
drive debt to EBITDA leverage to below 4.0x (Moody's adjusted)
over the rating horizon. The outlook also reflects Moody's view
that over the next two years, the company could use debt to
acquire more DHCAL equity from its principal shareholder, Denis
O'Brien.
What Could Change the Rating - UP
Moody's could upgrade Digicel's rating if the company demonstrated
a less aggressive dividend philosophy, financial policies target
leverage lower than 4.0x debt to EBITDA (Moody's adjusted) and if
the operations continue to generate free cash flow in excess of 5%
of total debt (Moody's adjusted) on a sustainable basis while
maintaining very good liquidity.
What Could Change the Rating - DOWN
The ratings could be downgraded if operational shortfalls or
unexpected acquisitions/investments elevated Digicel's leverage
above 6.0x debt to EBITDA (Moody's adjusted) within an 18 to 24
month horizon. The ratings will likely come under pressure if
competition escalates in the company's core markets or if
deterioration in the political, economic and regulatory
environments in the Caribbean or South Pacific markets result in
declining operating cash flows and weak liquidity.
Rating Assigned:
Digicel Group Limited
US$700 Million Senior Unsecured Notes due 2020 -- Caa1 (LGD-5,
83%)
Ratings Affirmed:
Digicel Group Limited
Corporate Family Rating -- B2
Probability of Default Rating -- B2
US$415 Million 9.125%/9.875% Senior Unsecured PIK Toggle Notes
due January 2015 - Caa1 (LGD-5, 83%)
US$1.0 Billion 8.875% Senior Unsecured Notes due January 2015 --
Caa1 (LGD-5, 83%)
US$775 Million 10.5% Senior Unsecured Notes due April 2018 --
Caa1 (LGD-5, 83%)
Digicel Limited
US$510 Million 12% Senior Unsecured Notes due April 2014 - B1
(LGD-3, 39%)
US$800 Million 8.25% Senior Unsecured Notes due September 2017
-- B1 (LGD-3, 39%)
US$250 Million 7% Senior Unsecured Notes due February 2020 -- B1
(LGD-3, 39%)
The assigned rating is subject to review of final documentation
and no material change in the terms and conditions of the
transaction as advised to Moody's. Digicel intends to use the debt
offering proceeds to repurchase existing DGL notes and for general
corporate purposes. Moody's will withdraw the rating on the senior
PIK toggle notes upon full repayment.
The principal methodologies used in rating Digicel Group Limited
was the Global Telecommunications Industry Methodology published
in December 2010. Other methodologies used include Loss Given
Default for Speculative-Grade Non-Financial Companies in the U.S.,
Canada and EMEA published in June 2009.
Incorporated in Hamilton, Bermuda, with headquarters in Kingston,
Jamaica, W.I., Digicel is the largest provider of wireless
telecommunication services in the Caribbean. Revenue for the
twelve months ended June 30, 2012 was US$2.5 billion.
* JAMAICA: Improves Competitive Ability
---------------------------------------
RJR News reports that Jamaica's ability to compete on the global
stage has improved, despite the country's macro-economy being
named among the worst in the World Economic Forum Global
Competitiveness ranking.
The World Economic Forum said its survey show Jamaica improved its
competitiveness by 10 places and now has an overall rank of 97 out
of 144 countries, according to RJR News.
RJR News notes that Senior Lecturer of International Business at
the University of the West Indies, Dr. Densil Williams assesses
the report.
"It's not because other countries have regressed but there is a
genuine increase in Jamaica's position. So Jamaica has gone ahead
of other people in those areas. Other people may have improved
but Jamaica's improvement is vaster than theirs," the report
quoted Dr. Williams as saying.
RJR News notes that areas in which Jamaica showed improvement
including top 50 rankings include the number of days to start a
business, the quality of airport and seaport infrastructure and
number of procedures to start a business.
The World Economic Forum said the most problematic factors for
doing business in Jamaica are Crime and Theft, Access to
Financing, Corruption and Tax rates, all rank ahead of inefficient
government bureacracy and poor work ethic, the report adds.
===========
M E X I C O
===========
INTERACCIONES: Moody's Assigns 'Ba2' Rating to MXN1.5-Bil. Loan
---------------------------------------------------------------
Moody's de Mexico assigned debt ratings of Ba1 (Global Scale,
local currency) and A1.mx (Mexico National Scale) to the MXN 5.5
billion enhanced loan from Inbursa and the MXN750 million enhanced
loan from Santander. Moody's de Mexico also assigned debt ratings
of Ba2 (Global Scale, local currency) and A2.mx (Mexico National
Scale) to the MXN1.5 billion enhanced loan from Interacciones and
the MXN1.5 billion enhanced loan from Multiva. The four loans are
payable through a trust (Invex, trust number F/1176), to which the
state has pledged the flows and rights of 38% of its general fund
participation revenues.
Ratings Rationale
The MXN5.5 billion enhanced loan from Inbursa has a maturity of 25
years. The state has pledged the flows and rights of 10% of its
general fund participation revenues. The loan will pay an interest
rate composed of the 28-day Mexican Interbank Interest Rate (TIIE
in Spanish) plus a spread.
The MXN750 million enhanced loan from Santander has a maturity of
15 years with twelve months of grace period for principal
payments. The state has pledged the flows and rights of 1.25% of
its general fund participation revenues. The loan will pay an
interest rate composed of the 28-day TIIE plus a spread.
The MXN1.5 billion enhanced loan from Interacciones has a maturity
of 16 years. The state has pledged the flows and rights of 2.5% of
its general fund participation revenues. The loan will pay an
interest rate composed of the 28-day TIIE plus a spread.
The MXN1.5 billion enhanced loan from Multiva has a maturity of 20
years with six months of grace period for principal payments. The
state has pledged the flows and rights of 1.9% of its general fund
participation revenues. The loan will pay an interest rate
composed of the 28-day TIIE plus a spread.
The Ba1/A1.mx debt ratings assigned to the MXN5.5 billion enhanced
loan from Inbursa and the MXN750 million enhanced loan from
Santander reflect the underlying creditworthiness of the State of
Veracruz (Ba3/A3.mx, stable outlook), supported by the following
legal and credit enhancements embedded in the loans:
1. Validity of the legal authorization of the transaction, which
authorizes the trust to be used as a mechanism for debt service
payment.
2. Strong trust structure based on an irrevocable instruction to
the federal treasury regarding the transfer of rights and flows of
participation revenues to the trustee.
3. Solid debt service coverage ratios, under a Moody's base case
scenario estimated cash flows generate 2.0x and 1.8x debt service
coverage at the lowest point during the life of the loan for the
Inbursa and Santander loans respectively. Under a stress case
scenario, estimated cash flows provide 1.7x and 1.5x debt service
coverage, at the lowest point during the life of the loan, for the
Inbursa and Santander loans respectively.
4. Solid level of reserves within the INVEX trust for each loan
that represents 3.0x debt service coverage under a stress case
scenario and provides enough cushion against payment delays.
The Ba2/A2.mx ratings assigned to the MXN1.5 billion enhanced loan
from Interacciones and the MXN1.5 billion enhanced loan from
Multiva reflect the aforementioned enhancements, but lower debt
service coverage ratios:
Moderate debt service coverage ratios, under a Moody's base case
scenario estimated cash flows generate 1.5x and 1.2x and debt
service coverage at the lowest point during the life of the loan
for the Interacciones and Multiva loans respectively. Under a
stress case scenario, estimated cash flows provide 1.3x and 1.0x
debt service coverage, at the lowest point during the life of the
loan for the Interacciones and Multiva loans, respectively.
Solid level of reserves within the Invex trust for each loan that
represents 3.0x and 2.9x debt service coverage under a stress case
scenario for the Interacciones and Multiva loans, respectively and
provide enough cushion against payment delays.
What Could Change The Ratings Up/Down
Given the links between the loans and the credit quality of the
obligor, an upgrade of the State of Veracruz issuer ratings rating
would likely result in an upgrade of the ratings on the loans.
Conversely, a downgrade of the State of Veracruz issuer ratings
could also exert downward pressure on the debt ratings of these
loans. In addition, the ratings could face downward pressure if
debt service coverage levels fall materially below Moody's
expectations.
=====================
P U E R T O R I C O
=====================
COSTA DORADA: Has Until Sept. 15 to File Amended Plan Outline
-------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Puerto Rico extended
until Sept. 15, 2012, Costa Dorada Apartments Corp.'s time to file
a second amended plan of reorganization and an explanatory
disclosure statement.
The Court previously extended until Aug. 15, the Debtor's time to
file an amended plan. The Debtor explained, in its motion, that
it is still analyzing creditor PRLP 2011 Holdings, LLC's claim in
order to assess its adequacy and provide for an adequate
disclosure statement and a feasible plan for the benefit of all
parties in the case.
Additionally, the Debtor related that it is obtaining certain
recent appraisal reports made upon the Debtor's real properties by
secured creditor Scotiabank de Puerto Rico. The information is
crucial in providing adequate disclosure within the documents to
be filed, the Debtor said.
The Chapter 11 Plan
As reported in the Troubled Company Reporter on June 6, 2012, the
Debtor has submitted a First Amended Plan that provides that upon
confirmation, the Debtor will have sufficient funds to make all
payments then due. According to the Disclosure Statement, the
funds will be obtained from these sources:
1) sale of 15 apartment units in the project;
2) rent and regular operation of the other apartments as part
of the hotel facilities;
3) sale of the remnant land of 3.5 cdas located at State Road
466 Bajuras Ward in Isabela, Puerto Rico; and
4) rent and regular operation of the other apartments as part
of the Time Sharing (Vacation Plan) project.
A copy of the Amended Disclosure Statement is available for free
at http://bankrupt.com/misc/COSTA_DORADA_ds_amended.pdf
About Costa Dorada Apartments
Costa Dorada Apartments Corp., dba Villas De Costa Dorada, in
Isabela, Puerto Rico, filed for Chapter 11 bankruptcy (Bankr.
D.P.R. Case No. 11-03960) on May 10, 2011. The Debtor disclosed
$10.7 million in assets and $8.6 million in liabilities as of the
Chapter 11 filing. The Hon. Enrique S. Lamoutte Inclan, presides
over the case. The petition was signed by Carlos R. Fernandez
Rodriguez, its president. Wigberto Lugo Mender, Esq., at Lugo
Mender & Co., in Guaynabo, Puerto Rico, represents the Debtor as
counsel.
***********
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
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Information contained herein is obtained from sources believed to
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The TCR Latin America subscription rate is US$625 per half-year,
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contact Peter Chapman at 240/629-3300.
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