/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/130809.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, August 9, 2013, Vol. 14, No. 157 Headlines A R G E N T I N A * Moody's Rates Two Bond Funds From Capital Markets Argentina B R A Z I L AGRENCO LIMITED: Says Sao Paulo Judge Ruled In Favor of Bankruptcy BANCO BVA: Brazil Liquidated Bank in June CENTRAIS ELETRICAS: S&P Ups Rating to 'CCC+' From 'D' GOL LINHAS: Sought Approval in July to Implement Codeshare Pact C A Y M A N I S L A N D S BLOSSY INVESTMENT: Members' Final Meeting Set for Aug. 30 CAMEL 1 LIMITED: Shareholder to Receive Wind-Up Report on Sept. 6 GTAM SPECIAL: Shareholders' Final Meeting Set for Sept. 6 HAWK CAPITAL SPC: Members' Final Meeting Set for Sept. 3 LEATHER AND KINS: Shareholders' Final Meeting Set for Aug. 30 LIM ASIA: Shareholders' Final Meeting Set for Aug. 20 MARINO INTERNATIONAL: Shareholders' Final Meeting Set for Aug. 30 RAS ABU: Shareholder to Receive Wind-Up Report on Sept. 6 TEMPEST PE: Shareholder to Receive Wind-Up Report on Aug. 19 TOP ALLIANCE: Shareholders' Final Meeting Set for Aug. 20 TROPICAL EXPRESSIONS: Members' Final Meeting Set for Aug. 30 WHITE MOUNTAIN: Members' Final Meeting Set for Sept. 3 ZAIS MATRIX V-C: Shareholder to Receive Wind-Up Report on Sept. 3 ZAIS MATRIX VI-A: Shareholder to Receive Wind-Up Report on Sept. 3 ZAIS MATRIX VI-F: Shareholder to Receive Wind-Up Report on Sept. 3 C H I L E INVERSIONES ALSACIA: Fitch Lowers US$464MM Bond Rating to 'B' H O N D U R A S * REPUBLIC OF HONDURAS: S&P Cuts Long-Term Currency Ratings to 'B' M E X I C O GRUPO FERTINAL: Moody's Lowers CFR to Caa1; Outlook is Negative SUNTECH POWER: Supplying Solar Modules for Plant in Mexico P E R U TERMINALES PORTUARIOS: Fitch Affirms Secured Note Rating at 'BB-' T R I N I D A D & T O B A G O TRINIDAD CEMENT: Republic Bank Responds to Firm's 'Threats' - - - - - ================= A R G E N T I N A ================= * Moody's Rates Two Bond Funds From Capital Markets Argentina ------------------------------------------------------------- Moody's Investors Services has assigned initial global and national scale bond fund ratings to two fixed-income funds managed by Capital Markets Argentina SGFCISA in Argentina. The global scale and national scale ratings assigned are: - CMA Proteccion FCI; rating B-bf/A-bf.ar. - CMA Argentina FCI; rating B-bf/A-bf.ar. Rating Rationale: "The fund ratings are based on Moody's evaluation of each of the fund's historical composition which are consistent with their assigned ratings and the expectation that Capital Markets Argentina SGFCISA will continue to maintain maturity-adjusted weighted average credit quality profiles in a similar manner," said Moody's lead analyst Carlos de Nevares. Capital Markets Argentina SGFCISA, part of a well known local and independent financial group, is a middle size asset manager in the Argentinean mutual fund Industry with 0.8% of market share. As of June 2013. Capital Market Argentina SGFCISA manages approximately AR$475,0 million in Assets under Management (AUM) or approximately $90 million. 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. =========== B R A Z I L =========== AGRENCO LIMITED: Says Sao Paulo Judge Ruled In Favor of Bankruptcy ------------------------------------------------------------------ Agrenco Ltd announced that, due to lack of approval of the General Judicial Recovery Plan, Deputy Judge of the Bankruptcy and Judicial Recovery Court in Sao Paulo declared bankruptcy of the Company's subsidiaries on August 2, 2013, Reuters reports. Karen Eeuwens, writing for Bloomberg News, reports that a regulatory filing said the recovery plan wasn't approved by the judge. Bloomberg News notes that the company said it will obey the ruling and take all possible measures to reverse the decision. As reported in the Troubled Company Reporter-Latin America on June 13, 2012, Agrenco Ltd. said it is negotiating partnerships in order to find a way to resume its industrial activities and fulfill its recovery plan. Agrenco Limited decided to suspend its production and cut jobs after creditors rejected a proposal to contribute to a mutual fund that formed part of its new reorganization plan. Agrenco Limited plans to use the money raised from the fund to restart operations at its Alto Araguaia and Caarapo processing plants. Without the needed contribution for the mutual fund, operations will be suspended. Headquartered in Sao Paulo, Brazil, Agrenco Ltd. is a provider of integrated and customized solutions for agribusiness, with global operations. BANCO BVA: Brazil Liquidated Bank in June ----------------------------------------- Banco BVA SA, which specializes in loans to mid-size companies, was liquidated in June after efforts to find a buyer failed. The bank, with seven branches, accounts for about 0.17 percent of assets in Brazil's financial system and 0.24 percent of deposits, the central bank had said in a statement, according to Cristiane Lucchesi of Bloomberg News. Investors own about $45 million of international bonds issued by the Rio de Janeiro-based lender that would have matured in February 2014, according to data compiled by Bloomberg. BVA is the seventh bank in Brazil to be seized or bailed out since 2010. Brazil's central bank took control of BVA in Oct. 19, 2012. * * * As reported in the Troubled Company Reporter - Latin America on June 25, 2013, Moody's Investors Service lowered Banco BVA S.A.'s baseline credit assessment (BCA) to c, from ca, and downgraded the bank's long-term global local and foreign currency deposit ratings to C, from Ca. CENTRAIS ELETRICAS: S&P Ups Rating to 'CCC+' From 'D' ----------------------------------------------------- Standard & Poor's Ratings Services raised the ratings on Centrais Eletricas do Par S.A. (Celpa) to 'CCC+' from 'D'. The outlook is stable. The rating on Celpa recognizes that the company now has a clearer turnover plan for the next few years, while it remains under judicial reorganization (this means that the company defaulted in its debt and has already restructured it and will be operating under court's supervision for a period of two years) through September 2014. In February 2012, the company filed for judicial reorganization after defaulting on its debt obligations. In 2012, its creditors approved a debt restructuring. On Nov. 1, 2012, Rede Energia S.A. (not rated) sold its controlling share in Celpa to Equatorial Energia S.A.(not rated) for R$1. Since the purchase, Equatorial has injected R$406 million into Celpa and now holds 96.18% of the company's shares. The stable outlook on Celpa reflects our expectation that the company will continue operating in compliance with its legal reorganization plan for the next two years. "We could upgrade Celpa if it improves the service quality in its concession area, resulting in improved cash generation, leading to a debt-to-EBITDA consistently less than 5.0x in the next two to three years. On the other hand, we could downgrade the company if it is unable to comply with its debt restructuring," S&P said. GOL LINHAS: Sought Approval in July to Implement Codeshare Pact --------------------------------------------------------------- GOL Linhas Aereas Inteligentes S.A. requested authorization in late July from the Italian and Brazilian governments to implement codeshare procedures (flight sharing) with Alitalia. The agreement will ensure improved access to connections between Brazil and Europe for clients of both companies. Initially, the agreement will allow Alitalia, an Italian airline with more than 14 flights per week from Rome to Sao Paulo and Rio de Janeiro, to include its codes on GOL flights, permitting connections with various other Brazilian destinations. "We actively seek codeshare agreements that generate even more benefits for our clients, and the alliance with Alitalia will do precisely that," declared Paulo Kakinoff, GOL's CEO. "We are extremely pleased to be joining forces with one of Europe's biggest airlines." The companies also plan to offer members of GOL's SMILES and Alitalia's MilleMiglia relationship programs the possibility of accumulating and redeeming miles on all eligible flights operated by the two airlines. * * * As reported in the Troubled Company Reporter-Latin America on Feb. 7, 2013, Fitch Ratings assigned an expected rating of 'B/RR5(exp)' to Gol Linhas Aereas Inteligentes S.A.'s proposed unsecured notes. Fitch also assigns a 'B+' rating to its foreign and local currency long-term Issuer Default Ratings. ========================== C A Y M A N I S L A N D S ========================== BLOSSY INVESTMENT: Members' Final Meeting Set for Aug. 30 --------------------------------------------------------- The members of Blossy Investment Ltd. will hold their final meeting on Aug. 30, 2013, at 12:00 noon, to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: MBT Trustees Ltd. Telephone: 945 8859 Facsimile: 949 9793/4 P.O. Box 30622 Grand Cayman KY1-1203 Cayman Islands CAMEL 1 LIMITED: Shareholder to Receive Wind-Up Report on Sept. 6 ----------------------------------------------------------------- The shareholder of Camel 1 Limited will receive on Sept. 6, 2013, at 9:00 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 Kim Charaman/Jennifer Chailler Telephone: (345) 943 3100 GTAM SPECIAL: Shareholders' Final Meeting Set for Sept. 6 --------------------------------------------------------- The shareholders of GTAM Special Realty Limited will hold their final meeting on Sept. 6, 2013, at 8:45 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Intertrust SPV (Cayman) Limited 190 Elgin Avenue, George Town Grand Cayman KY1-9005 Cayman Islands c/o Kim Charaman/Jennifer Chailler Telephone: (345) 943 3100 HAWK CAPITAL SPC: Members' Final Meeting Set for Sept. 3 -------------------------------------------------------- The members of Hawk Capital SPC will hold their final meeting on Sept. 3, 2013, at 10:00 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Khalij Fiduciaire SA Telephone: +4 (121) 961 2511 LEATHER AND KINS: Shareholders' Final Meeting Set for Aug. 30 ------------------------------------------------------------- The shareholders of Leather and Kins Trading Ltd will hold their final meeting on Aug. 30, 2013, at 12:00 noon, to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: MBT Trustees Ltd. Telephone: 945 8859 Facsimile: 949 9793/4 P.O. Box 30622 Grand Cayman KY1-1203 Cayman Islands LIM ASIA: Shareholders' Final Meeting Set for Aug. 20 ----------------------------------------------------- The shareholders of Lim Asia Alternative Real Estate Fund SPC will hold their final meeting on Aug. 20, 2013, at 10:00 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Oscar Wan Lim Advisors Limited Ruttonjee House, 20th Floor 11 Duddell Street, Central Hong Kong MARINO INTERNATIONAL: Shareholders' Final Meeting Set for Aug. 30 ----------------------------------------------------------------- The shareholders of Marino International Ltd. will hold their final meeting on Aug. 30, 2013, at 12:00 noon, to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: MBT Trustees Ltd. Telephone: 945 8859 Facsimile: 949 9793/4 P.O. Box 30622 Grand Cayman KY1-1203 Cayman Islands RAS ABU: Shareholder to Receive Wind-Up Report on Sept. 6 --------------------------------------------------------- The shareholder of RAS Abu Abboud Leasing Limited will receive on Sept. 6, 2013, at 9:15 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 Kim Charaman/Jennifer Chailler Telephone: (345) 943 3100 TEMPEST PE: Shareholder to Receive Wind-Up Report on Aug. 19 ------------------------------------------------------------ The shareholder of Tempest Pe Fund 1 will receive on Aug. 19, 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: Intertrust Corporate Services (Cayman) Limited 190 Elgin Avenue, George Town Grand Cayman, KY1-9005 Cayman Islands c/o Kim Charaman/Jennifer Chailler Telephone: (345) 943 3100 TOP ALLIANCE: Shareholders' Final Meeting Set for Aug. 20 --------------------------------------------------------- The shareholders of Top Alliance International, Ltd. will hold their final meeting on Aug. 20, 2013, at 9:00 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Angela Lin 8th Floor-2, 351, Yang Guang Street Nei-Hu District Taipei 114 Taiwan TROPICAL EXPRESSIONS: Members' Final Meeting Set for Aug. 30 ------------------------------------------------------------ The members of Tropical Expressions Ltd. will hold their final meeting on Aug. 30, 2013, at 12:00 noon, to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: MBT Trustees Ltd. Telephone: 945 8859 Facsimile: 949 9793/4 P.O. Box 30622 Grand Cayman KY1-1203 Cayman Islands WHITE MOUNTAIN: Members' Final Meeting Set for Sept. 3 ------------------------------------------------------ The members of White Mountain Venture Capital SPC will hold their final meeting on Sept. 3, 2013, at 1:00 p.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Khalij Fiduciaire SA Telephone: +4 (121) 961 2511 ZAIS MATRIX V-C: Shareholder to Receive Wind-Up Report on Sept. 3 ----------------------------------------------------------------- The shareholder of Zais Matrix V-C Ltd. will receive on Sept. 3, 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 Jo-Anne Maher Telephone: (345) 815 1762 Facsimile: (345) 949 9877 ZAIS MATRIX VI-A: Shareholder to Receive Wind-Up Report on Sept. 3 ------------------------------------------------------------------ The shareholder of Zais Matrix VI-A Ltd will receive on Sept. 3, 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 Jo-Anne Maher Telephone: (345) 815 1762 Facsimile: (345) 949 9877 ZAIS MATRIX VI-F: Shareholder to Receive Wind-Up Report on Sept. 3 ------------------------------------------------------------------ The shareholder of Zais Matrix VI-F Ltd. will receive on Sept. 3, 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 Jo-Anne Maher Telephone: (345) 815 1762 Facsimile: (345) 949 9877 ========= C H I L E ========= INVERSIONES ALSACIA: Fitch Lowers US$464MM Bond Rating to 'B' ------------------------------------------------------------- Fitch Ratings has downgraded to 'B' from 'BB' the rating for Inversiones Alsacia, S.A.'s USD464 million senior secured bonds due in 2018. The rating remains on Negative Watch. Currently, USD405 million is outstanding. The rating downgrade reflects heightened transaction risks due, to a great extent, to the structure of the new concession contract of May 2012, which substantially differs from that of the original 2005 agreement by being much more linked to a contracted passenger demand and by requiring higher operational standards. This model has resulted in large investments and cost escalations that have not been adequately compensated, resulting in increased pressure over cash flow and debt coverage ratio. The Negative Watch reflects the uncertainty with respect to the following: i) the company's future performance, given the lack of updated information that would allow Fitch to fully assess its financial position; ii) the waiver concession requested by the issuer recently and which resolution is expected in the next few days; and iii) the outcome of the ongoing negotiations to amend the concession contract and its potential impact on future performance. Fitch should resolve the rating watch status upon the receipt of information regarding the aforementioned. KEY RATING DRIVERS INCREASED DEPENDENCE ON DEMAND: The Operating Contract amendment of May 2012 heightened the project's risk profile by significantly increasing the linkage between passenger demand and revenue levels. In the last two years demand has performed below expectations. The contractual amendment includes a restated economic equilibrium mechanism that partially mitigates such risk by compensating to some extent, demand declines over 3%, among others. However, compensation payments are received several months after the occurrence of a negative impact in revenue, stressing the project's liquidity. HIGHER OPERATIONAL COMPLEXITY: Compared to other availability- based projects, bus operations are logistically complex. The incorporation of additional bus routes has heightened operational complexity. Synergies coming from Alsacia and Express' operational merger have taken longer than expected to materialize. Cost has largely increased due to a series of recurring and non-recurring items. The risk of a continued escalation in the coming years is partially mitigated by the indexed pass-through of major cost items that is present in the formula to calculate revenues. ADEQUATE DEBT STRUCTURE: Tight covenants for equity distribution and additional leverage, fixed interest rate, a cross-currency swap contracted with highly-rated institutions, and a 6-month debt service reserve account. Currently, such reserve is partially funded at almost 60% of its target balance. WEAKENING COVERAGES: Although coverage for the first three payments surpassed Fitch's base projection, the amended formula to calculate revenues, paired with the cost increase during 2012 and first quarter of 2013 tightened financial coverage ratios to the point that the use of reserve funds again is imminent. CAPEX RESERVES ARE BELOW INDUSTRY STANDARDS: In 2012, Alsacia made important investments in overhauling a portion of its bus fleet. However, given such investment and the fact that current fleet has a remaining life of 10 years average, Fitch does not foresee infrastructure renewal risk as material. RATING SENSITIVITIES -- Obtaining of the waiver requested to holders and note hedge counterparties in connection with the early amortization event recently triggered. -- New contractual terms following the current negotiations with the Chilean Ministry of Transportation and Telecommunications (MTT) that could lead to a positive impact on the company's operations and cash available for debt service. -- Depletion of the funds in the Debt Service Reserve Account (DSRA) and/or inability to replenish it. -- End of governmental subsidy could negatively impact the system's and the company's financial position. SECURITY The notes are secured by a first lien interest of total revenues and contract rights, as well as all assets owned by Alsacia and Express, excluding a bus terminal located in Huachuraba. CREDIT UPDATE Albeit Alsacia's improvement in some operational indexes and in passenger evasion control, a series of events during 2012 and 2013 have resulted in a contraction of the liquidity and profitability ratios. The two with higher impact were the signature of new concession contracts in May 2012, and the need for making a significant investment in bus overhaul to comply with higher service standards upon the recently amended concessions. Expense has grown faster than revenue. In 2012, Ebitda dropped to 14.3% from 23.5% in the previous year. The last information available as of the first quarter of 2013 reflects the deterioration in Ebitda, down to 11.2%. From 2008 to 2011, Alsacia and Express combined margin averaged 22.0%. It is Fitch belief that the company's financial performance has been largely affected by the new revenue structure of the concession, which is now much more linked and sensitive to a declining passenger demand level, and that includes partial compensation mechanisms that are delivered once each twelve months. The last obligates operators to absorb and finance the demand decrease for a whole year, causing a mismatch between revenue reception and debt service payments. In addition, the contractual amendments also include that those transfers across the services of a single operator will now account as one passenger only. According to the issuer, to a great extent, demand contraction seems to be the result of better financing conditions that have incentivized the acquisition and use of automobiles instead of public transportation, and a limited bus availability coming from the intensive maintenance program that is ongoing for its fleet. On the expense side, in 2012 Alsacia and Express faced some extra costs that were expected to be extraordinary and non-recurring. However, some of them have been present again in the first quarter of 2013, and the lack of further information prevents Fitch from assessing whether it has been normalized. Currently, the operators are in negotiations with the authorities to adjust some of the existing concession terms in order to make them less hurtful. The timing and result of such discussions are still unknown but the outcome would likely impact Alsacia's financial performance in a positive manner. Fitch believes that, if the current terms of the concession are kept unchanged and demand does not recover in the short term, Alsacia will face increasing difficulties to reach at least the 22% Ebitda margins averaged in 2008-2011. This in turn would severely hamper its ability to meet its increasing debt service burden. The next debt service payment is scheduled Aug. 18, 2013 for about USD38.8 million. No data about the cash available for this disbursement has been provided by Alsacia, but Fitch estimates it will be partially covered with funds from the Debt Service Reserve Account (DSRA). The current balance of that account is close to USD19.0 million after USD14.0 million was taken to complete the last debt service payment in Feb. 18, 2013. The weakened financial position of the company has derived in a failure to maintain a minimum DSCR of 1.10x and to reach the target balance of the O&M account, which constitutes an early amortization event upon the indenture. On Aug. 5, 2013, Alsacia communicated its intention to seek a waiver from holders and note hedge counterparties to solve this matter. The company's intention is to obtain the waiver for the reporting periods until Jan. 31, 2015. The failure in obtaining such waiver could lead to a further downgrade of current rating. Regarding the system's subsidy that ends in 2014, the Government is still in the process to obtain an annual subsidy of USD750 million until 2022. The final approval is at a very advanced stage, and expected to be resolved soon in 2013. While the subsidy termination is a potential risk, Fitch considers it is very unlike to occur, given the Transantiago system is a top-priority project for the country, as has been demonstrated in the past. Fitch Base Case assumed demand stays at current (2012) level while cost increases 3% over budget to reach 22% Ebitda average over the 2013-2018 projected horizon. DSCR results in 1.03x minimum and 1.10x average. Fitch Stress Case considered demand contracts 5% in 2013 and then stays stable, while cost increases 5% over budget to reach 20% Ebitda average. DSCR results in 0.93x minimum and 1.02x average. Under this scenario, funds from the DSRA have to be called several times. Alsacia and Express are two bus concessionaires of the Transantiago System, which provides mass urban bus/metro transportation services to the City of Santiago, in Chile since 2005, and is regulated by the MTT. The transaction consisted of the acquisition by Alsacia of the remaining shares of Express, and the refinancing of all the existing debt of both concessionaires. =============== H O N D U R A S =============== * REPUBLIC OF HONDURAS: S&P Cuts Long-Term Currency Ratings to 'B' ------------------------------------------------------------------ Standard & Poor's Ratings Services said that it lowered its long- term foreign and local currency sovereign credit ratings on the Republic of Honduras to 'B' from 'B+'. "At the same time, we affirmed our 'B' short-term foreign and local currency ratings. The ratings outlook is stable. We lowered the transfer and convertibility assessment to 'B+' from 'BB," S&P said. "The downgrade reflects the government's diminished fiscal flexibility and rising debt burden, which increases Honduras' vulnerability to external shocks or negative political developments," said Standard & Poor's credit analyst Kelli Bissett-Tom. The central government is likely to run a deficit of 6% of GDP in 2013 for the second consecutive year, largely because of spending overruns. "As a result, we project net general government debt will reach 27% of GDP in 2013, up from 21% in 2012. We project that general government interest expenses will exceed 14% of revenues this year, nearly double the level in 2011. Honduras' shallow domestic capital markets limit the government's ability to fund fiscal deficits," S&P said. A large current account deficit--which Standard & Poor's estimates at 10% of GDP this year--has weakened external liquidity. "We expect that usable foreign exchange reserves will decline modestly to cover 1.8 months of current account payments at the end of this year, despite the government's issuance of its first $500 million global bond in March 2013. (Our definition of foreign exchange reserve coverage includes net international reserves minus foreign currency required reserves of commercial banks divided by current account payments.)," S&P said. Heightened political uncertainty due to national elections in late November of this year constrains the government's ability to make policy adjustments. "We expect that per capita GDP growth will be only 1% in 2013 and likely lower next year," S&P said. "The stable outlook reflects our expectation that political uncertainty will diminish after the elections and that foreign exchange reserves will stabilize near their current levels. We also expect that the new Administration will take steps to contain fiscal deficits and stabilize the rising government debt burden," S&P said. "We could lower the ratings if political uncertainty persists for a prolonged period of time, undermining investment and economic growth. The resulting rise in the debt burden would make it harder for the government to fund its deficits in the local markets and likely lead to declining external liquidity," S&P said. Increased vulnerability would also lead to a downgrade. "In accordance with our relevant policies and procedures, the Rating Committee was composed of analysts that are qualified to vote in the committee, with sufficient experience to convey the appropriate level of knowledge and understanding of the methodology applicable. At the onset of the committee, the chair confirmed that the information provided to the Rating Committee by the primary analyst had been distributed in a timely manner and was sufficient for Committee members to make an informed decision," S&P said. After the primary analyst gave opening remarks and explained the recommendation, the Committee discussed key rating factors and critical issues in accordance with the relevant criteria. Qualitative and quantitative risk factors were considered and discussed, looking at track-record and forecasts. The chair ensured every voting member was given the opportunity to articulate his/her opinion. The chair or designee reviewed the draft report to ensure consistency with the Committee decision. The views and the decision of the rating committee are summarized in the rationale and outlook. =========== M E X I C O =========== GRUPO FERTINAL: Moody's Lowers CFR to Caa1; Outlook is Negative --------------------------------------------------------------- Moody's Investors Service lowered the Corporate Family Rating of Grupo Fertinal, S.A. de C.V. to Caa1 from B2. The downgrade reflects the company's lower profitability and limited liquidity. The rating outlook is negative. The following summarizes the ratings. Grupo Fertinal, S.A. de C.V. Ratings downgraded: Corporate Family Rating -- Caa1 from B2 Outlook - Negative Ratings Rationale: Fertinal's Caa1 CFR reflects its low profitability as well as Moody's expectations that the company's gross margins will not improve materially in 2013, which will constrain liquidity. The gross profit margins have been under pressure in 2012 and 2013 due to operational issues as well as higher ammonia and sulfur raw material feedstock costs that have not been fully compensated for by higher product selling prices. However, Moody's notes that industry prices for key products DAP and MAP have allowed Fertinal's competitors to successful generate healthy earnings, exceeding those of Fertinal. The firm's 2012 financial results suffered from an operational issue at the fertilizer plant that curtailed production volumes and added to maintenance costs. That has since been resolved, but all units of the plant are not operating at nameplate capacity and operating costs remain elevated. The company has poor liquidity as a result of the decline in its cash flow from operations, which it relies on (along with cash balances) to fund is operations. Fertinal does have a $20 million committed revolving credit facility due 2017, but it is fully drawn. It does not have meaningful amounts of uncommitted bank credit lines. The firm expects that its existing cash balances, an expansion of its credit facility sought from the existing lender and an equity infusion will support its cash needs through the end of 2014. The CFR also reflects the elevated leverage, the narrow and commodity nature of its product line, single site production facilities, and a limited operating history since restarting operations in 2007. The ratings are supported by the company's backward integration into phosphate rock production and Moody's positive view of the agricultural sector because of anticipated strong global demand for food and focus on crop yields. Fertinal does enjoy significant market shares in certain markets where it has an advantage based on the price of its products, but in the global markets, it also competes with larger competitors with significantly greater distribution capabilities and financial resources. The negative outlook reflect the poor profit margins and liquidity. The ratings could be downgraded further if Fertinal's liquidity does not improve. Moody's would consider an upgrade once the company improves it liquidity, profit margins and cash flows such that leverage was below 5.0x for a sustained period. The principal methodology used in this rating was the Global Chemical Industry Methodology published in December 2009. Grupo Fertinal, S.A. de C.V. produces various phosphate and nitrogen-based fertilizers and related industrial products (LDAN, phosphoric acid, sulfuric acid, nitric acid). The company has a fertilizer production complex in an industrial complex at the port of Lazaro Cardenas, Michoacan (west coast of Mexico) and a phosphate mine in San Juan de la Costa, Baja California Sur that supplies all of its needs. Fertinal had revenues of approximately $565 million) for the twelve months ended June 30, 2013. SUNTECH POWER: Supplying Solar Modules for Plant in Mexico ---------------------------------------------------------- Justin Doom at Bloomberg News reported in July that Suntech Power Holdings Co. is supplying panels for a 30-megawatt power plant in Mexico. Martifer SGPS SA's solar unit expects to complete the Aura Solar plant, according to a statement today from Wuxi, China-based Suntech, according to Bloomberg News. Construction began in March. Bloomberg News notes that Gauss Energia, based in Mexico City, is developing the solar farm near La Paz, at the southern end of Baja California. "With Mexico's excellent sunlight and strong renewable-energy demand, we expect to see excellent growth of PV in the region," E.L. McDaniel, managing director of Suntech America, said in the statement, Bloomberg News discloses. Bloomberg News relays that Suntech extended a forbearance agreement last month with holders of bonds that went unpaid earlier in March. About Suntech Wuxi, China-based Suntech Power Holdings Co., Ltd. (NYSE: STP) produces solar products for residential, commercial, industrial, and utility applications. With regional headquarters in China, Switzerland, and the United States, and gigawatt-scale manufacturing worldwide, Suntech has delivered more than 25,000,000 photovoltaic panels to over a thousand customers in more than 80 countries. As reported by the TCR on March 20, 2013, Suntech Power Holdings Co., Ltd., has received from the trustee of its 3% Convertible Notes a notice of default and acceleration relating to Suntech's non-payment of the principal amount of US$541 million that was due to holders of the Notes on March 15, 2013. That event of default has also triggered cross-defaults under Suntech's other outstanding debt, including its loans from International Finance Corporation and Chinese domestic lenders. ======= P E R U ======= TERMINALES PORTUARIOS: Fitch Affirms Secured Note Rating at 'BB-' ----------------------------------------------------------------- Fitch Ratings has affirmed Terminales Portuarios Euroandinos (TPE) USD110 million senior secured notes at 'BB-'. The Rating Outlook is Stable. Key Rating Drivers -- Completion risk: the Port of Paita is to undertake a four-stage expansion throughout the life of the concession. Phase I, which includes the construction of a mooring point and a dock, as well as dredging and the installation of three gantry cranes, is the most extensive of the four and expected to be completed in June 2014. According to the concession agreement, Phase I must be completed within 24 months after reaching financial closing (with a maximum six-month delay), which is considered attainable in the independent engineer's view. -- Material exposure to cargo volatility: the Port of Paita is a second port of call with considerable concentration in cargo type, business lines, and customers. Distant to major economic centers, the port is exposed to cargo volatility, with limited multimodal capabilities and access to infrastructure. The port's container activity has grown in each of the last three years and is expected to improve going forward, reflecting Peru's economic growth projections. -- Elevated exposure to volume risk: the port is significantly exposed to merchant risk and economic cycles, as contractual agreements with shipping lines are limited. A minimum revenue guarantee granted by the government is insufficient to cover for debt service payments. Tariffs and fees that are initially established in the concession agreement may be subject to regulatory modifications beginning 2019. -- Reliable facilities renovation program: the project has well- defined capital improvement planning and funding in place, and lower required investment by the operator in the future. Additional investments to infrastructure facilities and maintenance are mandatory, included in the concession agreement and budgeted in the financial projections. -- Adequate structural protections: the project's financial flexibility is mainly sustained by the existence of adequate liquidity reserves available for debt service and/or for construction costs of Phase II and III. The structure additionally, provides a five-year grace period, incorporates a strong provision to trap cash to prefund construction costs of Phase II and III, and includes a dividend distribution test. -- Considerable level of debt: the financing presents a sizable debt burden with dependence on cash flow growth to maintain healthy financial ratios. Concession agreement allows for an adequate cash flow generation term. However, required investments for phases II, III, and IV (additional investments), significantly reduce the project's financial flexibility. Rating Sensitivities Completion delays: a delay in completion beyond the established construction period of 30 months from financial closing, could result in a termination of concession. Substantial decrease in revenues: limited contractual agreements and weaker customer diversification elevates merchant risk, subjecting prices to market volatility. Replacement of performance security: failure to replace the stand- by letter of credit with a financial institution of similar credit quality by September 17, 2013. CREDIT UPDATE Phase I, which includes the construction of a 300 meter mooring point, a 12-acre dock, dredging to 13 meters, the installation of a gantry crane for dock and two for yards, among other handling equipment, has advanced in line with the initial schedule. As of end of June 2013, construction progress represents 47.5% of the project. According to the independent engineer, the construction is on schedule, and expected to be completed in June 2014 as initially projected. In Fitch's view, current construction progress and an adequate performance security in place to offset liquidated damages resulting from possible delays and/or cost overruns, partially mitigate completion risk. In 2012, the port operated 165 thousand of twenty-foot equivalent units (TEUs), 0.4% below our base case projections and primarily driven by a slower demand observed from China. The port's revenues, however, grew 20% in 2012 when compared to the previous year, and surpassed our base case projections by 7%. Revenue growth at the port reflects an increase of activities in energy- related services and on-board reefers, which generate a large portion of the special services revenues. Operating expenses compared with the previous year, remained constant at USD13 million in 2012 and resulted in USD10.2 million EBITDA as projected in our base case. During the first half of 2013 (1H13), the port has operated nearly 77 thousand TEUs, an increase of 3% over the same period in 2012. Revenues are estimated at USD12.6 million in 1H13, representing a 20% increase over the revenues generated within the same period in 2012. Similarly, operating costs and general expenses are estimated 24% and 13% higher in 1H13 year-over-year, respectively, reflecting adjustments to insurance policies, and payroll expenses. Consistent with Peru's economic growth prospects and our base case scenario, Fitch expects TPE to gradually improve its revenue generation and to maintain a stable cost profile commensurate with its debt burden and contractual investment obligations. In 2012, the Port of Paita exceeded the 160 thousand TEU milestone, and as established in the concession contract, Phase II Account has begun to be funded accordingly. Construction of Phase II is to commence when 180 thousand TEUs are handled. For the annual credit surveillance of TPE, Fitch created a base and rating case which assume the construction works of Phase I, II, III, and IV (or additional investments) and calculates the X- factor at 2.0% in 2019 and 1.0% thereafter. Annual transshipment growth is estimated to be constant at 4.0%, no IMAG utilization is considered under either scenario, and a 3.0% return on additional investments with a two-year delay is also assumed. Importantly, Fitch's analysis hinges on the use of the structure's reserves. Absent these, credit quality would be significantly diminished. Fitch's base case assumes a compounded annual growth rate (CAGR) of TEUs at 4.0% for the 2013-2037 period. TEU growth projections incorporate a decline of 11% and 10% in 2020 and 2030, respectively, with a full recovery the following year. TEU growth adjustments are applied to assess the port's resilience to adverse macroeconomic/severe weather conditions. Additionally, for tariff adjustment calculations, Fitch includes 3.0% for the U.S. CPI during the life of the notes. O&M expenses are escalated by 4.0% in real terms once every 10-year period. Under this scenario, the minimum natural DSCR is 0.67x which occurs in 2014, the average DSCR is 1.20x over the 2013-2020 period (no distributions), and the loan life coverage ratio (LLCR) is projected at 1.71x. Minimum natural DSCR is affected by the prefunding of Phase III. Given that mandatory investments are required by the concession agreement the structure mainly relies on the liquidity reserve accounts to meet debt service payments in a timely manner. Fitch incorporated the liquidity reserves, which are available for both construction costs and debt service, into the financial ratio calculations to determine the additional flexibility this liquidity provides. Under these calculations, the minimum DSCR is 1.83x in 2014, the average DSCR over the 2012-2020 period (no distributions) is 2.61x. Fitch's rating case assumes a CAGR of TEUs at 3.5% during the 2013-2037 period. TEU growth projections incorporate a decline of 9.2% and 4.5% in the years of 2016 and 2033 respectively, followed by a gradual recovery of 4.9% and 3.1% in the immediate years after the decline. Additionally, Fitch includes 2.20% for the U.S. CPI during the life of the notes. O&M is increased by 8.0% in real terms once every 10-year period. Under the rating case scenario, the minimum natural DSCR is 0.19x in 2026, the average DSCR is calculated at 0.95x during the 2013-2027 period (no distributions), and the LLCR is projected to be 1.27x. These coverage ratios assume the prefunding of the reserves for Phases II and III prior to debt service and exclude any financial flexibility derived from liquidity reserves. Fitch's rating case also incorporates the reserved liquidity into the financial calculations. Under these projections, the minimum DSCR is 1.12x in 2027, the average DSCR over the 2013-2027 period (no distributions) is 2.08, and the LLCR is computed at 1.46x. Under this rating scenario, no deficit in accumulated cash and reserves is shown. The notes are secured by the pledge of all the issuer's capital stock, the mortgage between the issuer and sub-collateral agent, and a perfected security interest in all of the issuer's assets. =============================== T R I N I D A D & T O B A G O =============================== TRINIDAD CEMENT: Republic Bank Responds to Firm's 'Threats' ----------------------------------------------------------- Trinidad Express reports that Republic Bank is getting legal advice on statements by Claxton Bay producer Trinidad Cement Ltd which the bank is alleging are threats against it and its officers. The bank was responding to TCL's complaint to the Securities and Exchange Commission and the Central Bank against Republic Bank, bank executive Ian De Souza and Wilfred Espinet of Wilnet Holdings asking the SEC to investigate whether or not De Souza and Espinet have contravened insider trading provisions of the Securities Act, according to Trinidad Express. On June 14, the report notes that TCL received a Shareholders' Proposal from a group of 11 shareholders holding 5.68 per cent of the company which included Wilnet Holdings Ltd. On July 12, Justice David Harris granted an injunction restraining the holding of TCL's annual general meeting scheduled for 4.30 p.m. on that same day and adjourned the matter to July 19. The report relates TCL immediately filed a notice of appeal challenging the granting of the injunction and requested an expedited hearing of its appeal. That hearing in the Court of Appeal is fixed for September 30. When the matter came up before Justice Harris on July 19, attorneys for the shareholders requested that it be fast tracked towards a trial even before the matter is heard before the Court of Appeal on September 30, Trinidad Express reports. The request was denied and the case has been adjourned to October 4. Trinidad Express notes that Republic Bank said in a statement that a copy of a media release from Kathryna Baptiste, group legal/company secretary of Trinidad Cement Ltd, dated August 5 had come to its attention. "Republic Bank Ltd has been reliably advised that this media release similar to other previous releases from Trinidad Cement Ltd has failed to provide a complete and accurate factual report. . . . There is currently a matter before the High Court and Court of Appeal between certain shareholders of Trinidad Cement Ltd and Trinidad Cement Ltd. Republic Bank Ltd is not a party to this litigation. As a matter of principle, the bank does not comment on matters that are before the courts, and in particular those in which it is not involved," the statement said, the report notes. But the bank added: "Republic Bank Ltd is in the process of taking advice with respect to the actions of Trinidad Cement Ltd's management, including, but not limited to, its continued media releases and its threats against the bank and its officers. . . . Dependent upon the advice received, the bank will then give mature consideration to what action it will take," the report relays. About Trinidad Cement Trinidad Cement Limited is a cement company and is the parent company of Caribbean Cement Company Limited. * * * As reported in the Troubled Company Reporter-Latin America on Oct. 5, 2011, RJR News reports that Trinidad Cement Limited reached an agreement with its debtors on the terms and conditions attached to the repayment of its debt. The agreement will convert most of the company's debt into an 8-year facility, to be paid, quarterly, from March 2013, according to RJR News. The report related that deal also includes certain performance criteria for repaying the debt and if those are not met, the company will be penalized. *********** 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 * * *