/raid1/www/Hosts/bankrupt/TCRLA_Public/121218.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
Tuesday, December 18, 2012, Vol. 13, No. 250
Headlines
A R G E N T I N A
BANCO AHORRO: S&P Affirms 'B' Global Scale Issuer Credit Rating
BANCO PATAGONIA: S&P Affirms 'B-' Counterparty Credit Rating
COMPANIA FINANCIERA: Moody's Rates US$250-Mil. MTN Program 'B2'
GOLDEN AMERICAS: S&P Affirms 'B-' CCR on Merger; Outlook Stable
GPAT COMPANIA: Moody's Assigns 'B1' Rating to ARS$200MM Issuance
* ARGENTINA: Ghana Ordered to Free Ship in Hedge Fund Dispute
B A H A M A S
BAICO: ECCU Starts First Phase of Policyholders Relief Program
B E R M U D A
BANK OF NT: Fitch Puts 'BB+' Viability Rating on Watch Negative
B R A Z I L
BANCO BMG: Moody's Cuts Standalone BFSR to 'E+'; Outlook Negative
DRIVER BRASIL: Moody's Assigns 'Ba2' Rating to Mezzanine Shares
FLEXTRONICS INT'L: Moody's Says Motorola Buyout No Rating Impact
PDG COMPANHIA: Moody's Cuts Rating on 15th Series Certs. to 'Ba3'
RB CAPITAL: Moody's Assigns 'Ba1' Rating to Real Estate Certs.
C A Y M A N I S L A N D S
AUTOPISTAS DEL NORDESTE: Fitch Affirms 'B' Long-Term Rating
GREAT GABLE OFFSHORE: Placed Under Voluntary Wind-Up
HYPER ENGINE: Placed Under Voluntary Wind-Up
ISLAND DRIVE: Commences Liquidation Proceedings
IVAN LIMITED: Placed Under Voluntary Wind-Up
NEW CHINA: Commences Liquidation Proceedings
NEWQUANT OFFSHORE I: Creditors' Proofs of Debt Due Dec. 10
M E X I C O
GRUMA SAB: Fitch Affirms 'BB' Rating on $300-Mil. Bond
ING BANK: Moody's Cuts Deposit Ratings to 'B3'; Outlook Stable
SANLUIS RASSINI: Moody's Assigns 'Ba3' Corp. Family Rating
X X X X X X X X
* Large Companies With Insolvent Balance Sheets
- - - - -
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A R G E N T I N A
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BANCO AHORRO: S&P Affirms 'B' Global Scale Issuer Credit Rating
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Standard & Poor's Ratings Services affirmed its 'B' long-term
global scale and 'mxBBB-/MxA-3' national scale issuer credit
ratings on Banco Ahorro Famsa S.A. Institucion de Banca Multiple
(BAF).
The rating on the bank's shareholder, Grupo Famsa, limits the
ratings on BAF because the bank is a captive operation closely
intertwined with the group. BAF's stand-alone credit profile
(SACP) is 'bb'. The outlook is stable.
"The stable outlook reflects that on Grupo Famsa. Due to BAF's
three-notch difference between its SACP and the group's credit
profile, we think a downgrade is unlikely unless we downgrade
Grupo Famsa. We could raise the rating if there is a positive
action on Grupo Famsa as well. The stable outlook on Grupo Famsa
incorporates our expectation that the company will continue to
improve its profitability measures, such as EBITDA margins to
17.5%-18.0% by 2015," S&P said.
"We could take a positive rating action if BAF's track record
remains favorable and its deposits consistently cover the group's
shortfalls under its high working capital requirements, and/or if
the company's EBITDA generation and profitability are beyond our
expectations. We could lower the ratings if group's liquidity
and/or financial flexibility deteriorate significantly, or if the
company takes on additional debt to fund its growth beyond what we
currently expect. This would mean a consistent total debt-to-
EBITDA ratio of more than 5.0x and FFO to debt of less than 15%,"
S&P said.
BANCO PATAGONIA: S&P Affirms 'B-' Counterparty Credit Rating
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Standard & Poor's Ratings Services affirmed its 'B-' counterparty
credit rating on Banco Patagonia S.A., and it has assigned a 'B'
short-term credit rating to the bank. The outlook remains
negative.
"The negative outlook on the bank reflects the sovereign rating
outlook on Argentina. If we downgrade Argentina, we could lower
the ratings on all Argentina-based financial institutions that we
rate at the same level as the sovereign. We rarely rate banks
above the sovereign rating because they're very likely to be
affected by changes in the national economy. Also, all financial
institutions operating in Argentina could face indirect negative
effects of a sovereign downgrade. We believe that a sovereign
downgrade is normally associated with, or could lead to, weaker
operating conditions for financial institutions, which would very
likely erode their creditworthiness," S&P said.
"A worsening external position, mostly likely from financial
outflows (perhaps combined with weakening terms of trade) or
additional policy actions that further diminish Argentina's growth
prospects could lead to a sovereign downgrade. On the other hand,
actions that restore investor confidence on medium-term prospects
for the economy (on the monetary or structural front), and thus
reduce uncertainty over its external liquidity position, could
lead us to revise the outlook to stable," S&P said.
COMPANIA FINANCIERA: Moody's Rates US$250-Mil. MTN Program 'B2'
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Moody's Investors Service has assigned a B2 global local currency
senior debt rating to the eighth expected issuance of Compania
Financiera Argentina S.A. (CFA) under its multi-currency US$ 250
million MTN program. The issuance is divided into two classes:
Class 1, from Ar$40 million which will be due in 270 days, and
Class 2, from Ar$80 million which will be due in 18 months. The
total amount of both classes must not exceed Ar$ 200 million. At
the same time, Moody's Latin America assigned Aa3.ar national
scale local currency debt ratings to both expected issuances.
The outlook on the entity's ratings is negative, except for the
entity's foreign currency deposits ratings and debt program, which
have stable outlook.
The following ratings were assigned to Compania Financiera
Argentina S.A.'s debt expected issuances:
Class 1: Ar$40 million senior unsecured debt issuance:
B2 Global Local Currency Debt Rating
Aa3.ar Argentina National Scale Local Currency Debt Rating
Class 2: Ar$80 million senior unsecured debt issuance:
B2 Global Local Currency Debt Rating
Aa3.ar Argentina National Scale Local Currency Debt Rating
Ratings Rationale
Moody's noted that the local currency senior unsecured debt rating
derives from CFA's B2 global local currency deposit rating and
that seniority was taken into consideration in the assignment of
the debt ratings.
Moody's National Scale Ratings (NSRs) are intended as relative
measures of creditworthiness among debt issues and issuers within
a country, enabling market participants to better differentiate
relative risks. NSRs differ from Moody's global scale ratings in
that they are not globally comparable with the full universe of
Moody's rated entities, but only with NSRs for other rated debt
issues and issuers within the same country. NSRs are designated by
a ".nn" country modifier signifying the relevant country, as in
".mx" for Mexico. For further information on Moody's approach to
national scale ratings, please refer to Moody's Rating Methodology
published in March 2011 entitled "Mapping Moody's National Scale
Ratings to Global Scale Ratings".
Compania Financiera Argentina S.A. is headquartered in Buenos
Aires, Argentina, and reported Ar$3.072 million of total assets
and Ar$912 million of shareholders' equity as of September 30,
2012.
GOLDEN AMERICAS: S&P Affirms 'B-' CCR on Merger; Outlook Stable
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Standard & Poor's Ratings Services affirmed its 'B-' corporate
credit and senior secured debt ratings on Cayman Islands-based
special-purpose vehicle Golden Americas Ltd. (GA). The outlook is
stable.
"Our ratings on GA reflect our assessment of the company's
business risk profile as 'fair', given GA's investment in
Colombia-based electric generation company Termobarranquilla S.A.
E.S.P. (TEBSA; not rated). The ratings also reflect a 'highly
leveraged' financial profile. GA's repayment capacity depends on
its ability to upstream funds from TEBSA. GA receives these funds
through management fees, which we view as having at least a
similar priority as TEBSA's senior debt; and through payments of
subordinated debt from TEBSA to Golden Gate Energy Investments
Ltd. (GG; not rated), which in turn go to GA. Because the flows of
subordinated debt from TEBSA, which cover 40% of debt service
until 2016, are a weaker source of cash flow, we consider GA's
creditworthiness weaker than TEBSA's. The rated debt at GA also
benefits from a debt service reserve account, which covers the
next two coupon payments," S&P said.
GPAT COMPANIA: Moody's Assigns 'B1' Rating to ARS$200MM Issuance
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Moody's Investors Service assigned a B1 global local-currency debt
rating to the expected eleventh issuance of GPAT Compania
Financiera (GPAT) Class A, up to the amount of AR$200 million
which will be due in 9 months, and Class B, up to the amount of
AR$200 million which will be due in 18 months. The total amount of
both classes must not exceed AR$200 million.
At the same time, Moody's Latin America assigned Aa2.ar national
scale local currency debt rating to GPAT's expected issuances.
The issuances are under an already rated program up to the amount
of AR$1,500 million.
The outlook on all ratings is negative, except for the entity's
foreign currency debt program which has stable outlook.
The following ratings were assigned to GPAT Compania Financiera
S.A.'s issuances:
Class A: AR$200 million senior unsecured debt issuance:
B1 Global Local Currency Debt Rating
Aa2.ar Argentina National Scale Local Currency Debt Rating
Class B: AR$200 million senior unsecured debt issuance:
B1 Global Local Currency Debt Rating
Aa2.ar Argentina National Scale Local Currency Debt Rating
Ratings Rationale
Moody's explained that the local currency senior unsecured debt
rating derives from GPAT's B1 global local currency issuer rating.
Moody's also noted that seniority was taken into consideration in
the assignment of the debt ratings.
GPAT Compania Financiera S.A. is headquartered in Buenos Aires,
Argentina, and reported Ar$ 1.483 million of total assets and Ar$
294 million of shareholders' equity as of September 30, 2012.
* ARGENTINA: Ghana Ordered to Free Ship in Hedge Fund Dispute
-------------------------------------------------------------
Jonathan J. Levin and Alex Cuadros at Bloomberg News reports that
The International Tribunal for the Law of the Sea said Ghana must
release an NML Capital Ltd, a Argentine naval ship, seized in a
dispute between the Latin American nation and a hedge fund that
said it's owed money over defaulted government bonds.
The International Tribunal for the Law of the Sea ordered the ARA
Libertad freed after the African country detained it on Oct. 2,
citing a court order obtained by NML Capital Ltd., which is run by
billionaire hedge fund investor Paul Singer's Elliott Management
Corp., according to Bloomberg News.
The report notes that Argentina and Ghana must bear their own
costs in the dispute, the Hamburg-based court said in a ruling.
Bloomberg News notes that NML and other investors who didn't
participate in debt swaps Argentina carried out after its 2001
default are seeking to recover the full value of the Argentine
securities.
About 93% of the defaulted bonds were restructured in 2005 and
2010, giving creditors about 30 cents on the dollar, Bloomberg
News relays. NML is separately fighting in a U.S. court for
repayment on the bonds, Bloomberg News says.
The Latin American nation will "keep defending itself from the
financial pirates," Argentina's Economy Minister Hernan Lorenzino
said in comments posted after the decision on his Twitter account,
Bloomberg News relays.
Bloomberg News notes that Argentina's President Cristina Fernandez
de Kirchner has vowed to never pay NML and other so-called
holdouts that she dubs "vulture funds," while continuing to
service its restructured debt.
A U.S. appeals court delayed a ruling by Judge Thomas Griesa that
had ordered Argentina to pay holdouts $1.3 billion by Dec. 15.
The court will hear oral arguments for the case on Feb. 27,
according to the Nov. 28 ruling.
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B A H A M A S
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BAICO: ECCU Starts First Phase of Policyholders Relief Program
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Caribbean360.com reports that after several years of waiting for
their pay day, some policyholders in the failed British American
Insurance Corporation (BAICO) are seeing financial light at the
end of the tunnel.
The Governments of the Eastern Caribbean Currency Union (ECCU)
have commenced Phase I of the Policyholders Relief Programme for
owners of traditional annuity insurance (FPA) policies and these
policyholders have started to receive a payment equivalent to the
amount of their policy balance as at Aug. 1, 2009, plus the amount
of any premiums that they have paid since that date, according to
Caribbean360.com.
However, according to a media release issued by the ECCU
governments, owners of BAICO Executive Flexible Premium Annuity
(EFPA) or Flexible Premium Annuity II (FPAII) policies are not
having such merry Christmas as their payment plans will roll out
from next year under Phases 2 and 3 of the program, the report
notes.
Caribbean360.com says that for the FPA policyholders, as a
condition of payment, they have had to sign an Application and
Release Form in which they give up all of their rights against
BAICO and other specified persons in respect of the FPA policy,
and their policy will be cancelled as at Aug. 1, 2009.
Policy owners eligible for immediate payments (those with balances
less than EC$30,000) have been able to go into their local BAICO
branch since the program started on December 3 in Antigua and
Barbuda to collect immediate payments, the report relays.
Caribbean360.com discloses that policyholders in Antigua and
Barbuda; Grenada; Dominica; St Vincent and the Grenadines; and St
Lucia have already collected their payments, while policyholders
in St Kitts and Nevis will be able to start collecting from
(December 14) until December 17, with Nevis only on December 15.
In Anguilla and Montserrat, due to the small numbers, policy
owners are being contacted directly to arrange their application
and subsequent cheque distribution, Caribbean360.com relates.
However, Caribbean360.com discloses that not all policy owners
have been able to receive an immediate payment, with only being
paid as part of the Deferred Payment group.
This group includes policy owners whose policy balances exceeded
EC$30,000 at Aug. 1, 2009, they will not receive payment until
around the first quarter 2013, the report notes. However, they
were still encouraged to apply now in order to ensure that their
applications would be finalized without delay once payments were
ready to be made, the report says.
BAICO policyholders who have EFPA and FPAII are slated to be
assisted in Phase 2 of the Program, currently planned for launch
during the first quarter of 2013, the report relays. The exact
timing will depend on when funds are received by the ECCU
Governments and operational arrangements can be implemented,
according to the release, the report adds.
About BAICO
British American Insurance Company is a Bahamian company, which is
owned by Trinidad-based parent CL Financial.
Casey McDonald, the British Virgin Islands liquidator for British
American Isle of Venice (BVI), Ltd, filed a Chapter 11 petition
(Bankr. S.D. Fla. Case No. 10-21627) on April 29, 2010. Mr.
McDonald is represented by Leyza F. Blanco, Esq., at Gray Robinson
in Miami, Fla. At the time of the filing, the liquidator
estimated British American Isle of Venice (BVI), Ltd's asset at
less than US$10 million and its debts at more than US$100 million.
Two affiliates -- British American Insurance Company Limited
(Bankr. S.D. Fla. Case No. 09-31881) and British American
Insurance Company Limited (Bankr. S.D. Fla. Case No. 09-35888) --
are also subject to the jurisdiction of the U.S. Bankruptcy Court.
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B E R M U D A
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BANK OF NT: Fitch Puts 'BB+' Viability Rating on Watch Negative
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Fitch Ratings-New York-14 December 2012: Fitch Ratings has
affirmed Bank of N.T. Butterfield & Son Limited's (BNTB) long-term
Issuer Default Ratings (IDR) at 'A-'. The Rating Outlook remains
Stable, reflecting the Stable Outlook on Bermuda's foreign
currency long-term IDR. Fitch has also placed the Viability Rating
(VR) of 'bb+' on Rating Watch Positive. A complete list of ratings
is provided at the end of this release.
RATING DRIVERS AND SENSITIVITIES - VRs and IDRs
The affirmation of BNTB's IDR reflects BNTB's Support Rating Floor
of 'A-' due to its systemic importance, and demonstrated support
from the Bermudian government given its guarantee on the principal
and interest payments of BNTB's outstanding preferred stock. Fitch
considers support from the Bermuda government to be extremely
high.
Although Fitch's view includes a strong probability of support in
determining BNTB's IDRs, these ratings could be adversely affected
if the willingness and/or capacity of the Bermudian government to
support BNTB in the event of need were to change.
BNTB's VR reflects its strong market position, liquid balance
sheet, good capital levels, and diversified revenue stream (with
fee based revenues representing almost 40% of total revenues),
offset by significant product concentration in residential
lending, geographic concentration in Bermuda and large exposures
in its commercial loan portfolio.
In placing the VR on Watch Positive, Fitch considered BNTB's
overall improving financial profile.
Fitch believes BNTB has returned to a sustainable level of
profitability after being recapitalized in 2010 following
significant losses in its investment securities portfolio.
Management has taken multiple strategic initiatives since the
recapitalization, including improvements in its risk management
profile, and more recently shifting its growth focus on expansion
in the UK and Guernsey. Fitch positively views the growth
strategy, which is targeted at lending, as well as fee-based
products particularly in private wealth and trust services, and
considers BNTB's risk management culture to be strong.
Although BNTB continues to face asset quality pressures,
specifically in its residential loan portfolio, Fitch expects net
losses to remain manageable. Fitch notes despite BNTB's non-
performing assets (NPAs; inclusive of accruing troubled debt
restructurings and foreclosed real estate) remain high at 5.06% as
of Sept. 30, 2012, annualized net charge-offs through the third
quarter of 2012 (3Q'12) remain relatively low at 18 basis points
(bps). Fitch also positively views a reduction in non-performing
loans, which have experienced a 37% decrease since 2009.
In resolving the Rating Watch on BNTB's VR, Fitch will closely
monitor asset quality and earnings trends over the near term.
Moderating trends in asset quality, including lower levels of NPAs
in absolute terms, would be viewed favorably and could lead to
upward momentum in the VR. Additionally, maintaining current
levels of return on assets (ROA) would also be viewed positively
by Fitch.
The company has also invested in its information technology
infrastructure which should provide operating efficiencies and
cost savings in future periods. Although execution of its
strategies is ongoing, Fitch believes these changes should result
in BNTB enhancing its interest and fee-based revenue streams from
other jurisdictions, and cost-saves.
Fitch would consider an upgrade of the VR if BNTB continues to
maintain ROA at roughly 75 bps in the short term, absolute levels
of NPAs continue to decline, or if the company exits or redeems
its government guaranteed preferred stock program while
maintaining strong capital levels. Conversely, a downgrade of the
VR could occur in the event of significant deterioration of
financial performance, a rise in NCOs due to asset quality
pressures, and an increase to the risk level of the balance sheet
mix.
RATING DRIVERS AND SENSITIVITIES - SUPPORT RATING
Fitch considers BNTB to be a systemically important institution to
the local Bermuda economy and as such considers the level of
support from the government to be extremely high. This support was
demonstrated by the governments guarantee on the principal and
interest payments of BNTB's outstanding preferred stock. Based on
the high support level, Fitch has assigned a support rating floor
of 'A-'.
SUBORDINATED DEBT AND OTHER HYBRID SECURITIES
Subordinated debt issued by BNTB is notched down from the VR, and
the rating of specific issues are typically sensitive to any
change in the bank's VR.
Preferred stock issued by BNTB is equalized with Bermuda's foreign
currency long-term IDR, reflecting the guarantee from the Bermuda
Government. Fitch has downgraded the preferred stock issuance to
'AA' from 'AA+' in conjunction with the downgrade of Bermuda's
foreign currency long-term IDR to 'AA' from 'AA+' (see release
'Fitch Downgrades Bermuda's Foreign Currency IDR to 'AA'; Outlook
Stable' June 26, 2012). BNTB's preferred stock rating is highly
sensitive to any changes in the presumed support from the Bermuda
Government. As such, any removal of the guarantee on the preferred
stock would lead to a multi-notch downgrade in the preferred
rating.
Fitch has taken the following rating actions:
Bank of N.T. Butterfield & Son
--Long-term IDR affirmed at 'A-'; Outlook Stable;
--Short-term IDR affirmed at 'F1';
--Viability Rating of 'bb+' placed Rating Watch Positive;
--Preferred stock downgraded to 'AA' from 'AA+';
--Subordinated debt affirmed at 'BB';
--Support rating affirmed at '1';
--Support Floor affirmed at 'A-'.
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B R A Z I L
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BANCO BMG: Moody's Cuts Standalone BFSR to 'E+'; Outlook Negative
-----------------------------------------------------------------
Moody's Investors Service has downgraded Banco BMG S.A. (BMG)'s
standalone bank financial strength rating (BFSR) to E+ from D-,
and lowered its baseline credit assessment to b1, from ba3. The
long-term global local and foreign currency deposit ratings were
downgraded to B1 from Ba3, and the foreign currency senior and
subordinated debt ratings were downgraded to B1 and B2, from Ba3
and B1, respectively. Moody's also lowered the long and short-term
Brazilian national scale deposit ratings to Baa3.br and BR-3 from
A3.br and BR-2, respectively. On the global scale, the short-term
ratings remain unchanged.
The outlook on the deposit and debt ratings remains negative,
while the outlook on the E+ BFSR (which also maps to either a b2
or b3 baseline credit assessment) is now stable.
The following ratings assigned to Banco BMG were downgraded:
Bank financial strength rating to E+ from D-; stable outlook
Long-term global local currency deposit rating to B1 from Ba3;
negative outlook
Long-term foreign currency deposit rating to B1 from Ba3;
negative outlook
Long-term foreign currency senior unsecured debt rating to B1
from Ba3; negative outlook
Foreign currency senior unsecured debt rating assigned to GMTN
program to (P)B1 from (P)Ba3; negative outlook
Foreign currency subordinated debt rating to B2 from B1; negative
outlook
Long-term Brazilian national scale deposit rating to Baa3.br from
A3.br
Short-term Brazilian national scale deposit rating to BR-3 from
BR-2
Ratings Rationale
The downgrade of BMG's ratings reflects the weakening of its
credit fundamentals, as indicated by its increasingly concentrated
funding profile and limited sources of alternate liquidity, as
well as the prospects of continued poor core earnings generation
that will limit internal capital replenishment, and thus the
bank's loan growth. These negative trends are no longer consistent
with a Ba rating.
Moody's noted that BMG's liability structure has become
increasingly reliant on secured funding sources, including credit
assignment agreements and securitization structures, which were a
sizable 61% of total funding as of September 2012, as well as
insured time deposits and direct financing from the deposit
insurance fund (Fundo Garantidor de Credito, FGC, unrated), which
accounted for about 14% of total funding. This trend reflects
declining investor and depositor confidence that exposes the bank
to increasingly higher funding costs and jeopardizes the bank's
liquidity, although management changes announced in November could
minimize negative impacts to the bank's reputation following the
indictment of its shareholders in October, said Moody's.
Moody's acknowledges that the joint venture recently announced
with Itau Unibanco - expected to become operational in the coming
days - will likely benefit the bank's funding structure and future
earnings generation. However, this arrangement also implies
greater concentration of funding from two main sources, namely
Itau Unibanco and the FGC. As a result, the bank's plans to
diversify into other consumer and commercial lending products to
its business appear less feasible at this time.
The rating action also incorporates the rating agency's
expectation of continued poor core earnings generation over the
coming quarters, as loan origination remains modest and
competition by large banks pressures margins. Moreover, the change
in gains on loan sales accounting will continue to lead to net
losses, thus further limiting the bank's ability to replenish
capital.
The negative outlook on BMG's ratings incorporates Moody's views
that net losses will continue to drag down capital, while limited
funding alternatives will constrain BMG's ability to grow its on-
balance sheet loan book and diversify its operations.
The principal methodology used in this rating was Moody's
Consolidated Global Bank Rating Methodology published in June
2012.
The last rating action on Banco BMG occurred on July 13, 2012,
when Moody's affirmed BMG's ratings following the announcement of
the joint-venture with Itau Unibanco Group. All ratings remained
unchanged and with negative outlook.
Banco BMG S.A. is headquartered in Belo Horizonte, Brazil, and had
consolidated assets of R$23.3 billion (US$11.5 billion) and equity
of R$3 billion (US$1.5 billion) as of September 30, 2012.
DRIVER BRASIL: Moody's Assigns 'Ba2' Rating to Mezzanine Shares
---------------------------------------------------------------
Moody's America Latina has assigned definitve ratings of Aaa.br
(sf) (Brazilian National Scale) and of Baa2 (sf) (Global Scale,
Local Currency) to the senior shares and of A1.br (sf) (Brazilian
National Scale) and of Ba2 (sf) (Global Scale, Local Currency) to
the mezzanine shares issued by Driver Brasil One Banco Volkswagen
Fundo de Investimento em Direitos Creditorios Financiamento de
Veiculos (Driver Brasil One FIDC or the Issuer), a securitization
backed by a pool of auto loans originated by Banco Volkswagen S.A.
Driver Brasil One FIDC is the first securitization of vehicle
loans sponsored by Banco Volkswagen S.A. and rated by Moody's.
Issuer: Driver Brasil One FIDC
Senior Shares - Aaa.br (sf) (National Scale) & Baa2 (sf) (Global
Scale, Local Currency)
Mezzanine Shares - A1.br (sf) (National Scale) & Ba2 (sf) (Global
Scale, Local Currency)
Ratings Rationale
The ratings are based on the following factors, among others:
- The initial 12.5% credit enhancement in the form of over-
collateralization (OC) for the Senior Shares and 7% for the
Mezzanine Shares in the form of overcollateralization. After
closing, the OC must reach the 15.5% Target Senior OC Ratio and
8.5% Target OC Mezzanine Ratio to allow dividend payments to
equity.
- Asset performance triggers that further increase the Senior and
Mezzanine Target OC Ratio.
- Static nature of transaction with no revolving period and no
additional on-going purchases of assets after the transaction's
closing. Principal and Interest on the Senior and Mezzanine
Shares will be paid starting month one of transaction.
- Good credit quality of the static target pool earmarked for
sale. The assets backing Driver Brasil One FIDC are vehicle
loans originated by Banco Volkswagen. The securitized pool is
constituted only by light vehicles; loans for trucks and heavy
vehicles are not allowed. As of September 28, 2012, as per
Banco Bradesco quarterly report filled with CVM, the pool was
highly diversified; the top 20 Borrowers represent only 0.17%
of pool balance. The weighted average remaining term was of
only 35 months.
- The role of a highly rated third party, Banco Bradesco and its
subsidiary, BEM DTVM, as custodian bank, payment bank and
trustee of the transaction. Transaction benefits from
Bradesco's operational quality;
The senior and mezzanine shares accrue a floating-rate interest of
the CDI Rate (Brazilian Interbank Rate) plus a fixed spread
equivalent to 1.25% and 2.05% respectively, with daily accrual,
and their final maturity will take place 60 months after closing.
The maturity could be extended by the trustee, on a discretionary
basis, for a maximum period of 12 additional payment dates counted
from the maturity date of the credit right with the latest
maturity date. Issuance of senior and mezzanine shares occurred on
July 17, 2012; their initial amounts were BRL 875 million and BRL
55 million. Payments to subordinated shares are permitted on a
monthly basis as long as (a) Target Senior OC Ratio, the Senior OC
Floor, the Target Mezzanine OC Ratio and the Mezzanine OC Floor
are maintained and (b) no evaluation or early liquidation event is
triggered.
Interest Rate Swaps
The fund has entered into two interest rate swaps, hedging the
full notional amount of the senior and mezzanine shares
respectively. The swap counterparty is Itau Unibanco S.A. rated A3
/Aaa.br bank deposit ratings. In Moody's view, the swaps
adequately hedged the interest rate risk arising from the fixed
rate assets and floating rate liabilities. Furthermore, the
notional of the swaps will mirror the notional of actual
outstanding balance on the notes.
Early Swap Termination
Risk may arise from the early termination of the swaps given i.) a
positive market value of the swap to the fund upon swap
counterparty default or ii.) open interest rate risk position to
the fund should the swap be early terminated. Moody's notes that
the senior and mezzanine shares benefit from Itau Unibanco acting
as a swap counterparty provider. Please see Moody's publication "
Approach to Assessing Linkage to Swap Counterparties in Structured
Finance Cashflow Transactions" dated July 2, 2012.
The transaction structure includes certain revision events. Should
a revision event occur, a shareholders meeting is called;
shareholders may decide to place the fund into early liquidation.
Key revision event triggers include:
* Downgrade of the Senior Shares by 2 or more notches;
* Resignation of the administrator or custodian;
* Failure of administrator or the servicer to carry out its
duties;
* Misrepresentation or warranty made by the seller;
* Occurrence of an adverse tax event;
* Failure to replenish the cash reserve for two consecutive times
or three alternate times during a 12 month period
* Acquisition of ineligible credit rights
* Incorrect amortization of the shares
* Breach of the Net Worth Ratio for two consecutive times or
three alternate times during a 12 month period
Key eligibility criteria and conditions of sale are:
* Each of the loan receivables will mature before the final term
of the fund.
* Loans to a single borrower may not exceed the total nominal
amount of BRL 100,000.
* No purchased loan receivable is overdue.
* No loans were originated to finance buses, trucks or
motorcycles.
* Loans are either fully amortizing loans with equal installments
or loans with substantially equal installments.
* The credit rights are legal, valid, binding and enforceable and
are not impaired by set-off rights.
* The seller may assign the credit rights free from claims or
rights of third parties.
* The credit right is current.
* The credit rights had an original term between 5 and 60 months.
* The credit rights will not mature earlier than 3 or later than
60 months after the purchase date.
* On the purchase date, at least 2 installments have been paid.
* No insolvency proceedings are initiated against any of the
borrowers.
Banco Bradesco S.A. acts as Master Servicer (custodiante) of the
transaction as well as payment bank. Its responsibilities include,
among other duties, verifying that all receivables purchased by
the fund meet certain eligibility criteria, monitoring the early
amortization triggers, in addition to managing all of the Issuer's
daily financial and operating activities.
BEM DTVM S.A. (Banco Bradesco Group) is the trustee. BRAM DTVM
(Banco Bradesco Group) is the fund manager.
Banco Volkswagen (not rated by Moody's) is the servicer. It is an
integral part of Volkswagen Financial Services AG (rated A3 and P-
2), in turn owned by Volkswagen Group AG (rated A3 and P-2).
In assigning the ratings to this transaction, Moody's evaluated
historical performance data from January 1, 2005 and ending
September 30, 2011. Moody's key ratings-model assumptions for this
transaction include various performance statistics, including log
normal estimate of the annual gross loss rate with mean loss 5%
and a coefficient of variation of 50%. Other model input
assumptions include a constant prepayment rate of 15% per annum.
The discount rate used for modeling was 14.98% per annum.
Moody's has considered how the cash flows generated by the
collateral are allocated to the parties within the transaction,
and the extent to which various structural features of the
transaction might themselves provide additional protection to
investors, or act as a source of risk. In addition, Moody's has
analyzed the strength of triggers to reduce the exposure of the
portfolio to the originator/servicer bankruptcy.
To determine the rating assigned to the Shares, Moody's has used
an expected loss methodology that reflects the probability of
default for each series of Shares times the severity of the loss
expected for the Shares. In order to allocate losses to the Shares
in accordance with their priority of payment and relative size,
Moody's has used a cash-flow model (ABSCORE) that reproduces many
deal-specific characteristics: the main input parameters of the
model are described above. Weighting each loss scenario's severity
result on the Shares with its probability of occurrence, the model
has calculated the expected loss level for each series of Shares
as well as the expected average life. Moody's model then compares
the quantitative values to the Moody's Idealized Expected Loss
table for each tranche.
Parameter Sensitivities provide a quantitative, model-indicated
calculation of the number of notches that a Moody's-rated
structured finance security may vary if certain input parameters
used in the initial rating process differed. The analysis assumes
that the deal has not aged. It is not intended to measure how the
rating of the security might migrate over time, but rather, how
the initial rating of the security might differ as certain key
parameters vary.
Parameter sensitivities for this transaction have been calculated
in the following manner: Moody's tested nine scenarios derived
from the combination of mean loss: 5% (base case), 7.5% (base case
+ 2.5%), 10% (base case + 5%). and coefficient of variation rate:
45% (base case), 50% (base case + 5%), 55% (base case + 10%). The
5% / 45% scenario would represent the base case assumptions used
in the initial rating process.
At the time the rating was assigned, the model output indicated
that Senior Shares would have achieved a B3 global rating model
output if mean loss was as high as 10% with a coefficient of
variation of 60%. Under the same assumptions, the Mezzanine Shares
would have achieved Caa2 global rating model output.
Key uncertainties relate to future asset performance under a
severe stress scenario involving diminished economic growth and a
sharp rise in unemployment.
The principal methodology used in rating the shares was "Moody's
Approach to Rating European Auto ABS: More Rubber Set to Hit
European Roads" published in November 2002. Other methodologies
and factors that may have been considered in the process of rating
this issuer can also be found on Moody's website.
FLEXTRONICS INT'L: Moody's Says Motorola Buyout No Rating Impact
----------------------------------------------------------------
Moody's Investors Service said that Flextronics International
Ltd.'s Ba1 rating is not impacted by the company's announcement
that it agreed to acquire Motorola Mobility LLC's manufacturing
operations in Tianjin, China, and will also assume the management
and operation of its Jaguariuna, Brazil, facility.
PDG COMPANHIA: Moody's Cuts Rating on 15th Series Certs. to 'Ba3'
-----------------------------------------------------------------
Moody's America Latina downgraded to Ba3 from Ba2 (global scale,
local currency) and to A3.br from Aa3.br (national scale) the 15th
series of the 1st issuance of real estate certificates (CRI or
certificates) issued by PDG Companhia Securitizadora. This
concludes the review for downgrade that was announced on November
22, 2012.
Issuer: PDG Companhia Securitizadora
15th Series / 1st Issuance of Certificates: downgrade to Ba3 from
Ba2 (global scale, local currency), and to A3.br from Aa3.br
(national scale); the last rating action occurred on Nov 22, 2012,
when the Ba2/Aa3.br ratings were placed on review for downgrade.
Ratings Rationale
The conclusion of the review of real estate certificates follows
the conclusion of the rating review of PDG Realty S.A.
Empreendimentos e Participacoes (PDG Realty) finalized on December
13, 2012. Moody's downgraded the corporate family ratings and the
ratings of the CCB (cedula de credito banc rio) that backs the
15th series of CRIs, both to Ba3 / A3.br, negative outlook, from
Ba2 / Aa3.br. The downgrade of PDG ratings to Ba3 reflects the
significant deterioration of the company's credit metrics over the
last twelve months and the uncertainty regarding the pace of
recovery. Please refer to the press release titled "Moody's
downgrades PDG's ratings to Ba3, outlook negative".
Moody's views the certificates as being full pass-through
securities of obligations and guarantees of the underlying CCB.
Given that the ratings of the 15th series of certificates are
primarily based on PDG Realty's ability to make payments under the
bank loan agreement (CCB), any changes to the CCB ratings will
lead to a change in the ratings assigned to the certificates. The
current ratings of the CCB are Ba3 / A3.br, negative outlook.
Headquartered in Rio de Janeiro, PDG Realty is one of largest
homebuilders in Brazil operating through its wholly owned
subsidiaries, Goldfarb, CHL, Agre and minority investments in
other companies. The company's portfolio of products is diverse
including projects in several Brazilian states. During the last 12
month ended September 2012, PDG generated net revenues of BRL 5.8
billion and net losses of BRL 410million.
PDG Realty holds a near 100% stake in PDG Companhia
Securitizadora, a fully controlled subsidiary incorporated in
2009.
The principal methodology used in rating the certificates was
Global Homebuilding Industry rating methodology published in March
2009.
RB CAPITAL: Moody's Assigns 'Ba1' Rating to Real Estate Certs.
--------------------------------------------------------------
Moody's America Latina has assigned definitive ratings of Ba1
(Global Scale, Local Currency) and of Aa2.br (National Scale) to
the 72nd and 73rd Series of real estate certificates issued by RB
Capital Companhia de Securitiza‡ao S.A. (RB Capital, the Issuer or
the Securitizadora).
Issuer / Securitizadora: RB Capital Companhia de Securitizacao
S.A.
72nd and 73rd Series / 1st Issuance: BRL 500,100,000 certificates
rated Ba1 / Aa2.br
Ratings Rationale
The ratings of the certificates are based, among others, on the
following factors:
- The ability and willingness of BR Malls Participacoes S.A. (BR
Malls), which has a senior unsecured rating of Ba1 (Global Scale,
Local Currency) and Aa2.br (National Scale), to make any payments
due under the guarantee. The irrevocable and unconditional
guarantee issued by BR Malls in favor of the Issuer and
consequently to the investors of the CRI, obligating itself as
guarantor and principal payer, together with the debtor, for full
and timely payments of the real estate credits ultimately backing
the CRI;
- The structure of the transaction whereby payments under the
guaranteed Real Estate Credits match payments under the CRI;
- Legal and structural features, including (i) mandatory
repurchase events defined in transaction documents which obligate
BR Malls to repurchase automatically any outstanding credit rights
and (ii) non-automatic and automatic early redemption events.
The assigned ratings reflect the guarantee provided by BR Malls
S.A and are based on BR Malls' ability to make payments under the
guarantee, as reflected by its senior unsecured rating. Any future
change in the senior unsecured rating of BR Malls will lead to a
change in the ratings of the CRI. In assigning the ratings,
Moody's has not given credit to the pledged real estate backing
the certificates, or the pledged real estate receivables (pledged
tenancy revenues).
The CRI are backed by real estate credits rights derived from
purchase and sale agreements of a Real Estate Asset ("Real Estate
Credits") and benefit from a (i) guarantee issued by BR Malls in
favor of the Issuer, (ii) a pledge of the real estate asset
(aliena‡ao fiduci ria) of 100% of Fashion Mall stake in Niteroi
Plaza Shopping ("Real Estate Asset") in favor of the Issuer and
(iii) a pledge of rental income of 80% of cash flows derived from
tenancy agreements and parking lot income of the Real Estate
Asset, including the Expansion currently under construction, and a
pledge of the escrow account where rental payments are made
(cessao fiduci ria).
The key steps to the transaction are:
1) Fashion Mall S.A. (Buyer or Debtor), BR Malls Participacoes
S.A. (Seller of Real Estate Credits) and Cofac (Seller of Real
Estate Asset) enter into a Purchase and Sale Agreement of Real
Estate Asset;
2) BR Malls sells the Real Estate Credits, from the Purchase and
Sale Agreement, to RB Capital Securitizadora S.A. (Issuer) by
means of the Real Estate Credits Sale Agreement. As a guarantee of
full and timely payment of all principal and accessory obligations
from the Real Estate Credits that back the CRI, BR Malls issues a
guarantee in favor of the Issuer and, consequently, in favor of
the investors of the CRI ("Guarantee"), obliging itself as
guarantor and principal payer, jointly responsible with the
Debtor, for the payments of all monies from the Credit Rights. In
addition to the guarantee issued by BR Malls, and to further
guarantee the sale of the Real Estate Credits that back the CRI,
the following additional collateral package back the CRI,
including (i) real estate pledge (aliena‡ao fiduci ria), in favor
of the Issuer, of the Real Estate Asset and (ii) receivables
pledge (cessao fiduci ria), in favor of the Issuer, of 80% of the
cash flows from the revenues generated by the Real Estate Asset
(including monthly rental payments made by stores, revenues from
merchandising, as well as 80% of revenues generated by the parking
lot of the Real Estate Asset);
3) The issuer issues via CETIP, the 72nd and 73rd Series CRI
(together the CRI) backed by the CCI. BR Malls previously issues
Cedulas de Credito Imobili rio (CCI) representative of the Real
Estate Credits;
4) Investors purchase the CRI;
5) The issuer pays the Sale/Purchase Price (in respect of the Real
Estate Credits) to BR Malls;
6) Fashion Mall (Debtor) makes payments of the Real Estate Credits
directly to the Issuer;
7) The Issuer institutes a fiduciary regime over the Real Estate
Credits, the Guarantee, the Real Estate Asset Pledge and the Real
Estate Receivables Pledge and which together form the Segregated
Assets destined for the repayment of the CRI and related expenses.
The Segregated Assets do not commingle with the assets of the
Issuer.
BR Malls is the largest owner and manager of shopping centers in
Brazil. The company has grown significantly to R$ 15.2 billion in
gross assets at 2Q12 from BRL 2.8 billion at YE07. BR Malls
currently owns interests in 48 malls plus it has six projects in
development. The malls are geographically diversified across the
country and diversified across consumer income groups. Another
credit strength is the portfolio's high occupancy of 97.6% and its
solid operating margins at 76% as of 2Q12. The company is well
positioned to benefit from the positive retail fundamentals in
Brazil stemming from the limited supply of shopping malls and a
growing middle class with growing disposable income. The ratings
are further supported by the company's demonstrated access to
capital and manageable debt maturity schedule. Offsetting these
strengths are the risks associated with an aggressive growth
strategy, the greater risks and volatility associated with its
floating rate debt, and the limitations associated with jointly
owned assets.
==========================
C A Y M A N I S L A N D S
==========================
AUTOPISTAS DEL NORDESTE: Fitch Affirms 'B' Long-Term Rating
-----------------------------------------------------------
Fitch Ratings has revised the Rating Outlook on Autopistas del
Nordeste (Cayman) Ltd's (AdN) $162 million senior secured notes to
Stable from Positive and affirmed the long-term rating at 'B'.
The Outlook revision results from Fitch's recent Outlook revision
to the Dominican Republic's Sovereign rating.
Key Rating Drivers
-- Strong support from Government: The government pledged a
Minimum Revenue Guarantee (MRG) throughout the life of the
notes;
-- Financial guarantee: The notes are protected by a partial
political risk guarantee (PPRG) provided by a reputable
multilateral organization;
-- Limited competition: Autopista del Nordeste provides the
shortest access from Santo Domingo to Samana, reducing the
travel distance significantly;
-- Predictable operating costs: A fixed operation and
maintenance agreement with experienced operator considerably
reduces cost escalations;
-- Substantial counterparty risk: The legal framework and
business environment in the Dominican Republic are fragile,
leaving investors' rights with limited protection;
-- Low traffic performance: The road is currently in a ramp-up
period. Traffic performance has been below projections for
this period and highly depends on MRG support.
What Could Trigger a Rating Action
-- Government defaults on honoring the MRG, and/or a rating
action on the Sovereign rating;
-- Significant and continued improvement to traffic could allow
the project to become self-sustained.
Security
The notes are secured by all revenues received by the company, the
rights of the concession, contracts and all issued and outstanding
shares of the company pledged to the Trustee.
Credit Update
On Dec. 11, 2012, Fitch revised the Rating Outlook on the
Dominican Republic's rating to Stable from Positive. The agency
also affirmed the long-term foreign and local currency Issuer
Default Ratings (IDRs) at 'B'; and affirmed the Dominican
Republic's Country Ceiling at 'B+'. The Outlook revision on the
Dominican Republic has triggered an Outlook revision on the notes
issued by AdN. AdN's ability to meet its financial obligations
significantly depends on the government's ability and willingness
to timely honor its MRG payment, given that traffic performance
has historically been below initial projections.
The government's MRG, designed to cover the costs associated with
O&M and to service the debt issued for the construction of the
road, ensures the timely payment of the road's financial
obligations. Fitch believes the level of revenues guaranteed
provides adequate flexibility for the project to face unexpected
increases in costs and to service debt on a timely basis.
The Congress of the Dominican Republic previously approved the
Memorandum of Completion of the Stage of Design Revision and
Traffic Demand Study, and the Memorandum of Completion of the
Stage of Realizing the Financial Closing. Congressional approval
of the memorandums formalized the obligation of the Dominican
government towards the project, as stated in the Concession
Contract. Fitch is of the view that this explicit financial
obligation by the government largely reduces revenue risk.
Additionally, AdN has in place a partial political risk guarantee
provided by the Multilateral Investment Guarantee Agency (MIGA).
In the event that the government fails to meet timely payments
under the MRG, the MIGA policy will be triggered. Expected
disputes over a breach of contract will be solved through the
American Arbitration Association in New York courts.
Under the MIGA guarantee, MIGA would make a compensation payment
of an amount up to 51% of any scheduled interest or principal of
the outstanding debt that is the result of political events
including breach of contract.
The toll road, completed in 2009, extends along 106 kilometers
(approximately 66 miles), connects Santo Domingo with the northern
province of Samana, and includes three toll plazas. In comparison
to alternative roads in the region, AdN considerably reduces the
travel distance between Santo Domingo and Samana.
Autopistas del Nordeste (Cayman) Limited is the issuer, created
under the laws of the Cayman Islands, and is an exempted limited
liability company owned by a consortium composed of: Organizacion
de Ingenieria Internacional SA, Odinsa Holding Inc., CI Grodco S
en CA Ingenieros Civiles, Grodco Panama, Consorcio Remix,
Caribbean Basin Construction Corporation Ltd.
GREAT GABLE OFFSHORE: Placed Under Voluntary Wind-Up
----------------------------------------------------
On Sept. 29, 2012, the sole shareholder of Great Gable Offshore
Fund, Ltd. resolved to voluntarily wind up the company's
operations.
Only creditors who were able to file their proofs of debt by
Dec. 3, 2012, will be included in the company's dividend
distribution.
The company's liquidator is:
Appleby Trust (Cayman) Ltd.
P.O. Box 1350 Clifton House
75 Fort Street, George Town
Grand Cayman KY1-1108
Cayman Islands
HYPER ENGINE: Placed Under Voluntary Wind-Up
--------------------------------------------
On Oct. 22, 2012, the shareholders of Hyper Engine Limited
resolved to voluntarily wind up the company's operations.
Only creditors who were able to file their proofs of debt by
Dec. 5, 2012, will be included in the company's dividend
distribution.
The company's liquidator is:
Buchanan Limited
c/o Allison Kelly
Telephone: (345) 949-0355
Facsimile: (345)949-0360
P.O. Box 1170, George Town Grand Cayman KY1-1102
Cayman Islands
ISLAND DRIVE: Commences Liquidation Proceedings
-----------------------------------------------
On Oct. 22, 2012, the sole shareholder of Island Drive Offshore,
Ltd. resolved to voluntarily liquidate the company's business.
Only creditors who were able to file their proofs of debt by
Dec. 5, 2012, will be included in the company's dividend
distribution.
The company's liquidator is:
Intertrust Corporate Services (Cayman) Limited
87 Mary Street, George Town
Grand Cayman KY1-9002
Cayman Islands
c/o Jennifer Chailler
Telephone: (345) 814 6847
IVAN LIMITED: Placed Under Voluntary Wind-Up
--------------------------------------------
On Oct. 22, 2012, the shareholders of Ivan Limited resolved to
voluntarily wind up the company's operations.
Only creditors who were able to file their proofs of debt by
Dec. 5, 2012, will be included in the company's dividend
distribution.
The company's liquidator is:
Buchanan Limited
c/o Allison Kelly
Telephone: (345) 949-0355
Facsimile: (345)949-0360
P.O. Box 1170, George Town Grand Cayman KY1-1102
Cayman Islands
NEW CHINA: Commences Liquidation Proceedings
--------------------------------------------
On Oct. 19, 2012, the members of New China Land Group Limited
resolved to voluntarily liquidate the company's business.
Creditors are required to file their proofs of debt to be included
in the company's dividend distribution.
The company's liquidator is:
Emil Nguy
3311-3313 Two IFC, 8 Finance Street, Central
NEWQUANT OFFSHORE I: Creditors' Proofs of Debt Due Dec. 10
----------------------------------------------------------
The creditors of Newquant Offshore Ltd I are required to file
their proofs of debt by Dec. 10, 2012, to be included in the
company's dividend distribution.
The company commenced wind-up proceedings on Oct. 22, 2012.
The company's liquidator is:
Lisa Clarke
c/o Jane Fleming or Lisa Clarke
Telephone: (345) 945-2187
Facsimile: (345) 945-2197
PO Box 30464 Grand Cayman KY1-1202
Cayman Islands
===========
M E X I C O
===========
GRUMA SAB: Fitch Affirms 'BB' Rating on $300-Mil. Bond
------------------------------------------------------
Fitch Ratings has affirmed the ratings of Gruma, S.A.B. de C.V. as
follows:
-- Long-term Foreign Currency Issuer Default Rating (IDR) at
'BB';
-- Long-term Local Currency IDR at 'BB';
-- USD300 million perpetual bonds at 'BB'.
The Rating Outlook is revised to Stable from Positive.
The Stable Outlook reflects the expected leveraging effect on
Gruma's capital structure that will result from the debt-funded
acquisition of the 23.16% equity stake that the Archer Daniels
Midland Company has in Gruma and other ownership in certain
subsidiaries. The incremental debt for USD450 million maturing in
one year will increase the company's gross leverage measured as
total debt-to-EBITDA to approximately 3.3x by the end of 2013.
Fitch expects that the company will continue with its commitment
to gradually improve its leverage in the medium to long term.
On a pro forma basis considering the loan of USD450 million,
Gruma's total debt for year-end 2012 would reach close to USD1.5
billion and the gross leverage ratio should be approximately 3.6x.
Excluding the Venezuela operations, Fitch estimates that total
debt to EBITDA would be 4.2x. As of Sept. 30, 2012, the company
had a total debt to EBITDA ratio of 2.4x, lower than the 2.7x at
year-end 2011.
Fitch takes into account that Gruma will refinance its USD450
million credit during the first half of 2013, improving its debt
profile and financial flexibility. The company's liquidity
position is adequate, with cash and marketable securities as of
Sept.30, 2012 of MXN1.9 billion, which combined with annual funds
from operations (FFO) generation of MXN2.6 billion and available
committed credit lines, sufficiently covers its short-term debt
obligations of MXN2 billion. The company does not face any
significant debt maturity until 2016.
Fitch expects that Gruma will use any excess of cash generation to
reduce leverage. FFO is expected to maintain its trend in 2013,
reaching levels above MXN3 billion which combined with the
company's strategy to reduce capital expenditures below historical
levels in the following years and no dividend policy, will
contribute to free cash flow to be used towards debt reduction.
Fitch notes that in 2013, Gruma's strategy will be oriented
towards organic growth and profitable operations, resulting in a
possible slight decrease in sales and volume growth coming from
the optimization of SKUs, distribution routes and some facilities.
In addition, profitability should remain relatively stable as
higher pricing, hedging of corn and wheat prices by Gruma
Corporation, and productivity initiatives would partially offset
volatility associated with its main raw materials. The company's
consolidated net sales continued their upward trend in 2012,
supported by higher volume and better pricing, while profitability
improved despite higher commodity prices. During the nine months
ending Sept. 30, 2012, consolidated net sales increased 17% driven
mainly by the volume growth coming from the integration of the
acquisitions in 2011 and better pricing. In terms of
profitability, EBITDA margins improved slightly to 8.3% from 8.1%
for the same period.
Gruma's ratings are supported by its solid business profile as one
of the largest producers of corn flour and tortillas in the world,
strong brand equity, and good operating performance. The ratings
also incorporate the company's geographic diversification and hard
currency revenue with nearly 42% of its total sales generated by
Gruma Corporation with has operations in the U.S. and Europe. The
company's ratings reflect its exposure to the volatility in prices
of its main raw materials, corn and wheat, and the uncertainty
derived from the nationalization of the Venezuelan operations.
What Could Trigger A Rating Action
Positive rating actions may result from a combination of debt
reduction, stronger operating results, and stable cash flow
generation that leads to a sustained improvement in the company's
gross leverage ratio to below 2.5x. Conversely, negative rating
actions could occur if the company's gross leverage permanently
remains beyond the pro forma levels including the USD450 million
of incremental debt, as a result of operational factors or adverse
market conditions.
ING BANK: Moody's Cuts Deposit Ratings to 'B3'; Outlook Stable
--------------------------------------------------------------
Moody's de Mexico downgraded ING Bank (Mexico), S.A., Institucion
de Banca Multiple's (ING Mexico) long term global local and
foreign currency deposit ratings to B3, from Ba3, long term
Mexican National Scale deposit rating to Ba3.mx, from Baa1.mx, and
short term Mexican National Scale deposit rating to MX-4, from MX-
3. ING Mexico's standalone credit assessment was lowered to b3,
from b1.
At the same time, Moody's de Mexico downgraded ING (Mexico), S.A.
de C.V., Casa de Bolsa, ING Grupo Financiero's (ING Casa de Bolsa)
long term global local currency issuer rating to B3, from Ba3,
long term Mexican National Scale issuer rating to Ba3.mx, from
Baa1.mx, and short term Mexican National Scale issuer rating to
MX-4, from MX-3.
Moody's changed the outlook of all ratings to stable, from
negative.
The following ratings were downgraded and their outlooks changed
to stable, from negative:
ING Mexico
Long term global local currency deposit rating to B3, from Ba3
Long term foreign currency deposit rating to B3, from Ba3
Long term Mexican National Scale deposit rating to Ba3.mx, from
Baa1.mx
Short term Mexican National Scale deposit rating to MX-4, from
MX-3
ING Casa de Bolsa
Long term global local currency issuer rating to B3, from Ba3
Long term Mexican National Scale issuer rating to Ba3.mx, from
Baa1.mx
Short term Mexican National Scale issuer rating to MX-4, from MX-
3
Rating Rationale
In lowering ING Mexico's standalone credit assessment to b3, from
b1, Moody's incorporated the ongoing reduction in business volumes
and thus assets and earnings, as well as continued losses which
derive from the orderly winding out process of the bank's Mexican
operations, in line with the strategic repositioning of its parent
bank's assets globally. ING Mexico's B3 deposit ratings
nonetheless incorporate Moody's expectations that the bank will
maintain sufficient capitalization levels in order to continue to
orderly repay liabilities, as operations continue to be wound
down.
Moody's no longer incorporates any probability of parental
support, given that the Mexican operation is not considered
strategic for ING Bank N.V. of the Netherlands, nor part of the
group's long term plans. Therefore, deposit ratings are now at the
same level as the bank's standalone credit assessment of b3.
Moody's downgraded ING Casa de Bolsa's issuer rating to B3, in
line with the downgrade to B3 of its support provider, ING Mexico.
Moody's National Scale Ratings (NSRs) are intended as relative
measures of creditworthiness among debt issues and issuers within
a country, enabling market participants to better differentiate
relative risks. NSRs differ from Moody's global scale ratings in
that they are not globally comparable with the full universe of
Moody's rated entities, but only with NSRs for other rated debt
issues and issuers within the same country. NSRs are designated by
a ".nn" country modifier signifying the relevant country, as in
".mx" for Mexico. For further information on Moody's approach to
national scale ratings, please refer to Moody's Rating Methodology
published in October 2012 entitled "Mapping Moody's National Scale
Ratings to Global Scale Ratings".
The methodologies used in these ratings were Moody's Consolidated
Global Bank Rating Methodology published in June 2012 and Global
Securities Industry Methodology published in December 2006.
The last rating action on ING Mexico was on 28 June 2012 when
Moody's downgraded its global local and foreign currency deposit
ratings to Ba3, from Baa3. The last rating action on ING Casa de
Bolsa was on 28 June 2012 when Moody's downgraded its global local
currency issuer rating to Ba3, from Baa3.
The period of time covered in the financial information used to
determine ING Bank's ratings is between 31 December 2007 and 30
September 2012 (source: Moody's, Issuer's financial statements,
CNBV and Banxico). The period of time covered in the financial
information used to determine ING Casa de Bolsa's ratings is
between 31 December 2008 and 30 September 2012 (source: Moody's,
Issuer's financial statements, CNBV and Banxico).
The sources and items of information used to determine ING Bank
and ING Casa de Bolsa's ratings include 2011 and 2012 interim
financial statements (source: ING Grupo Financiero (Mexico) S.A.
de C.V.); year-end 2011 audited financial statements (source: ING
Grupo Financiero, audited by Mancera, S.C. Member of Ernst & Young
Global); financial statements and information on market position
(source: CNBV); regulatory capital information (source: Banxico).
SANLUIS RASSINI: Moody's Assigns 'Ba3' Corp. Family Rating
----------------------------------------------------------
Moody's Investors Service assigned a Ba3 corporate family rating
to Sanluis Rassini, S.A. de C.V.'s (Sanluis) The rating outlook is
stable.
Rating Rationale
The Ba3 rating is supported by the company's leading market
position for leaf spring suspension components in the NAFTA region
and Brazil, the recovery of its operating performance and credit
metrics over the last two years, and solid near term performance
prospects as various supply agreements for new original equipment
manufacturer (OEM) platforms are coming online in 2013 and 2014.
Credit positives also include the limited steel price exposure
because of cost pass-through contracts established with major
OEMs, the benefits of fixed price arrangements for key OEM
platforms, and the largely dollar based revenue stream, which
provides a natural hedge for dollar costs and liabilities.
Partially mitigating these positives incorporated in the rating
are the highly competitive environment in the automotive supplier
industry; the company's small size compared with other industry
peers; its limited business diversification, evidenced by a narrow
product focus on brakes and leaf and coil spring suspension
components; a modest geographic diversification; and a still large
exposure to the Big 3 U.S. OEMs (Ford, GM and Chrysler) which
accounts for 68% of revenues.
The stable rating outlook reflects Moody's expectation that the
company will be able to achieve its projected growth in its
regions of operation, defend its dominant market positions for
leaf spring suspensions going forward, and maintain stable credit
metrics.
Sanluis is the market leader in leaf spring suspension components
for light and commercial vehicles in the NAFTA region and Brazil.
In the coil spring and brakes' businesses the company estimates it
ranks #4 and competes with larger companies such as Akebono, TRW,
Meritor, Mubea, ThyssenKrupp, and Brembo. The company has a
relatively competitive cost base which should be able to absorb
some shocks and help protect market shares. The company benefits
from a high proportion of variable costs, low transport cost vis-
…-vis Asian and European competitors, attractive Mexican wages,
steel pass-through arrangements with the major OEMs, and the
partial elimination of productivity discounts with OEMs for all
its new supply contracts.
Since the last economic crisis and Sanluis's parent company's
(Sanluis Co-Inter, S.A.) emergence from its reorganization
proceeding in 2011, credit metrics have improved substantially as
the company's operation has normalized. The company has
renegotiated all of its customer agreements to include steel price
pass-through arrangements which should allow the company to
maintain its margins. Furthermore, the visibility of the company's
near term earnings is high given the new contracts it has entered
into with the OEMs for new model platforms. Moody's adjusted
debt/EBITDA was 2.7x as of September 30, 2012 (down from levels of
7.6x as of December 2008 and 4.8x as of December 2009) and
adjusted EBIT/Interest expense was 2.6x in LTM 3Q12 (compared to
levels below 1x in 2008 and 2009).
Liquidity is adequate, given Moody's expectations for positive
free cash flow generation and a projected USD41 million of cash
reserves by year-end 2012 as compared with its near-term debt
amortization profile with USD12 million due in 2012 and USD25
million due in 2013. Moody's notes that the company faces a
significant debt maturity of USD110 million in 2014. Moody's
expects that the company can cover this maturity with its own cash
generation. However, a deterioration in its cash generation due to
adverse operating environment may force the company to refinance
this debt in the market..
A rating upgrade is unlikely over the near to medium term because
of the company's limited scale and diversification. Longer term,
upward ratings pressure could build once the company materially
increase its scale and expand its footprint while maintaining
strong credit metrics for the rating category.
The rating could be downgraded if the company's margins are
affected for example due to a change in the pass-through steel
price agreements with OEMs or if there is an adverse change in the
company's market position. A deterioration in the company's credit
metrics such that debt/EBITDA increase above 4.0x with
EBIT/interest expense declining below 2.0x or if the company's
free cash flow becomes negative could also pressure the rating.
The principal methodology used in rating Sanluis Rassini, S.A. de
C.V. was the Global Automotive Supplier Industry Methodology
published in January 2009.
Sanluis Rassini, S.A. de C.V., headquartered in Mexico City,
Mexico, is the leading manufacturer of leaf spring suspension
components for light trucks and commercial vehicles in the NAFTA
region and Brazil. The company is the main leaf spring suspension
components supplier for GM, Ford and Chrysler light trucks in the
NAFTA region and for a number of heavy truck manufacturers in
Brazil. The company also operates a coil spring suspensions
business, which accounts for about 15% of sales, and brake rotors
which account for 17% of sales. Sanluis Rassini is the main
operating subsidiary of Sanluis Corporacion, S.A.B. de C.V., a
privately-controlled holding company based in Mexico City, Mexico,
which trades on the Mexican stock exchange. For the 12 months
ended September 30, 2012, Sanluis Corporacion's sales reached
MXN9,573 million.
The date of the last Credit Rating Action was September 20, 2012.
===============
X X X X X X X X
===============
* Large Companies With Insolvent Balance Sheets
-----------------------------------------------
Total
Total Shareholders
Assets Equity
Company Ticker (US$MM) (US$MM)
------- ------ --------- ------------
ARGENTINA
-----------
SOC COMERCIAL PL SCDPF US 222756992 -310302930
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RIMET REEM3 BZ 103098361 -185417655
RIMET REEMON BZ 103098361 -185417655
RIMET-PREF REEM4 BZ 103098361 -185417655
RIMET-PREF REEMPN BZ 103098361 -185417655
SANSUY SNSY3 BZ 183826187 -133218258
SANSUY SA SNSYON BZ 183826187 -133218258
SANSUY-PREF A SNSY5 BZ 183826187 -133218258
SANSUY SA-PREF A SNSYAN BZ 183826187 -133218258
SANSUY-PREF B SNSY6 BZ 183826187 -133218258
SANSUY SA-PREF B SNSYBN BZ 183826187 -133218258
BOTUCATU TEXTIL STRP3 BZ 27663604.9 -7174512.03
STAROUP SA STARON BZ 27663604.9 -7174512.03
BOTUCATU-PREF STRP4 BZ 27663604.9 -7174512.03
STAROUP SA-PREF STARPN BZ 27663604.9 -7174512.03
TEKA TEKA3 BZ 341291511 -388484677
TEKA TEKAON BZ 341291511 -388484677
TEKA-PREF TEKA4 BZ 341291511 -388484677
TEKA-PREF TEKAPN BZ 341291511 -388484677
TEKA-ADR TKTPY US 341291511 -388484677
TEKA-ADR TKTQY US 341291511 -388484677
F GUIMARAES FGUI3 BZ 11016542.1 -151840377
FERREIRA GUIMARA FGUION BZ 11016542.1 -151840377
F GUIMARAES-PREF FGUI4 BZ 11016542.1 -151840377
FERREIRA GUIM-PR FGUIPN BZ 11016542.1 -151840377
VARIG SA VAGV3 BZ 966298048 -4695211008
VARIG SA VARGON BZ 966298048 -4695211008
VARIG SA-PREF VAGV4 BZ 966298048 -4695211008
VARIG SA-PREF VARGPN BZ 966298048 -4695211008
BATTISTELLA BTTL3 BZ 251786497 -39723897.3
BATTISTELLA-PREF BTTL4 BZ 251786497 -39723897.3
SAUIPE SA PSEGON BZ 15164420.8 -2756081.99
SAUIPE PSEG3 BZ 15164420.8 -2756081.99
SAUIPE SA-PREF PSEGPN BZ 15164420.8 -2756081.99
SAUIPE-PREF PSEG4 BZ 15164420.8 -2756081.99
CIA PETROLIFERA MRLM3B BZ 377602195 -3014291.72
CIA PETROLIF-PRF MRLM4B BZ 377602195 -3014291.72
CIA PETROLIFERA 1CPMON BZ 377602195 -3014291.72
CIA PETROLIF-PRF 1CPMPN BZ 377602195 -3014291.72
LATTENO FOOD COR LATF US 14423532 -3506007
VARIG PART EM TR VPTA3 BZ 49432124.2 -399290396
VARIG PART EM-PR VPTA4 BZ 49432124.2 -399290396
VARIG PART EM SE VPSC3 BZ 83017828.6 -495721700
COLOMBIA
---------
LA POLAR SA NUEVAPOL CI 605994833 -543186477
PUYEHUE RIGHT PUYEHUOS CI 24251713.9 -3390038.99
LA POLAR-RT LAPOLARO CI 605994833 -543186477
LA POLAR-RT LAPOLAOS CI 605994833 -543186477
LA POLAR SA LAPOLAR CI 605994833 -543186477
PUYEHUE PUYEH CI 24251713.9 -3390038.99
***********
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 * * *