/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/130607.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Friday, June 7, 2013, Vol. 14, No. 112 Headlines A N T I G U A & B A R B U D A STANFORD INT'L: Court Approves Interim Plan to Distribute Assets B R A Z I L ENERGIAS DO BRASIL: Moody's Affirms Ba1 Rating C A Y M A N I S L A N D S ASI OFFSHORE: Shareholders to Hear Wind-Up Report on June 21 GOLDENTREE SPECIAL II: Members to Hear Wind-Up Report on June 14 GOLDENTREE SPECIAL III: Members to Hear Wind-Up Report on June 14 GOLDENTREE SPECIAL V: Members to Hear Wind-Up Report on June 14 HJORDIS MARINE: Shareholder to Hear Wind-Up Report on June 20 LIQUIDMACRO FUND: Members to Hear Wind-Up Report on June 21 LLK TECHNOLOGY: Shareholders to Hear Wind-Up Report on June 22 ODIN CDO I 2: Shareholder to Hear Wind-Up Report on June 24 ODIN CDO I 3: Shareholder to Hear Wind-Up Report on June 24 ODIN CDO I 4: Shareholder to Hear Wind-Up Report on June 24 QI ST EDMUND'S: Shareholder to Hear Wind-Up Report on June 21 SAKURA BONDCO: Shareholders to Hear Wind-Up Report on June 24 UNION AVENUE: Shareholder to Hear Wind-Up Report on June 12 UNION AVENUE FUND: Shareholder to Hear Wind-Up Report on June 12 J A M A I C A AIR JAMAICA: NWU Calls For Firm Decision on Airline's Future DIGICEL GROUP: Pledges US$9 Billion to Build Out Myanmar M E X I C O BOWLMOR AMF: Moody's Assigns 'B3' Corp. Family Rating MANZANILLO MUNICIPALITY: Moody's Cuts Global Scale Rating to Ba3 MUNICIPALITY OF COLIMA: Moody's Alters Ratings Outlook to Neg. OFFICE DEPOT: Sale of Stake in Mexican JV is Credit Positive T R I N I D A D & T O B A G O PETROTRIN: Headquarters To Cost USD440m - - - - - =============================== A N T I G U A & B A R B U D A =============================== STANFORD INT'L: Court Approves Interim Plan to Distribute Assets ---------------------------------------------------------------- The Associated Press reports that a federal judge in Dallas, Texas, has approved an interim plan that distributes some US$55 million in assets to bilked investors in a failed Ponzi scheme run by disgraced former Texas financier Robert Allen Stanford. The plan submitted by court-appointed receiver Ralph Janvey and approved last May 30, by U.S. District Judge David Godbey amounts to only 1 per cent of the US$5.1 billion in claims from investors, according to The Associated Press. As reported in the Troubled Company Reporter-Latin America on June 18, 2012, Jamaica Observer said that Robert Allen Stanford was sentenced by U.S. District Judge David Hittner to 110 years in prison for bilking investors out of more than US$7 billion in over two decades. In a defiant, Mr. Stanford told the court about the injuries he suffered during a prison fight; criticized the government for its "gestapo tactics" when his companies were put in receivership and their assets sold off to pay back investors; described his financial empire as a victim of the 2008 credit collapse; and recalled riding horses with former President George W Bush, according to Jamaica Observer. Domiciled in Antigua, Stanford International Bank Limited -- http://www.stanfordinternationalbank.com/-- is a member of Stanford Private Wealth Management, a global financial services network with US$51 billion in deposits and assets under management or advisement. Stanford Private Wealth Management serves more than 70,000 clients in 140 countries. On Feb. 16, 2009, the United States District Court for the Northern District of Texas, Dallas Division, signed an order appointing Ralph Janvey as receiver for all the assets and records of Stanford International Bank, Ltd., Stanford Group Company, Stanford Capital Management, LLC, Robert Allen Stanford, James M. Davis and Laura Pendergest-Holt and of all entities they own or control. The February 16 order, as amended March 12, 2009, directs the Receiver to, among other things, take control and possession of and to operate the Receivership Estate, and to perform all acts necessary to conserve, hold, manage and preserve the value of the Receivership Estate. The U.S. Securities and Exchange Commission, on Feb. 17, 2012, charged before the U.S. District Court in Dallas, Texas, Mr. Stanford and three of his companies for orchestrating a fraudulent, multi-billion dollar investment scheme centering on an US$8 billion Certificate of Deposit program. A criminal case was pursued against him in June 2012 before the U.S. District Court in Houston, Texas. Mr. Stanford pleaded not guilty to 21 charges of multi-billion dollar fraud, money- laundering and obstruction of justice. Assistant Attorney General Lanny Breuer, as cited by Agence France-Presse News, said in a 57-page indictment that Mr. Stanford could face up to 250 years in prison if convicted on all charges. Mr. Stanford surrendered to U.S. authorities after a warrant was issued for his arrest on the criminal charges. The criminal case is U.S. v. Stanford, H-09-342, U.S. District Court, Southern District of Texas (Houston). The civil case is SEC v. Stanford International Bank, 3:09-cv-00298-N, U.S. District Court, Northern District of Texas (Dallas). =========== B R A Z I L =========== ENERGIAS DO BRASIL: Moody's Affirms Ba1 Rating ---------------------------------------------- Moody's America Latina Ltda on June 5, 2013, affirmed the ratings of Energias do Brasil S.A. (EDB, Ba1; Aa2.br), Bandeirante Energia S.A (Bandeirante, Baa3; Aa1.br), Espirito Santo Centrais Eletricas S.A. (Escelsa, Baa3; Aa1.br) and Energest S.A. (Energest, Baa3; Aa1.br). The outlook for all ratings remains stable. Ratings Rationale EDB's ratings reflect the group's adequate credit metrics for the rating category, despite recent deterioration, and relatively stable cash flow from the regulated distribution business and long-term supply contracts from the generation business. EDB's resilient access to the local capital and banking markets further supports the ratings. The ratings are constrained by the recent deterioration in liquidity, sizeable capital expenditures and historically high distribution of dividends. The weaker consolidated credit metrics that EDB recently reported as well as the weaker liquidity positions at the holding parent company and its two distribution subsidiaries Bandeirante and Escelsa do not have any immediate impact on EDB's ratings or those of its rated subsidiaries Bandeirante, Escelsa and Energest. The deterioration stems from the delay in the completion of the 720 MW coal-fired thermo power plant Porto do Pecem Geracao Energia S.A. (Energia Pecem), which EDB had committed to the regulator ANEEL would start operating in July 2012. It also stems from lower cash generation at the two distribution companies, Bandeirante and Escelsa, because of the increase in the cost of acquiring energy during the last quarter of 2012 and the first quarter of 2013 due to the continued low hydrology levels across the country. Sizable consolidated capital expenditures and a relatively high dividend pay-out ratio have also contributed to weaker credit metrics. EDB holds a 50% participation in Energia Pecem, which comprises two 360 MW turbines. The first turbine came on stream in December 2012; the second one started operating on May 10, 2013. As a result of the delay in the start up, Energia Pecem was forced to acquire energy in the spot market at unusually high prices to honor the existing power purchase agreement (PPA) during the second half of 2012 and first quarter of 2013. In 2012, Energia Pecem posted a very poor financial performance as measured by negative EBITDA of BRL 209 million. The company's cash flow was also very weak as measured by negative funds from operations (FFO) of BRL 305 million. Increased working capital needs of BRL 331 million plus capital expenditures of BRL 406 million to complete the project further hurt results. In 2012, both shareholders capitalized Energia Pecem by BRL 703 million and extended inter-company loans of BRL 267 million in proportion to their participation in Pecem Energia's capital, i.e. 50% in EDB's case, to cover the shortfalls in cash flow. Despite the startup of the first turbine, which reduced the amount of energy Energia Pecem needed to acquire to honor the PPAs, Energia Pecem again posted a very poor performance in the first quarter of 2013, with a negative EBITDA of BRL 143.4 million and a net loss of BRL 124 million. As a result, the company's shareholders had to step in once again to support the company by injecting an additional BRL 110 million capital in the first quarter of 2013. Moody's expects Energia Pecem to generate positive cash flow in the second half of the year when the two turbines should be operating at full capacity. Moody's does not rule out the potential need of additional capitalization from the shareholders over the next couple of months to help the company meet its main cash needs, which mostly consists of meeting its debt service requirements, which are currently estimated at BRL 40 million per quarter. The actual amount needed, however, should be much lower. The major downside risk for this expectation is that some unforeseen technical problem in the operation of the power plant would prevent the company from generating the level of energy as required by the National Operating system (ONS). EDB's two distribution subsidiaries Bandeirante and Escelsa also posted weaker than expected financial performances in 2012. In line with our expectations, the third tariff review applied by the regulator last October significantly affected Bandeirante's cash flow as the review was retroactive to October 2011. Nonetheless, Bandeirante incurred additional costs acquiring more expensive thermo energy due to the drought induced hydrology restrictions, mainly in the second half of 2012. These additional costs were not recognized or covered in the company's existing tariffs. Reaching BRL 142 million as of December 31, 2012, these additional costs were accounted for as regulatory assets to be included in the company's next tariff adjustment in October 2013. Consequently, Bandeirante posted CFO Pre working Capital (CFO) of BRL 217 million (26.1% of total debt), down from the previous three-year average of BRL 429.6 million or 50.8% of total debt. Increases in the cost of acquiring energy also hurt Escelsa's cash flow in 2012 which resulted in BRL 89 million in net regulatory assets which were also not recovered in the company's tariffs in 2012. In August 2013, the regulator ANEEL will apply the new procedures of the third tariff review on the company's tariffs, which will be reduced accordingly. The reductions, however, will be partly tempered by the recognition of the previous operating costs not included in the company's tariffs in the previous period. In 2012, Escelsa posted CFO of BRL 295 million (27% over debt) slightly up from the previous three-year average of BRL 265.6 million (29.7% over debt); however, the deterioration in this ratio largely stems from Escelsa's recognition of an additional BRL 171 million in unfunded pension liabilities which Moody's treats as debt. On March 7, 2013, the federal government approved the use of existing financial resources from the sector's regulatory fund CDE (Energy Development Account) to alleviate the tighter liquidity position experienced by most of the Brazilian electric distribution utilities due to the higher thermal energy costs . Use of these funds is to prevent the permanent transfer of what is viewed as rather unusual circumstances in acquiring the more expensive thermal power this past 12 months to the current electricity tariffs. The federal government, which has committed to replenish the CDE so that this fund can fulfill its new objectives, has recently indicated that it will sell part of its existing receivables against ITAIPU to BNDES in an amount not disclosed whose proceeds will be used to capitalize the CDE fund. Although timing and operational procedures are not clear, Brazilian electricity consumers are bound to pay for this subsidy in the long term through higher electricity bills. Bandeirante received BRL 58.8 million and Escelsa received BRL 94.9 million in the first quarter of 2013 from CDE. These payments not only reduced the amount of regulatory assets these companies would be forced to recognize but also contributed to a reduction in the pressure on their liquidity. As a result of Pecem Energia's poor performance and the tight liquidity position of its distribution businesses, EDB accessed the local capital markets to meet its increased cash needs, raising BRL 950 million of medium-term debt over the past 10 months. In August 2012, EDB issued 18-month debentures and in April 2013 it secured an additional 3-year BRL 500 million debentures, which were fully acquired by a local Brazilian bank. Moody's expects the next two years will be challenging for EDB in light of its sizeable capital expenditures program which should average over BRL 1 billion per year. While Moody's doesn't expect EDB's credit metrics to materially change over the next couple of years, they will improve thereafter when two other major hydro- power projects commence operations. In the interim, Moody's projects that EDB's consolidated credit metrics will remain commensurate with the Baa3 rating but now more at the lower end of the rating category. Moody's will keep monitoring EDB'S financial and operating performance over the medium horizon to evaluate its cash flow generation and liquidity position, as well as its ability to turnaround and stabilize the Pecem project while successfully completing its other major power projects as scheduled. Management's ability to secure long-term debt in a timely and adequate manner to fund its major capital expenditures and to lengthen its debt profile will be an important key rating driver going forward. Also important will be the group's ability to balance capital expenditures and the distribution of dividends with any materially lower-than-expected cash generation. Given the recent deterioration in credit metrics an upgrade action is very unlikely in the short to medium term. There would be growing pressure for a downgrade action if EDB and its subsidiaries do not improve their liquidity by lengthening their debt profile and securing timely and adequate long-term funding to meet its sizeable capital expenditure program. Quantitatively, a downgrade could be triggered by a fall in the RCF over debt ratio below 10% and interest coverage below 3.5x for a prolonged period. The principal methodology used in this rating was Regulated Electric and Gas Utilities Rating Methodology (August, 2009). ========================== C A Y M A N I S L A N D S ========================== ASI OFFSHORE: Shareholders to Hear Wind-Up Report on June 21 ------------------------------------------------------------ The shareholders of ASI Offshore Global Relative Value Fund, Ltd. will receive on June 21, 2013, at 4:00 p.m., the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: DMS Corporate Services Ltd. c/o Ronan Guilfoyle Telephone: (345) 946 7665 Facsimile: (345) 946 7666 dms House, 2nd Floor P.O. Box 1344 Grand Cayman KY1-1108 Cayman Islands GOLDENTREE SPECIAL II: Members to Hear Wind-Up Report on June 14 ---------------------------------------------------------------- The members of Goldentree Special Holdings II Ltd will receive on June 14, 2013, at 10:00 a.m., the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: GTAM TS Investment LLC c/o GoldenTree Asset Management LP 300 Park Avenue, 21st Floor New York NY10022 United States of America GOLDENTREE SPECIAL III: Members to Hear Wind-Up Report on June 14 ----------------------------------------------------------------- The members of Goldentree Special Holdings III Ltd will receive on June 14, 2013, at 10:00 a.m., the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: GTAM TS Investment LLC c/o GoldenTree Asset Management LP 300 Park Avenue, 21st Floor New York NY10022 United States of America GOLDENTREE SPECIAL V: Members to Hear Wind-Up Report on June 14 --------------------------------------------------------------- The members of Goldentree Special Holdings V Ltd will receive on June 14, 2013, at 10:00 a.m., the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: GTAM TS Investment LLC c/o GoldenTree Asset Management LP 300 Park Avenue, 21st Floor New York NY10022 United States of America HJORDIS MARINE: Shareholder to Hear Wind-Up Report on June 20 ------------------------------------------------------------- The shareholder of Hjordis Marine Ltd. will receive on June 20, 2013, at 10:00 a.m., the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Campbells Directors Limited Willow House, Floor 4 Cricket Square PO Box 268 Grand Cayman KY1-1104 Cayman Islands Telephone: +1 (345) 949 6258 Facsimile: +1 (345) 945 2877 LIQUIDMACRO FUND: Members to Hear Wind-Up Report on June 21 ----------------------------------------------------------- The members of Liquidmacro Fund, Ltd. will receive on June 21, 2013, at 4:00 p.m., the liquidator's report on the company's wind- up proceedings and property disposal. The company's liquidator is: DMS Corporate Services Ltd. c/o Ronan Guilfoyle Telephone: (345) 946 7665 Facsimile: (345) 946 7666 dms House, 2nd Floor P.O. Box 1344 Grand Cayman KY1-1108 Cayman Islands LLK TECHNOLOGY: Shareholders to Hear Wind-Up Report on June 22 -------------------------------------------------------------- The shareholders of LLK Technology, Inc. will receive on June 22, 2013, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Yeh, Yu-Ching Michelle R. Bodden-Moxam Telephone: 945 6682 Facsimile: 945 6692 Portcullis TrustNet (Cayman) Ltd. The Grand Pavilion Commercial Centre Oleander Way, 802 West Bay Road P.O. Box 32052 Grand Cayman KY1-1203 Cayman Islands ODIN CDO I 2: Shareholder to Hear Wind-Up Report on June 24 ----------------------------------------------------------- The shareholder of Odin CDO I (Cayman Islands No. 2) Limited will receive on June 24, 2013, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: David Dyer Telephone: (345)949 8244 Facsimile: (345)949 5223 P.O. Box 1984 Grand Cayman KY1-1104 Cayman Islands ODIN CDO I 3: Shareholder to Hear Wind-Up Report on June 24 ----------------------------------------------------------- The shareholder of Odin CDO I (Cayman Islands No. 3) Limited will receive on June 24, 2013, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: David Dyer Telephone: (345)949 8244 Facsimile: (345)949 5223 P.O. Box 1984 Grand Cayman KY1-1104 Cayman Islands ODIN CDO I 4: Shareholder to Hear Wind-Up Report on June 24 ----------------------------------------------------------- The shareholder of Odin CDO I (Cayman Islands No. 4) Limited will receive on June 24, 2013, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: David Dyer Telephone: (345)949 8244 Facsimile: (345)949 5223 P.O. Box 1984 Grand Cayman KY1-1104 Cayman Islands QI ST EDMUND'S: Shareholder to Hear Wind-Up Report on June 21 ------------------------------------------------------------- The shareholder of QI St Edmund's Terrace Limited will receive on June 21, 2013, at 9:30 a.m., the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Intertrust SPV (Cayman) Limited 190 Elgin Avenue, George Town Grand Cayman, KY1-9005 Cayman Islands c/o Jennifer Chailler Telephone: (345) 914 3115 SAKURA BONDCO: Shareholders to Hear Wind-Up Report on June 24 ------------------------------------------------------------- The shareholders of Sakura Bondco will receive on June 24, 2013, at 10:00 a.m., the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Sakura Master Holding GP c/o Rupert Bell Walkers 190 Elgin Avenue, George Town Grand Cayman KY1-9001 Cayman Islands Telephone: +1 (345) 949 0100 UNION AVENUE: Shareholder to Hear Wind-Up Report on June 12 ----------------------------------------------------------- The shareholder of Union Avenue Portfolio Fund Ltd. will receive on June 12, 2013, at 10:00 a.m., the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Ogier c/o Michael Lockwood Telephone: (345) 815 1803 Facsimile: (345) 949 9877 UNION AVENUE FUND: Shareholder to Hear Wind-Up Report on June 12 ---------------------------------------------------------------- The shareholder of Union Avenue Fund Ltd. will receive on June 12, 2013, at 10:00 a.m., the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Ogier c/o Michael Lockwood Telephone: (345) 815 1803 Facsimile: (345) 949 9877 ============= J A M A I C A ============= AIR JAMAICA: NWU Calls For Firm Decision on Airline's Future ------------------------------------------------------------ RJR News reports that Granville Valentine, vice president of the National Workers' Union (NWU), is calling for the Jamaican government to act decisively in addressing concerns about the management of the Air Jamaica Limited brand by Caribbean Airlines Limited. Questions have been raised in some quarters about the future of the brand following the decision by CAL to reduce daily flights to Jamaica, according to RJR News. The report discloses that earlier this week Prime Minister Portia Simpson Miller said the relationship between Caribbean Airlines and Air Jamaica, which it acquired two years ago, is of great concern. Mr. Valentine said it is time for the Government to address the matter, the report notes. As reported in the Troubled Company Reporter-Latin America on July 23, 2012, Caribbean360.com said the Civil Aviation Authority (CAA) instructed Caribbean Airlines to drop its Air Jamaica Limited branding from its aircraft. Trinidad Express News said CAL has been informed that the use of the Air Jamaica brand does not comply with CAL's airline operator certificate and, despite the acquisition of Air Jamaica's routes, according to Caribbean360.com. Trinidad Express reported that CAL is not licensed to operate the two brands, although it has been doing so for over a year. Caribbean360.com relayed that for CAL to use the Air Jamaica brand, it would in fact have to register a new airline in the name of Air Jamaica. About Air Jamaica Headquartered in Kingston, Jamaica, Air Jamaica Limited -- http://www.airjamaica.com/-- was founded in 1969. It flies passengers and cargo to almost 30 destinations in the Caribbean, Europe, and North America. As reported in the Troubled Company Reporter-Latin America on June 23, 2010, Trinidad and Tobago Caribbean Airline on May 1, 2010, acquired Air Jamaica for US$50 million and operated six Air Jamaica aircraft and eight of its routes. Jamaica got a 16% stake in the merged operation, with CAL owning 84%. A TCR-LA report dated June 29, 2009 said cash-strapped Air Jamaica has been hemorrhaging over US$150 million per annum and the government has had to foot the massive bill. Air Jamaica also had over US$600 million in loans outstanding. DIGICEL GROUP: Pledges US$9 Billion to Build Out Myanmar -------------------------------------------------------- Jamaica Observer reports that a Digicel Group-led consortium promised to invest close to US$9 billion in Myanmar in its bid to get one of two telecommunications licenses there. The pledge, which accompanied its official bid, is twice the amount it spent over the last 12 years, according to Jamaica Observer. Jamaica Observer notes that Irish telecommunications firm's owner, Denis O'Brien, said that the planned capital expenditure includes the roll-out of a 4G network, which would provide coverage to 52 per cent of the population by year-end and 96 per cent by 2016. The report relates that Digicel Group has been gunning for a licence in the South-East Asian country (formerly Burma) since 2009, and says it already has 893 persons employed in the country, while it is the title sponsor of the Myanmar Football Federation and the Myanmar Special Olympics Federation. The report says that the consortium includes YSH Finance, a subsidiary of SPA Myanmar Group, which is a leading conglomerate in Myanmar, and billionaire George Soros. But Digicel, which operates in the Caribbean, Central America and the Pacific, has stiff competition, the report relays. The report relates that even while mega mobile-phone companies Vodafone and China Mobile withdrew their joint bid, the 10 other shortlisted companies include: -- Airtel Consortium; -- Axiata Group; -- France Telecom-Orange and Marubeni; -- KDDI, -- Sumitomo, -- Myanmar Information and Communication Technology Development Corp and A1 Construction; -- Millicom International Cellular; -- MTN Consortium; -- Qatar Telecom; -- Singtel, KBZ and Myanmar Telephone Co; -- Telenor; and -- Viettel Group. The consortiums led by Singtel, India's Airtel, and MTN have also announced bid submissions. The report says that Digicel boasts having substantial success in driving mobile penetration in previously underserved markets. The report notes that Myanmar's government aims to increase overall teledensity to 75 per cent to 80 per cent by 2016, even though the 5.4 million mobile phone subscribers and the 600,000 fixed-line users, as at the end of December, placed teledensity at less than 10 per cent of the population. Digicel Group, with regional headquarters in Jamaica, entered the Panama market in 2008. * * * As reported in the Troubled Company Reporter on Sept. 7, 2012, Moody's Investors Service assigned a Caa1 rating to Digicel Group Limited's proposed US$700 million senior unsecured notes due 2020. Net proceeds will be used to repurchase the entire tranche of the DGL 9.125%/9.875% senior PIK toggle notes due 2015 (US$415 million outstanding) and a portion of the 8.875% senior notes due 2015 (US$1 billion outstanding) via tender offers. =========== M E X I C O =========== BOWLMOR AMF: Moody's Assigns 'B3' Corp. Family Rating ----------------------------------------------------- Moody's Investors Service has assigned Bowlmor AMF a B3 Corporate Family Rating (CFR) and B3-PD Probability of Default Rating (PDR). As part of the rating action, Moody's has also assigned a B2 (LGD3-33%) rating to AMF Bowling Centers, Inc.'s proposed $260 million senior secured 1st lien credit facilities, which consist of a $230 million term loan and $30 million revolver. The rating outlook is stable. After exiting from Chapter 11 bankruptcy protection, AMF Bowling Worldwide, Inc. (AMF) will merge with Strike Holdings LLC (Bowlmor) with the combined company being operated by Bowlmor's existing management team. The proceeds from the new debt along with $55 million of unrated senior secured 2nd lien debt issued by the holding company, Bowlmor AMF, will be used to repay the DIP term loan, pre-petition 1st lien debt facilities, Bowlmor's term loan as well as pay a distribution to Bowlmor's minority investor and unsecured creditors, and pay fees and expenses. Moody's took the following rating actions: Bowlmor AMF Corporate Family Rating, assigned B3 Probability of Default Rating, assigned B3-PD Outlook, stable AMF Bowling Centers, Inc., $30 million 1st lien Revolving Credit Facility due 2018, Assigned B2, LGD3-33% $230 million 1st lien term loan due 2019, Assigned B2, LGD3-33% The assigned ratings are subject to review of final documentation and no material change in the terms and conditions of the transaction as provided to Moody's. Ratings Rationale Bowlmor AMF's B3 CFR reflect the company's high leverage after AMF exited from bankruptcy protection for the second time since 2001 and the limited expected free cash flow on a pro-forma basis. The ratings also include the heightened sensitivity of its customer base to the economy and the long term decline in bowling demand from traditional league bowlers that has pressured AMF's results. Supporting the rating are expected cost savings and efficiency initiatives that should improve EBITDA margins and help the firm deleverage. The company's strategy is more likely to be able to grow the higher margin casual bowler or open play customer that will be needed to replace league bowlers and support increased revenue from food, drink, and other entertainment offerings. Growth from corporate events and private parties are also anticipated to be supportive of performance, although this is also expected to be highly sensitive to economic conditions. Pro-forma for the transaction, Moody's expects leverage to decline from over 6.5x (including Moody's standard adjustments with lease obligations adjusted at 8x rent expense) to the low 6x at the end of the company's fiscal year ended June 2014 as a result of EBITDA growth from operating improvements. Moody's anticipates that Bowlmor AMF will have adequate liquidity over the next 12 months, supported by approximately $11 million cash on hand pro-forma for the transaction and an undrawn $30 million revolver. Moody's expects the company to generate limited free cash flow over the projection period. The term loans are expected to have two covenants: maximum leverage and minimum interest coverage. The ratings for the debt instruments reflect both the overall probability of default of Bowlmor AMF, to which Moody's assigns a probability of default rating (PDR) of B3-PD, the average family loss given default assessment and the composition of the debt instruments in the capital structure. The proposed 1st lien credit facilities will be issued at AMF Bowling Centers , Inc., are rated B2 (LGD3, 33%), one notch above the CFR given the loss absorption from the unrated 2nd lien debt at the parent company, Bowlmor AMF. The stable outlook reflects Moody's expectation that Bowlmor AMF will be able to achieve operating improvements and grow EBITDA such that leverage will decline towards 6x (Moody's adjusted) over the rating horizon. While unlikely, Moody's could upgrade Bowlmor AMF's ratings if leverage were to decrease below 5.5x (Moody's adjusted) with free cash flow to debt above 5% on sustainable basis. Moody's could downgrade the company's ratings if leverage were to increase above 7x (Moody's adjusted) due to poor operating performance or from economic weakness. Strained liquidity or a likely covenant violation could also put downward pressure on the ratings. The principal methodology used in this rating was the Global Business & Consumer Service Industry Rating Methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Bowlmor AMF is a leading bowling center operator in the US and includes 8 centers located in Mexico. Pro-forma for the pending merger of AMF with Strike Holdings LLC ("Bowlmor), the combined company will have 268 centers across the country and will operate under the Bowlmor, Bowlero, and AMF Sport brands. AMF Bowling Worldwide, Inc., filed for Chapter 11 bankruptcy protection in 2001 and 2012. MANZANILLO MUNICIPALITY: Moody's Cuts Global Scale Rating to Ba3 ---------------------------------------------------------------- Moody's de Mexico downgraded Manzanillo's issuer ratings to A3.mx from A2.mx (Mexico National Scale) and to Ba3 from Ba2 (Global Scale, local currency). At the same time, Moody's maintained the negative outlook on the ratings. Ratings Rationale The downgrade reflects Manzanillo's weak operating performance that led to the deterioration of its consolidated fiscal results and the reduction of its liquidity levels. The negative outlook reflects Moody's expectation that the municipality will continue to face significant challenges to redress its poor operating performance and liquidity levels. Manzanillo continues to record poor operating performance, with an average Gross Operating Balance of -3.6% of operating revenues over the period 2008-2012. This is a result of operating revenues growing only at a compound annual growth rate (CAGR) of 5.6%, slightly below operating expenditures (5.8%). The solid performance of own-source revenues, that have grown considerably over the last five years, CAGR08-12 = 9.1% has not been enough to offset the operating deficits. Driven by a dynamic economy, own- source revenues represent on average a solid 36.8% of operating revenues. Manzanillo has registered cash financing requirements over the last five years, that average -4.8% of total revenues. These have led to a rapid increase of debt to 33% of operating revenues in 2012, from 23.7% in 2008. Manzanillo financed its 2012 deficit through its own liquidity, driving the net working capital to expenditures to a very weak -10.3% in 2012 from -1.1% in 2011. WHAT COULD CHANGE THE RATING UP/DOWN? Given the negative outlook, we do not expect upward pressure on the ratings. Notwithstanding, an improvement in gross operating performance and its liquidity, could lead to the stabilization of the rating. Conversely, the persistence of poor operating and consolidated financial performance leading to the deterioration of debt metrics and/or liquidity could exert downward pressure on the ratings. The principal methodology used in this rating was regional and Local Governments published on Jan. 18, -2013. MUNICIPALITY OF COLIMA: Moody's Alters Ratings Outlook to Neg. ------------------------------------------------------------- Moody's de Mexico affirms the Municipality of Colima's A2.mx (Mexico National Scale) and Ba2 (Global Scale, local currency) ratings and changed the outlook to negative from stable. Ratings Rationale The recommendation to change the Municipality of Colima's outlook to negative from stable reflects a sharp deterioration of its liquidity position by year-end 2012. Colima has registered cash financing requirements over the last five years averaging -6.0% of total revenues. In 2012 Colima recorded a small deficit of 0.3%. These deficits have not been financed with debt, which remains still low, at 3% of operating revenues. Instead, Colima has the practice to finance its deficits through its liquidity, driving the net working capital (current assets minus current liabilities) to expenditures to a very weak -19% in 2012 from -2.1% in 2008. Colima, has also the practice to finance its in-year cash needs via short-term loans. While we acknowledge that the current administration is taking measures to improve financial performance and pay off its current liabilities, in Moody's view, its dependence on short term financing and its poor liquidity levels could lead to a rapid deterioration of Colima's creditworthiness. The aforementioned challenges are tempered by Colima's credit strengths, including (i) a solid level of own-source revenues representing on average 37.4% of operating revenues, which gives the city some revenue raising flexibility, and (ii) contained pressures on operating performance. While own-source revenues have only grown at a CAGR of 3%, Colima has managed to control current expenditures (CAGR of 4%) and as a result, its operating performance, albeit weak, has not deteriorated. WHAT COULD CHANGE THE RATING UP/DOWN? Given the negative outlook, we do not expect upward pressure on the ratings. Notwithstanding, an improvement in gross operating performance and its liquidity levels, could lead to the stabilization of the rating. Conversely, the persistence of poor operating performance leading to a further deterioration of liquidity or a sharp increase in debt metrics could exert downward pressure on the ratings. The principal methodologies used in this rating were Regional and Local Governments published on 18-Jan-2013 and Mapping Moody's National Scale Ratings to Global Scale Ratings published on Oct. 9, 2012. OFFICE DEPOT: Sale of Stake in Mexican JV is Credit Positive ------------------------------------------------------------ In a comment published on June 5, 2013, Moody's Investors Service stated that Office Depot's announcement on June 4, 2013 that it had agreed to sell its 50% stake in Latin American Joint Venture Office Depot de Mexico S.A. de C.V. to its partner Grupo Gigante, S.A.B. de C.V. (GIGANTE.MX) for roughly $690 million was a credit positive for the company. "Assuming approvals from shareholders are received, and the company deploys the approximately $550 million in net after-tax proceeds to debt repayment as publicly announced, this transaction will be positive for debtholders and will also result in an enhanced liquidity profile for Office Depot," stated Moody's Senior Analyst Charlie O'Shea. "While it has no immediate impact on the company's B2 rating or the developing outlook as these are presently driven primarily by still-challenged operating performance and issues surrounding the potential merger with OfficeMax (B1, developing), we believe this is definitely a positive action for the company." Office Depot's B2 rating considers its credit metrics, which remain weak, though will improve upon closing of the sale of the Mexican JV, and its solid, though still-challenged, number two position in the office supplies segment. The rating also considers the difficult macroeconomic environment in the U.S. and Europe, which continues to compress operating performance. We expect liquidity to remain at least very good and remain a critical factor supporting the B2 rating. The developing outlook considers the pending merger with OfficeMax, with issues such as shareholder and regulatory approval remaining. Upward ratings momentum would result in the event the company is able to improve the operating profitability of its North American and International businesses. Ratings could be upgraded if debt/EBITDA approaches 5.0 times and EBITA/Interest was sustained above 1.75 times, with liquidity generally maintained at present levels. Ratings could be downgraded if debt/EBITDA is sustained above 6 times or if EBITA/interest fell below 1 time. Ratings could also be downgraded if liquidity were to weaken. Headquartered in Boca Raton Florida, Office Depot is the second largest office supply retailer in the U.S., with annual revenues of around $10.7 billion and 1,112 stores in North America. =============================== T R I N I D A D & T O B A G O =============================== PETROTRIN: Headquarters To Cost USD440m --------------------------------------- Newsday reports that Trinidad and Tobago Minister of Energy Kevin Ramnarine said the budget for the new Petroleum Company of Trinidad and Tobago (Petrotrin) headquarters is now US$440 million. In a Senate statement, Mr. Ramnarine said the 60,000 square feet project had initially been budgeted at $75 million, but changes in the scope and design under the previous administration gradually saw the projected cost rise, according to Newsday. To date, he said, $170 million had been spent on the project, the report relates. The report says that Mr. Ramnarine also said he will call upon Petrotrin to conduct a "post-investment appraisal analysis" of the gas-to-liquids project which has saddled Petrotrin in debt. The report notes that the matter is currently subject of a lawsuit brought by the State against the former Petrotrin Malcolm Jones- led board alleging breach of company duties. The report discloses that twice during Mr. Ramnarine's statement, PNM Senator Faris Al-rawi rose, citing Parliament rules that prevent matters before the courts from being prejudiced. The report adds that Senate President Timothy Hamel-Smith overruled both points of order, but however cautioned Mr. Ramnarine in making his statement. About Petrotrin Petroleum Company of Trinidad and Tobago is the major state-owned oil company in Trinidad and Tobago. The company was established in 1993 by the merger of Trintopec and Trintoc, two state-owned oil companies. Petrotrin's main holdings are extensive, mature onshore fields located across southern Trinidad. Large areas have been leased out to small private producers who are able to make a profit on wells that are unprofitable for Petrotrin, giving it higher labor costs. The company operates a refinery at Pointe-Pierre, just north of San Fernando in south Trinidad. Most crude petroleum produced in Trinidad is exported without being refined. The refinery depends on imported crude (mostly from Venezuela), which is either used domestically or exported. * * * As reported in the Troubled Company Reporter-Latin America on June 9, 2010, Trinidad Express related that four members of Petrotrin submitted their resignation letters. According to the report, Malcom Jones resigned as chairman of Petrotrin and from the State boards. The report related board members Lawford Dupres, who chaired the National Petroleum board, attorney Kerwin Garcia and Andrew McIntosh had also resigned. Prime Minister Kamla Persad-Bissessar, the report noted, said that Cabinet had ordered a forensic audit of Petrotrin as there were "grounds for suspicion of misconduct" at Petrotrin similar to what may have transpired at special-purpose State enterprise UDeCOTT. The report said that the company was experiencing serious financial difficulties resulting in high cost overruns of its refinery upgrade. The situation was exacerbated by a US$12 billion lawsuit by World GTL Inc. against Petrotrin, the report added. *********** 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., Washington, D.C., USA, Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez, Valerie U. Pascual, Julie Anne L. Toledo, Frauline S. Abangan, and Peter A. Chapman, Editors. Copyright 2013. 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$775 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 A. Chapman at 215-945-7000 or Nina Novak at 202-241-8200. * * * End of Transmission * * *