/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/121226.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 Wednesday, December 26, 2012, Vol. 13, No. 255 Headlines A R G E N T I N A ALTO PARANA: Moody's Maintains 'B1' Corporate Family Rating * ARGENTINA: Holders of Bonds Seek Documents From Lawyers B A R B A D O S * BARBADOS: Moody's Cuts Ratings to 'Ba1'; Outlook Negative C A Y M A N I S L A N D S BELVEDERE SOUTH EAST: Placed Under Voluntary Wind-Up DAMPIER INTERNATIONAL: Commences Liquidation Proceedings DAMPIER MASTER: Commences Liquidation Proceedings FAV LIMITED: Placed Under Voluntary Wind-Up FIVE OCEANS: Commences Liquidation Proceedings HBS-SITO UKRAINE: Placed Under Voluntary Wind-Up LARU LIMITED: Placed Under Voluntary Wind-Up C H I L E AUTOMOTORES GILDEMEISTER: Moody's Cuts CFR to Ba2; Outlook Stable C O L O M B I A BANCOLOMBIA: To Buy Banks in Guatemala for $216 Million BANCOLOMBIA: Fitch Affirms 'BB+' Support Rating Floor H A I T I * HAITI: To Invest $17.25MM in Programs With IDB Support M E X I C O CENTRAIS ELECTRICAS: S&P Affirms 'D' Corporate Credit Rating SANLUS RASSINI: Fitch Withdraws 'B+' Rating on $250MM Sr. Notes SATELITES MEXICANOS: Moody's Cuts CFR to 'Caa1'; Outlook Neg. - - - - - ================= A R G E N T I N A ================= ALTO PARANA: Moody's Maintains 'B1' Corporate Family Rating ----------------------------------------------------------- Moody's Investors Service placed the Baa2 senior unsecured ratings of Celulosa Arauco y Constitucion S.A.'s (Arauco) on review for downgrade. The Baa2 rated notes of Arauco's Argentinean subsidiary Alto Parana were also placed on review for downgrade, as these notes are guaranteed by Arauco. Alto Parana's B1 global local currency corporate family rating and the Aaa.ar national scale rating remain unchanged. On Review for Downgrade: Issuer: Celulosa Arauco y Constitucion S.A. Senior Unsecured Regular Bond/Debenture, Placed on Review for Downgrade, currently Baa2 Issuer: Alto Parana SA Senior Unsecured Regular Bond/Debenture, Placed on Review for Downgrade, currently Baa2 Outlook Actions: Issuer: Celulosa Arauco y Constitucion S.A. Outlook, Changed To Rating Under Review From Negative Ratings Rationale The review for downgrade was prompted by the recent deterioration in company's performance, and specifically, increase in debt leverage to levels that are not consistent with current rating. The company's financial debt increased by approximately US$1.3 billion over the past twelve months, as the company raised approximately US$500 million in bonds and bank loans (net of paydowns), consolidated approximately US$185 million in debt in Flakeboard acquisition, and increased use of short-term pre-export financing. At the same time, the company's EBITDA deteriorated, largely due to significant deterioration in pulp prices over the past twelve months. Moody's believes that in the near term pulp prices will remain low, due to additional pulp capacity coming online in Latin America in 2013-2014 (4.3 million tons). That said, absent significant further deterioration in pulp prices, the company's metrics should improve in 2013 and 2014, as the joint project with Stora Enso in Uruguay nears completion, capital expenditures decrease, new projects finalized in 2012 (including new Particleboard and MDF lines, and acquisitions like Flakeboard) contribute more incremental EBITDA in 2013, and the debt balances are reduced. Moody's review will focus on the company's expected operating performance in light of the continued weak pulp prices, as well as its funding requirements and its ability to pare down debt to levels more commensurate with its rating. * ARGENTINA: Holders of Bonds Seek Documents From Lawyers --------------------------------------------------------- Edvard Pettersson at Bloomberg News reports that holders of Argentina's defaulted bonds filed a motion in federal court in New York to compel the nation's lawyers to produce documents on Argentina's intentions about paying holders of exchange bonds without making payments to the defaulted bond holders. =============== B A R B A D O S =============== * BARBADOS: Moody's Cuts Ratings to 'Ba1'; Outlook Negative ----------------------------------------------------------- Moody's Investors Service has downgraded the Government of Barbados' foreign and local currency bond ratings to Ba1 from Baa3. The outlook remains negative. The rating action was driven by two key factors: 1) The country's continuing lackluster economic performance 2) ongoing deterioration in the government's debt metrics. Barbados's economy grew by just 0.6% in 2011 and 0.2% in the first nine months of 2012, well below expectations. Over the past ten years, Barbados has grown at a compound average annual rate of just 1.2%, among the slowest rates for countries rated by Moody's. While tourism arrivals rebounded strongly in 2011, returning to 2008 levels (and just 1% shy of their 2007 peak), this was driven in part by heavy discounting and tourism expenditures continued to decline to just 80% of 2007 levels. Furthermore, arrivals have started to decline again in 2012, falling 5% in the first ten months of the year. Unemployment now exceeds 12%. Moody's believes that the country's growth prospects remain very limited due to its deteriorating competitiveness and declining productivity coupled with heavy dependence on tourism, particularly from the United Kingdom and the United States. Given the prospects for continued low economic growth in those countries, discretionary spending on travel is likely to remain subdued. In addition, Barbados' off-shore business sector, its second most important industry, also faces greater competition and is coming under increasing pressure from changes in tax laws in the U.S., Canada, and the U.K. In response to the country's poor economic performance, the government loosened its fiscal consolidation targets last November, pushing back the deadline for achieving a balanced budget by two years to the fiscal year ending March 31 2017. While the fiscal deficit of 4.7% was smaller than expected for the fiscal year ending March 31, 2012, it remained quite large and it widened in the first six months of the current fiscal year to 5.9% (annualized). Debt/GDP equaled 80% as of March 31 this year (net of holdings of government paper by Barbados' National Insurance Scheme totaling an additional 30% of GDP), a ratio generally reached only by much wealthier countries with considerably larger economies, and it is projected to reach 83% by next March, up from 56% in 2009. Interest expense now consumes more than 20% of the government's revenues, significantly limiting its budgetary flexibility. As a result, the government strategy of gradual fiscal consolidation relies upon optimistic growth forecasts, very tight control over expenditures that will be difficult to achieve, and continued high inflation -- which does not bode well for the country's competitiveness. While the worst appears to be behind Barbados both in terms of fiscal deficits and economic deterioration, Moody's anticipates that the government's deficits will remain large for the next few years and its debt levels will continue to rise, albeit at a slowing pace. Even if the country is able to consolidate its finances and stabilize its debt metrics, they are unlikely to improve meaningfully for the foreseeable future given its poor economic prospects. Consequently, Barbados will have considerably less flexibility to respond to economic shocks in the future than it did in the past, particularly given its fixed exchange rate which significantly constrains the government's capacity to pursue a counter-cyclical monetary policy. Notwithstanding the rating action, Barbados continues to demonstrate certain key strengths that support its rating at the Ba1 level. It has one of the highest levels of GDP/capita relative to Ba peers and it continues to benefit from a strong reputation as a tourist destination. It also boasts strong public institutions and a stable political system supported by significant policy consensus. In addition, the government's debt structure is characterized by a well-termed out maturity profile and a high proportion of domestic currency debt - the government benefits from a dependable local creditor base. This limits refinancing and market access risk, though the capacity of the domestic market to absorb additional issuance is limited in Moody's view. Finally, the banking system remains sound thanks in large part to the strong presence of Canadian-owned banks. Moody's has also revised Barbados' local currency bond and deposit ceilings to Baa1, its long-term foreign currency bond and deposit ceilings to Baa2 and Ba2 respectively, and its short-term foreign currency deposit ceiling to NP. The negative outlook considers that economic performance is likely to remain weak; that it will be progressively more difficult for the government to consolidate its finances given an increasingly rigid budget structure; and that debt metrics will continue to rise and financial flexibility to decline as a result. While access to a stable source of funding reduces roll-over risk, it does not ensure debt sustainability and it therefore remains crucial that the sovereign bring down its debt ratios in order to preserve creditworthiness. However, the government faces difficult choices in terms of stewardship of the economy: in the absence of significant corrective measures, debt metrics will continue to rise, and if the government does take such measures, it risks putting the economy back into recession. On the other hand, many of the proposals to boost economic growth carry the risk of continued deterioration of the government's financial position, at least in the near term. The outlook also reflects rising pressure on the country's foreign currency reserves, which continue to decline despite a reduction in the current account deficit, though Moody's believes they remain adequate for the time being. The rating will face further downward pressure unless the government is able to successfully navigate the current situation such that a clearly visible and easily achievable path to stabilizing debt metrics is established within the next 12-18 months, in which case the outlook could be revised to stable. The rating could also be downgraded if pressures on the currency peg mount significantly. Ratings Rationale The principal methodology used in this rating was Sovereign Bond Methodology published in September 2008. ========================== C A Y M A N I S L A N D S ========================== BELVEDERE SOUTH EAST: Placed Under Voluntary Wind-Up ---------------------------------------------------- On Oct. 24, 2012, the sole shareholder of Belvedere South East Asia Investments Limited resolved to voluntarily wind up the company's operations. Only creditors who were able to file their proofs of debt by Nov. 16, 2012, will be included in the company's dividend distribution. The company's liquidators are: Rankine McMillan Emily Anne Tibbetts 62 Forum Lane, 2nd Floor, Camana Bay Grand Cayman KY1-1004 Cayman Islands DAMPIER INTERNATIONAL: Commences Liquidation Proceedings -------------------------------------------------------- On Oct. 23, 2012, the sole shareholder of Dampier International Fund 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: Ian D. Stokoe c/o Devina Patel Telephone: (345) 914 8739 Facsimile: (345) 945 4237 P.O. Box 258 Grand Cayman KY1-1104 Cayman Islands DAMPIER MASTER: Commences Liquidation Proceedings ------------------------------------------------- On Oct. 23, 2012, the sole shareholder of Dampier Master Fund 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: Ian D. Stokoe c/o Devina Patel Telephone: (345) 914 8739 Facsimile: (345) 945 4237 P.O. Box 258 Grand Cayman KY1-1104 Cayman Islands FAV LIMITED: Placed Under Voluntary Wind-Up ------------------------------------------- At an extraordinary general meeting held on Oct. 24, 2012, the shareholders of Fav 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 Cayman Islands KY1-1102 FIVE OCEANS: Commences Liquidation Proceedings ---------------------------------------------- On Oct. 16, 2012, the sole shareholder of Five Oceans (Global) Fund 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 HBS-SITO UKRAINE: Placed Under Voluntary Wind-Up -------------------------------------------------- HBS-Sito Ukraine Fund Ltd. commenced wind-up proceedings. Only creditors who were able to file their proofs of debt by Nov. 30, 2012, will be included in the company's dividend distribution. The company's liquidator is: Alric Lindsay Telephone: (345)-926-1688 e-mail: info@lindsay.ky P.O. Box 11371 Grand Cayman KY1-1008 Cayman Islands LARU LIMITED: Placed Under Voluntary Wind-Up -------------------------------------------- On Oct. 23, 2012, the sole shareholder of Laru Limited resolved to voluntarily wind up the company's operations. Only creditors who were able to file their proofs of debt by Nov. 21, 2012, will be included in the company's dividend distribution. The company's liquidator is: Eagle Holdings Ltd. c/o Barclays Private Bank & Trust (Cayman) Limited FirstCaribbean House, 4th Floor P.O. Box 487 Grand Cayman KY1-1106 Cayman Islands Telephone: 345 949-7128 ========= C H I L E ========= AUTOMOTORES GILDEMEISTER: Moody's Cuts CFR to Ba2; Outlook Stable ----------------------------------------------------------------- Moody's Investors Service has downgraded Automotores Gildemeister S.A. (Gildemeister)'s corporate family rating and its US$400 million senior unsecured notes due 2021 to Ba2 from Ba1. The outlook is stable. Ratings downgraded: Issuer: Automotores Gildemeister S.A. - Corporate Family Rating: to Ba2 from Ba1 (global scale) - US$400 million Senior Unsecured Notes due 2021: to Ba2 from Ba1 (foreign currency) Ratings Rationale The downgrade to Ba2 was triggered by Gildemeister's higher leverage as a result of its more ambitious growth strategy with higher capital expenditures that are being funded with debt. As a result, Gildmeister's leverage, as defined by Moody's and on a Total Debt to EBITDA basis, is likely to remain at its current 4.0x level, which is more commensurate with the Ba2 level. The downgrade also reflects Moody's expectation that free cash flow will remain largely negative as the company has embarked on a large capex program to expand its network dealership. After strong passenger and light commercial vehicle sales during 2010 (+67% year-over-year) and 2011 (+21%), the Chilean market started to soften during 2012. As of November, sales are only 1% up in comparison to the same period of 2011, according to data published by ANAC, the Chilean Automobile Association. The weaker performance has negatively affected Gildemeister's operating margins and market share as the company has not been able to pass through increasing costs to the final consumers during times of softening demand and increasing competition. Gildemeister's market share dropped slightly from 13% in 1Q12 to 12.5% in 3Q12. In the same time period, Gildemeister's market share in Peru also dropped from 17.8% in 1Q12 to 16.5% in 3Q12. Although the Peruvian automotive market remains robust with passenger and light commercial vehicle sales up 30% year-to-date October, according to ARAPER, ANAC's Peruvian counterpart, Gildemeister's sales have not been able to follow the same pace as the market, which explains the slight loss of market share in the last few quarters. Meanwhile, the company has been impacted by higher costs which are pressuring its EBITDA margins. Therefore, as a result of the company's growth strategy and planned entry into the Brazilian market, which will gradually improve margins over time, Moody's expects Gildemeister's EBITDA margin to level off at around the 10% mark, going forward. The company has expanded its network in Chile and Peru and has started to develop its franchise dealership in Brazil, where it plans to sell approximately 3,000 vehicles of its newest acquired Mahindra brand during 2013. At the same time the expansion plan is positive from the scale and geographic diversification point of view, there are high execution risks as the company plans to spend over US$400 million during 2013-2017 cycle, of which 57% will be in Chile, 29% in Peru and 14% in Brazil. Year-to-date September 2012, Gildemeister's US$85 million capital expenditures have focused on the construction of new dealerships, expansion of its spare parts facility and the building of a new headquarters building in Santiago, Chile. Consequently, leverage measured by gross adjusted debt to EBITDA reached 4.0x (3.5x in 2011 and 3.3x in 2010), a level considered high for a Ba1 rating category. At the end of the 3Q12, Gildmeister's cash position was Chilean Pesos 20.9 billion, covering 55% of its next 12 months of debt maturities (Chilean Pesos 38.2 billion). With increasing capital expenditures and Moody's expectation that free cash flow will remain negative, liquidity as it currently stands is likely to remain tight and reliant on external sources to fund its growth plans. The stable outlook reflects Moody's expectation that Gildemeister will be able to continue to benefit from the attractive medium- term fundamentals of the Chilean and Peruvian automotive retail sector, maintain reasonably stable EBITDA margin of around 9-10% and keep adequate leverage vis-�-vis its growth plans that include a larger capex program than before. The stable outlook also considers that Gildemeister will prudently manage dividends and intercompany loans in support of a comfortable liquidity position and that there will have no material changes in its long-standing relationship with Hyundai. Although unlikely in the near to-medium-term, due to the current higher leverage and ambitious growth plans, the ratings or outlook could face upward pressure, if Gildemeister's adjusted debt to EBITDA were to remain sustainably below 3.5x, if free cash flow were to be maintained at positive levels and if the company is successful in achieving greater brand diversification. An upgrade would also require Gildemeister to further improve its corporate governance standards in areas such as an implementation of an independent fiscal committee and written public financial policies. Gildemeister's ratings or outlook could come under downward pressure if adjusted debt to EBITDA rises above 4.5x and adjusted EBIT to interest falls below 3.0x, both on a sustainable basis. The ratings or outlook could also be downgraded in case its agreement with Hyundai were to be unfavorably altered or if liquidity were to deteriorate significantly. Structurally, a substantial increase in secured debt could also lead to a downgrade of the Ba2 rating of the US$400 million senior unsecured bonds. The principal methodology used in rating Gildemeister was the Global Automotive Retailer Industry Methodology published in December 2009. Gildemeister S.A., headquartered in Santiago, Chile, is one of the largest importers and distributors in Chile and Peru operating a network of company-owned and franchised vehicle dealerships. Its principal car brand is Hyundai for which it is the sole importer in both of its markets. During the last twelve months ended September 30, 2012, Gildemeister reported consolidated net revenues of Chilean Pesos 714 billion (approximately US$1.44 billion converted by the average exchange rate). =============== C O L O M B I A =============== BANCOLOMBIA: To Buy Banks in Guatemala for $216 Million ------------------------------------------------------- Dan Molinski at Dow Jones Newswires reports that the Panama affiliate of Bancolombia SA has agreed to pay $216 million for a 40% stake in Grupo Agromercantil Holding, which owns Guatemala's Banco Agromercantil bank and other financial institutions. In a statement on the website of Colombia's financial regulatory agency, Bancolombia said the deal is subject to regulatory approval in Colombia, Panama and Guatemala, according to Dow Jones Newswires. The report relates that while the deal would only give Bancolombia Panama a minority stake in Grupo Agromercantil, a Panama-based firm, Bancolombia said it plans to boost that to a controlling stake in the medium term. Bancolombia said the Agromercantil holding firm's total assets are $2.23 billion, the report notes. BANCOLOMBIA: Fitch Affirms 'BB+' Support Rating Floor ----------------------------------------------------- Following the announcement of an agreement to acquire up to 75% of Banco Agromercantil (BAM, Guatemala), Fitch Ratings has today affirmed Bancolombia's Viability Rating (VR) at 'bbb' and its Issuer Default Rating (IDR) at 'BBB'. The Rating Outlook is Stable. Fitch has also affirmed the VR and IDRs of Bancolombia Panama. Bancolombia announced on Dec. 18 that it would acquire 40% of the holding company of Banco Agromercantil (BAM) for $216 million. The bank has agreed to acquire up to 75% of the financial group over seven years. The total assets to be acquired (after getting a controlling stake) amount to about $2.3 billlion and the transaction will be closed through Bancolombia Panama (BP), a wholly owned subsidiary of Bancolombia. The acquisition is a new step in Bancolombia's expansion into the region and well in line with the company's policy of acquiring banks with significant market share, consistent performance and adequate management. Given the modest size of the transaction for Bancolombia -- the bank has $51.2 billlion assets, $6.2 billlion equity at September 2012 -- the financial impact for the bank is quite limited. Furthermore, the bank will not immediately take control of BAM and future integration risk is mitigated by Bancolombia's extensive and successful experience in M&A, including the acquisition of Banco Agricola (El Salvador) in 2007. According to Fitch's initial calculations, should the transaction be closed during 1Q13 (i.e. if Bancolombia takes control of 75% of BAM), Bancolombia's Fitch core capital ratio would decline by about 110-150bp but remain in the 11%-12% range and continue to compare well to that of similarly rated peers; profitability would barely be affected. For Bancolombia Panama, the transaction would mean (again if it were to close during 1Q13) a setback in the improvement of its tangible capital ratio bringing it back to the levels of early 2012, in the 6.5%-7% range, also aligned with the trend of banks with similar VR. Banco Agromercantil is a mid-sized bank oriented to the corporate segment and enjoying a 7% market share by assets in Guatemala which is seen as a prime target market for Bancolombia in Central America. The bank has recently strengthened its capital, improved its asset quality and sustained a consistent performance within a relatively stable economic background. In Fitch's opinion, the acquisition will consolidate Bancolombia's competitive position in the region and has the potential to contribute to its growth and performance in the coming years. Bancolombia's VR is underpinned by its sound franchise, solid balance sheet, consistent performance, robust asset quality and reserves, ample deposit base and access to funding, and positive economic environment and prospects. Fitch's view of Bancolombia's creditworthiness is tempered by its heightened competitive environment and the execution risk that any merger or acquisition entails. Given Bancolombia's systemic importance, it is likely to receive support from the sovereign should it be required. Colombia's ability to provide such support is reflected in its sovereign rating ('BBB-'/Outlook Stable) and underpins Bancolombia's support rating and support rating floor. Bancolombia Panama's IDR reflects the support it would receive from its parent given its importance to Bancolombia's business and strategy in the region. Bancolombia Panama's VR is underpinned by its high efficiency, improved diversification, sound performance, improving asset quality, adequate reserves, diversified funding and sound liquidity. Bancolombia Panama's VR is limited by its relatively lower but improving capital. In the medium term, Bancolombia's IDRs and viability ratings would be upgraded if the bank is able to sustain its performance while maintaining its sound balance sheet, including a non-eventful integration of Banco Agromercantil. The ratings would be pressured downward if asset quality deteriorates beyond reasonable levels, performance declines significantly, and/or the bank's capital/reserves cushion weakens. Bancolombia Panama's IDR's would move in line with those of its parent while its VR would benefit from stronger capital levels. A dismal performance that would erode its capital/reserve cushion would pressure its VR downwards. Fitch has affirmed Bancolombia's ratings as follows: -- Long-term foreign currency Issuer Default Rating (IDR) at 'BBB'; Outlook Stable; -- Short-term foreign currency IDR at 'F2'; -- Long-term local currency IDR at 'BBB'; Outlook Stable; -- Short-term local currency IDR at 'F2'; -- Viability rating at 'bbb'; -- Support rating at '3'; -- Support rating floor at 'BB+'; -- Senior unsecured debt at 'BBB'; -- Subordinated debt at 'BBB-'; -- Long term national scale rating at 'AAA(Col)'; -- Short term local national scale at 'F1+(Col)'. Fitch has affirmed Bancolombia Panama's ratings as follows: -- Long-term foreign currency Issuer Default Rating (IDR) at 'BBB'; Outlook Stable; -- Short-term foreign currency IDR at 'F2'; -- Viability rating at 'bb'; -- Support rating at '2'; -- Long Term Deposits at 'BBB'. -- Short Term deposits at 'F2'. ========= H A I T I ========= * HAITI: To Invest $17.25MM in Programs With IDB Support -------------------------------------------------------- Haiti will invest $17.25 million in programs to promote the development of micro-, small, and medium-size enterprises, and support the launch of leasing services to stimulate economic growth and generate sustainable employment, the Inter-American Development Bank (IDB) announced today. One of the programs will expand a pilot project for sustainable textile production in priority economic areas. The program will include the use of a business incubator and the creation of "microparks" that foster micro-, small, and medium-size enterprises linked to industry, tourism, and agribusiness value chains. Through the program, the business incubator is expected to support 56 new companies by providing technical, administrative, and financial support in the form of seed capital to implement medium- and long-term business plans. The program will also include the creation of six microparks for firms that cannot afford their own production facilities. The microparks will give producers access to strategic investments in basic and productive infrastructure, technical assistance, and training in organization to support the generation of sustainable income. A second program will encourage the creation of financing sources for small firms and agricultural enterprises. The program will finance loans for the creation of new leasing companies for machinery and other productive equipment. An invitation will be made for the submission of leasing projects aimed at micro-, small, and medium-size enterprises, including small farmers. Resources will be provided to projects that demonstrate a potential for solid financial returns as well as a positive impact on beneficiary firms. Most of resources for this program will be provided by the government of Haiti. The programs will be carried out by the Ministry of Economy and Finance in coordination with the Ministry of Commerce and Industry. Program resources will be provided by the government and the private sector of Haiti ($7 million), the IDB ($5.25 million), and the Haiti Reconstruction Fund ($5 million). =========== M E X I C O =========== CENTRAIS ELECTRICAS: S&P Affirms 'D' Corporate Credit Rating ------------------------------------------------------------ Standard & Poor's Ratings Services affirmed its 'D' corporate credit rating on Centrais Eletricas Do Para S.A. (Celpa). "The rating on Celpa reflects its judicial reorganization filing since Feb. 28, 2012. The company's recovery plan, which was approved on Sept. 1, 2012, includes the debt restructuring (debt maturity extension, reduction in interest expenses), as approved by its creditors. An additional feature of the recovery plan was the change of the controlling shareholder (Equatorial Energia acquired 65.18% of Celpa's ordinary shares on November 1) and a minimum capital contribution of R$700 million through either one or several installments over two years. Celpa received the first contribution of R$350 million in the second week of December and began paying R$79 million in labor claims, subject to judicial recovery. The future capital contributions will depend on the company's cash flow generation," S&P said. "Celpa has announced that an extraordinary general meeting will be held on Dec. 26, 2012, to discuss and approve an additional capital increase. If shareholders approve the proposal, Celpa's capital will increase in R$572 million, which it will use for debt payment," S&P said. "Upon its emergence from bankruptcy or more disclosure on the execution of its recovery plan, we will likely upgrade the company depending on our view of Celpa's business and financial prospects under its new ownership and capital structure. We will closely monitor the recovery plan implementation and the resolution of the extraordinary meeting," S&P said. SANLUS RASSINI: Fitch Withdraws 'B+' Rating on $250MM Sr. Notes --------------------------------------------------------------- Fitch Ratings has withdrawn its 'B+/RR3' rating on SANLUIS Rassini, S.A. de C.V.'s (SLR) cancelled issuance of up to USD250 million senior notes planned in October 2012. Proceeds were intended to simplify the consolidated debt structure and refinance existing indebtedness. As there is no set time frame for resuming the issuance process, no rating is required at this time. Fitch currently rates SLR as follows: -- Foreign currency Issuer Default Rating (IDR) 'B'; -- Local currency IDR 'B'; The Rating Outlook is Stable. SATELITES MEXICANOS: Moody's Cuts CFR to 'Caa1'; Outlook Neg. ------------------------------------------------------------- Moody's Investors Service downgraded Satelites Mexicanos, S.A. de C.V.'s (Satmex) corporate family rating to Caa1 from B3 given increased operational and liquidity risks resulting from the company's December 12, 2012 disclosure of a potential further delay in launching Satmex 8. As part of the same rating action, the company's 9.5% US$360,000,000 Gtd. Sr. Sec. Global Notes due 2017 were also downgraded to Caa1 from B3 and the rating outlook was changed to negative. The action concludes a review for downgrade initiated on September 4, 2012, after the initial announcement of a delay in Satmex 8's launch from August to December 28, 2012. The last action on Satmex's ratings was on September 4, 2012, when Moody's placed the B3 Corporate Family and Senior Unsecured Ratings of Satmex and its US$360 million in global notes due 2017 under review for possible downgrade. Ratings Rationale Satmex' Caa1 ratings reflect operational and liquidity risks related to the uncertain launch date of Satmex 8. The new satellite, which is required to replace Satmex 5 since Satmex 5's useful life expires in October 2013, does not yet have an updated launch date after the recently announced delay. Given Satmex 5's very short remaining useful life and the uncertainty of when Satmex 8 can replace Satmex 5's revenue-generating capacity, Satmex faces a potential cash flow fall. Moody's believes that Satmex' September 30, 2012, cash balance of US$113 million plus expected cash from operations for the next 12 months ending in December 2013, should be enough to pay annual interest of about US$34 million as well as capex related to the construction of Satmex 7 and launching of Satmex 8. However, "if Satmex 8 is not launched soon and a smooth transition of customers from Satmex 5 to Satmex 8 does not follow, the company's liquidity position will be impacted, jeopardizing its ability to meet payment obligations related to interest and committed capex", said Nymia Almeida, a Moody's Vice President-Senior Analyst. There is also the potential of customer losses to competitors if the matter is not addressed quickly. If Satmex is able to raise external funding to complete the construction of Satmex 7, it would support its liquidity position. The negative outlook is based on the risk that Satmex 8 is not fully operational shortly but also that Satmex 5, whose useful life ends in October 2013, presents operating failure, leaving the company with the revenues related to Satmex 6 only. Further ratings downgrades are likely if Satmex 8 is not launched and fully operational shortly. Conversely, positive ratings actions are likely if the company sustains or increases revenues starting in 1Q13 from excess capacity that Satmex 8 is expected to provide, once it is launched, vis-�-vis that of Satmex 5. Last December 12, 2012, Satmex informed the market that the launch date for Satmex 8 is most likely to be further delayed; the company did not provide an estimation of when it expects Satmex 8 to be launched. Satmex also announced that a testing and analysis conducted by COMSAT Technical Services (CTS) regarding the remaining lifetime of Satmex 5 determined that in a worst case scenario, end of station-kept operational lifetime for Satmex 5 is October 5, 2013. Moody's estimates that 30 to 90 days before this date, if Satmex 8 is not yet fully operational, the company will have to place Satmex 5 in inclined orbit, which would reduce the satellite's revenue-generating capacity in about 30-50%; if Satmex 5 is placed in inclined orbit, its lifetime would last for another 12 months beyond October 2013, maybe a little more, depending when it is placed in inclined orbit, but with dramatically decreased revenue potential. The December announcement followed a previous announcement on August 7, 2012, when ILS informed that a Proton launch vehicle carrying some satellites did not properly reach their orbits. The failure resulted in a delay in the launch of a number of satellites, including Satmex 8. Last October, Satmex announced that the launch was expected for December 28, 2012. Originally, the satellite was expected to be launched in August 2012. The principal methodology used in this rating was Moody's Global Telecommunication Infrastructure Methodology, published in June 2011. Satmex is a privately-owned Mexican satellite operator providing fixed satellite services (standard C- and Ku-band services) to local and international broadcasting and telecom firms as well as to government-related entities. Satmex operates three satellites in geo-synchronous orbital slots allocated to Mexico, covering the Americas. The company's satellite fleet includes Satmex 5 and Satmex 6, that jointly generate around 85% of total revenues; Solidaridad 2, that currently operates in inclined orbit and has a marginal contribution to consolidated revenues. As of September 30, 2012, the company's revenues amounted to about US$136 million, of which fixed satellite services represented around 80%. Moody's adjusted EBITDA reached US$97 million, with a 71% adjusted EBITDA margin. *********** 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 * * *